Rocking the Boat of "Business as Usual"

As a result of the amount of feedback on our previous articles on the psychology of change and having met with a number of business over the past few weeks, I want to veer off course slightly to address what I consider to be a very real and pressing trend that is rife in the marketplace.

In this article, I want to rock the boat of the way we do business by playing devil's advocate to challenge your thinking on "business as usual" and what is happening in the marketplace at this very moment.

A Sign of the Times

Most (if not all) business owners and executives in Australia would agree that 2013 was a challenging year economically. We were hit by the plateau in the mining industry which had a domino effect across most industries. Some of us are still shell-shocked by how it has impacted our own businesses as well as the number of insolvencies and take-overs of some large and well-respected firms, some of which had been around for decades.


Despite the doom and the gloom, the New Year brought with it a slight lift in optimism as we start to see some indication of the world economy recovering. For many, 2014 is viewed as the year of recovery. However, challenged with reviving the business, many organisations fall into the trap of "business as we were used to." This poses a very real threat to their continued profitability and sustained growth.

The Challenge

Speaking to a number of CEOs and senior managers during the past few weeks, most indicated having lost some sizeable contracts as a result of some of their clients closing their doors or simply battening down. In addition, business has become cut-throat with significant price cuts by the competition driving prices down across the market. A number mentioned that they had one or two contracts enabling them to barely keep the business afloat. Questioning them on what they were doing to generate more business, the typical answer was banging on more doors and making more phone calls than before.


To a great extent, business as we have known it during the mining boom, has changed and in turn, has caused a huge awakening call among many companies and SMEs in the marketplace. Gone are the years where we relied on the repeat business of a small number of clients and making a good living out of it. We need to become more proactive and smarter at how we do business!


The issue with the Australian market is that for many business-to-business (B2B) companies, there is little change of the pool of prospective clients available, which in some instances, has even shrunk. The competition for these clients' business is becoming fiercer by the day as more competitors are fighting over the same bone having less meat on it. In this, what I can only describe as a frantic environment, an alarming number of business owners and senior managers admitted to having to slash their own prices as a result of being undercut by their competition. This gives way to a worrying downward spiral where more pressure is on senior management to drum up more work and keep their employees productive, and in doing so, keep the 'nagging wolves away from the door.'


In this whole equation there is a bit of a problem: by nature most of us are creatures of habit; we keep with the familiar. Thus we do what we've always done - we knock harder on the doors of our existing and prospective clients within those industries we've always focused on. We make more phone calls. We try to compete by reviewing and reviewing again our prices. And we waste more time and capital on marketing and business development practices that have worked in the past. Yet, they are becoming increasingly ineffective. As pressures mount, we typically exert even more effort , and in doing so, we continue doing more of the same over and over again, and if it fails to produce the desired result, we try even harder and hope for a different result. Does this ring a bell as to Albert Einstein's definition of insanity?

What is happening in the marketplace?
We know that the mining industry, despite having plateaued, will continue to be central to this country's economy. However, we also have to acknowledge that potential business in this arena will be slower than previous years. In fact, a recent study by Deloitte on the expected global growth of industry sectors up to 2033 indicated a negative growth for the mining and construction industries of 3.24% and 3.25% below the Global Gross Domestic Product (GGDP) respectively. This puts the mining and construction industries among the bottom 25% of industry sectors in terms of estimated growth figures.
In contrast, the gas, tourism, agribusiness, health and international education sectors are among the top quarter  where growth is expected to be +10% above the GGDP.


This calls for some innovative thinking; we cannot continue focusing on the same industries and doing the same things we have done for the past decade.


We have to become innovative and be continually smarter (not cheaper) than our competition. However, the reality is that instead of becoming proactive, an alarming number of organisations view this as important, but secondary to their current business development and marketing efforts. Of equal concern is the amount of businesses where the "talk" is not "walked" in terms of communication to, and the engaging of employees in the process. Playing our "cards of the business" close to our chest, we fail to realise the immense opportunity that exists in leveraging off our employees in relation to the business strategy and the development of new business.


Folks, instead of battening down like most and doing "business as we are used to," now is the time to step out and start asking some bold questions about the approaching economic wave, the emerging industries that will take precedence in the years to come, and how your business and its people are aligned to take a hold of it.

Laying the foundation

Laying the foundation to serve as a launching pad for propelling the business into the future, senior management teams have to be able to answer specific questions and devise appropriate strategies for addressing them effectively. Do you know (not intuitively) what the actual strengths, weaknesses, opportunities and threats are in relation to your business and its people? Do you have clear-cut answers to the following questions?

