Author: Danielle Lee

Revisiting the basics that small business owners often overlook will bring about the need to change your organization.

Change can be daunting. But, it doesn’t have to be daunting if done as part of a disciplined process. In this post we look at how to manage change in four steps. It is a process that will sharpen your focus and give you a repeatable methodology for continuing to fine tune your business efforts.

 

 

 

 

The four steps are:

Empowering Others to Act on the Vision

• Getting rid of obstacles to change
• Changing systems or structures that seriously undermine the vision.
• Encouraging risk taking and non-traditional ideas, activities and actions.

 

Planning for and Creating Short Term Wins

• Planning for visible performance improvements
• Creating those improvements
• Recognizing and rewarding employees involved in the improvements.

 

Consolidating Improvements and Producing Still More Change

• Changing systems, structures and policies that don’t fit the Vision
• Hiring, promoting and developing employees who can implement the Vision.
• Recharging the process with new projects and themes.

 

Institutionalizing New Approaches

• Articulating the connections between the new behaviors and new successes
• Creating the means to ensure leadership development and succession.

 

These four steps, if properly executed will allow you, as an owner, to change your organization not only in an orderly and non-disruptive way but in a way that willingly involves those most affected by change – the people who work for you. However there are some assumptions we need to visit before tackling these four steps:

• Assumption 1:  You have established a sense of urgency regarding your small business vision and the need to change your organization.
• Assumption 2: In forming your guiding group you have included participants from all levels of your organization . . . not just managers and executives but line staff too . . . to gain credibility throughout the organization.
• Assumption 3: You have created that vision AND the strategies to be used to achieve it.
• Assumption 4: You have widely communicated the Vision and the strategies to be used to ALL stakeholders both internal and external, such as business consultants, and have gained their buy-in.

 

Now, to add some clarity, let’s go back and look at some specific guidance on how to manage change, following the four-step process:

Empowering Others

• Getting rid of obstacles- Unfortunately almost every organization has a “Bill” . . . someone who has been there forever, is resistant to change and often starts his objections with, “But we’ve always done it this way ….” If you have a “Bill” in your organization it may be time to retire him or re-assign him as difficult as it may be.
• Encouraging risk taking and non-traditional ideas etc.- If the only “authority” any given employee has is the ability to say “No” (not yes) you be absolutely certain that employee will use it often and most likely with the folks you don’t want to alienate. . .you customers. Broaden your employees’ authority and encourage them to seek creative ways to solve problems. Then trust them to do it.

 

Planning for Short Term Wins

• Planning for visible performance improvements- identify those areas that need qualitative and quantitative improvements then plan for empowering employees to create the solutions.
• Recognize and reward employees involved in creating and implementing qualitative and quantitative improvements.

 

Consolidating Improvements and Producing Still More Changes

• Use the increased credibility gained with the staff to change systems, structures and policies that don’t fit the Vision and the called for strategies and tactics.
• Hire, promote and develop only those employees that can willingly help to implement the Vision
• Keep the process ongoing by initiating new projects and themes, all of which are continually measured against the Vision.

 

Institutionalizing New Approaches

• Point out the connection between the new behaviors and new successes then reward those responsible.
• Appoint someone to be the plan “sponsor and guardian” whose responsibility it will be to keep the process circular and repeatable as well as monitoring the measurements of success.

 

This last point may be the key to how to manage change successfully. Creating a Vision, sharing it and implementing a single series of changes then putting the plan on the shelf never to be visited again, will guarantee that your company will fall back on previous habits and lose their enthusiasm for fine tuning processes and making your business more competitive and more successful.

Having a vision plan is one of the basics of owning a small business, but it’s sometimes unintentionally neglected. A small business vision plan is important because it articulates the owner’s strategy and goals to all stakeholders.

Many successful small businesses are often led by a charismatic and driven entrepreneur who is not only seeking to be successful but also wants to build a business of lasting value that can be passed on to heirs and successors. Usually this type of leader has a very clear business vision plan and roadmap for getting there. The biggest problem is that the plan and the roadmap are, more often than not, in his or her head and are not clear to others in the organization.

More than one manager employed in a small business has complained, “I know my performance is somehow being measured by ownership against some standard or plan but, for the life of me, I don’t know exactly what that is. ” Asking your employees to perform against some vision they can’t see is like asking someone to put together a jigsaw puzzle but not allowing them to see the picture on the box. If they don’t have a clear vision of what the puzzle should look like, they have no idea of how to link the pieces.

