Change Management in SME
This is the last installment in my series on Change Management:
Chapter 1: Leading Change – Part 1 of a Series
Chapter 2: Leading Change – The Art of Change Management
Chapter 3: Leading Change in a Perfect Storm
Chapter 4: Leading Change – The Need for Speed
Chapter 5: Leading Change – Putting it all Together
Start-ups are a Petri dish for change. Business models are refined as knowledge of customers and markets is gained. Products gain sophistication as time advances and investments are made, thus allowing penetration into new customers and markets. People turn-over as the business changes and new ideas and strategies enter the business. New teams are constantly forming and old teams reforming.
In my business, I frequently work with start-ups and small companies, advising them on issues of strategy, change and growth. While many entrepreneurs are strong technologists or industry domain experts, their experience in leading change is often under-developed and their appreciation of the importance of Change Management is low. Change Management is often viewed a "consultant speak" that carries with it the connotation of additional cost without measurable value. After all, what does Change Management have to do with developing new products or selling to customers? Isn't it just overhead that a start-up can't afford? In reality, a strong Change Management culture creates employee loyalty, confidence and retention, accelerates growth and attracts the right talent to a start-up as it grows.
The term "Founderitis" or Founder's Syndrome has come to represent the time in most start-ups where the business plateau's or begins to fail because of the inability of the Founders to manage the business, combined with their refusal to step aside. Typically Founderitis is associated with symptoms of:
- Autocratic, non-inclusive behaviours
- Unwillingness to listen or be coached
- Unwillingness to accept that new approaches (often that are outside of their experience or comfort zone) may be required
- Distain of management process or planning
- Refusal to delegate authority
- Unconscious incompetence (don't know what they don't know)
Developing a strong Change Management culture early in a start-ups life is strong preventive medicine for the onset of Founderitis. With Change Management comes the discipline of listening, delegating and debating. It also creates greater employee ownership of outcomes and stronger loyalty to the company. It makes a company more nimble and innovative.
In my previous blogs on Change Management, I have talked about key lessons I have learned through my career. While these stories related to times at IBM are equally applicable to small and medium sized business. They include the need:
- To answer the question for employees: "What will the change mean for them personally?"
- To face brutal reality, communicate honestly about the need to change and get buy-in
- To surround change with a bold new visio
- To make big bets and doubling down on priorities
- For speed in executing change
- To develop strategies to communicate and listen while you change
To illustrate, I am currently working with a 150 person company on the integration of past acquisitions. Until now, the acquisitions have been run as autonomous divisions. They now see a large opportunity to re-organize the company into integrated Sales, Marketing, Development, Customer Service and Consulting teams and leverage the critical mass that we have. The Founder is also using the opportunity to broaden his management team and delegate more decision-making to them. For a relatively small organization, these changes are difficult, sometimes gut-wrenching, but required if the company is going to leverage these and other new acquisitions.
In September, we planned the changes. They revolve around a bold new vision to triple the company's size. In October, we finalized detailed plans and announced the changes. We pre-sold the plans to key stakeholders and dealt with any concerns or issues. On announcement of the changes, we broadly communicated not only the "what" but the "why" and the "how". Implementation is currently under way and the entire organization is engaged. By year-end, the old divisional structures will just be faint memories of the past.
Change management isn't rocket science. Maybe that is why it is often overlooked and sometimes dismissed out of hand as unnecessary. Not so! Regardless of the size of your organization, a good Change Management culture is a key to success.