Revolutionize your business

Citation

Earley, M.E. (2013), "Revolutionize your business", American Journal of Business, Vol. 28 No. 1. https://doi.org/10.1108/ajb.2013.54028aaa.002

Revolutionize your business

Article Type: Executive viewpoint From: American Journal of Business, Volume 28, Issue 1

In today’s unpredictable business environment, a company’s prosperity is often dependant upon its agility. The ability to grow and reinvent is crucial to staying competitive and profitable. While many businesses have struggled through the recession, economic downturns can be a perfect time to reassess and reposition a company for success.

The old adage of “business as usual” has been replaced by the concept of successful, revolutionary change. The most innovative and successful companies are proactively transforming and improving instead of reactionarily changing due to a decrease in sales or an economic crisis. These companies are evolving the business for long term, sustainable success, not patch working in response to short-term challenges. Remaining competitive in an industry is a continuous process. Companies must continuously revise their strategy in response to their competitors’ actions as well as realign with the expectations of their customers.

Before an organization can embark on a transformation journey, employees at all levels must recognize the urgent need for change. Establishing this sense of urgency ignites action and creates momentum and intensity, mobilizing the company’s passionate “change agents.” An organization should look for a burning bridge and then clearly communicate to employees the reason why change is critical.

However, transformation cannot be successful without a process. Processes provide a systematic and defined series of steps that will aid in achieving the goal. Having a well-defined process for transformation blueprints the challenge ahead and helps efficiently use the team’s time.

In the book Control Your Destiny or Someone Else Will, Tichy and Sherman (1993) created The Handbook for Revolutionaries, which details a process of corporate transformation as a three-act drama. In summary:

1. 1.

   Act 1. The organization awakens to the need for change.

2. 2.

   Act 2. The organization creates a blueprint for the future and develops a vision.

3. 3.

   Act 3. Rearchitecture of the organization.

At Sherry Laboratories, we utilized a similar process. We found that transformation begins with a clear definition of objectives. These can be numerous depending on a company’s diversity but they all lead to a clear goal; establish strategic and tactical plans and develop the leadership and skills necessary to facilitate change. At the end of each phase the teams present to an executive leadership board. Their involvement and support at each phase of transformation is key to driving the change that the teams are perpetuating.

Teams are typically created to support specific business areas, e.g. strategic, operations, markets (products and customers) and sales. Importantly, each team’s role must be clearly defined. For example, the role of the “markets” team may include “define the customer experience and appropriate product offerings” and “analyze the competitive marketplace to determine why customers buy, how they buy, and where the company is positioned.” Operations might look at the necessity to improve productivity or to decrease their cost of labor as a percentage of sales.

Staffing of the teams is crucial. People should be selected not only for their expertise but also for the growth and learning experience the transformation process will provide. Why staff the “sales team” with only members of your company’s sales organization? Reach down in the organization to include shining stars from other departments. This is a great opportunity for them to learn more about a specific area and they often bring a fresh perspective. They are likely to ask questions that others look at as matter-of-fact. However, as the team digs deeper and deeper, they often find the answers are not necessarily as easy as initially believed.

We find importance in choosing front-line employees who are actually doing the work and are closest to the customer. Wisely choose team members who are influential on others in the company, since their buy-in and ability to “be the change agent” is critical. Also important is explaining the significant time commitment required; participants will need to perform these responsibilities in addition to their usual duties. This is hard work but also very rewarding.

A key step is setting a specific time frame for the process. This allows people to run hard for a period of time but still see an end in sight. Part of what I teach is speed and fast cycle time. It creates energy around the business that is both contagious and mobilizing.

The concept of “Action Learning” may also be employed. Action Learning combines real work (solving key problems) and individual/team leadership development. Action Learning focuses on individuals and teams acquiring new skills and immediately putting them to use. It also creates a common language to be used within the organization. In the case of Sherry Laboratories, we found that associated work flow processes – from start to finish – were not as well documented, leaving opportunity for improvement in quality control and efficiencies. The concept of a common language can be crucial if the company pursues an acquisition strategy. This can drive a much faster assimilation effort. Action Learning, by its nature, improves cycle time. In a smaller organization, cycle time (or lack of it) can be an untouched problem that is never addressed.

An added benefit to the concept of Action Learning focuses on identifying and immediately acting on “low hanging fruit.” These opportunities can drive positive results immediately. There is no need to wait until the completion of the transformation for implementation. Additionally, immediate attention to the “low hanging fruit” helps foster acceptance and understanding within the organization for those employees not participating on a transformation team as well as creates momentum for the changes ahead.

For a company’s future success, it is critical that the entire organization understand the business model and how its role and relationship symbiotically contributes to adding value to the company. To reach this level of accountability, we must first understand the company’s value drivers, for example, availability of a route service to collect samples.

During the first phase of transformation the teams perform a SWOT analysis and a thorough examination of the existing organizational processes. From these processes, teams develop a set of baseline metrics to measure the success of the transformation effort and align the business structure with the realities of the market. During this phase, the teams also identify the root causes of challenges plaguing the company. Teams must be cognizant that they should be identifying and focusing on root causes, not symptoms. For example, at Sherry Laboratories, we found that our clients loved us. Unfortunately, a big portion of the state did not know who we were. The need to improve our brand awareness became an opportunity and a top goal.

The second phase of transformation aims to identify the gaps between the company’s current state and its desired state. The focus of the teams should be on developing high-level plans to reach company objectives by focusing on key value drivers and addressing the root cause challenges. Teams deliver detailed and coordinated implementation plans, complete with concrete expected outcomes or justifications. This phase is also the time to get a head start on early implementation and to start picking your “low hanging fruit”.

At Sherry Laboratories we were able to harvest right away. Just prior to beginning transformation, we increased our testing capabilities. This opened a brand new market for us. As stated above, we knew we needed to do a better job of marketing. For phase two, the marketing team came up with a plan to reach this new target audience. The companies were identified and the team developed an integrated approach to target marketing. This improved approach focused on identifying targets, e-mail and direct marketing, sponsorship of events, participating in trade shows, and of course, follow-up by our sales team. This effort resulted in an increase of new clients for Sherry Laboratories.

In phase three, each team uses the high-level plans outlined in phase two and translates each into detailed, actionable items. Deliverables are presented to all teams and key decision makers within the company for discussion, critique and implementation. In regard to increasing our brand awareness, our marketing team came up with many suggestions that have since been implemented. In addition to the direct mail, we also became much more involved in strategic trade organizations and associations, improved our visibility at trade shows by being guest speakers and participating in more events, hosting seminars for key client bases, and making drastic improvements to our web site. Our operations restructured our route service to pick up samples and implemented productivity improvements based on redesigned work-flow processes.

Of course, these are general guidelines and will vary among organizations that commit themselves to transformation initiatives and progress. Obstacles are inevitable and some will probably be the result of what O’Toole (1995) has so aptly characterized as “the ideology of comfort and the tyranny of custom.” Additionally, companies that undergo transformation initiatives must be prepared to act agile and flexible in response to ever-changing conditions. Inevitably, it is only a matter of time before change is necessary again. The question is then: how do I perpetuate change? By involving those throughout the organization in transformation, you create a culture of change agents and revolutionaries, thus better preparing to perpetuate and embrace change. Before you know it, you will be on to the next transformation.

Michael E. EarleyPresident of Sherry Laboratories Petrochemical, Environmental and Food Divisions. Michael received his BS from Ball State University Honors College with majors in Accounting and Management and a MBA from Butler University. He currently serves as President of Ball State’s Miller College of Business Alumni Board.