The challenge of change

Regardless of the organization, change is often one of the toughest challenges that most leaders face.  Most people don't like change, and that includes many of the leaders as well.  Change means that something becomes new, and we prefer the old and familiar.  Under the old ways of doing things everyone knows their role.  Whether you are the CEO or the janitor it's easier to function as long as things don't change because you know how to fulfill your role in that structure.  But, when things change it often means our roles change as well.  Now we face our work with caution because new things are expected of us.  However, whether we like change or not it is necessary in a rapidly changing world.  As Marshall Goldsmith entitled his book What Got You Here Won't Get You There: How Successful People Become Even More Successful.  No matter how successful your small business may be today, it will have to change if you want it to be successful tomorrow.  As I often tell people in some of my workshops, forget the old adage "If it ain't broke, don't fix it."  A better saying in the 21st century is "If it ain't broke, break it" because it will soon be obsolete anyway.  You may as well embrace change because it is here to stay for the leader who wants to be successful.  And, if you are a leader, you need to learn as much as you can about how to successfully introduce change to your organization.

One of the places I recommend you to start learning how to be a change agent is by reading John Kotter's book Leading Change, With a New Preface by the Author.  It remains in my top three leadership books and is essential reading for anyone called to be a leader.  One of the key learnings I got from reading the book is that the failure to create urgency is one of the primary reasons most change efforts fail.  When I first read that several years ago I immediately thought back to some of greatest failures I had related to changes I tried to implement and realized that I had not taken the time to create any sense of urgency in any of those efforts.  I just announced to people what changes I wanted us to make without ever explaining the why behind those changes.  I also never took the time to allow others to think about the changes and how they might benefit from them.  In my mind I understood the importance of the change and how it would positively benefit us, but I forgot that I may have spent weeks (maybe months) thinking through the change.  I seldom gave others that same time frame.  How much better might it have been if I had explained the why something needed to be changed, explained the change I wanted to see us make, and then gave people time to reflect on the change and ask whatever questions they might have had?  If I had done that many of those change efforts might have been much more successful.

Creating a sense of urgency is only one of Kotter's recommendations for the leader who wants to introduce change into his or her organization.  The book is a goldmine for anyone who needs to bring change to the organization he or she leads, and that would include anyone in a leadership capacity.  If you haven't read it I cannot emphasize too much how valuable it will be to do so if you want to successfully lead your organization.  Goldsmith's book is also helpful to anyone who isn't convinced that change is inevitable in every organization.

Indecision will cripple your business

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Every day leaders are confronted with a variety of decisions they have to make.  Hopefully, your employees have been trained and are empowered to make many of the decisions that need to be made, but there will be those decisions that only you as the owner or manager can make.  The most successful leaders will not postpone making those decisions.  A study conducted by the Harvard Business School once asked "What are the top characteristics of high achievers?"  The persons being asked gave a wide variety of answers, but the top response was the ability to act quickly.  They recognized that leaders who can make quick decisions and act on those decisions were going to be the most successful in their fields.  Those who procrastinate in making the tough decisions would enjoy much less success.

This does not mean that these quick decisions were always the correct ones.  Sometimes these decisions were not the best that could have been made, and occasionally they were completely wrong.  But, the decisions led to actions, and if the actions didn't produce the desired results then new decisions could be made.  In either case, the best solution would be discovered more quickly through not putting off making a tough decision.

These decisions were also not made without input.  Leaders know to acquire as much information as possible before making an important decision, but not to delay that decision until they have every iota of information that might impact the decision.  Leaders never have all the information they need, but they often can't wait until that information is available before making a decision.  If new information becomes available later that would lead to a different decision then the initial decision can be altered.  I once sat in on a meeting when a question was raised about a decision that had been made by a board two years earlier.  One person in the room reminded everyone in the room of the earlier decision when another person responded that decisions can be changed when new information became available.  Few decisions should be written in stone.  Especially in the times in which we now live, decisions made two years earlier should not be seen as Gospel.  They may have been the right decision at the time, but as new information becomes available or things change, then those decisions need to be examined and changed if needed.

When leaders refuse to make necessary decisions they create doubt in the minds of their team members.  These team members wonder who is running the organization and what will happen if their leaders become incapable of making important decisions.  There is a great scene in one of the Pirates of the Caribbean films when, near the end of the movie, two pirate ships go on either side of a British ship and begin firing.  Throughout the movie the commander of the British ship was arrogant in his leadership, but as these pirate ships made a maneuver he never expected he suddenly became frozen and incapable of responding.  The subordinate officer kept demanding an order which never came until the subordinate office assumed control and ordered the men to abandon ship.  The pirate ships kept firing on the British ship as the commander slowly walked across his ship until it finally blew up and sank taking the commander with it.

