Everybody talks about the importance of change management. Actually, change management is the Cinderella of the corporate strategy. It’s something that you do alongside process changes, but nobody wants to take responsibility for it. Whenever we modify a process or introduce a new strategy, we cannot fail to consider the impact that these changes will have on the company. Let’s not forget that a company is not an abstract entity, but a group of people who identify with common values and work to achieve a common goal. You need to learn how to introduce change in your scale-up if you want to succeed as a founder.
The main resistances are habits («We have always done this»). But also beliefs, lack of motivation for change, lack of skills and that of time.
Maybe you find yourself in one of these situations:
- think your collaborators could work more effectively but you don’t know how to organize them
- work in a heavy and uncooperative climate
- are introducing SAP (or another cross-impact tool) and you are already outside the planned time with the external consultants
- modified the production process by inserting new machinery. Instead of reducing the time, there is an inexplicable increase in waste and delivery time
What do the examples shown have in common? Nobody took the human factor into consideration. No involvement of those who will use the new tools, neither in the initial phase nor during the course. Except by claiming availability for extra work on top of that already assigned. No responsibility on the part of managers. They are still pressured to reach the assigned KPIs at the beginning of the year. Nobody considers the impact of the big changes on the objectives. A total absence of the sponsor, who often coincides with the CEO, who is completely detached from the problems that emerge.
Read what happened to Marco, owner of an SME
Marco founded 15 years ago a medium-sized company. They have around 50 employees, one-third of whom are employees and two-thirds of workers. In the last year, they hired a couple of new collaborators. And the workflow that previously seemed to flow without particular difficulties stops unexpectedly. They don’t address problems immediately but they are hidden. They make out of budget purchases or place orders without all the necessary authorizations.
But what happened? Marco has hired new people with the intent to lighten and redistribute the workload and be more efficient! Unfortunately, Marco inserted two new employees in an unformalized environment. He thought that they would integrate without the need for any intervention on his part. Soon we found that the level of digitization is low, an IT specialist tailored their management system and must intervene every time users make mistakes. The accounting, purchasing, and warehouse interfaces do not communicate with each other. The manual work required to synchronize them is high.
Improve the communication channel
Talking to the staff reveals deep dissatisfaction, little collaboration, and absent communication. There are no job descriptions and procedures to follow. Employees entered without a well-defined role in previous years and over time they took care of everything as needed, with difficulty defining responsibilities. This has led to overlaps, duplications or, in extreme cases, to having “orphan” activities no one is responsible.
A series of interviews made it possible to identify needs (expressed and otherwise), to collect management requests and to define which areas were critical. We prepared an as-is / to-be report, where we compared the current situation with the ideal future situation. We drafted an action plan to coordinate the other suppliers in compliance with the strategic objectives identified. There was strong initial resistance from the employees, but having considered the necessary change management actions in advance after only three months, Marco was able to see the first performance and financial results.
Fundamental steps for a correct corporate assessment
This is my checklist:
- Interview the various line managers and collaborators going down at least 2-3 levels
- Design informal processes or review existing formal ones, confronting the various actors (4-5 revisions are usually necessary before having a likely one)
- Identify with the managers which steps can be simplified and/or digitized
- Evaluate with the help of HR if it is possible to reassign responsibilities
- If you decide to proceed, identify an internal or external project manager (if internal, don’t be involved in the processes you intend to change)
- Evaluate the sustainable costs with the support of Finance dep.
- Ask Purchasing dep. to identify at least 3 suppliers for each area of intervention
- Assess the impact on internal resources (working hours, roles, rooms, equipment)
- Propose to the CEO and top management the action plan and the estimates to authorize times and costs
- Interview the suppliers, filling in a comparative table to choose the most suitable ones
- Prepare a detailed implementation plan (who, what, when, KPI)
- Outline an internal communication plan that involves stakeholders at various levels
- Schedule monthly meetings with CEO and top Management and weekly meetings with the operational team
My take-away message: When starting a process of profound change you must consider that while some activities have a defined and planned duration, others are activities for continuous improvement or that must be repeated with a certain frequency.
Read also my post on corporate strategy.