Transforming Organisations

Managing Change

To manage change you need a plan. Some people see them as a useless part of planning because as soon they are finalised, they are out of date by circumstances.  This attitude misses the point that they function as key indictors to measure progress. What is more they help us change from one state to another better state using clear matrix and defined pathways.

Continuous change or transformation is not a one off, it should be how businesses operate and build into their DNA. It is not easy, it demands and an open mind to keep improving productivity, improve outcomes and customer satisfaction. It accepts that some things will fail but we can learn from them. To do these you need a set of internal benchmarks, and this is provided by a business plan.

What is business plan?

A business plan is a written document  of your ‘intentions,’ what your business intends to do you achieve with specific aims or gaols. Businesses live in constantly changing environment, tastes, markets, legal and societal expectations. These are impossible to put into to put business plan, even if you are Nostradamus.

What plans need is flexible mindset to make changes based on business conditions and estimates of the future impacts of current changes. The ‘plan’ consists of three main elements;

1.      The business plan narrative

2.      Projections of income costs and revenues

3.      Risks the plan faces as part of the business plan

This is the first step to helping understand and transform your business.

Change Management

In terms of change management, the three strands are

As threats, opportunities and markets change it means or aims, needs and operating processes or adoption to technology also change. The realisation that something is wrong is one that a human can see, sense and factor into development, it is not just about numbers but more soft skills such as empathy, perception, and leadership.

This demands flexible mindset that drives existing processes but then change but due to reality checks. Often MBA’s or managers are not really up to the grade as they lack the vision and motivation. Remember the reason the board or HR choses such people are that they want a ‘save pair of hands’ rather than some one who will radically change direction and has the flexibility of mind to create new paths.  Some examples from three different sectors.

1.    Policy making 1968	Theory	Issue
Strategic Policy making McNamara 1961-68	Use numbers to beat the Vietnamese during the US invasion of Vietnam. Using superior technology to beat a peasant army into submission: the body count theory.	The McNamara fallacy refers to the tendency to focus on numbers, metrics, and quantifiable data while disregarding the meaningful qualitative aspects.
Result	America lost the war to North Vietnam, in Cambodia and Loas by 1973 to a technological inferior but more motivated power.
Lesson	Will power, a good cause and determination wins.

2.    Banking 2008	The theory	Issue
Too aggressive sales drive by Fred Goodwin (MBA) Buying other banks	The purchases would help RBS to add more assets to its balance sheet	The property market started to collapse in2007-2008. Values inflated to cover up cracks. Cause collapse in other companies and confidence.
Result	UK government bailed out RBS by £45billion of taxpayer’s money.
Lesson	Never hire idiots

3.    Technology 1974	The theory	Issue
Few corporate blunders as staggering as Kodak’s missed opportunities in digital photography, a technology that it invented.	Let’s not change as old ways is making money right now. Old process was to take your film roll to the Kodax store and get a printout on special paper. With delays or mistakes by the  picture taker! New digital process did away with all this. Kodak invented the digital camera process.	The board was tied to old processes which had helped them before but failed to see that the advent of mobile phones and digital photography upended their 100-year-old business models and assumption. The failed to focus on new technologies and customer needs that mobile technology offered. Other companies got a head start, Kodax  stuck to its old model. This limited them to a fundamentally flawed path.
Result	Kodax collapsed into bankruptcy. Has never recovered.
Lesson	Be flexible and nimble and take risks.

Conclusion

These examples show how mindsets, process and leadership fail to change outcomes when even when they can. Change management needs;  

1.      Having an enterprise mindset that is open to change. Unless those at the top are sufficiently open and willing to consider all options, the decision-making process soon gets distorted.

2.      Think strategic by thinking and acting holistically.  The bank case and Kodax show how the board when acting within the framework of the existing technology leads to failure.

3.       Having the ability to adapt the business design to changing conditions. The right design depends on the predictability of the market. All three cases show that they failed to heed technological, consumer and process changes.

4.      Decentralised and inclusive decisions making using a variety of methods. That is the ability to incorporate a range of sophisticated decision support tools when tackling complex business issues and aims.

It is better to keep the failures in change management in view to help us guide businesspeople and managers when dealing with ever-more disruptive rapid changes, such as AI, consumer income changes, digital shifts. Given that there are few sectors not grappling with disruptive change it is critical to keep the idea of an enterprise mindset and understand reasons for failure. Hopely, it will help you keep on step ahead.

By Zulf Choudhary

April 24, 2024

Contact us if you want a free chat with any changes, you are proposing or are planning and use as a sounding board.

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