In business we will always have pirates firing at us.  People will do things we never expected.  New challenges will continually confront us.  Some of these challenges will offer opportunities for our businesses to grow; others will threaten to sink us if we do not react quickly.  In either case, decisions will have to be made, and you as the leader will be responsible for making them.

Going smaller with your business

Since this blog is primarily for small business owners the idea of going smaller may be the furthest thing from your mind.  Chances are you are trying to find ways to grow your business, and there is nothing wrong with that if big is how you define success.  However, there is much to be said for small as well.

What would happen if you fired half of your customers?  You know, the ones who always pay late, complain about your prices and/or service, never give you a positive recommendation, and take up large chunks of your time over the most miniscule of issues.  Right now I'm thinking of a woman who complained to me about the cost of a service call our company did for a rental house she owned.  She didn't feel she should have to pay as much for that call as someone in a community less than ten miles away because she lived in a poorer area.  I reminded her that our supplier charged us the same for the part we used regardless of where we used it.  Our serviceman had to drive that extra ten miles to do the service call, and she was the one who chose to buy rental property in that poorer community.  She was adament that I reduce the bill which I did.  Life is too short to quibble over ten or twenty dollars.  We also never accepted another service call from her.

What would happen if you fired half of your employees?  Barbara Corcoran of Shark Tank fired the bottom 20 percent of her sales staff each year. Don't just dump them out on the street.  Help them find other jobs before letting them go, but keep only your top talent and give them substantial raises.  You would lose the employees who come in late, are less productive, and often infect other employees with their bad attitudes.  Your overhead would go down, you would be working with your top talent, the atmosphere in your workplace would be less toxic, and the ones you keep would be more productive because they are no longer carrying dead weight.

Doing these two things would change the way you could do business.  You could begin to pick the projects you actually enjoy doing rather than the ones you have to do to make payroll.  Your stress levels would go way down because now you are working with your very best clients and team members.  You would probably be more profitable at the end of the year.  Think about that: less work, less headaches, more on the bottom line.

Again, making this type of change first requires a change in how we define success.  If you want to grow your small business into the next empire, fine.  Just know that your dream could turn into a nightmare before it's over.  If you want to enjoy the things in life that really matter: your family, your friends, your faith, your life, and enjoy a good living then you may want to consider going smaller with your business.

For other tips on small business success be sure to read my e-book Mistakes: Avoiding the Wrong Decisions that Will Close Your Small Business.

If it ain't broke...break it.

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Many of us have heard all our lives  "If it ain't broke, don't fix it."  It was a warning that messing with something that was working well might create more problems than it was worth.  That may have been good advice at one time, but it's lousy advice now.  I encourage people that "If it ain't broke, break it because it will soon be obsolete anyway."

We live in a rapidly changing world that requires people to adapt quickly or be left behind.  Your business plan from 2007 is probably not as effective today as it was just five years ago.  Hopefully, you're not even using that plan any more.  If your equipment is more than five years old it's probably outdated and inefficient.  If the goods and/or services you offer your clients have not been updated in the past 2-3 years they are probably coming across as stale and unappealing compared to what your competitors are offering.  Have you taken a fresh look at your marketing strategy to see what's working and what's not?  Have you checked out new vendors to see how they can add value to your business?  How often do you change out your displays to showcase new items?

One of the mistakes I made when I took over our business was seldom changing anything.  You can read about that, and many other mistakes I made, in my e-book Mistakes: Avoiding the Wrong Decisions that Will Close Your Small Business.  You can order it for your NOOK reading device by clicking on the book cover on the right column on this blog.  I made very few changes in how we operated as a company, and the changes I did make were often too small and certainly too late in coming.  Our competitors ate our lunch because I didn't want to change things that had stopped working.

Several days ago I admitted I liked watching Bar Rescue on television.  One of the things that the rescuer does is change virtually everything about the bar.  He changes the name, the decor, the items on both the food and drink menu, the uniforms the employees wear, and the way they go about their business.  One of the reasons the bars are not profitable is that nothing has been changed for years, and he wants to help create a new brand for the bar.

When you walk into your business tomorrow take a long look around.  Try to imagine what it would look like to someone who had never been in your business before.  Would they find it vibrant and exciting, a good place in which to do business, with goods and services that appeal to them?  Or, would it appear to be tired and outdated with people who look like they would prefer to be just about anywhere but there?  You may want to ask someone to be a secret shopper so you can get an honest opinion from someone with new eyes who may see things you'll overlook.

