Change-Management for SMEs

Monday, 29. October 2018

A guest article by Prof. Dr. Roman Stöger
 

Innovation-Boost, Digitization, Internationalization, new Business Models. We live in times of continuous change. What are the drivers behind this phenomenon?

We had more time for reacting on upcoming dynamics in former times. Today we have to be much faster especially when it is about execution. Ten years of banking in the 60ies have been quite an easy, constant and ongoing business without any disruption. When reflecting the 10 years after Lehman Brothers crash in 2008 then we have to admit that banking business already changed fundamentally.

Aermel hochkrempeln webProducts, services or organizational units were handled with more isolated focus within change processes. Nowadays the whole business model is affected. If a mid-sized engine building company aims to transform oneself into more engineering services it will impact not only the service itself. It will impact procurement, research & development, manufacturing, HR and the inherent corporate culture.

In former times a smaller and better “manageable” amount of people could initiate change. Today we have to integrate many people with the needed knowledge and decision-competencies in order to develop a proper solution and to get this solution executed as intended. If a company aims to move a bigger step into the digital world then the knowledge and abilities of all functions along the whole value chain have to be involved.

Experienced entrepreneurs know that operative figures coming from finance & controlling are of course relevant but neither reliable nor sufficient to answer this question. Decreasing profitability or liquidity, as examples, are for sure initiators for a change process but in most cases it is already too late for corrective action when those signals get obviously visible in the P&L.

The following key questions might help your company to come to a more robust judgement on the need to change early enough and to be able to prepare yourselves:

  • How does customer value change? What does the customer really pay for?
  • Are there new, relevant competitors coming up from other industries or start-ups?
  • Where – considering the life cycle - is our market positioned and will we get into a more saturated commodity- and price-driven market?
  • Can we foresee competencies and abilities which we need to fully cover in future?
  • Do we perceive to get slower, more complicated and administrative and do we rely too strongly on the success of our past?
  • Do we have a culture of readiness for change, changeability, performance and trust?
  • Are we free-minded enough to seriously question our success from the past?
  • Do we realize significant changes in our markets early enough and are we fast and good in counter-measuring and execution?


By answering those questions is it easier to judge whether the fundamental transformation from an “old world” to a “new world” is needed. This decision is not easy to take as we tend to stick to our known habits and beliefs and as the “old world” still works fine. Responsive and sustainable management must question the patterns of success continuously. It is about to think through “rules of the game” from the potential future business and not to copy or to extrapolate our own successful past. 

Small- and medium-sized enterprises have a huge opportunity which is the size agility of the company: customer focused, mobile, fast, pragmatic. These are characteristics that are needed in phases of high market dynamics and transformation.

Goldfisch webThe equation for successful change-management is “Market Dynamics = Company Dynamics”. This implies that the ability to change of the company is in minimum as high as the rate of change in the markets the company serves. If this is not the case, the company will be behind, passed by and will stay in the known “old world”. Real, big transformations and fundamental changes always have to do with responsibility and trust. Both evolves over time.

Taking responsibility for a company, for a department or generally for people means to think long-termed and beyond the quarter. Your people have fine antennas and can judge very well whether top-management is only driven by money and status or by sustainable, long-term business. This is the key lever for change with impact and results.

 

Literature:
Stöger, R., Strategieentwicklung für die Praxis, Stuttgart 2017.
Stöger, R., Die Toolbox für Manager, Stuttgart 2016.



About the Author

Stöger Foto webProf. Dr. Roman Stöger is professor for Strategic Management at University of Applied Science FH Kufstein, Austria. He is engaged in consulting and development projects over twenty years and member of supervisory boards in international companies. Roman Stöger has published books and articles on strategy, digitalization, innovation, organization, productivity and management. You can reach him via roman.stoeger@fh-kufstein.ac.at.