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Business Insights from Andrea Hill

The types of changes you should – and should not – make during a recession are the same types of change you should consider during a strong economy.

Change Mismanagement

Originally Published: 18 March 2009
Last Updated: 27 October 2020

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Ask the average management consultant about organizational change, and he’ll tell you that more organizations need to do a better job of embracing more change. Ask the average CFO about organizational change, and she’ll likely tell you that organizations need to do a better job of maintaining and improving the things they are already doing.

The change/don’t change conflict has existed as long as fathers have had sons, children have taken over family businesses, and marriages have reached 25th anniversaries. If you had to choose one option over the other, the only option that would carry you into the future would be to choose change. But change is always disruptive, and it can be quite dangerous if not applied with deep knowledge and finesse.

Some elements of a business should be fairly unchanging. The core values of a business should change very little over time, though they may evolve a bit as the business owners and participants deepen their understanding of them. One of the primary reasons for merger and acquisition disasters is the failure to consider differences in core values governing the cultures and brands of the organizations involved. Reconciling conflicting value systems is much more difficult than integrating computer systems (though systems migration is a bear). Business culture and business proposition are related to values, and should be similarly unchanging. 

Other elements of a business should be reviewed annually but changed far less often. Strategy is an example. Any business that adopts a new strategy each year has not embraced strategy at all – they are just pursuing serial tactics. Effective strategic planning looks out 7-10 years and creates ambitious multi-year plans and goals to achieve the strategy. Strategy should be monitored monthly and reviewed annually – but it should not be changed unless compelling market reasons to do so are present.

Brand is another element that should be constantly monitored but which should change rarely, and brand change should be subtle and incremental. Customers do not like the shock of adapting to new brand messages. Brand loyalty is based on trust, and trust is shaken when a friend you thought you knew suddenly changes.

Everything a company does to fulfill the promise of its brand and to achieve its strategy should be considered as viable candidates for change. But change should be considered carefully. For instance, if a company decides to implement a new sales strategy to achieve their long-term revenue and margin goals, they should conduct research to find out how long it typically takes for a business to benefit from such a change. If they expect to see immediate benefits, but case studies show that results typically require 18 months, it would be good to know that in advance. Too many companies abandon viable change efforts because they do not have realistic expectations.

Why am I speaking of change when the only news anyone wants to talk about is the economy? That’s why.

Too many companies are abandoning their values, their brands, and their strategies in an attempt to weather the storm – a storm which by all comparisons is bad but not tragic and is certainly precedented and survivable.

Too many companies are cutting loose important (strategic) talent, eliminating their advertising budgets, changing their marketing strategies, and reducing their operations to customer-unfriendly shells in an effort to survive a bad tornado season that’s been billed as an earth-bound meteor. 

If your business values, strategy, and brand were sound before the recession, they probably still are. Evaluate them, yes – particularly to see if the irrational reaction of your competitors is creating market opportunity for you. In a recessionary economy the tactics you deploy to achieve your strategy and brand may need to be tweaked, adjusted, and redirected. If you keep your eye on your established strategy and brand, you can modify your approach to take current market conditions into account, and find success. 

The types of changes you should – and should not – make during a recession are the same types of change you should consider during a strong economy. Don’t let the economy dictate how you will run your business. To do so would be the last type of change you want to make. A terrible change in leadership.

© 2009. Andrea M. Hill