Tag: change

What Comes Next?

What comes next?

We are currently in the throes of what can only be described as a catastrophe, both on a human level and also from a business point of view. It is the latter I am concerned with now, as it seems to be the thing that is most puzzling for us all. What comes next?

First of all, many people seem to think that we are having some sort of blip and then things will go back to being as they were. Well, this is definitely wrong. We have a virus that is killing people and for which there is no known cure.

Whether lockdown continues or social distancing stays with us for another year, things will not go back to being as they were towards the end of 2019.

Then we come to that awful phrase ‘new normal’. What is it exactly? The term implies that the old normal was not quite right and that a newer version will be more useful somehow. It also infers that a new state will be constant as though there has just been a change, a slight shift in our day to day lives.

The reality is that the post COVID-19 era will be characterised by change, constantly shifting environments, and also the need for rapid decision making.

So, you are thinking, how on earth do I create plans for my business? Ditch the plans (well the boring linear sort anyway) and create yourself a storyboard. Your endpoint is probably just past the end of the current wave of coronavirus and the intermediate points are wherever you want them to be (significant milestones).

So, at this endpoint, you need to ask yourself a lot of questions about how things will work because we will not know what things look like. Forget the products and services that you currently sell and think about your customers.

Will customers still want the things that you have traditionally provided, will they want something else, will they want more (or less), will they prefer it if you bundle more things together to save them going to many suppliers (a bit like going to local shops or getting supermarket deliveries during lockdown)?

Next, take a look to see if the competitive landscape is changing. Will any of your competitors be weakened or perhaps not be there at all? Will this leave gaps in the marketplace for you to fill?

And finally, you are always going to be able to make money is you have a solution to someone’s problem(s). So, try to think about potential customers who are just popping out of the other side of the pandemic. What extra things might they need, what things might they not be able to do, or what might they be afraid of?

At this point you might be thinking that there are a lot of questions to answer. Things do get harder though. Remember I suggested that our new world will be characterised by change and the need to make decisions quickly. Imagine that your business has to adapt in the same way a chameleon adapts to its surroundings.

You cannot wait to be told what to do, your business must be constantly scanning the environment around it and make decisions accordingly.

In the future, you will need to be nimble. Where you work will be immaterial, especially as technological advances will make remote working seem like we are all together. Factories will still exist but may be staffed by relatively few people.

Organisational structures will change and become flatter and more fluid with greater value placed on knowledge than job title.

For more ideas on structure and infrastructure please also read Soft Infrastructure Post Coronavirus to get a better idea of what comes next.

When The Threat Is Here, It Is Too Late To Change!

When is it too late to change

Here I shall use the spreading of deadly bacteria as a metaphor for change.

Consider a body of water that we all know well, the Mediterranean Sea. It has a volume (give or take a cupful) of 439 trillion litres.

Now imagine 1 litre of seawater with some of the deadliest bacteria known to man. This will contain around 1 trillion bacteria.

Imagine that these bacteria divide every minute so after 1 minute there are twice as many, after 2 minutes there are four times as many.

You like swimming in the ‘Med’ whilst on your summer holidays and have heard about these bacteria. How long do you think it will take before the whole body of water is filled with these deadly bacteria and we have another dead sea on our hands?

Is it weeks, months or perhaps years?

The alarming answer is a little over 68 minutes. I’m sure that we would have longer to get out and dry off before succumbing but this is alarming.

1 minute before ‘the end’ only 50% of the water is contaminated but this is still too late. 3 minutes before the end only 12.5% is contaminated but we have still left it too late. After a certain point, it is simply too late to change.

To save our beloved swimming destination we should really stop the deadly bacteria being put there in the first place or have developed some way of killing them.

My message here is all about taking action. When is it too late to change, when no amount of action will save our business? With rapid communications and lightning-fast technology, threats to our businesses are spreading ever more quickly. When we have spotted the threat and reacted it may actually be too late to change.

In the current climate, we need to be looking at what comes next. The old adage ‘if it ain’t broke don’t fix it’ does not apply, we need new products and services before our current ones become outdated.

Scientists amongst you will recognise this as a classic exponential curve. For some industries and countries, the steepness of the curve may vary but change in this day and age is much more rapid than in the industrial revolution.

Consider the current coronavirus as an interesting example. There are two aspects that we should be concerned with. The first is how contagious it is (change spreading at a local level) and how quickly it multiples and spreads on a global level. Let us apply this to the business world.