• What is the degree of alignment of the business strategy with what is happening in the marketplace?
• What is the level of our people's actual involvement in, and taking ownership of the business and its marketing strategies?
• How well is the current business structure, systems and procedures aligned with our business objectives?
• What is the degree of balance between our inbound and our outbound marketing strategies?
• Are the current business values and the business culture conducive to realise our business objectives?
• How well have we captured the people's hearts and their minds?
• What is the internal and external customer experience?
• How ready and adaptable is the business and its people toward change initiatives?
• What are our people's occupational behaviour styles in terms of their preferred team roles (imperative for project management), their preferred leadership and subordinate styles (important to match leaders and their subordinates to achieve ultimate performance and productivity), and their preferred influencing styles (negation skills, winning new business, etc.)?

Many a change strategy and project having the best of intentions had failed as a result of senior management teams failing to recognise the importance of these key elements when embarking on new change initiatives and tracking their progress.

In Conclusion

The world of business has changed. For many willing to take the plunge and rethink their strategies of "business as usual" thereby laying a proper foundation to embark on a new and exciting journey of doing business, a bright future lies ahead.


Now is the ideal time for starting this journey and focus on those elements within the business where the highest return on your investment will be achieved. Start thinking outside of the box of "business as usual" and get answers to the questions above ... and use them wisely to propel your business into the future. There is so much more potential for growth in you business than you may currently realise!


Until next time!


Hein


Roth Associates

heinr@rothassociates.com.au

Making Communication Work in a Changing Economy

Our economy is experiencing a dramatic shift, which essentially calls for a fresh and proactive look at the way we do business to ensure continued economic growth.

In essence, four conditions essential to bring about change are found at the heart of each and every successful change management strategy: people will adopt a new idea when they understand it, like it, can act on it, and want to act on it. Behind this simple, yet profound statement is a mass of psychological and behavioural research that explains the 'why' of change strategy.

The focus of this series of articles is not to provide yet another change model - there are enough of those around. Instead, I want to get down to the basics of successful change. If we want to be able to "roll with the punches", it means we have to become 'gourmet chefs' who have a solid understanding of the 'why' of change strategy instead of following a step-by-step recipe of the 'how' and not really knowing the reasoning underlying each step.

Continuing our previous article, our focus in this discussion is on laying a foundation for ensuring an effective change communication strategy to achieve buy-in from employees and the impact senior management desires.

The communication challenge

How often have you found yourself saying: "That's not what I meant" or "I didn't know that was what you meant"?

Most senior management teams and project leaders have a pretty good appreciation of the need for effective communication when it comes to change. In fact, many view change management to be equal to effective communication - and they're right. However, we continue to be plagued by why our communication despite our best intentions, often fail to produce the desired outcomes. This is often because we fail to fully understand the uniqueness of people's differing worldviews and that which is important to them - we think we know, yet do we really? Biologists claim that 80% of the information we encounter in the external environment comes from information already stored in our brain which directs our thinking. Thus whatever we encounter in our external environment is assessed from a point of what we already know about the subject and what we deem as important.

We are our own worst enemy when it comes to change. We make the mistake of believing that our employees understand the issues, feel the need to change, and see the new direction as clearly as we do, and we end up by communicating the wrong messages using the wrong people.

What is it that our employees would like to know? Who do they want to hear from? How do we make our communications work?

The meaning of communication is the response you get

Irrespective of how good we think we communicate, the proof of its success is in its outcome. I.e. we are accountable for the understanding that others gain from our communication, not they. This becomes glaringly evident the moment an organisation is faced with the implementation of a change initiative.

Facing change, senior management and their employees are often not on par at the onset. We talk past one another. Often what we say and what an employee hears are typically two very different messages. We may communicate to our employees the implementation of a restructuring project for the business to remain competitive and the risk if we don't. We may also touch on all the key messages we think are important and even be very excited about it. However, much of the message we are trying to convey is not heard. Instead, the message the employee hears and discusses at home with their family is very different and goes like this: "My job is at risk" or "The company is having financial trouble." You may have spent 95% of the time talking about the business and 5% on the impact it may have on the people; yet, the employee is more likely to spend 95% of the time talking about the impact it will have on them personally, and 5% on the issues facing the company.

Instead of hearing the actual message, it is overshadowed by fear of the impending change and its impact in terms of job security. What people hear and their interpretation thereof is tainted by their worldviews, level of self-esteem, past experience, career plans, family situations and interpersonal relationships, performance on the job, what they hear among the corridors (or even worse - the media), their level of trust toward the person who communicates the message and senior management - to name but a few. Multiply these factors by the number of employees who are the receivers of our message, and we start to appreciate the communication challenge we are up against - it's not simple or straight-forward.

Who are the communicators of the change message

Senior management often walks into the trap of believing that the primary message employees want to hear is focused on the impending change (what is happening and when it will happen) and that employees want to hear it from them, the change project team, the communications team, or HR. Hence, decisions are broadcasted across the organisation and we await the desired outcome, which frequently fails to materialise.

