Disruptive change is inevitable – Change is constant

Change is inevitable.

More and more organisations today face a dynamic and changing environment. The oft-heard rallying cry in today’s organisations is “Change or die.” Survival in today’s global economy requires organisations to be flexible and adapt readily to the ever-changing marketplace. Change has become the norm. It is as necessary for organisations to pay as much attention to the psychological and social aspects of change as they do to the technological aspects.

We live in an era of risk and instability. Globalisation, new technologies, and greater transparency have combined to upend the business environment and give many CEOs a deep sense of unease. Just look at the numbers. Since 1980 the volatility of business operating margins, largely static since the 1950s, has more than doubled, as has the size of the gap between winners (companies with high operating margins) and losers (those with low ones).

Change is the one true constant in business, especially when it comes to operating a business. Having defined processes in place to effectively manage change can help companies sustain success.

In today’s business environment, knowing how to successfully navigate these changes and develop appropriate and effective processes to properly manage such change is a must. It’s virtually impossible for organisations to make sound strategic decisions and completely accomplish objectives when deprived of strong change management strategies. This is especially true in the world of project, program and portfolio management, where obstacles and ambiguity are inevitable at every juncture.

Companies all over the world find that they have to continually make changes to the way they work in order to stay ahead of the game, be profitable, and be relevant. Oftentimes, the changes could be externally mandated, internally conceived, or both, but the reality is that companies do have to evolve, change, or die. The global landscape is changing: businesses are moving to take advantage of new markets; organisations are restructuring to operate better, given the current market dynamic; competition is causing companies to radically change the way they do business.

The old business is not coming back – this is not just a statistic, it is a fact.

Companies operate in an increasingly complex world: Business environments are more diverse, dynamic, and interconnected than ever – and far less predictable. A study I read recently suggests that 75% of the S&P 500 will turn over in the next 15 years.

Many businesses that “have done things the same way for years” are affected by disruptive change: the economy changes, the competition changes, products change, technology changes, customers change, employees change, vendors change, buying methods change, delivery methods change.

Disruptive change is coming, and the only question is whether companies are going to cause it or fall victim to it. Disruption is not easy, to create or to confront it.

Businesses need to grow continuously in one way or another to achieve and maintain success. Growth comes by making positive changes that promote growth and by responding correctly to external changes.

Organisations throughout the world and across the global markets also recognise the need to embrace ‘nimbleness’ and ‘agility’ if they are to survive in the long run. The ever-changing landscape, globalisation, global dynamics, make it inevitable that companies have to evolve fast, repeatedly, and in a continuously improving manner in order to comply with regulations, collaborate with customers, and stay ahead of competition.

Whilst awareness of the challenges associated with change is prevalent, there is also compelling evidence of the long-term benefit of being great at driving organisational change. Therefore, it is expedient to look at some of the reasons why change is difficult, so that we can deliberately tackle the reasons for change complexity.

Sustaining success depends on an organisation’s ability to adapt

Why can some companies take advantage of any change the market brings, while others struggle with market-necessitated modification? The reasons why will differ for each organisation, but the question is definitely worth asking especially in light of the fact that the pace of change is accelerating at the fastest rate in recorded history.

Most companies find it hard to transform themselves in difficult circumstances. Corporate transformation under pressure.

Leadership needs to have a mindset that although change ability (agility, resilience) is essential for the survival and growth of many companies, there needs to be a concerted effort to build capacity to lead change effectively, and to purposefully build a change friendly culture in a systemic manner. This means that change leadership or sponsorship becomes a leadership competency that is recruited for and developed in leaders in the same way that it is done for other competencies such as decision-making.
Companies most likely to be successful in making change work to their advantage are the ones that no longer view change as a discrete event to be managed, but as a constant opportunity to evolve the business.

Change readiness is the new change management: change readiness is the ability to continuously initiate and respond to change in ways that create advantage, minimise risk, and sustain performance.

Organisations, and the people within them, must constantly re-invent themselves to remain competitive. Sustaining success depends on an organization’s ability to adapt to a changing environment.

Senior executives recognise that in order to compete optimally in the current and future landscapes, their companies will be expected to do more for less in a more dynamic landscape with issues of globalisation, new market opportunities, and new ways of doing business. There is a recognition that the changes are going to increase and the demands for business benefits realisation will also increase. It is therefore no longer optional for leaders to increase their ability to successfully implement strategies by increasing their ability to manage change and in fact leveraging this change management skill to become a competitive advantage.