In business, changes made by our competitors will have varying effects on the marketplace and may be difficult (or easy to copy). Should we copy technology or develop our own to achieve the same ends (or perhaps add more value)?

How will change affect us and how quickly do we need to react?

Unlike my fictitious example of bacteria in the sea, we will have more than 68 minutes to react to serious business competition. But once a competitor produces something that threatens our products or services, how long have we got to live?

So what can we do? Well, the answer is to react like a chameleon does if that is the strategy that you wish to use. Change must be instant and you will need to be scanning your business environment to see as far ahead as possible.

You will not be able to use cumbersome decision-making processes and your sales, marketing, manufacturing, and distribution will need to change with very little input from senior management.

Another possible way of creating a strategy for the future is to look at the following:

  • Who are your customers?
  • What are you selling to them and why (what problem are you solving)?
  • What technology is coming over the horizon?
  • What skills do you possess as a company?
  • Who else is competing for your customers’ money?

Then consider the following just to start off with

  • How could you utilise new technology?
  • Can you make it lighter, heavier, smellier, greener …..?
  • Can you add value or combine products or services?
  • Can you use your skills to branch out into another sector?

Here are two examples.

I once met an author of children’s books who had just written a book about gardening. I introduced him to my list of things to think about and he immediately latched onto ‘add a smell’. The ‘scratch and sniff’ gardening book became a viable idea at that point.

Now consider a manufacturing company that makes a commodity such as mattresses. They have manufacturing expertise and knowledge of the human form but very little design skills. Find a designer and ‘hey presto’ you have the capability to design and manufacture higher value items such as furniture.

In the world of electronics, advances can be even more startling.

Remember, when change hits you it may already be too late to change.

Is It Time To Get Out Of Your Current Business?

is it time to get out of your current business

We know that a number of businesses will not make it but a number will be asking themselves the following questions:

What’s next?

What’s the cure?

What can we do to stay to keep our heads above water?

For many, the initial knee-jerk reaction is not actually a reaction at all. The temptation is to hold on to the past as much as possible and pray that the storm blows over.

Are you or fellow board members saying any of the following?

“We just need to wait for the market to recover, and then it is business as usual!”

“The trouble is a blip, let’s just wait and see.”

“It is too risky to act on incomplete information. Let’s allow things develop — we can always take action later.”

This desire to hold on to the past, to endure whatever the harsh environment has to offer, is well known to social scientists.

Summarising a 2010 study, Social Psychologist Dr. Heidi Grant Halvorson wrote:

“People who saw a painting described as having been painted in 1905 found it far more pleasing to look at than people who saw the same painting described as created in 2005.

Students preferred the course requirement described as the status quo over a new version (regardless of whether the new version meant more or less coursework).

People who were told that acupuncture had been in existence for 2,000 years expressed more favorable attitudes toward it than those who were told it existed for 250 years.

Study participants were given a piece of European chocolate. It was described to them as having first been sold in its region either 73 years ago or 3 years ago. Guess which group rated the chocolate as better-tasting…”

As far as organisational change is concerned, there are three primary emotions at play. These are cynicism, fear, and acceptance. Two of these are negative and one positive. Surveys following organisational change put the negative emotions top of the list. Positive emotions are nowhere to be seen.

So it would seem that we have an inbuilt desire for things to stick around as long as possible and avoid change because of the negative emotions that it conjures up.

We all want to last, continue and get back to  “business as usual.” We want to hold on to the world just the way it is.

This is exactly where the problem lies and why so many of our transformation efforts fail. It is the desire to stick with the status quo that kills our businesses.

Whyis this? As with life in the natural world, sustainability is not a driver for survival. But change is!

Every day, things change. We breathe in and out, becoming a different person with every molecule of oxygen that enters our bloodstream (it is said that every day you are guaranteed to inhale at least one of the molecules of air that passed through Genghis Khan’s lungs!).

The seasons and weather change, crops grow.

We survive the ups and downs of the stock exchange and commodity markets. Nothing is constant. Change is unrelenting. So if hanging on is not the best strategy for our businesses, what can we do?

The secret lies in working out what our business is exactly. You might produce cardboard boxes on a production line but is your business one of production or packaging? You need to distill the essence of your business idea (maybe focus on the packaging) and throw away everything else.

If you get this right then you can reinvent your business over and over again according to changes in markets, customer buying habits, etc. Our fictitious box making company could become experts in sustainable (or recyclable) packaging solutions for the automotive sector.

Focus on knowledge and core skills as well as what product or service you actually provide.

Instead of desperately trying to stay in your current business by all means possible, it is time for you to get out of the business and get into a new one!

