Business success is wonderful, but it may not be permanent. New competitors enter the field, new products can make your company's top seller obsolete and customers develop new priorities. Businesses adapt to change or they shut their doors. That's the importance of change in business.
Change in Business Environment: An Example
The business environment is shaped by the industry, the customers' wishes, technology and the law. All of these can change rapidly, affecting some companies for the better and others for the worse.
- The cell phone makes it possible for businesses to stay in constant touch with their employees, wherever they are.
- Consumers, particularly younger ones, increasingly want to support businesses that are charitable and socially progressive. Companies that swim against the tide may lose customers.
- A recession or a rise in unemployment may make customers more cautious about spending money. Companies selling expensive non-essential goods may see sales drop.
- Tightening or loosening regulations changes the playing field. The federal decision not to support net neutrality, for instance, opened up new profit-making opportunities for broadband providers.
Companies that don't adapt may pay a price. When it's physically possible to telecommute to work, for instance, employees may prefer working for companies that allow them to do so.
Other Reasons for Change
A shifting environment isn't the only reason for change. There are many others:
- The organization isn't meeting its performance goals.
- The leadership has identified new opportunities the company can exploit.
- Mergers and acquisitions have created a new business with different priorities and assets.
- You need to drop an unsuccessful product line.
- New management makes changes to demonstrate they were worth hiring.
- There's a new management trend in the industry and the company wants to hop on board.
Change Leads to Growth
Change isn't just about surviving in a shifting landscape, it's also about growth. Most entrepreneurs, and even many established businesses, have to try something new at some point. It may be a way to fix a running problem, to expand into a new market or to boost sales from adequate to exceptional.
This kind of change can help with the internal environment, not just the external one. Pushing employees outside their comfort zone, asking what they're least satisfied with or raising controversial issues can lead to a newer, happier, more productive workplace.
To make change succeed, you have to plan it out: the goal is transformation, not anarchy and confusion. Think about your vision or your company's mission statement to help understand what sort of changes you want. Rather than issue decrees, go to employees and explain the reasons for the change in a business environment.
Questioning the Status Quo
If things are going well, you may not feel a need to change things up. One way to avoid becoming complacent is to ask yourself "Why?" on a regular basis.
- Why do you have so many layers of management?
- Why don't you delegate more responsibilities?
- Why did you develop your product the way you did?
- Why do you let customers take so long to pay?
Constant questions may alert you to ways you can improve your company's efficiency. That's another reason for the importance of change in business.
Bringing Employees On Board
There's an old saying that nobody likes change except a wet baby. To shake things up effectively at your company, you must convince your employees to support your innovations.
- Tell your employees what you're going to change and why. If the need for change isn't obvious, explain the importance of accepting change positively in the workplace.
- Listen to your staff's responses and acknowledge their concerns.
- Show support and empathy for employees who are worried about what's coming down the pike.
- Identify who's responsible and accountable for making change happen.
- Provide any necessary training, for example, to bring employees up to speed on new technology.
- Reward team members who embrace change.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com