IS THE CHANGE MANAGEMENT ACTUALLY AS DIFFICULT AS STATS SHOW? (PART 1/5)

I previously posted that last week I had interesting lunch meeting with a foreign (non-Finnish) Executive Director who had been recently placed in charge of the company he works for. How he recognizes the need for change, but all time is spent on extinguishing fires here and there. I asked if he inherited business plan from previous management and the answer was no, there is nothing written down. We had lengthy lunch where I shared some of my ideas, based on my studies and practical experience on Change Management, how things can be set on motion for better tomorrow.

This conversation and positive feedback he gave me inspired me to share some of these Change Management observations. To keep it short I make this series of 5 posts, posting every day one part. My approach is highly rational and pragmatic, even though knowing it to be highly unpopular nowadays when everything at work must be fun, focus on wellbeing of people and Friday sparkling at the office. I want to emphasize the fact that it is also taking care of people to provide them stable and secure working environment with reliable income to support their life outside work and family.

PART 1: CHANGE MANAGEMENT - BUILDING RESILIENT ORGANIZATION

 Often the potential difficulties are well foreseeable and could be avoided if planning process would be properly completed and documented. Plan does not have to be heavy and detailed to the end, but having one is crucial to success on a long run.

First basic element is understanding the operational environment, competition, opportunities, and risks.

Second is setting the objectives, how to measure success on short run and business-related intermediate run. Third element is planning process where parallel to plan itself the worst- and best-case scenarios are also considered, which prepares mentally to be agile in business, to grab the opportunities and avoid panic if something unexpected happens.

Fourth part is decision making process which in controlled way evaluates the 2-3 possible courses of action introduced in planning phase and after pros and cons selects the best course of action.

Fifth part is highly important. Setting milestones when action is evaluated. If something goes wrong, it`s natural to re-evaluate the plan, don`t tear it apart though, plan might be good even though things didn`t go perfectly. Evaluate, adjust if needed, keep objectives in mind and keep going. Equally important it is to evaluate when things are going well. Stopping occasionally to reflect allows to see potential further opportunities as well as possible new risks.

Part 6. In part 2 overall business objectives were set and now in part 6 objectives, tasks and basic “how to” is set for each individual business unit. These are business related, but I give few examples here:

1.     Finance is the most important unit to me. CFO should provide CEO with accurate current situation as well as cash flow prediction. Identify major cash flow out routes and suggest possible savings. Post calculations on projects / business units, what is our profitable business to focus on. Basic KPIs chosen to evaluate business on regular basis.

2.     Sales Plan. Who are we selling to, what products, pricing, competition, potential available market, sales actions, and realistic forecasting. What we must be able to do in order to be successful.

3.     Strategic marketing Plan. Aligned with sales efforts and supporting building of the brand. Cost efficient, focusing on what is needed right now to support success, not on what would be cool to do.

4.     Production. Secure Supply Chain, cost structure, process, production time, coordinating efforts with sales. Sales sells products that production can efficiently produce and accurate info about difficulties to sales, so pricing can be made correctly. Align Design – Production – Sales – After Sales process.

 Like said, these are business specific, but here is some basics to focus on and where I have successfully improved company`s P&L Management and P&L Optimization.

Business Plan can be extended as much as needed, but here are few simple steps that are minimum to do and by doing so organization is already considerably more resilient than one without. As a Chairman of the Board or CEO, if these basic plans don`t exist or your organization is not able to produce those, it is the first red flag and indication that something must be done preferably sooner than later.