Change Management in A Cost Driven World
Another interest rate change; fuel prices at an all-time high; utilities set to rise again later in 2022….it seems that everything is costing more!
And from a business perspective, it’s no different – supplies, rents, utilities, logistics plus the estimated impact of Covid-19 on sales has recently worsened from -4% in 2021Q3 to -6% in 2021Q4 and -7% in 2022 Q1.
Respondents to a February 2022 DMP* survey of over 3,000 small, medium, and large businesses “........expect the effects of Covid-19 on sales to continue to ease during 2022. The group expect sales growth to go from the -7% in 2022Q1 to -4% in 2022Q2 and move up to approximately 0% by 2022Q3. Beyond this, they expect the Impact to rise to around 1% over the medium term (2023 and beyond).”
If you are a business owner, reduced or slow to recover levels of sales means that almost everything is being driven by cost efficiencies. And that involves change – not always something welcomed by your people, who are already having to make unwelcome changes in their lives from the rising cost of living.
You have overcome the Covid challenges of the last 2+ years, your business has survived and your staff are still loyal. You may have taken on further debt, seen some of your customers depart, or indeed not have survived themselves. Perhaps you are one of the lucky businesses in the right place when Covid struck and perhaps you were able to pivot in the middle of the pandemic.
As a business leader, you know you need a fresh injection, a new direction, or, put simply, to deliver greater results with less proportional cost…MORE FOR LESS to ride the storm of those slow to return sales levels.
But you also know that it’s a candidate driven market and there IS a war for talent. The Great Resignation is very real for many businesses as their people look for new opportunities where they can perhaps reduce the cost of their commute or secure a higher salary to pay for that ever-increasing cost of living.
How do you achieve business change whether that is upsizing, rightsizing, or diversifying your business effectively and efficiently and ensure the whole team continue to pull in the right direction, remain loyal and don’t choose to leave for pastures new?
To understand how to lead people through change you need to understand the influences affecting your staff. The Influence model by McKinsey is a great tool to repeatedly review how we manage teams and determine what obstacles (at an individual level) are in their personal path.
First, we need to understand where the resistance to change is greatest;
A lack of a role model
Environmental reasons
Skills or confidence,
or
Personal Value
With that clarity you can then better help every individual within your organisation to progress through that often unwelcome change curve.
Change in all its guises can transform a business in many ways, often with additional benefits outside of the desired result. For example, implementing a change to management practices can have a positive impact on the bottom line over time but also on your most precious of assets, your people.