The global pandemic, civil unrest, and continuing changes in technology have necessitated business leaders to reconsider how their staff work, how their companies deliver, and how they source their supplies. These factors have fostered a culture of innovation, and the world is already seeing and discussing the future of business, work, and product offerings. Having a Change Governance Process is crucial to approving the right changes and managing their implementation.
Innovation and change
Innovation and change are buzz words which are often used interchangeably; however, they are different. Innovation refers to something new. A company may need a new product to sell or a different way to approve payments to suppliers. Change is the process of implementing the innovation. Sometimes, innovation on its own does not require formal change.
Change can be broad and strategic or it can be isolated in specific to a person or group. Making changes could have large costs to implement or be as simple as updating the formula on a spreadsheet. Changing also may be need to fix a bug in the process as is common in technology, and many of us are familiar with updates to applications on our tablets and phones which were implemented to fix errors.
How to innovate, when to change
Company leadership should foster a culture of innovation. Holding regular meetings with the team to understand within the customer base, within their daily activities, and with suppliers will give management a direction to approve and implement changes. Adaptations will be needed to keep the company relevant and providing the services their customers need.
Determining when to make a change sometimes is not as simple as identifying innovation areas, and sometimes changes are not driven by innovation. Some factors for change include:
Cost vs. benefit - What will it cost to implement this change, and what benefit will it provide? Sometimes making changes have significant costs and the benefits will not provide enough revenue to cover them. In other cases, there may be no revenue, but the reduction in costs to manage risks or handle compliance violations may outweigh the investment needed.
Change in customer behaviour - Customer behaviours change over time. For example: Customers may have shifted to online clothing purchases, and now want an ability to return them without coming into the store. Not having a proper online store or a process to ship and return could put the company into a position where they cannot compete. This could include return policy changes, developing better relationship with logistics companies, or reducing the amount of physical store space.
Regulatory requirements - In recent years, new tax regimes have been implemented in some countries. In some countries, such as Spain, there's a requirement for sellers to submit invoices to the tax department which are reconciled to the buyer's submission in B2B transactions. This requires a process change and a method to consolidate invoices for reporting.
Moving forward with change
Small changes, such as minor bug fixes to spreadsheets or those that only affect a few people, may not need formalised or approved. Management should expect that staff innovate and make small changes as part of their roles. Ensuring that a company has a good innovation culture and an expectation for staff to add value from the grassroots level allow some changes to be made with little to no resource allocation. It is always a good idea to keep some resource for managers to use to make small changes and should be governed under a policy.
For larger changes which may affect multiple departments and teams, which carry large risk if not implemented correctly, or who require system integrations or enhancements, should be reviewed before they are approved for implementation. The review needs to include consultation with affected parties, perceived effects on the business, budget requirements, and timescale for implementation. This is where a Change Governance Process is important. The process needs should have a related policy and include the following roles:
The board - The board can be a group of leaders or a single leader who provides approval to proceed with the project and approval for any additional budget. In larger companies, the board should be comprised of enough people representing different areas who can determine that a change is needed and the change resources should be provided. For example: Having representatives from the business along with human resources, IT, and finance ensure that the change is reviewed from all angles. The board should only provide approval after a business case is submitted.
Secretary - When requests for change are submitted, they must be reviewed by someone to confirm that the requests are complete. Having someone to manage the change process and ensure that business cases are complete and have enough evidence will keep the process efficient.
The project board - The project board provides leadership and decision making within the project itself. The project board does not need to be comprised of member of the change board, but should be comprised of decision makers within the project space.
Project manager - Once the change is approved, it should be given to someone to manage the project. The project manager, relying on the business case, should develop a project plan, identify all stakeholders, and ensure that the change is delivered on time, within budget, and within scope. This person is also responsible for providing updates on change and escalating delays.
When to get help
Larger companies should have innovation and change management teams to manage changes and work with stakeholders; however, smaller companies do not need dedicated resource. A management consultant, such as Chayim Messer Consulting can help your company develop a business case and manage your project's implementation without the need for a full time change management department.
If your company needs to implement changes, contact Chayim Messer Consulting today for a free consultation. We can help you develop a change management process, provide support in managing it, and manage the implementation of your changes.