It is imperative to make a robust and convincing case for change when an organisation is not on fire or in a crisis. Why the need for change? What is the end goal? And what happens if we do nothing?
Once the case for change has been written, the message will not always convince the stakeholders. Consequently, this will cause problems during the transformation process itself. This can manifest in several ways: lack of perceived priority, issues about freeing up people’s resources, or resistance towards the direction of the newly chosen path. These are symptoms forcing you back to the case for change, to improve it. But how do you build a case for change that convinces the audience?
What does that case for change contain, and what does it not?
The purpose of a case for change is to create a commitment for the desired situation and to dismantle commitment for the way it was. A strong case for change contains well-considered responses – that is, sufficiently reasoned and emotionally sensitive answers – to two central questions:
This question is typically answered, although often slightly unsatisfactorily. A link is made between the company strategy and the change initiative to explain why a particular initiative should take place. What tends to be missing is a well-rounded stakeholder perspective.
For example, it may include the financial perspective, but not the customers’ perspective.
A construction company has been making unsatisfactory profits for a long time, caused by poor project planning. Initially, the ceo formulated the rationale to work on this project planning as such: “if we don’t reorganise our construction project planning now, we will not make a profit”. This is a narrow statement.
A more rounded argument, in which multiple stakeholder perspectives are considered, would be more powerful. It could sound like this: “Although we have increased our turnover, we have hardly made any profit in these last couple of years [shareholder perspective]. Significant and expensive mis- takes have been made in our planning, which has yet to lead to a lower Net Promoter Score [customer perspective]. These mistakes have led to signif- icant repairs, leading to frustration amongst our staff [employee perspec- tive]. The extra costs of fixing these mistakes have caused our profitability to decrease to zero, leading to a negative rating from our bank. This threat- ens the stability of our company [shareholder perspective, external financer perspective].”
For most organisations, the second question, ”why can’t we continue the way we are?”, goes unanswered. Yet responding to this question is essential for making a stronger case for change. The answer requires data analysis, outlining the implications of changing versus not changing. It also requires uncomfortable messages about the here and now to be uncovered.
Let’s look into the example of the construction company again to illustrate. An answer to the question “why can’t we continue the way we are?” could be: “because, if we don’t fix our capacity planning now, we run the significant risk of losing two big clients, the exit of a number of our co-workers due to pure frustration, and being put under supervision by our bank, who might make uncomfortable choices about increasing profitability for us”. Making these implications explicit is worth the effort.
The following real-life example will illustrate this in more depth. This case deals with a transition many companies currently find themselves in, which is the further digitalisation of their commercial activities.
Petra, a commercial director of an FMCG company, wants to serve customers 24/7 glo bally. To do so, the ecommerce platform needs to be strengthened.
She has communicated this message to her sales and marketing directors several times, but they don’t seem to see or understand the need to accelerate. They don’t walk the talk. There has been no evidence of reallocating budgets, nor have they hired people with the muchneeded digital skillsets.
Petra feels compelled to strengthen the case for change, to help colleagues understand the need to change now. Together with the digital transformation managers, she reintro duces the data from the consumer, competitor, employee and shareholder perspectives.
“We are working on the digital commercial transformation of our company, so our clients can purchase our products 24/7, at a time that is convenient for them. As a company, we spend less than 20 per cent of our marketing budget on ecommerce, where our clients can be found 7080 per cent of their time. We advise and sell to our customers in our physical stores, but we don’t answer the 25,000 queries we receive about our products online. We still spend our money on TV and radio commercials without knowing who sees them.”
“We could use data to target consumers who fit perfectly with our target audience. We have already shown that we can do this in China, Brazil and Vietnam, which has resulted in market leadership in two of those markets, and reduced our conversion costs by 40 per cent. In these markets, talented staff get headhunted because competitors want to copy our success formula.
We can scale up this digital way of working, but it requires every one of us to adhere to the following:
“I am convinced we can still make it happen if we act now. If we wait another six months, we can be sure that the companies that are ‘attacking’ us online now will take over our market share. And we will lose our desirability as individuals, because employers will
hesitate to hire someone with a limited digital skillset. I therefore ask you to accelerate in your market now and use the support of the digital transformation team.”
The company strategy can usually provide an excellent starting point and argumentation to stake the case for change. You might need help, however, if the company strategy, or the plan for your department, fails to rally your colleagues and needs to be clarified. Describe what you do know in the case for change and put the crystallisation of the company or departmental strategy on the change agenda if you can. If not, flag the risk.
Don’t be tempted to skip the interviews and data analysis required to build your case for change at the start of the change journey because of time pressure. If you do, it may well haunt you for the rest of the journey. That doesn’t mean you can’t use a “pressure cooker approach” to finalise the data analysis step in a week or two.
The success or failure of a transformation initiative is directly related to the quality of the case for change. The case for change and the story together form the backbone of the change plan; every change activity you design is related to it and can be linked back to it. A strong case for change is a pre- requisite. However, the way it is presented is equally important.
Challenge 2 discusses the change story and how to communicate it.