Change just for the sake of change is stupid, but making changes that improve your organization makes a lot of sense.  Don't hold on to something just because it used to work or your employees (and you) find it a comfortable way of doing things.  Business is too competitive and customers are now too demanding to hold on to things that no longer make good business sense.

Why change often fails

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It's the kind of problem that keeps small business owners up all night.  You know you need to make certain changes in how your business operates, but you also know the opposition that will come if you try to make those changes.  You're not even sure the changes you are contemplating will produce the results you want, but you are certain that your business will suffer if you do not make the changes.  You try to determine which of your team members will be supportive and which will be resistant.  Some of the ones you fear will be most resistant are critical to the success of the change, so how can you get them on board?

One of my favorite books on change was written by John Kotter, a professor of leadership at Harvard Business School.  The title is Leading Change.  In the book he provides an eight step process for implementing successful change in an organization.  They are

1. Establish a sense of urgency
2. Create a guiding coalition
3. Develop a vision and strategy
4. Communicate the change vision
5. Empower employees for broad-based action
6. Generate short-term wins
7. Consolidate gains and produce more change
8. Anchor the new approaches in the culture of the organization.

Let me briefly touch on just the first one: establish a sense of urgency.  Kotter believes the failure to do this is one of the primary reasons most change efforts fail.  That has certainly been true for me.  Most of the changes I've failed to implement could be attributed to my failure to create a sense of urgency around the change.

People do not want to change until they are convinced the pain of not changing is greater than the pain they will feel when the change is implemented.  As long as they are comfortable with the status quo they will be very resistant to change.  One quick illustration.  Everyone knows that obesity and smoking are not good for one's health, but how many people wait until they have a heart attack to begin to lose weight and stop smoking?  That initial heart attack creates a sense of urgency and suddenly they realize that they need to make major changes in their lifestyles if they want to enjoy a long productive life.  The same is true with any change that is needed.

Do not begin your efforts to introduce change with "what" until you have addressed the "why."  Explain why the change is needed and the likely results if the change doesn't happen.  If you can create the sense of urgency you are much more likely to get buy-in for your change efforts.

If you have not read Kotter's book I highly recommend it before your next effort to introduce change to your organization.

When a company is resistant to change

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I have met very few people who enjoy change.  I know I don't.  I like things that are familiar and comfortable.  In such circumstances I know my role, what's expected of me, and what success looks like.  Changing things means all of these are up in the air.  I no longer know what my role is (or if I'll even still have a role), I don't know what others expect of me, and I no longer know how to measure success.  If this is true of the owner-manager of a small business, think how much more true it is for employees.

Unfortunately, change is no longer an option and hasn't been for a long time.  It doesn't matter if you and I enjoy change, it is going to happen.  The marketplace has changed dramatically over the past few years.  Customers, and employees, expectations have changed.  Everyone now demands more value in every item or service they buy.  With the rapid increase in social media, marketing has changed.  Unless your target audience is baby boomers and older I would be very reluctant to advertise in the local newspaper or on the local radio station today.  Younger generations no longer read the newspaper or listen to the radio.  Small businesses that do not move a substantial portion of their marketing dollars to social media may soon find their customer base shrinking rapidly, and with it their profits.

I recently started watching Bar Rescue on television.  I don't know how much of that is reality and how much is staged for the cameras, but the premise is a valid one.  Bars that have been losing money for extended periods of time call in an expert to turn them around.  Immediately, he identifies a number of issues that will require significant change for the owner, the employees, and how the bar operates.  Everyone is opposed to the changes, but once the expert yells at them long enough they agree to make the changes he recommends.  Of course, at the end of the hour-long program the bar is now making money.  What's interesting is when the producers return to the bar a few months later to see how they are doing.  Some continue with the changes and are making a nice profit, but occasionally the bar owners revert back to their old ways of doing things even though they know those ways will not be successful.  The change is just too much for them.

What is limiting the growth of your business?  What do you know needs to be changed, but the thoughts of making that change scares you to death?  What will be the short-term effect if you don't make those changes?  What are the possible long-term effects?  These are questions you need to honestly answer if you want your small business to remain successful and profitable in the future.

Pyschology tells us that we can't resolve problems simply by thinking about them.  We need someone to talk to about them if we want to be able to find the answers we need.  Do you have someone you trust that you can talk to as you try to answer these questions?  If not, I have coached a number of people and would be glad to come alongside you as a coach to help you identify and begin to make the changes your small business needs to make.  Send me a note telling me you would like to discuss having me coach you through some changes in your company, and we'll discuss how I can help your company begin to move forward.  In the meantime you will find a lot of help in my latest book available only on your NOOK or NOOK apps.