How Innovative And Flexible Is Your Business?

how innovatve and flexible is your business

To be innovative we must be flexible and embrace change. Innovation is a special type of change program. It has many other attributes that make it deeply fascinating and sometimes difficult or impossible to grasp, but change is what it is.

Sometimes this change is fast and sometimes slow, but change is a competence and managing change can be learned, developed and practised.

The thing that trips us up most often is that we get no practice, we have to improvise. Most of us would not stand up at a comedy club and improvise a 10 minute set. But our bosses expect us to do this and we gladly assume the role.

Of course, we can never practice the stages of change without actually changing. But in our businesses, we crave stability. We either change once in a lifetime or we keep doing so in a way that we don’t have time to bed in the changes that have been made.

Worse still, we invent an innovation program that changes rapidly. This results in bewildered staff, unhappy sponsors and management shaking their heads at the hastily drawn up Key Performance Indicators.

Even in changing business environments businesses make the assumption that volatility will be low.

For obvious reasons, the least volatile part of a business is related to finance. For example, consider the process of budgeting. The budget is usually set once a year and tinkered with occasionally. Often budgets are reused. It might not be efficient to use zero-based budgeting (budgeting from scratch) but how often are the inputs to a budget reexamined?

But what happens when there is volatility in the marketplace? Commodity prices can rise and fall quickly. Recently we have seen fuel prices affect the costs of all goods that need to be transported. Crop failures can push up food prices and regulatory changes can force huge burdens upon us all.

What would you do regarding your finances if the cost of fuel rose by 50% due to events in the Middle East? What would you need to do and how fast could you do it? Would it spell the end anyway?

Some businesses do conduct some scenario planning or create a series of ‘What if?’ statements so that they have some idea what to do. This is a little like leaving instructions for a simple board game. What happens when the board game is different from the one mentioned in the instructions?

To be truly agile (nimble, flexible, innovative or whatever adjective you favour), a business must create a system that reacts automatically to its surroundings rather as a chameleon does in nature. You might find it useful to take a look at the following two posts No More Change Programs – Meet The Super Chameleon and Innovation Constipation – Are You Suffering?

How do we create this elusive flexible or innovative business? Well if you are starting a new business you can start as you mean to go on. Although whoever is providing startup funding might take in interest in why you are doing something that does not obviously have a ROI (Return On Investment).

If you are a larger business then they are ways of making the necessary structural and cultural changes. The businesses that have been doing this for years make it look easy. It is not! However, once you have mastered this (a bit like riding a bicycle) then things get easier.

If you want to know more or would like some case study material then please get in touch.

So your homework for today is to answer the following:

How does your company cultivate change and reinvention capacity in its people and managerial processes? What currently works? What can be improved or replaced?

Can The Public Sector Leopard Change Its Spots?

Can the public sector changeI went to an event very recently where a number of public sector and not for profit organisations were shouting very loudly about the joined up way in which they were working together and the great benefits that were being delivered to their customers.

On the face of it, this was exciting news but was everything as it seems? I can hear readers now thinking ‘he is going to have a go at the NHS’. Well in a way you would be right and in a way wrong. It is brilliant that service deliverers can improve and extend the range of services and observe genuine results.

So where is the problem? Well, the biggest one comes when someone reminds us that ultimately these organisations are spending our money. One of the people present who commissions services provided compelling evidence that these services were being effective. Commissioners have predictions for future service demand. This helps to ensure the amount and type of services required are actually there. The commissioner stated that demand was increasing much less than predicted which implies that prevention is working.

Well, that’s that then? Not quite. A gentleman asks politely but in a very ‘civil servant’ type of manner, what evidence he can put on the table at a meeting he is going to attend the next day. He wants facts (and lots of them) as do his colleagues (anyone with the word ‘Manager’ in their job title). We have a whole raft of people whose job it is to justify and account for spending.

The organisations are delivering new or altered services (great) but underneath they are fundamentally the same. This is a little like saying that a supermarket chain is changing and supporting the environment whilst all it is doing is stocking some local potatoes and getting rid of some plastic packaging.

We should remove whole swathes of middle management. We could then fund many more services if we could only change the way in which these organisations work. The public only turn their attention to accountability when the services they seek are not there. When GP visits are easy to make, when libraries are still there and functioning well, when refuse collections do not result in piles of waste on the street, we are all happy.

For a small example of how this can work see my article Ban The Boss – see the BBC’s Business Doctor at work. Its an hour long programme but well worth it.