Change is an inevitable part of SME business, and those that are able to adapt and evolve are more likely to succeed in the long term. Within this blog I'll share with you common drivers for change, reasons why change initiatives often fail, how people may react to change and provide a useful change management framework to help your small business to successfully navigate change.
Drivers for change...
There are several reasons why a SME business may need to go through change, including:
Changes in the market: Businesses may need to change in response to shifts in the market, such as changes in consumer behaviour, new competitors entering the market, or technological advancements that require the business to adapt to new ways of operating.
Internal inefficiencies: Change may be needed to address internal inefficiencies, such as processes that are slow or ineffective, or outdated technology that is no longer fit for purpose.
Changes in leadership: Changes in leadership, such as the appointment of a new CEO who has a different vision for the business.
Financial pressure: A business may need to change in order to address financial pressure, such as declining revenues or increased competition that is putting pressure on profit margins.
Growth opportunities: A business may need to change in order to take advantage of growth opportunities, such as expanding into new markets, launching new products or services, or acquiring other businesses.
Compliance requirements: Change may be needed to meet new regulatory or legal requirements, such as changes to data protection laws, or new health and safety regulations.
Did you know...
An astonishing 75% of business change initiatives either fail outright or don't achieve desired objectives. Here are some of the most common reasons why change initiatives fail so you can learn from others:
Lack of clarity: When a change programme is not well defined, people are often unclear about what they need to do, and how it will impact their work. This can lead to confusion, frustration and resistance.
Resistance to change: Change can be difficult for people, particularly if they perceive it as a threat to their job security or their way of working. When people resist change, it can be difficult to achieve the desired outcomes.
Inadequate communication: Communication is crucial in any change programme. If people do not understand the reasons for the change, or the benefits that it will bring, they are less likely to support it. It is important to communicate clearly, frequently and in a variety of formats to reach different audiences.
Lack of leadership support: When leaders do not support the change programme, it can be difficult to get others on board. Leaders need to provide clear direction, resources and support to ensure that the change programme is successful.
Inadequate planning: Change programmes require careful planning to ensure that they are executed effectively. This includes identifying risks, developing contingency plans, and ensuring that all stakeholders are engaged in the process.
Lack of resources: Change programmes often require significant resources, including time, money and people. When resources are scarce, it can be difficult to achieve the desired outcomes.
Failure to measure progress: Change programmes need to be monitored and evaluated to ensure that they are achieving their intended outcomes. If progress is not measured, it can be difficult to identify problems and make adjustments.
By addressing these common reasons for failure, you as a small business owner can improve your chances of successfully implementing your change programme.
Lets talk people and change...
People's reactions to change can vary widely depending on a number of factors, including the type and magnitude of the change, the individual's personality and coping skills, and the context in which the change is occurring. Generally, people tend to experience a range of emotions when faced with change, including:
Resistance: People may resist change if it feels uncomfortable or unfamiliar, or if they feel that they will lose something they value as a result of the change.
Fear: Change can be scary, especially if it involves uncertainty or the unknown.
Anxiety: People may feel anxious about how the change will impact them or those around them.
Excitement: Some people may be excited by the prospect of change and the opportunities it presents.
Optimism: People may feel optimistic about the potential benefits of the change.
Frustration: People may feel frustrated if the change is imposed on them without their input or if they feel that they have no control over the situation.
Acceptance: Ultimately, people may come to accept the change and adjust to it over time.
It's important to note that people may experience multiple emotions in response to change, and their reactions can shift and change over time as they adjust to the new situation. Additionally, some people may be more adaptable and resilient in the face of change, while others may struggle more. Successful change requires a holistic approach that considers the needs and perspectives of all stakeholders and emphasises communication, collaboration, and flexibility.
The Kubler-Ross change curve, also known as the "Five Stages of Grief," is a psychological model that explains how people react to significant changes in their lives. The five stages are:
Depression (Uncertainty and confusion)
Acceptance (and moving on)
While the Kubler-Ross change curve was originally developed to explain the stages of grief, it has also been applied to organisational change management and can help SME business owners and managers understand how employees may react to change and how to address their concerns.
Here are some examples of how the five stages of the Kubler-Ross change curve may manifest in a business change scenario:
Denial: At first, team members may deny that the change is happening or that it will have any impact on their work.
For example, when a company announces that it will be implementing a new software system, some employees may deny that it will affect their daily tasks or productivity.
Anger: As the reality of the change sets in, employees may become angry and resistant to the change. They may feel like their opinions were not considered or that they were not given enough notice.
For example, if a company announces that it will be restructuring and laying off employees, those who are affected may become angry and lash out at management.
Bargaining: Employees may try to negotiate or bargain with management to try and mitigate the impact of the change.
For example, if a company announces that it will be reducing benefits, employees may try to negotiate to keep some of their existing benefits.
Depression: As the change becomes a reality, employees may become depressed or disengaged. They may feel like they are losing control or that they are no longer valued by the company.
