How to use Change Management for Better Business Optimization

Improvement and Optimization Requires Change

In the world of systems thinking and business process improvement, you cannot improve your business, systems, or processes without change. If you’re always doing what it is you doing today, you are always going to get the same results.

If you want to optimize what you’re doing to get more effective, efficient, and productive, you must make changes to your process steps into your inputs.

Two Sides to Change

Anytime you make a change in your business, you must think about it from different angles. Changes that you make will have at least some level of employee impact. Even if you’re a solo entrepreneur, changes in your business are still going to impact you, so it’s still useful to go through this exercise and think about the impact a change will have on you.

You want to think about the impacts on you as well as the other employees that are in your business or organization.

The other angle you want to make sure to cover is the impact on your Customers.

Changing things within your business, at times, is going to impact your Customers. Your customers need to be aware of changes that impact them. They might need to do things differently because of the change that you’re making.

Be sure to think through both the employee side and the customer side. Think about what’s changing and how those changes potentially impact both sides.

Understanding the Impacts

Impacts can come in many different forms and you’ll have to think through this for your business.

The size of your business is going to matter. The industry that you’re in is going to matter. The process or system that you’re changing is going to matter.

All these different variables are going to have some influence over how big a change will be and how big of an impact a change is going to have. You have to consider that on a case-by-case basis.

As you think through the different variables you’ll be able to start to identify patterns and realizations of how changes are impactful for you and your business.

When you think through the impacts, it’s generally easy to identify the direct impacts of changes. You can look at what employees that are involved in the process have to do differently. You can look at what your Customers will have to do differently because of the changes.

Those direct impacts are usually pretty easy to identify.

Next Level Impacts

What becomes more difficult, and a lot of people skip this step, is thinking about the second, third, fourth, or fifth level of impacts that might happen because of a change that you make in your business.

Let’s talk through an example to understand what that might look like. Let’s say you’ve reached a point where your business has grown a sizeable amount. You’ve got employees that are buying things regularly to do their jobs.

This could be different equipment like computers, monitors, or office supplies. If you’re manufacturing things, it could be the resources needed to manufacture your products.

Because you’re buying a lot of things in your business, you want to introduce a procurement function that would provide many benefits.

Adding a procurement function means having a person or a team that is responsible for either helping your employees by things or buying on behalf of your employees. You can imagine adding a function like that to your business is going to have some direct impacts on the employees that you already have in your business.

Anyone regularly buying something on their own credit card and submitting an expense or they just come to you and say, “Hey I need a new monitor or a need a new computer for this new employee that we’re starting…” and you swipe a credit card and you make the purchase.

Now you’re at a point where you want to centralize the function of procurement and anybody that normally buys things in your business is going to be directly impacted because you’re changing the way things get acquired for your business.

So that’s the first level. The direct impacts are pretty easy to identify but what gets more difficult to identify is the impact of the impact.

There is a tool that I’ve covered previously called the Five Whys. Here’s a slightly different application of that same mental model. I call it the Five Impacts.

It’s a very similar mental model to the Five Whys. The Five Whys is used to understand root cause by repeatedly asking yourself why something is happening.

Why is ‘a’ happening? Because of ‘b’.

Why is ‘b’ happening? Because of ‘c’.

Why is ‘c’ happening? Because of ‘d’ and so on.

The Five Impacts is asking yourself

What is the impact of ‘a?’ The impact is ‘b’.

What is the impact of ‘b?’ The impact is ‘c’ and so on.

Let’s think back to the procurement example. Adding a procurement person or team means new processes for employees to acquire materials and equipment used to perform work.

What is the impact of these new processes? As an example, you could say that new processes mean that materials and equipment now have a three to five-day lead time.

If a new employee is starting that needs a laptop, in the past it could be acquired the same day. Now there’s a three to five day window that is going to appear because of the procurement processes. While there are many other benefits from having a procurement function, it’s going to slow down the process of buying a new laptop for an employee.

So that would be an impact of the impact.

