There are various reasons why you may decide that your business model is no longer working. Examples are:
- pricing problems due to commoditisation of your product
- lost customers
- slimmer margins as a result of rising costs
- innovation in your market, leading to increased competition.
How to choose a new business model that will help you solve these problems is a topic for another time. This article deals with the biggest challenge you will face once you have made your choice: how to successfully transition your brand to a new model, when the old one isn’t completely exhausted yet.
A successful transition may simply be a matter of a strong internal structure. One way to set this up is to create two separate business units. One group runs the “old” business that you’re relying on for current revenue, while another group leads the start-up business. Typically, the cultures in these two scenarios will attract different personalities and leaders.
Talk to your executive staff about your plans, and show that you support innovation and change. Find the right people to do the right things, plan for their futures along the way, and you’ll be as good as gold.
Another key point is to consider your customer. If you begin to offer a new product but the old one is still on the shelf, be sure to reduce the penalty of buying the old brand by offering an incentive, for example by providing an upgrade or accepting a trade-in.
Handling resistance
How do you handle resistance to change, from employees, executive staff or board members?
When the change is deemed a choice that the company as a whole has made, the employee is more likely to welcome and embrace the change. There are six ways to help staff welcome the change.
1. Ensure that your people see why the desired end state is better than the present
When the change is perceived to be more desirable than the alternative, it is easier to accept. To make the case compelling, use hard numbers, stories, metaphors and visual images to show how the change, albeit difficult, is positive for everyone.
2. Acknowledge mixed emotions
Expect ambivalence, involvement, negativity, enthusiasm, fear, eager anticipation, joy and sorrow, and lead your team through these undercurrents.
3. Find opportunities within the change process for staff to make choices
Choosing such things as work hours and when and how to go about training will help employees feel a sense of control over the situation. Being flexible with details can add complexity, but in the long run it will help ensure acceptance.
4. Be clear about what is expected from each employee and hold them accountable
Cast a broad net and get everyone involved in some way. Anticipating and planning can be an exciting part of the change process. Locate key leaders within your organisation and give them a larger role.
5. Build in rituals and ceremonies to celebrate progress, provide recognition and remember the past
Be creative. Shred old company manuals. Give mementos. Memorialise firsts: first £ earned, first product created, first milestone achieved.
6. Maintain focus on the end goal and on the gratification to come
A vision of the end state keeps employees engaged and productive in spite of long hours, hard work, uncertainty and challenge. When the change may not have a definite end point, create junctures at which major progress can be anticipated, communicated and celebrated.
The executive staff, even if they’re fully embracing the change, will likely stumble from time to time. A big issue here is that change makes failures more likely. The CEO needs to get employees to see that failures will be celebrated as logical steps to success.
Change may not be immediately adopted. In fact, you are likely to encounter negativity and resistance. But with your support and open communication, you should be able to move even the most unmovable employees.
Are you thinking about changing your business model? For more guidance, email me or call me on 020 7099 2621.