It works the same way in your business. Market planning, sales planning, product planning, goal setting and financial forecasting could all be rendered useless if your staff doesn’t have the big picture –a strategic small business vision — of what your organization wants to look like five, 10 or even 20 years from now. In other words, without a business vision plan, how will you know if your strategy is valid — and even more importantly, how will you know when you’ve gotten “there?”

The process of creating a well-organized, facilitated small business vision plan will help you assess and articulate some concepts you may intuitively know but may not have formalized, such as:

• your organization’s core values;
• your organization’s core purpose; and
• a well-defined map to your goals.

 

A formal small business vision plan can help you achieve much-needed ancillary results, such as:

• creating short term wins for your organization;
• buy-in from employees; and
• buy-in from other stakeholders, both internal and external.

 

But even more importantly, that small business vision, once formally articulated and widely shared, becomes the yardstick against which all other planning is assessed and measured. This applies to financial, market, sales and product plans.

Notice the comment about the business vision plan being widely shared. You will probably want to form a relatively small but empowered group to help put your vision into something that can be clearly seen by others.

Once done, the impulse is to share it only with management or those people to whom you have given certain authorities. But that would not be getting the greatest use from your planning efforts. Once complete, the business vision plan should be widely shared with all employees. Why? Well, the obvious answer is that you want their buy-in and you want them to embrace the plan. But an even bigger reason is that if they know what you know, 90% of the time they will make the same decisions you would make.

In addition to your employees, you will want to share the plan with suppliers and key clients, plus your banker, CPA, attorney and estate planner. Doing so will help every one of your external stakeholders –people who have no financial ownership in your business but have a stake in your success — deliver better and more targeted services to your organization, often at a savings in costs and logistics.

Another outcome from engaging in a small business vision planning process is that it will bring about change in your organization, and change can be a very scary word. In the next post, we’ll look at how to deal with change in your organization in such a way that it is not only manageable but welcomed.

The first step in identifying your company’s driving force is to determine whether you have a product-driven or market-driven business.

In the previous blog post we told you that in the next few weeks we’d be focusing on some of the basics of owning and managing your own small business. In that first post we defined a market and suggested you might want to revisit the definition of your particular market and use that definition to aid you in how you produce your product or service and for whom. This week’s post assumes you have done that whether formally or informally. And if so, then you are now ready to take a look at another of the basics: driving force.

All businesses — both small and large — on the basis of their successful experience operating in the marketplace, develop certain mindsets, usually based on the owners’ and managers’ perceptions of their competitive edge or the uniqueness of their product or service. These mindsets become the driving force behind the strategic and tactical decisions made by owners and managers. In their epic treatise, authors Tregoe, Zimmerman, Smith and Tobias identified eight such driving forces. They are:

• Products offered (think General Motors or tobacco companies)
• Markets served (think Proctor and Gamble)
• Technology (think Apple)
• Production capability (think agriculture)
• Operations capability (think hospitals and airlines)
• Methods of distribution and sales (think Amazon and Wal-Mart)
• Natural resources (think oil companies)
• Profit/return (think General Electric)

 

Realizing your particular driving force is another basic that will help you focus your sales and marketing efforts and get more bang for the dollars spent in promoting your product-driven or market-driven business. It will also help you in making strategic and tactical decisions about how to grow your business. For the purposes of this blog we’ll deal with only the three driving forces most small businesses need to consider. That’s why the first step you may want to take is to decide whether you have a product-driven or market-driven business. The difference is actually quite simple.

A product-driven business has a finite set of products, usually unique or without a lot of competition in the marketplace. Tobacco companies are the classic example. A fairly well-defined and finite set of products — cigarettes, cigars, chew and their variants — is their hallmark. Thus, in order to grow, they must continually look for new markets (groups of people) who will find their products attractive and who have the ability to buy them. Conversely, a market-driven business — perhaps like yours — has a well-defined market and pays attention to their wants and needs and continually adjusts their product lines to meet those needs. These companies constantly seek information from their market about what it is they want and what they are willing to buy. (Go back and look at the example of the small sportswear manufacturer in the previous blog post.)

I can hear some of you now: “But my driving force will always be profit/return!” Be careful there. Obviously every business, both large and small, seeks to be profitable; otherwise they won’t be in business for long. But businesses driven solely by the need to meet a predetermined amount of profit or a targeted rate of return often make huge mistakes in decisions to expand their product lines or offered services or where and how to produce those products and services. In particular, they make the wrong “buy, build or partner” decisions. Companies like GE have the luxury of periodically selling off product lines or divisions that do not meet the company’s profit/return standards. Most small businesses do not have that luxury.

Sticking with the product-driven or market-driven business approach is probably the best bet for most small companies. However, if you think your business may be driven by any of the other forces, contact Murphy Business for additional help.