If you’re struggling or your market is down, change management is especially critical because growing companies are not afforded the time to weather the storm of down markets or decreased demand. Offensive change when the company is doing well is a whole lot easier to manage than defensive change.
With this sentiment, I am not suggesting that you overhaul your business entirely change your mission, vision, and values or abandon your product strategy with every minor bump in the road. I am suggesting, however, that the best companies the ones that experience exceptional long-term success are able to quickly recognise the need to change and make the tweaks necessary to help their business continue its growth trajectory.

Here are three tips that can help the journey of change easier:

  • Top down support from the CEO level down to the senior executives below the CEO is what ultimately drives successful change. When the changes are major, you need to create a burning platform scenario that will encourage a sense of urgency.
  • Clear, consistent, and transparent communication by all executives is critical to explain why the change is necessary. Throughout the change process, it’s important to regularly and clearly communicate the reasons for change and reinforce that message to your team so they understand why you’re taking the hill in front of you.
  • Quickly identify the senior team members who don’t buy in and encourage and support them to leave the company if they refuse to embrace change. This means you may lose some very good people who helped you get to where you are, but those people won’t be as valuable going forward if they aren’t willing to help you get to where you need to be.

Final thought on the subject – business is a little like the growth rings on a tree. Every year, something changes it could be your product, your top competitors, your customers’ preferences, or any number of things. The best companies adapt to those changes, reinvent themselves when change requires it, and find a way to grow – in good times and bad.

Successful organisations foster a positive attitude toward change by anticipating it and purposefully planning for change. Change must be addressed in an intentional, goal-oriented manner. Change is something that people should do, not something that is done to them. People are more comfortable with change when they participate in planning for or implementing it because they gain some sense of control which reduces their fears.

As George Soros once said:

‘Market fundamentalists recognize that the role of the state in the economy is always disruptive, inefficient, and generally has negative connotations. This leads them to believe that the market mechanism can take care of all the problems.’

How do you sustain long term change in a business?

Time For ChangeInteresting enough, only a quarter of employers achieve long-term gains from change management initiatives, according to a Towers Watson study. The study blames a lack of long-term success on companies’ inability to prepare and train managers to be effective change leaders. It found more than half (55%) said their change management initiatives met initial objectives, but only 25% are able to sustain gains over the long-term.

These initiatives can range from programme or policy changes to business transformation and mergers and acquisitions. “Most companies are having a difficult time keeping the momentum of their change management initiatives going,” said Nicola Cull, a senior change management consultant at Towers Watson.

But for mainstream companies, sustainability remains a disappointment: worthwhile thinking on products and services has not translated into increased sales. Change is so much easier for businesses if it comes from the marketplace and is represented by fundamental shifts in consumer values and needs.

Positioning for these changes requires companies to act today to address areas that are likely to become consumer concerns, to build brands that are more resilient to the changes ahead. For those companies wishing to be in the vanguard there is a clear need to promote behavior change and establish new rules in the marketplace. Brands need to play a bigger role: they are the most powerful tools companies have.

The big questions are how and when, to do it in such a way that you gain the rewards of leadership.

Linking the broader corporate intent with the plans and direction of its brands is one of the biggest challenges for many companies. Short-term commercial focus continues to dominate category and brand decisions. But good brand practice today is about building for the future as well as the present. To endure, brands need agility. Those that are building equities on more sustainable principles now may just be the ones that thrive and dominate in the future.

First, you should constantly explore your company’s capabilities. Which of those capacities will serve it well in the years ahead and which won’t? A careful analysis can help you to identify which of them to retain, which to jettison, and what new capabilities might strengthen your company’s position in the marketplace.

Second, you will want to look for trends that will shape the services, programs, and products you offer to your target market. You can identify key trends by listening carefully to the evolving needs and goals of your customers. When they express a new need or goal, you can then develop new offerings proactively that will fulfil them. You can also identify trends by following the latest news and developments in your target markets.

Third, it is likely that, in the process of creating a sustainable business, your company establishes itself as a leader in a particular market that generates a considerable amount of your customer base and revenues. At the same time, it can be risky to focus too much on one market. What happens if that market collapses for some reason? Just as with financial investing, as you build your business, you will want to diversify your markets, so that if one market slows down, you can pick up the slack with customers from another.