Wednesday, April 15, 2020

Changing after COVID - the Why, the How and the What

Let's face it, the COVID pandemic and the following economic freeze-up are likely to have a lasting impact.  Experts are constantly telling us that the future will be different - things can't go back to the way they were.  No one is quite sure what the future holds - many have ideas or predictions - but there are few definitives.  There is one thing you can count on - change - and the faster you decide not WHAT to change, but the WHY and HOW to change, the better off you'll be.

We'll get signals over the next few quarters about what to change, but so will everyone else.  Strategies, prior commitments and resistant existing platforms and models will become barriers to change.  But what executives need to be doing now is thinking about how to create the context for change, how to get their teams to embrace change, and how to ensure change is not a once and done phenomenon.

Why change?

I think most people understand that COVID will likely create changes in the way we work and live.  The fact that people understand that change may be necessary does not mean that they are comfortable or accept the need for change, or that they understand the purpose or goals of change.  Executives must be planning communication programs to demonstrate a program of change that takes COVID and the aftermath into consideration, communicates sound and reasonable change objectives and let's people see their role and their responsibilities in the change. 

The communication does not need to be definitive - we are all learning in this discontinuity - but it does need to path a broad outline of the reasons for change, the potential impacts and what it means for the business.  Open, honest and consistent communication about the impact of COVID, the change it will create and how your company is moving proactively to change is vital.  While the need for change may seem evident, that does not mean that everyone accept that change is important, imminent or will impact them.

How change?

How to change is equally important.  We have to recognize that employees and customers are comfortable with the existing status quo, even as they acknowledge that change is likely. There are also different attitudes about change - some are ready to change, and were pushing for it before COVID. Some are nervous about change, and some really don't want to change.  You will need different strategies for each group:  ready, aware but unready, and the unwilling.

Moreover this change needs to be more than window dressing.  Tweaking a few things here and there in the overall scheme of things won't be convincing.  Change is likely to come to many facets of your business - how customers find and interact with you, the channels they use, how you source and create value, your customer experiences and your business models.  And, of course, there's a concurrent digital transformation on as well.  All of these factors are likely to change.  The question is:  how much do they need to change, and what does the future look like?

Of course, you will want to think about making the organization more agile, more nimble and faster to respond, because the COVID pandemic and its aftermath are likely to create more volatile conditions for quite some time.  Choosing one new static way of operating and ignoring the potential for further societal, political or economic shifts is shortsighted.

What to change?

Now that you've done the important stuff first, we can turn our attention to what needs to be changed.  In order of importance, you'll find that it is easier to change processes and people than systems, and very difficult but perhaps necessary to change business models and revenue models, but they all may need to change.

Let's start with information systems.  In my days as an SAP consultant, we liked to say that enterprise software is like cement - easy to work and shape when "wet" - while being implemented, and very rigid and hard once it sets - thereafter. Unless you are implementing a new ERP, CRM or other enterprise application, much of the hard work will be realigning the software to support new operations, processes or business models.  This is a significant investment, and in some cases may be better to simply start over rather than try to re-implement a large enterprise system.  Developing a new strategy or operating model in concept will not be difficult, but given how reliant we are on IT systems and data to support operations, the impact to existing enterprise systems cannot be underestimated.

People can be more difficult to change than processes.  A business process can be mapped out and issues or challenges within the process identified quickly using tools like the Customer Experience Journey.  However, getting your people to adapt to a new process or decision making model or new operating model or business model can be much more challenging.  We've addressed above why it's important for people to understand WHY they need to change, and then WHAT they need to do.  The more expertise people have, the more difficult it will be for them to adopt new ways of working.  You'll need to consider the training people need in order to do new or different jobs, and how they are recognized, rewarded and compensated.  Do these align with new strategies and processes?

Finally, consider the idea of business models.  COVID is showing us, at least in the restaurant industry, which companies can adapt to take out and curb side service, and which cannot.  This is an operational, revenue and business model shift that likely none planned for.  Changing a business model or revenue model while trying to remain solvent or even profitable is very difficult, because near term demands for revenue and profit can overwhelm the logic to prepare for and build to a future operating model.


If this strikes you as a lot of work - it is.  You need good thinking and good strategy in order to define WHY to change and WHAT to change.  You need good communication skills to get buy in from your customers, partners and most importantly your employees.  You need to understand the key value drivers in your business and which are going to be the most difficult to change.

Most importantly, you need to realize that change, at least for the next 18 months to 2 years, will be constant, volatile and a bit unpredictable, so you need to build more acceptance and resiliency into your organization.  Inertia, rigidity, bureaucracy, hierarchy and rules may need to be toned down or eliminated all together.  The goal isn't to survive until a new normal emerges - it is to thrive in any circumstance.

To thrive in an uncertain and volatile future, you'll need to build more agility into your organization, allow decisions to be made closer to the customer or the process, build speed into all facets of the business and gain and use data far more quickly than you have previously.

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posted by Jeffrey Phillips at 7:42 AM


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