Wednesday, July 16, 2008

The five stages of effective change initiatives.

As I mentioned yesterday, it helps to follow The Five Ps. The five stages of an effective change initiative are:

(1) Purpose – specifying the kind of change that’s needed.

(2) Pressure – explaining why it’s important to change at this time.

(3) Pace – maintaining the velocity of the change process.

(4) Process – taking steps to implement the change effectively.

(5) Power – driving the change effort.

Let's look at each of these in turn.

(1) Purpose - Specifying The Kind Of Change That’s Needed.

In a fast changing world, the biggest threat is not from changing business conditions (such as outsourcing, mergers, consolidation of suppliers, new technologies, new competitors) but from your hesitation to actively respond to them. In a world of ceaseless change, sooner is better than perfect, certainty is suspect, and risk is inevitable. Path breaking companies aren’t afraid to experiment. They’re willing to try and if necessary fail so they can learn faster than the competition.

Here are three useful ways to think about change. However, remember that it’s important to work on all three of these at the same time:

Change you can figure out.
Not everything about the future is a mystery. Some things are still predictable. But if you can figure out what to do next, it’s likely that your competitors can too. So doing the obvious won’t give you a competitive advantage for very long.

Change you can’t anticipate.
If you can’t plan with certainty, you’d better be very flexible and fast on your feet. Today, it’s the survival of the fastest, not the fittest. Studies show companies that respond to customer demands twice as fast as the industry average grow five times faster and can charge twenty percent more. Flexibility and speed depend on how you’re organized, so having the right skills, structures, processes and partnerships gives a company significant advantages over others in the marketplace.

Successful organizations in the future will be simple, smart, speedy and strategic. They’ll concentrate on developing knowledge, talent, foresight, innovation, speed, mobility, agility and collaboration. To enhance their adaptability, they’ll move from tall complex organizations built around simple boxes to simpler flatter organizations build around more complex boxes.

Change you can initiate.
If you can introduce products and services that are useful, unique and difficult to replicate, this will give you a sustainable competitive advantage. Quick moving firms don’t simply respond to events after they’ve happened. They lead their customers, markets, employees and suppliers to new and better places that no one thought possible before. That’s how Mazda created the Miata and how Holiday Inn introduced Embassy Suites. Winners work to invent, not just to predict the future.

More on how to guide these kind of change initiatives tomorrow.

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