For example, if a company announces that it will be moving to a new location, employees who are not able to move with the company may become depressed and disengaged.
Acceptance: Finally, employees will reach a stage of acceptance where they come to terms with the change and are able to move forward. They may begin to see the benefits of the change and may even become excited about the new opportunities that it presents.
For example, after a company implements a new software system, employees may come to appreciate the increased efficiency and productivity that it provides.
Understanding the Kubler-Ross change curve can help managers anticipate how employees may react to change and develop strategies to address their concerns and facilitate a smoother transition. The Change Curve indicates a positive shift towards change, with acceptance as the end goal. However, without active support from leaders and the organisation, individuals may become stuck at any stage, hindering progress. To guide people through change in a positive and effective way, it's crucial to understand their communication preferences and personality types, and consider the human side of change.
So how can small business leaders and senior leaderships teams help individuals and teams through the change curve?
In the initial stages of the Change Curve (Stages 1 and 2), individuals may blame themselves or others. In this situation, it's essential to listen without offering solutions or agreeing with them. As they move to Stage 3 (Depression), you can begin to give context and direction, "selling" the benefits of the change. In Stage 4 (Acceptance), it's a good time to brainstorm ideas and solutions, and offer support. Stage 5 (Problem Solving) is where individuals take ownership of the change and start adapting. Finally, individuals start to move on embrace the change, rebuild their ways of working, and benefit from the change.
The same techniques can be used when leading change for teams. In Stages 1, 2, and 3, it's important to listen to individuals one-on-one, let them vent, and avoid creating a 'group think' situation. Instead, communicate with everyone via writing, explaining the change's rationale, benefits, and inviting them to reach out to managers or leaders. Provide details of the change. For Stages 4 and 5, arrange change workshops, brainstorm ideas for engagement, and work out the processes and roles involved. Finally, stabilise the change, capture learning, and look for the benefits of the change to feed back into the team or organisation.
A pragmatic change framework to help you succeed...
Kotter's 8 step change process is a well-known framework for managing change. It outlines a series of steps that an SME business can take to successfully implement a change initiative.
Here are the 8 steps of Kotter's change process, along with an example to illustrate each step:
Establish a sense of urgency
Form a powerful coalition
Create a vision for change
Communicate the vision
Empower others to act on the vision
Create short-term wins
Consolidate gains and produce more change
Anchor new approaches in the organisation's culture
Establish a sense of urgency: The first step is to create a sense of urgency among the organisation's stakeholders. This can be done by identifying the reasons why change is necessary, and communicating these reasons effectively.
For example, if a company is facing declining sales, the leadership team could communicate the urgency of the situation by presenting data on revenue trends and market conditions.
Form a powerful coalition: The second step is to form a coalition of key stakeholders who will lead the change effort. This group should have the necessary skills, credibility, and relationships to drive the change initiative forward.
For example, the leadership team could create a task force or steering committee to oversee the change initiative.
Create a vision for change: The third step is to create a clear and compelling vision for the change initiative. This vision should articulate the desired outcome of the change effort, and should be communicated to all stakeholders.
For example, if the company is seeking to improve customer service, the vision could be to become the most customer-friendly company in the industry.
Communicate the vision: The fourth step is to communicate the vision in a way that is compelling and easy to understand. This can be done through various channels, such as meetings, memos, and presentations.
For example, the leadership team could hold a town hall meeting to communicate the vision and answer questions from employees.
Empower others to act on the vision: The fifth step is to empower others to act on the vision by removing barriers and providing the necessary resources. This involves creating a supportive environment in which employees feel empowered to contribute to the change effort.
For example, the company could provide training and development programs to help employees build the skills needed to improve customer service.
Create short-term wins: The sixth step is to create short-term wins that demonstrate progress toward the vision. This helps to build momentum and maintain the commitment of stakeholders.
For example, the company could launch a new customer feedback system and celebrate when the first positive customer reviews come in.
Consolidate gains and produce more change: The seventh step is to consolidate the gains achieved in the previous steps and use them as a platform for further change. This involves continuing to build momentum and implementing additional changes as needed. For example, the company could use the positive feedback from customers to identify areas where further improvements are needed, and launch new initiatives to address those areas.
Anchor new approaches in the organisation's culture: The eighth and final step is to anchor the new approaches in the organisation's culture so that they become a permanent part of the way the organisation operates. This involves integrating the changes into the organisation's systems and processes, and creating a culture of continuous improvement.
For example, the company could establish new performance metrics related to customer service and incorporate them into the company's regular performance reviews.
It's fair to say that being able to effectively scope, plan and manage change is critical to all businesses regardless of size, industry or lifecycle stage due to the ever changing business environment and the need to sustain competitive advantage. I hope after reading this blog you'll feel more equipped to navigate your next change journey, but if not speak to an expert.
About the author.
Hi, I'm Heather Beckett - the founder of BPO. I help small business owners to think, plan and act more strategically. Please join the BPO community and stay up to date with the latest blogs - Click here
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