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Change management: Why change? What is environmental scanning?

March 27th, 2013

Why change?

This, is indeed, a very good question.  A quote by Charles Darwin answers this quite succinctly “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive…”.  I find that this quote not only fits for species, but companies and organisations too.

Change management starts with someone identifying a need for change.  This blog entry looks at reasons for change, the triggers for change, along with how to scan for them.

In my view of change management there are three key reasons for change:

Imposed

This occurs where something has happened outside your control and there is no option but to respond.  Examples of this include; legislation change, suppliers changing specifications or consumer trends shifting.

Advantageous or Improvement

When there is a sound business case for doing something differently then this is improvement or advantageous.  For example, to deliver a better customer experience, technical experts are placed into call centres so that queries can be resolved at first point of contact.

Experimental

Change can also be a voluntary event that has been motivated by trying something new, taking a risk or a gamble on something that may improve an area of performance.  Often referred to as a pilot.

So now we know the reasons why companies and organisations change, but what leads up to this change?

Envorionmental Scanning

Before a decision to change is taken, there is a need to identify a trigger for that change.  Using a simple model below can ensure that the majority of triggers are identified.  One commonly used model for scanning is PESTEL analysis:

 

PESTEL analysis used in change management

PESTEL analysis

 

The above diagram shows the PESTEL model in a graphical format.  As you can see the organisation is at the heart of the diagram, as it should be at the heart of your environmental scanning; a critical part of change management.

With the organisation at the centre of your research, consider current trends changes and influences in the following areas:

Political Factors

How is the government, both local and national, affecting your organisation?  Are there new funding streams available? Are there any areas that governments are prioritising and how does this affect your organisation?  Could changes in politics lead to changes in policy that influence your region?

Environmental Factors

How are factors such as weather, climate and the green agenda changing?  Will these changes impact upon your business or does it provide opportunity to exploit?

Social Factors

How are social trends shifting?  Is the demographic of your region, customer base or country changing and what impact could this have upon your organsiation?  Does an ageging population influence your workforce availability?  How do your customers do business nowadays?

Technological Factors

Does a shift toward google based phones affect your apple apps business?  What does the latest innovation in communication technology mean for your business? What new methods of automation have been developed and how could this make your organisation more efficient?

Economic Factors

This area of consideration includes; How are interest rates going to impact your customers ability to purchase or can you afford to take on a new loan now to expand?  What incentives have become available or are likely to become available?  Is your sector of business growing or contracting?

Legal Factors

Often linked to Political Factors but in my view an area to consider in its own right!  What legislation has changed?  What is going to change?  Is there new legislation being prepared?  Areas to consider are; Health and Safety, Employment Law, Equal Opportunities.

I would recommend that Environmental Scanning takes place at least once a month and you may find that some of the areas above feature more in your area of business than others, but it is critical to consider all of the factors.

Once the relevant changes in the factors above are known they should be recorded, collated and analysed.  SWOT analysis is one method of analysing whether the trigger for change is worth acting upon.  I will discuss SWOT analysis next time!

But for now it is key to remember these three points:

  1. Change can be Imposed, Advantageous/Improvement, Experimental
  2. Scan for potential triggers of change at least once a month
  3. Use PESTEL to remind you of factors to consider

Environmental Scanning is part of being an intelligent business.  Learn more or contact us for a free consultation on how Performance Works can help your organisation.

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