“It’s like they opened a box of squirrels in the middle of my shed.” Is the charming, backwoods way one of my clients described the chaos and pandemonium his customer introduced into his business.
The external, uncontrollable factors effecting businesses today seem to have no end. Talent jumping ship, finding qualified talent that will show up for an interview, let alone on-board and work, supply chain delivery and cost surprises, exasperated customers, the hits just keep coming. At times like these, not all surprises or interrupts will be/can be dealt with. It is critical to get priorities in order and ensure that earnings and customers are protected. We have come through an amazing period of civil and commercial stability and we are now in a period of something else.
In the Redbank Business Capability Maturity Model, Level 2 is Defined. It is the stage where the business uses defined processes to manage activity to satisfy customers. Level 3 is Proactive where the business manages change proactively. Transitioning from level 2 to level 3 means transitioning from managing processes to managing the change of those processes. Let me explain.
The Business System
At the heart of the challenge in turbulent times like these is the business system. The processes, equipment, space and automated systems that people use to make commitments to customers, fulfill those commitments and then receive payment. This encompasses everything, talent, phone systems, computer systems, machinery, trucks your office space everything.
The damage that occurs when the business system is disrupted should be plain to everyone now. The pandemic blew it all up. Clients couldn’t even use the offices they had literally been using for over a century to conduct business. Computer systems that facilitated business were located in those offices and had to be made available remotely. Normal behaviors like meeting with customers were disrupted. All of it changed overnight. …and it continues to change. For some businesses, the disruption isn’t really abating.
The Impact
The result is severe impact to earnings and customer relationships. Both of which can have negative consequences for long term sustainability of the business. We saw many firms, especially traditional, sit-down restaurants just go away because they could not respond fast enough or didn’t have cash enough to wait out the storm.
It is also true that some businesses thrived as a result of the changes. Businesses in the construction supply chain, building materials etc. faired well as a group. Some recording record sales and earnings.
The Strategy
So how does one deal with external factors that just seem out of control? Introduce a role into the organization to manage change in a controlled fashion. We refer to the role as Impact Manager. Our clients refer to them as change management, program management or risk management. The role is designed to plan in advance for events that might require change. Business disruption like the pandemic, customer demands, shifts in regulation, shifts in supply availability etc. By developing the business’ change management capability and speeding up the process of implementing a change while simultaneously controlling the impact of the change on the talent, a business can drastically reduce the existential threat that change represents.
The change management functions role is to treat the business system like software. Start with version 1.0, the business system as it exists. And migrate to new version of the business system like transitioning to a new version of software. Develop the processes, train the team and implement the new system with a specific go-live date. Once the new system is in place, monitor it for problems and implement solutions quickly as the problems are identified.
In this way, even large changes can be undertaken with more control and less disruption than the alternative. The business has probably already identified, over the least two years, who and what the critical resources are for such a function.
Call To Action
Implement a change management function in the business.
Select a leader of business system change management.
Establish a timetable (one year?) for completion of the business change management process.
Label the current business system 1.0 (or whatever makes sense).
Develop a migration plan for known/expected changes to the business system.
Develop an alternate management process for unexpected changes including a tiger team or steering committee to deal with unplanned issues.
I hope you found something to apply to your business in this MBR. Let me know either way.
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