Contrary to expectation, extensive research involving 800+ international organisations shows that employees do not prefer the change project team, the communications team or HR to communicate change messages - at least not initially. The primary preferred communicator of the change message is senior management who is perceived as the active and visible change sponsors and expected to provide messages in relation to:

  * Why do we need to change?

  * What is the risk of not changing?

  * How does this change align with organisational vision and the business direction?

Second to senior management, employees prefer the active involvement of frontline and middle managers (especially their immediate manager/supervisor) in communicating change at the coalface. This is important as confidence, credibility, trust and respect, which are the vital elements to successful performance, are already established. The message employees want to hear from this person includes:

  * What is the impact this will have on me and our group?

  * How will it impact my daily tasks and responsibilities?

  * What is in it for me (WIFM)?

  * What is in it for us (our team or workgroup)?

Thus, although the assumption is that employees want to hear about the 'what and when,' this is clearly not the case. Research continues to show that employees only express interest in what is happening and when it will happen once they have built an awareness of why the change is happening and have made a personal choice to engage in it. Any communication from the project or communications team or HR about new processes or systems or the change schedule will fall on deaf ears until employees have heard from their preferred communicators regarding the topics they care most about.

The reality of misinterpretations

The concept of communicator-receiver demonstrates another important lesson in communicating change. Even when we do involve the right people to communicate the message, there often is a mismatch between what the communicator says and what the employees hear, especially the first time around. Many senior managers appreciate the need for effective communication when it comes to change initiatives and their implementation. Hence many implement a prescribed communications plan for sharing information. Unfortunately, this is often performed in a mechanistic "tick-the-box" fashion as activities are completed, after which they return to their already busy day.

Reality is that most organisations fail to assess what employees have actually heard or to gain some understanding of how information was processed. To simply assume that the employees have heard and understood exactly what we have meant is a grave mistake. It is more likely that they only took in a fraction of the message and interpreted it against the background of what is important to them. The danger is that apart from hearing more than what was said, they will fabricate answers to questions they do not understand - answers that are often worse than reality. The situation is further compounded by information spread through the corridors, with employees starting to compare "official communications" against what they have heard from their colleagues and friends. Never underestimate the power of the grapevine!

What are the implications?

Initiating successful and sustainable change, communication is central to capturing people's hearts and their minds. However, we have to be aware of human nature's tolerance of the conclusions of others, but its tendency to act upon its own conclusions. Equally important, we have to be cognisant of human nature's tendency to interpret its external environment in the light of its internal framework of reference - this includes the hearing and interpretation of messages we receive. Receiving a message, our typical thoughts are: "Can I trust you?" "Can I believe you?" and "What is in it for me?"

By his very nature, man is a communicative being. It is unfortunate that with social media and technology at our side 24/7, we have lost the true art of communication to a great extent. Many a senior management team has made the mistake of thinking electronic devices and emails are sufficient in communicating a change message. However, research clearly points to face-to-face communications still being the most powerful and most effective method to communicate with employees. In this regard, it is imperative to realise that 55% of the message we deliver is carried in our body language and physiology, while 38% is carried in our voice tone. As little as 7% of our communication is determined by the actual content of the message! I.e. people "see" the message before they hear it - credibility and respect are conveyed not simply through the words we speak, but our intent, which is sensed, not simply heard. In simple terms: we are the message.

Implementing and reinforcing change, we have to be crystal clear in the message we communicate and must understand the counter story as deeply as our own to anticipate objections and deal with them proactively - play devil's advocate by inviting colleagues to provide their interpretations of the message. Equally important, we have to listen to employees to understand how our message is received. Test and test again for understanding; consistently communicate over and over again; and be willing to correct misinformation that naturally spreads during change. A lesson I've learnt over the years in dealing with change initiatives is that you can never over-communicate. In fact, we have to plan on key messages being repeated five to seven times before they are truly heard and understand by employees.

In conclusion

In the modern business context, change is a natural and continuous process enabling organisations to stay relevant and at the leading edge. The reality is that it is typically messy and peppered with mistakes, problems and unmet expectations. Coming to change initiatives and their implementation, we are often the very reason for them not completely delivering on our expectations. This is mostly because we view our communication and what it is we want to achieve from our own perspective, while neglecting to take regard of human nature in receiving and internalising our message. In addition, we tend to use the wrong people and channels to communicate the wrong messages.

Effective change is only possible once people understand and like the message, and they can and want to act on it. It has to be a face-to-face process. They need the opportunity to hear it from their preferred communicators, to process the information over time, and ultimately, to make the choice to get into motion. Once this occurs, employees are prepared to hear more from the change or communications team or HR about the "what" and "when." Then, and only then, they will be ready for the details and training to take place, and ready to take ownership of a change initiative and make a positive and lasting contribution to its successful implementation.

Until next time!

 Hein Roth

  Director

  Roth Associates

  heinr@rothassociates.com.au