Getting ready for change

Identify the change

The driver for change often comes from a change in the organisation’s strategic direction. A strategic plan communicates the strategic direction.

The strategic plan provides a summary of:

• Vision – where the organisation wants to be
• Values – the acceptable standards of behaviour of all staff working on tasks to achieve the organisational plans
• Focus areas – such as expansion, revenue, customers, compliance, innovation and human resources
• Objectives to achieve
• Projects to be completed
• Key performance indicators to measure performance and success.

As a Leader or Project Manager, you may be responsible for developing a change management strategy to achieve the organisation’s strategic plan.

Other times, you might recognise the need for change due to:

• Change in competition – All businesses need to be aware of their competitors in their industry. This insight can help shape a business’s strategy, product development and service delivery. Useful information about a competitor may entail:
  • products and services they provide
  • customer feedback/reviews
  • branding and design elements
  • technology
  • target markets.
• Changes in demand – Customer willingness to pay for your product or service. Monitor sales to review the change in demand for your product. Consumers won’t pay if a lower-price option is available.
• Market position – Pricing needs to be competitive and meet market expectations of quality and price.
• Legislation – Major change to an organisation can be a result of a need to meet a change in legal obligations.
• Crisis – a crisis is an unexpected event requiring an organisation to respond to change quickly. For example, due to a financial or health crisis.
• New technology – changes in technology to provide more efficient processes
• Cybersecurity – breaches in public security and changes required within an organisation to protect the privacy of data.
• Business opportunities – business opportunities to expand and provide new products or services or new target markets.
• Performance gaps – if a team or the organisation are not achieving its objectives, it may result in significant change. Depending on the cause of the performance gap, it could result in the training and upskilling of staff, organisational restructuring, new systems or a change in business objectives.
• Management decisions –new management often brings fresh ideas and innovative approaches to improve business performance.

This stage is about creating your case for change. You must clearly identify the need for change, the benefits and the consequences if the change is not adopted. Stakeholders need to understand the reason for the change.

You must thoroughly investigate the need for change. In this stage, you are identifying, analysing, researching and exploring the need for change.

Here are some questions you will need to consider:

What is the current state of the organisation? What does the future state look like?

Information could be in the form of a review of the strategic plan and the organisational objectives. Research trends to look for opportunities and gaps within your current organisation.

What is your understanding of the change management process? What model might best suit your change initiative?

It is important to identify the organisation’s readiness for change and assess any concept shifts. Things you can include:

• What has brought about the need for change?
• How large is the change?
• What systems, policies and procedures may need to change?

Benefits of change

You must communicate the benefits of change to gain approval and commitment from others about the change.

Staff that understand the benefits of a change initiative are more likely to be supportive and less resistant to change.

The benefits of change often relate to why the change is required, which was discussed earlier.

Benefits of change include:

• Stay competitive in the marketplace
• Enhance business opportunities
• Innovation
• Improve efficiency
• Improve business morale
• Increase profits

Policies and procedures

Internal policies and procedures guide employees about expected behaviour, actions and steps to complete tasks for a particular job or work area.

You will need to update your policies and procedures to help implement the change. Policies and procedures may include:

• Information technology
• Marketing
• Internet, data security and use of computers
• Recruitment
• Performance management and development
• Privacy
• Customer service and complaints
• Work health and safety
• Risk management

Organisations need to assess the internal and external environment before planning a change to meet their objectives. A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis and PESTEL (Political, Economic, Social, Technology, Environmental, Legal) analysis can be used to scan the business environment and the organisation. 

SWOT – Strengths, weaknesses, opportunities and threats

A SWOT analysis can help an organisation to examine its internal strengths and weaknesses and external opportunities and threats. It can assess where the organisation is currently sitting and identify gaps that could be incorporated into strategic planning objectives. 

Strengths and weaknesses can appear through internal factors within an organisation, such as: 

• People (Human Resources)
• Culture
• Financial
• Resources
• Brand
• Organisational systems and structures
• Products
• Competitors
• The economy
• Demographics
• Trends 

Opportunities and threats can appear through external factors that are outside the organisation, such as:

• The physical environment
• Legislation
• The internal environment focuses on the organisation itself and can include: 
• Management expertise
• Brand awareness and reputation
• Location
• Facilities
• Cash flow and liquidity
• The strength of the balance sheet
• Product mix
• Organisational culture. 

The external environment looks at things like new technologies, where there might be growth to move into new or existing markets, the price of materials or plant/ facilities, and competitors.

Once you have a complete picture, you can do a gap analysis of the identified areas where strengths and opportunities align and could be a good fit for expansion. Here, you can develop strategies to overcome any weaknesses, peruse opportunities, identify if you can use strengths to reduce any external threats and establish any defensive plans to minimise or mitigate weaknesses that could be exposed to external threats.

PEST – Political, Economic, Social, Technological

The external (macro) environment consists of the general landscape that affects all organisations and the specific industry environment that might only affect the associated organisations. Managers must understand the external environment in which the organisation operates because external issues can affect an organisation’s strategy and viability. By monitoring the external environment, an organisation can anticipate and react to changes and take advantage of opportunities. 

A PEST or PESTEL analysis is a tool that can help to scan the external environment. A PEST or PESTEL stands for: 

It is important that each category is identified and assessed against the organisational objectives. This analysis can be helpful in populating the SWOT analysis and uncovering threats and opportunities or gaps in the market. 

The events in the external environment may be out of your control, but they are very important because they will determine what a business can or cannot do. Organisations do not operate in a vacuum; they need to scan the environment and regularly incorporate findings into strategic planning. 

Awareness of your industry-specific environment should also be considered in your PESTEL analysis. You could ask yourself the following questions: 

1. What consumer trends may affect my business? 
2. Who are the potential disruptors to my industry or product base? 
3. Who are my competitors? 
4. Given market conditions and consumer trends, do I have the right product mix? 

Watch the YouTube PESTEL Analysis EXPLAINED B2U Business To You to learn more about analysing the macro environment. 

Read Scanning the Environment: PESTEL analysis to see examples of the PESTEL analysis. 

Read How Kodak Failed by Forbes to learn how these tools could have helped Kodak see the change in the camera market.