Eight steps to change that increase company value
Updated: Feb 1, 2019
Running a business when you have a private equity investor on board can be very different to the way you ran it before. Your team may have to adapt to new principles, standards and demands, and there will be pressure to increase profits whilst having to satisfy covenants and other constraints. You will need to adopt new ways of working whilst coping with the normal pressures of your day to day business.
We know how to create effective change. From experience we learn that successful change occurs when there is a commitment, a sense of urgency or momentum, stakeholder engagement, openness, clear vision, good and clear communication, strong leadership and a well- executed plan.
1. Create a Sense of Urgency
You’ll often see change beginning with detailed analyses, a huge business case and ultimately approval from the board of directors. Unfortunately, this gigantic effort often does very little to convince your organisation of the need for transformational change.
Gaining senior approval and presenting new ideas to disinterested business units rarely secures agreement and often leads to resistance. Unless you can sell the change process you’ll have a poor start and a disaffected organisation.
Statistics show: Q x A = E
Q: Is the quality of the solution, normally high as you are capable of finding good solutions to problems.
A: Is the acceptability of the solution to the people in your organisation, often driven by the communication and change management process.
E: Is therefore the efficiency of the overall process.
Results show: 90% x 30% = 27%
It is easy to see why so many change initiatives fail!
Work less on improving the solution and more on gaining acceptability.
Create a sense of urgency by using compelling story lines and communicating them widely across your organisations using various media.
People will embrace change if they are informed and involved.
Communication and acceptability are key.
2. Build the Team
Once you have established urgency you must create a team to effect the change. They’ll need the right mindsets, skillsets and authority to get the job done. Usually these people are key players or are in key positions in your company and represent a diverse and dynamic set of skills applicable to the task in hand.
Identify the effective change leaders and key stakeholders in your organisation ensuring their involvement and commitment towards the process.
3. Create a Vision
Create a vision of the world after the change. Make it compelling, eye-catching, factual and inspiring. Give people a purpose and they will strive for it.
4. Communicate for buy-in acceptability
Communication is the key for any successful change initiative. Remember that the acceptability of change is important. You must make sure that your people understand that change is necessary, and that they feel informed about what is going to happen. This minimises resistance, starts to build openness and transparency and eventually builds trust.
Analyse your stakeholders. Create messaging that will move and inspire them. Decide how you want them to think and act, then find the words and images to motivate them.
Determine the right media to reach them, easy for them to see, understand, internalise and absorb. Handle any concerns openly, honestly and with involvement.
5. Empower Action
Create teams to concentrate on specific aspects of the change and to support the overall change initiative. In this way, your change will gather momentum.
Remove barriers to change. These may be out of date procedures, policies, practices, systems or structures that you no longer need, or that are leading to gross inefficiencies in your company.
Be prepared to move people – “If you can’t change the people, change the people”. People are the worst barriers. You have to take action otherwise change will not happen and credibility will die.
6. Create Short Term Wins
Assess the “low-hanging fruit”, tackle these issues early and publicise the results. Short term wins are important and will:
* Provide feedback about the validity of your strategies.
* Give those working hard to support the vision recognition and encouragement.
* Build faith in the change project – attracting others!
* Remove power from some of the sceptics.
7. Implement and Sustain the Change
Create structures, projects and initiatives to keep change moving. Implement new KPIs, reward systems, policies and procedures to reinforce the change process. Continue to communicate the results across the organisation and seek to engage more people in the change journey. The change must become the “new normal” for it to last.
8. Make it Stick!
In a change effort, culture comes last not first! Change has to be embedded in the very culture of your organisation if it is to last. You must sustain new ways of working before culture truly changes. Making it stick means:
* Achieving results and ensuring the change is embedded.
* Tying results to new behaviours and rewarding those results.
* Reinforcing the new culture via training on new tools, systems, policies and continuing to communicate, communicate and communicate!
* Promoting people via the new norms.
* Continually refreshing and renewing the message.
If you use this methodology, you’ll achieve the changes you need.
Effective change management will make your company more valuable. Your agility will help you win new customers, reduce costs, implement new technologies and processes far quicker and cheaper than your competitors.
Take the first step - make it happen.
Paul Hogg leads Lighthorne Partners change management and operations capabilities.
If you would like to contact Paul directly: firstname.lastname@example.org