This page contains a Flash digital edition of a book.
T


he main motivation for implementing change within a business is often


cost-cutting. However, many businesses end up damaging their profitability in the process. For example, they may fail to understand the real costs of the change implementation, or they don’t fully assess the costs versus the benefits of the proposed change. Others attack the costs so aggressively that they lose sight of the revenue. As an L&D and/or HR profession-


al, you have a role to play in helping the organisation manage change effectively and successfully. To help you do this, I have nine tips I believe every L&D/ HR professional should be aware of when it comes to protecting profit- ability through a period of change:


Key Performance Indicators


All change projects, whatever their initial motivation, should focus on growing revenues and profits. Te clearest way to achieve this is by setting fair and reasonable Key Performance Indicators (KPIs) which are in the best interests of the company as a whole, rather than individual parts of the organisation. Rather than making your main


KPI cost reduction, focus instead on revenue and profit increase. Tis subtle shift in mentality helps to promote a change in culture. You will find that instead of the conversation being built around management, a certain internal team, or someone’s bonus structure as a way of reducing costs, instead it will be centred around positive dialogue exploring ways to expand and increase revenue.


Remuneration and incentives


In organising change, great care and attention is required to ensure that every individual is pulling in the same direction. Tis is no truer than in the case of remuneration and incentives. Remuneration and incentive policies need be coherent with the new vision of the business and the only way of ensuring this is to include the HR team, management, employees and shareholders in the conversation.


Joined up thinking


Sadly, we often find that the resources allocated to implementing


www.trainingjournal.com


cost-cutting are then subjected to cost-cutting themselves. A common example of this is


when contractors are hired on day rates, rather than taking on interim executives. While, this strategy can undoubtedly save money in the short term, freelancers will still need a touch point who can coordinate their input and manage their work on a daily basis. Any project undertaken needs to be properly planned and fully managed until the very end. However, we often find that their line manager or the individual responsible for their output is the first to go. When discussing cuts, try to drive


the conversation towards the bigger picture as well as the wider impact of subsequent changes. Including other factors, aside from costs, can have more far more impactful results and be of long-term benefit to your company.


External contractors


Companies tend to focus on the costs of projects, rather than the potential benefit. However, an emphasis on price


Rather than making your main KPI cost reduction, focus instead on revenue and profit increase





can see a steep decline in quality and, ultimately, value. Try to encourage the directors to take a step back and, without considering cost, see what potential value there is from a project. Once they understand the value, then it is easier to allocate a realistic budget. Having a dedicated person with a specialised skillset in this area can bring in a much needed outside perspective. When planning any new project, try to consider different ways of enriching your output, rather than just reducing your costs.


Consumer feedback


Far too often we see owners and man- agers reduce the value of their business by not looking at the impact a change will have on customers. Tis can lead to executives being out of touch with their own customer base. Tis failing has seen many global businesses lose their edge, as well as their profitability.


market pressures was not to blame for Comet’s closure. What put the nail in the coffin of Comet was their reaction to these challenges; their strategy was to slash prices. However, this was done at the expense of their customer service, which then became a huge pain point. Looking at reviews on sites such as Trust Pilot it is clear that customers were dissatisfied with the level of service. To get people through the door they needed to transform their consumers’ experience; creating a streamlined and compelling sales fun- nel. And, ultimately, it was this failure that led to Comet’s demise in 2012. Te lesson? Make sure your


customers’ views are always incorporated into any change in your business. Whether it is introducing a feedback form with every purchase or carrying out a comprehensive market research survey, never forget that your customers are, essentially,


Comet is a good example of this


failure. Comet began its commercial life in 1933 as Comet Batter Stores, where its sole service was recharging batteries for customers’ wireless radios. Since then it has undergone a number of successful transformations. By 1975 Comet had grown into a chain of 50 successful outlets. In the early noughties however, as


the pace of change increased, Comet was unable to keep up: Wal-Mart entered the UK market and took over Asda. Tis formed the world’s largest retailer with the potential to drastically slash prices thanks to their phenomenal economies of scale. Add to this the global economic crash of 2007 and its accompanying increased levels of unemployment and lowered disposable income. And then, to add to their woes, online retailing took off, threatening many traditional bricks and mortar businesses. However, many managed to


survive – so why didn’t Comet? Most market analysts now agree that the combined force of these


 | may 2017 | 29


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36