Creating A Culture Of Change Culture

CHANGE FOR THE SAKE OF CHANGE

When a company observes a dip in trade, which continues over time along the same trajectory, ie. downwards – there's very likely something wrong with the offering at the heart of it. In these circumstances, it would be prudent for directors to take a good hard look at the reasons for a company's change in fortune and take some aversive action.

Being involved with and affected by the restructuring, culture changing programs rolled out in long-established companies previously worked at, I've become more adept at recognising how this downward trend and the implementations made are going to impact the employees, their effectiveness, overall production and company moral. The culture of change ideology, creates more often than not, a new culture where the once grounded employees are having to function in an uncomfortable environment. The aversive measures a company takes, can be more of a threat to the health of the organisation than the actual dip in sales. And the reasons why seemingly counter-productive decisions are being made, can stem from a top-down denial of the true causes for the downturn. It's important to initiate change – but change needs to be directed and it has to be effective – otherwise it's merely an upheaval.

At the heart of any business, making the key decisions, are company defining leaders. They are directors – steering through choppy waters to determine the fate of an organisation. They are market navigators and risk aversive specialists who understand what works in business. However, they can be out of touch with the very people who make the organisation tick and slow to accept when the product has become devalued in some way, – through market stagnation, saturation, trends, an increase in competition or other contributing factors.

Major global organisations like McDonalds and Starbucks, have had to change their offering to reflect cultural sensibilities, shifts and alterations, to stay current. They've learned to adapt, cut back where necessary and once again prosper in turbulent times. Howard Schultz, the Starbucks founder, has been praised for his ability to turn around a company's fortunes by first identifying the great attributes it has and equally, for admitting to the causes of it's failures. His passion for creating a brand that people want to be a part of and pay a premium for, relayed in his rags-to-riches story, is something regularly touted as inspiration for other flourishing or floundering organisations to follow. His very direct involvement with the company's trading practices, plus emotional attachment to it's success, have helped him steer Starbucks through problematic periods and this has been key for Starbucks to adapt and thrive.

Ray Croc is not around today to aid McDonalds in their rebranding initiatives, or to help them shed negative press connected to their products making people fat, but that's ok -– he needn't be. With environmental concerns being raised in connection with meat production, publicity for Veganism and elevated awareness about healthy food choices being made today, it's no big surprise why there's been a drop in customer footfall, but CEO Steve Easterbrook and his predecessor Don Thompson, have strived to retain McDonalds' defining characteristics. Retaining the classic range, while also extending their menu to include salads, lower calorie and deli options, plus improving the quality of their ingredients, raise awareness of the factors affecting weight gain/health, implementing environmental programs to help reduce waste, as well as making a savvy move to renovate stores and modernise packaging, all done to keep up with the competition.

What's apparent from these two huge, long-established companies, is that they acknowledge the positive attributes that define them. As founder Steve Jobs also witnessed, when he returned to an imminently bankrupt Apple in 1997, the essence of the brand had been compromised. He took the next ten years to re-define it, climaxing with an iPhone launch in 2007. The business was reminded of what Apple was about and thereafter, Steve Jobs' legacy has influenced his peers to continue improving upon the vision he'd created.

Baby Out With The Bathwater
Companies can be knee-jerk quick to find a solution to a problem of diminishing sales and blindly opt for a complete change in their offering when a refresh would suffice. All too often, they remove what's been working well along with what's not. I experienced this yesterday when I walked in, lamented on and left without buying a drink, or any food from a pub I'd once loved until experiencing the 'revamped' version of The Rose of Southfields. Rather than focus on their defining attributes – guest ales on tap, freshly prepared and high value gourmet fare, served within premium, spacious and tastefully decorated surroundings, the new management have taken an easy route to attract what they believe will attract more punters. So they have gotten rid of their quality offering and replaced the best things about the pub with cheaper, less-premium and mainstream options. They've lost the unique character of this establishment by trying to appeal to a wider audience, creating just another average pub, with no distinguishing features in the process.

Into A Spot Of Bother
Changing the culture of a company, is no easy task. In may ways, it's going to be simpler setting up again than to steer the doomed metaphorical tanker away from the looming rocks, but that's what many organisations are looking to do today. Long-established businesses have proven their ability to adapt by the very fact they are still around. Trying to conform with today's fickle consumers in an ever-shifting market place and without realising the importance for retaining a product's defining attributes (which have already kept them there in the market for so long), is sadly, something being witnessed across the board.

When consumer loyalty wanes in favour of shiny new and on the surface, better value options, there will be a drop-off period. However, fickle consumers still want to pay for quality which they will soon realise is lacking in the new product. Providing the original version is relatively unchanged, they will likely return. By all means, it makes sense to tweak the underlying production costs where possible, but pays to avoid compromising the integrity of the original offering. Consumers, realising their erroneous affair often return, with even greater loyalty, to where the true value lies.

Dancing Dads
Unless you're lucky enough to be a rock star, older guys should avoid donning the skinny jeans. In a similar vein, longer-established businesses, should tread carefully when using modern business approaches to measure their effectiveness within a modern-day environment.

Data analytics has been a key tool for assessing effectiveness and for measuring early successes at start-up companies. Data, when used correctly, is a useful tool. For anyone who's traded the markets, they will already understand how micro measurements are ok for seeking quick returns on an hourly trade, but they give no indication of the asset value or the direction of the market trend. To assess the true value of the commodities/shares, etc., there'll be a lot more comparables to consider and analysis made over longer time frames.

So data used to measure already established organisations, should also consider the longer time frames, which may be more difficult to do, with the limited access to data from a bygone era. So comparing old and new companies like-for-like, is like comparing chalk and cheese. What may work for assessing SME's – for example, those developing smart apps, will be completely different for a 30 year old public relations giant like the Brunswick Group, who are business consultants. Two different sectors, from a different era, dealing with very different products.

Metaphorically speaking, in a move to be seen as cutting-edge, mature demi-gods of industry, who once looked good busting moves on the dance floor before 1984, are now in an embarrassing attempt to impress the new kids on the block, wheezing around in their restrictive garments when they should have stuck with the appropriate loser-fitting denim they've traditionally been more comfortable in and figured out a better way to get noticed.

Business leaders dislike admitting when they are unsure of the right direction to take. Hubris has been at the root of all too many recessions. With falling figures and mounting pressure to modernise, this is where desperation creeps in and changes made for change's sake can diminish once great brands through lack of inspiration.

Let's hope the next few years see an increase in business-savvy leadership that doesn't leave the old leopards, wandering blindly around the wilderness in the dark.