Downsizing? Restructuring? Undergoing Radical Change? Avoid Fatal Mistakes!

Some real, potentially disastrous, dangers may lurk in the assumptions underlying a rush to radically change the way you produce, distribute or market your products, or the manner in which you serve your customers.

Before making drastic changes, ask yourself some vitally important questions. The most fundamental question is this: If you make a change, will your customers notice?

From that pivotal question stem others. If your customers notice the change, what might they think? Will their perceptions of your firm change significantly? Could thatput you at a competitive disadvantage?

WHAT SHOULD YOU CHANGE?

Because major changes can be terribly disruptive to people both inside and outside the organization, you need to think carefully and work diligently to identify the workthat you would change.
Begin by questioning the most basic assumptions underlying your business.

• Are you serving the right customers? (Do you have a clear analysis of your customer segments? Are these the customers you'd ideally want? What customer types are over- or under-represented?)
  
• Are you selling the right mix of products?
  
• Across your entire product line and your entire customer base are you getting a return that justifies the related expense and effort? Are you carrying losers? Why?
  
• Are you providing more or less than your customers expect in the way of product features or services?
  Examples: Do you really need to have customer service representatives available after 9 p.m. or on Sundays? If you dropped the gold-plated tail-fins, how many people would stop buying? Is that an acceptable trade-off?
  
• Can you maintain or improve customer satisfaction and your volume of new and repeat sales while becoming more efficient?
  
• Are your employees doing make-work "because we've always done it that way"?
  
• Are you taking full advantage of technology? Conversely, do you really need to upgrade your computers or other equipment? If you do upgrade, will you get a proportional boost in productivity or lower cost of operating?

ARE YOU READY FOR CHANGE?

Your company's success in undertaking important change initiatives relates to more than just how well you've defined the changes you need to make, or even how well you've planned the transition from the old to the new.
Consider some less obvious, but equally potent factors such as the collective mood of the organization, the "buy-in" from people at all levels, the capacity of your workforce to implement the change you envision. Ask yourself some tough questions such as:

• How ready is the organization for change?
  
• Do your people embody the willingness to try new ways?
  
• Do they possess the commitment to support thechanges, especially when things don't go according to plan (always!)? Even if they do, do you have the right mix of skills on the payroll to successfully undertake the new agenda? If you don't, will you retrofit current employees or replace them? How will you do that and how fast and at what cost?
  
• How adept at change management are the ranks of your middle managers? How will you prepare them and support them through the painful transition? (Middle managers are key to the change initiative; they'll either be part of the problem or the solution. Which of the two is up to senior management.)

In honestly assessing your answers to these difficult questions, you might find that your have much work to do preparing your organization for the coming dramatic changes.

HOW CAN YOU BEGIN?

To avoid making changes that could damage your reputation with your customers and negatively impact on sales, focus your change efforts on activities that will improve your service to customers or your competitive position. Such change initiatives might include offering faster delivery times, making it easier for your customers to buy, or lowering your prices.

Making such improvements starts by examining the work you're currently doing. Before you reengineer your work, reassess it. Rank the value of all the organization's activities by determining:

• What work must you do?
  
• What work is desirable to do?
  
• What work are you doing that you could stop with negligible impact on the business?

THE ULTIMATE QUESTIONS

Before undertaking Radical Change activities, that inevitably will upset the organization (and perhaps your customers), make sure you have a clear answer to both of these decisive questions:

• What is the cost of changing?
  
• What is the cost of not changing?
  

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Don Blohowiak, a management consultant and popular conference speaker, is the author of several business books. The executive director of the Lead Well® Institute in Princeton, NJ, he may be reached at http://www.LeadWell.com/.

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