5 Ways to Develop a Change Strategy That Fails
A current client wants to build a legacy business, and I was recommended to help them by their accountant, who is a colleague in my local BNI chapter.
The company is run by a father and three sons. They fight, they bicker, fall out, and they are running a business in spite of rather than because of an appropriate change strategy.
After some lengthy interviews with each director and extensive desk research on the business finances, operations, and history, I introduced the notion to them last week that their business was grounded, barely standing still, and as far from a legacy company as they might get. That took them aback, apart from the youngest of the family, who had raised the query with my accountant friend initially.
I explored with them why that was, in my estimation, and here’s what I told them.
Don't understand the business environment.
They are not adequately assessing and understanding external needs and opportunities, including trends and changes in the economy and marketplace that affect what customers are looking for. They buy cars to make a tidy profit, rather than selling a volume of vehicles that customers want and then make a tidy profit. Consequently, they have a lot of stock sitting too long on their forecourts.
Lack customer focus capability.
They underestimate the inherent abilities they require to serve customers distinctively. Some family members can sell cars; others do not want to do that. They agree to working practices and then do not adhere to them. Most of all, there is no individual or collective accountability for their actions, and no plan which binds them together.
Be unclear about customer differentiation.
They do not frame the different choices they can make about which customers to serve and how to help them, including having clear intelligence about differing costs and potential pay-backs. Again, a quick buck has driven their business, rather than a planned, strategic approach to growth and sustainability.
Lack the courage or willingness to make ‘limited choices’.
To a certain extent, they believe that what has always worked before will continue to work for them in the future. Unfortunately, pattern analysis shows last year’s sales, month on month, were markedly higher. That has not stopped them from doing more of the same, merely because they are not viewing the data available and adjusting their actions accordingly. They also believe they can be ‘all things to all people’ rather than focusing their strategy on the aspects of their business that work and stopping those things that are most definitely not!
Think of strategy as an academic exercise.
As in many businesses I have encountered in the past sixteen years or more, the family sees a strategy as a static, academic exercise, rather than one that is a dynamic process.
I expressed the view that an effective strategy requires testing and experimenting, using new ideas and different types of customer, and then adjusting their approach as they learn from that experimentation.
Besides providing my face-to-face advice, I also suggested that they all quickly read this blog, and if they find the time, dig more deeply into this, as those articles will reinforce some, and more, of the messages I am trying to share. I will know soon whether my attempts to open up their thinking and necessary actions bear any fruit.