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Change management: Why change? What is environmental scanning?

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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Risk Management (Threats): Identify,Assess,Control

Okay, okay, perhaps the reality of the above situation occurring within your personal life or organisation is highly unlikely, however the message is: threats are out there!  They come in different shapes and sizes, arrive at the most inopportune moments with varying consequences.  Sometimes the consequences are amusing (as in the above) but other times the threat or risk can seriously damage our businesses.  The intelligent organisation has a risk management strategy in place, that mitigates or removes the identified threat.

What is a Risk?

A risk is an occurrence or sequence of occurrences that have the potential to influence your business in a positive or negative manner.  When it has a positive effect, then the risk is referred to as an opportunity.  When it has a negative impact, then it is known as a threat.  This blog entry will focus on the threat aspect of risk management.

What is a threat?

A threat is a risk that has the chance to prevent you from successfully delivering your product or service to your desired standard or at all.

Risk Management.

One cannot deal (mitigate or manage) with a threat unless the threat is identified.  Thus, the first thing to do is to make sure that you and your organisation are continually and actively seeking out this type of risk.  Secondly, it is vital that the organisation has a culture that individuals feel confident their managers will not chastise them for raising the risks.  Too often people are viewed as resistant to change, when the reality is they are very good at risk, (and therefore) threat identification.  It is only in a culture where feedback to leaders is accepted, that you are in a strong position to identify risks at an early stage.

After the threat has been identified, the next thing is to assess it.  It is important to ensure the threat is fully understood in as much detail as possible and then develop early warning indicators that will signal the threat is becoming a reality.

Tools that can be used to understand the threat include:

  • Risk workshops
  • Probability trees
  • Probability Impact Grid
  • Pareto Analysis
  • Expected Value Analysis
  • Monte Carlo Analysis

At the earliest opportunity, the threat should be recorded, analysed and an owner for the threat should be appointed.  This is the person who is in charge of the management, surveillance and monitoring the threat.  They are also the individual responsible for initiating appropriate responses, should the threat become realised.

Once the threat has been managed or mitigated, the risk owner should ensure that the story of the threat is recorded for posterity.  The events that led to the identification of the threat, the responses and outcomes should be captured and deposited into the organisational memory as lessons learned.  With this vital information banked for the future, you are ensuring should similar circumstances arise, that your organisation will be ready and have a potential off the shelf solution at hand.

The ability to mitigate, reduce and avoid threats, coupled with the assurance that your organisation is going to be better prepared for future events, are the reasons you need to understand and implement risk management in your organisation.

Risk management is part of the intelligent organisation, contact us now for further information and an initial (free, first fifteen minutes) consultation.

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Change management: Succesful change in organisations

The above video, whilst funny, highlights a failure to express the need for change.

Many organisations change, in fact it is healthy for them to do so.  An organisation that does not change cannot respond to threats or exploit opportunities.  Sometimes things happen within or external to the organisation that necessitate change and not to respond would be commercially unhealthy.

During a change process communication skills are critical in the successful transition from one state to another.  Relentless communication ensures people know what to do and when.  However there is one area that organisations and leaders can neglect.  This is the “WHY”.

Why we do things is as important to some of the members of an organisation as the what and when.  It is the why that gains the buy in from the employees not the what and when.  Understanding why can allevieate some of the confusion, gain support and reassure some individuals.

The above video is a perfect example of two people demanding change but neither explaining it till the last minute.  How much time was wasted?  Did you see how frustrated the Captain of the ship was?  All of this was caused by neither explaining WHY.

Managing Change Tip

Always ensure your people know why change is needed.  This can calm the waves somewhat in a stormy sea.  How much easier would the conversation in the above video have been if the lighthouse had just said WHY the ship had to change course.  Of course, if it had, we wouldn’t have that wonderful clip or advert for Silva compasses.

Don’t make the mistakes of others, ensure individuals know why change is happening.

Change management is one of the courses available from Performance Works.

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