Management: Change Key Component in Survival Strategy
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In times of economic hardship, adapting mindsets, behaviours and strategies is key to the survival of any business. In short, change is the essential component. This may seem obvious, but according to James Forson of Quatern Advisory Services, there are obstacles in affecting change in stressed organisations.
“Often, the first measure that companies take in an economic downturn is retrenchment. This may provide a temporary reprieve, but ideally companies should develop an overall plan, encompassing all aspects of the business, and not just staff,” says Forson.
“In an economic downturn, such as our present environment, there are a number of measures to be taken to improve or maintain the status quo of a business in the short- term. The process of developing a survival plan begins with evaluating the market, the underlying causes of the downturn, and identifying where it is hitting your business the hardest.”
By evaluating your business in terms of a larger context, companies can then analyse internal processes to decide which measures should be taken to cut costs, from redeploying staff and production changes, to overall culture and behaviour. The process of gearing up for change begins with an organisational audit, evaluating key aspects from excess stock and cancelled orders, to identifying departments or work groups that are not performing.
Forson identifies four elements that can be used to guide change. “Firstly, have a look at your strategy. Redeveloping a company strategy forms the basis from which to launch any initiative and typically involves amending the strategy according to the market and economy. The strategy should be clear, relevant and current.”
Narrowing a company’s strategy includes assessing which actions, in terms of production or services, are being undertaken that deplete valuable time and resources, while at the same time, yield little or no benefit. This also stretches to include distractions, such as plans that are still economically viable but detract from core business.
The three remaining elements: structure, systems and the resulting processes, must be analysed and changed accordingly to fit into the new strategy. These elements are crucial in supporting change and must be embraced by the entire company.
“Aligning your structure, systems such as payroll, IT, and ERP, and processes or the things that people are doing, requires ongoing commitment. However, one of the most important aspects is changing the behaviour of your staff, from actual work behaviours directly linked to the strategy to smaller things, such as saving paper, electricity, and other office consumables. While these save relatively minor amounts, they create a ‘saving’ mindset.
“Changing staff members’ attitudes from one of abundance to scarcity may be an obstacle at first, but communicating the change objectives and expectations to workers will go a long way towards obtaining buy-in,” says Forson.
Once the plans for change have been implemented, they need to be constantly monitored and evaluated to determine whether they are working or still applicable to the strategy or current market situation.
Developing a survival strategy can be done by the company itself, but Forson notes that engaging an independent consultant has distinct advantages. “Consultants obviously bring extensive knowledge and experience to the process. But more than that, their independence and objectivity is often the most important factor. With any business, especially one that may be experiencing difficulties, there are also internal politics, loyalties to certain products or processes, and the overall resistance to change. Consultants offer a clear perspective into the business, aren’t afraid to ask the stupid questions, and are therefore unhindered by any internal bias. Consultants are able to give a voice to employees whose valid views are often overlooked.”
Furthermore, Forson notes that when the audit, strategy rethink and resulting plans are done properly, clients can recover their cost, as well as save their business.
“Consultants can save companies money, that’s the bottom line. While there may be resistance to spending more money, the results of strategy realignment are easily measurable.”
Business News Sector Tags: Management|