How Should Companies Change in Response to Changing Times?

Change in the business environment is inevitable and constant. Businesses that proactively anticipate and adapt to change have a better survival rate than their less responsive counterparts.

How Should Companies Change in Response to Changing Times?

As business owners and leaders of the organizations we head, our primary responsibility is to ensure the permanency and success of our companies. Although this idea is straightforward, we are well aware that strategic planning and implementation stand as one of the most challenging and intense jobs on the planet. Keeping the business alive and thriving will neither happen by accident, nor will it adapt naturally to the change in circumstances and evolve. Various companies over the years, including business behemoths, have crashed and burnt while neglecting business transformation based on timely responses to their environment. The case studies of Kodak, Polaroid, General Motors, and Pan Am, exist for a reason – so that history doesn’t repeat itself by committing the same mistakes again.

As the saying goes, change is inevitable and constant. In other words, change is something businesses must constantly anticipate and watch out for. Change can manifest both in the external and internal environment of a business. It can knock on your door in the form of technological disruption, a change in environmental policy and regulation, a new competitor on the block, or in the form of a global event like the Covid-19 pandemic. Internally it can be as basic as the business leader suddenly being unable to hold the reins or the star sales team leaving the organization. If your company takes a hit at every turn of events, then something is not plugged in properly in the machinery that runs it.

This brings us to the topic at hand: How should companies change in response to change?

Reactive vs. Proactive Approach to Change

The business’s response to change can unfold in one of two manners: reactively or proactively. In the case of reactive response, the company at some point understands the disruption in its business environment and responds to it by adjusting its operations to stay relevant. The emergence of tools like ChatGPT and other AI technologies has already forced several industries to change the way they operate and will likely continue to do so as it proliferates into new avenues. And not all of it is seen in a negative light either, businesses also expect AI to improve cost efficiency (59%) and streamline job processes (42%).

The proactive approach on the other hand is more part of a strategic initiative. When the onslaught of AI was foreseen as a disruptor, certain companies were already providing AI-driven solutions and had developed software empowered by AI capabilities. These companies harped in on the first mover advantage as we approach widespread AI adoption. Then again, if the motive of the businesses entirely focusing on the current AI boom is just to jump on that bandwagon, chances are high that they will end up like the hundreds of companies that crashed when the bubble burst. As with any response to change, businesses need to understand how it will impact them over time.

As you may recall, the COVID-19 pandemic demanded an exceptional degree of adaptability for numerous businesses. Many thriving businesses suddenly found themselves in the red. Restaurants, for instance, were forced to transition exclusively to delivery services or sadly shut down. Similarly, team-building enterprises had to shift from organizing live events to conducting them exclusively in virtual environments. Boardroom meetings gave way to video calls and new protocols needed to be in place to manage workflow effectively. Data safety became a nightmare with employees using home networks and personal laptops for managing work. While it was impossible to predict the emergence and the widespread impact of the pandemic, it showed us the need for having a protocol in place during an extraordinary event. While it was a reactive change that had to happen, the solution could still certainly align with the company’s values. In other words, companies who had broad contingency plans in place rooted in their company’s values adapted faster and survived better in the pandemic. Leading growth-stage companies through changes is a challenge but it is not formidable if you plan for it.

Planning for Change – Evaluation based on TRUTH

Planning for business transformation based on change always starts with an evaluation of your company’s status and its surrounding environment. The key guiding factor in this exercise will be the ability to perceive the TRUTH, meaning the ability to see the facts without seeing them through the colored lens of your inherent bias. It is to accept that your perception of the scenario might not resemble the actual situation in your company. Involving others, as the extra pair of eyes, is one way to tide over this myopic view and get accurate insights. This will help you to seek the TRUTH that was staring at your face all along.

It is also essential not to restrict the assessment to the internal environment of the company alone. Businesses should keep an eye on the external environment too to foresee changes that can affect it, like policy changes, competitor strategies, economic trends, new technology, etc. By doing so, the business can not only be prepared for any adversity coming its way but also spot opportunities before its competitors. For example, threats of recession will have a potential impact on the buying behavior of your customer. Suddenly a different SKU or a less perishable product might find better sales than your traditional stock-keeping unit. Environmental laws may force you to find alternatives in warehouse planning or influence your decision to purchase a new fleet for transportation. An honest appraisal of the business’s status would act as a guideline for the changes it needs to implement.

Defining SMART Goals

The next step in the process of successfully implementing change is to construct a comprehensive list of actions based on the insights from the internal and external assessment. Boiling down problems to their root causes and clustering similar tasks in line with the company’s vision and core functions will help to define goals that are strategic.

Mere declarations like, “Our accounting software is terrible,” isn’t helpful. “We need to replace our accounting software”, is still a vague statement, although it is a goal. Understanding that the software is cumbersome to work on, with limited accessibility due to being on a server-based platform, lacking custom reporting, and poor integration, we can state that, “We need to replace our accounting software within the next six months with one that will simplify our financial management processes, improve our ability to track financial performance and provide a platform for access to reliable data that can be used to make decisions.”

This by definition is a SMART goal – Specific, Measurable, Achievable, Relevant, and Time-bound. Here is an article that will show you how to create SMART goals for your business.

Implementing Change: Expectation vs. Reality

One of the areas where I see businesses fail in their planning is creating unrealistic expectations. Another is not creating ownership and accountability to make sure that things are getting done within a reasonable timeframe.

We must be clear that change is disruptive. People do things a certain way, and while they might complain about certain things, there are those who will have figured out a system to use things in a way that will allow them to do their jobs.  So once the change is introduced, it means that they will have to put effort into learning the new process. They may be skeptical and resistant to change, extending the time and effort required for the change(s) to be adopted.  We have seen situations wherein, while some people embraced the changes right away, others were so disrupted by it that they left the company.  Being intentional about managing change will help reduce the disruption of any changes that will need to happen.

Ownership and accountability happen through assigning and regular, purposeful, productive communication.  There is software specifically for strategy implementation, which tracks initiatives, communication, goal progress, and ownership. So, in a monthly meeting, the owner would know exactly who is responsible for what and can ensure that things are on track or provide the necessary support to get it on track. Being a dynamic leader who can nurture growth and build trust in the team would make the process faster and more efficient.

Finally, implementation cannot happen inside a box.  The environment that has already been reviewed will change, and thus targets and priorities will need to change.  Meta should have changed your e-commerce strategy.  AI should change your content marketing strategy and perhaps your whole business model.

If you find it challenging to embrace the new normal or if your business isn’t flourishing amidst the myriad changes of recent years, you are not alone. Companies big and small are struggling to adapt to the changing environment. If you want the help of Aepiphanni Business Consulting to navigate the changing business landscape, let’s discuss how business transformation program can disrupt your day-to-day over a Coffee & a Consult. Click here to register.

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