Leverage the top trends in Change Management. In tough times, there’s hardly an organization that won’t actively be engaged in change management. Based on a survey of 1,800 senior executives, Arcus has identified 10 areas for managers to consider when managing change in tough times with tips such as forecasting realistically and setting trigger points.
Address the optimistic bias: Managers tend to have an optimistic bias in tough times which is difficult to overcome. So, the first task is to forecast as realistically as possible, rather than just taking the most optimistic forecast and hoping that it will deliver against expectations.
Find the right trigger points: The second success driver is to think about the point at which you need to take action when things really go wrong. And, that’s the trigger point. Quite often, when you slide down the slope and things get bad, managers generally postpone the point at which they take action. The trigger point could be a conversation with the management team beforehand to say: “Well, it could get bad. If it gets to this level, we really need to do something about it.” And you can get pre-agreement for a contingency action plan.
Optimize strategically: At some point managers need to consider cost cutting and the recommendation is to make improvements and be creative, which is easier said than done. Cost cutting is the immediate action of managers. They always start to look at headcount. The question really, is, what costs should we cut out all together? Sometimes it may be better to stop offering a service or a product completely, because it takes a whole set of costs out, rather than just trying to take a little bit of, of every line item in a ledger. Also, with cost cutting, it is important to assess services. Is the customer still going to pay for that if it is scaled back? So, cost cutting is about taking costs out, but it’s also about focusing resources on improving the performance that people will pay for. That’s what really matters there.
Two other points relate to timing and setting objectives. The question is when would we begin this process and how do we go about setting objectives?
Start early: Managers should start as early as they can. If they see a problem coming, the sooner they start, the better chance they have to react. Setting the objectives and targets are also important. But, it is important to be realistic about those targets. A flexible approach to setting targets is important, especially in context of contingency plans if targets are not met. If people are selling, you load them up with the sales targets. But, in a downturn comes, you may not be able to achieve those targets. So, do you load the supply chain with stock they can’t get rid of, or do you get your sales people to actually get very close to the customers, treat them in a, a very fair and honest way, and then, when the things pick up, you pick up when your competitors don’t.
Demonstrate leadership: Leadership and motivation are going to be key points as well, and, so, what’s the role of the leader in this process? How do you go about motivating employees in difficult times? It’s hard. But, it’s leadership, not management. It’s about being present. It’s about being accessible. It’s about understanding what people are going through and empathizing with that. But, it’s also about being absolutely clear about what you are trying to achieve and what the future holds and holding that vision in front of people. And that’s the way you take people through it.
Address the perception of change: Change is often perceived quite negatively. But it provides its own opportunities as well. We all get caught up in the change and the uncertainty and the angst that it creates.
In summary, forecasting realistically and trigger points are critical. Setting a trigger point is like putting a thermometer into water and saying “When it reaches this temperature, we are going to take a specific action.”
If you are interested in discussing a business idea that could transform your organization, please contact our managing partner, Merril Mascarenhas, by phone at +1 (416) 710-2727 or Email.
“Needless to say, there are many firms that provide research and strategy consulting services, but few can deliver the value demonstrated in performing the scope of analysis, strategies, product evaluations and practical recommendations. Your commitment and ease of doing business with your firm ensured that we had a sound basis to address our most challenging business decisions.”
Mr. Peter Flattery
CEO, Healthcare Insurance Reciprocal of Canada