Now ask yourself again, “What is the impact of a three to five day lead time needed to acquire a new laptop?

Now the HR person needs to be a little bit more aware and they need to plan a little bit better so that they give the procurement person a three to five day lead time for a new employee.

You’ve now identified the impact of the impact of the impact. You continue to go down until you feel like you’ve covered all of the impacts that are happening because of the change that you’re making.

That’s what I mean when I say you need to understand the second, third, fourth, and beyond levels of impacts. You need to figure out the connectivity between the pieces in your business to understand how the change is going to impact not just the people directly, but also people indirectly.

Implementing Better Change Management

So let’s talk through an approach that you can use to better manage change in your business or team.

The first thing you want to do anytime you’re making the changes is to understand what the change is. This is important because you won’t always be involved in all of the decisions of the change. If you’re a solo entrepreneur, you’ll know all of the changes, but that won’t always be the case. On the opposite end of the spectrum, many changes will happen in large organizations where you’ll potentially be missing the context of a change in the beginning. You will need to know that to help communicate that to the people that will be impacted.

The next thing you want to do is make a plan. Start assessing the impacts of the impacts and go through a five impacts assessment to figure out who’s going to be impacted and how they’re going to be impacted. That will then allow you to start to plan how you are going to deal with those different impacts.

The assessment will also help you identify gaps that you might have that are created by the changes. If you don’t fill the gaps, they will cause you problems later on as you continue to try and run your business.

Having these gaps will create lots of headaches for you so better to identify those early on and address those as part of your change management.

It’s important to identify the people that will be impacted as well. Not just the individuals, but think about the roles that they play. It’s not Frank, but anybody in Frank’s role will also be impacted.

As you identify the people (both Employees and Customers) that will be impacted by the changes, you must start to involve them as early as possible in the process of the change. Don’t wait until the end. Don’t only include them in the change management.

The more you can involve people that will be impacted by the change early in the decision-making, the better your solutions are going to be. It will give you input on how to make the change work better and get the outcomes that you want. These people are also going to become advocates for the change as it rolls out. As they start to believe in the change, they’re going to tell other people, “Hey we’re making this change and I think it’s really good because it’s gonna it’s going to help save us money every month.” It will make it easier overall for you to deploy changes when you can get the impacted people advanced warning and get them bought into those changes before you roll them out to everybody.

It’s also important to communicate often with those that will be impacted by the change. Make sure you have a good communications plan and that you’re giving the right information out to people at the right times.

As part of the plan, you want to make sure you have different mediums that you’re using to communicate, especially if it’s a large change.

Now of course if you’re making a tiny change that impacts two people, you don’t need to do that much. You need to understand those two people and what they need to know. You communicate that to them and you’re good.

If you’re implementing a change that’s going to impact hundreds of employees or a change that’s going to impact a lot of your Customer base, what you need to consider is everybody processes information differently.

If all you do is put out a bunch of written communication, your kinetic learners, your visual learners, and your audio learners will struggle with understanding the change and understanding what they need to do differently. So think about different mediums for communicating change.

You might put out some print or written communication, whether it’s emails or text messages or messages in whatever collaboration tools you’re using like Slack or Teams. You might consider doing short videos. Record a short video or series of videos and talk about the change.

There are many ways that you can consider communicating change to your organization and to the people that are impacted. Leverage at least a few different types of communication styles or methods so that the change can be communicated well to a broad audience of different types of learners.

The last thing is to get feedback often and don’t be afraid to make adjustments.

As soon as your changes go live you want to start gathering feedback from the folks that are impacted. How is this change going? What’s working well? What’s not working well? Are there unanticipated problems that you’re having?

Start getting that feedback and then continue to make refinements and adjustments so that you can optimize what it is you’re doing and get those outcomes that you’re looking for.

That covers it for today. As always if you have any questions about anything that I’ve covered or you’re considering some change in your organization and want to talk about it, go ahead and email me at brian@optimizeforoutcomes.com or reach out to me on your preferred social network and let’s have a chat.

Thanks and I will see you online.

Brian