Leverage Change to Generate Competitive Advantage

  • The Ride Gets Wilder Do you ever wonder why some leaders tend to act, plan, and react with the assumption that tomorrow will be much like today, while others take the challenges presented by change as sources of enormous energy to drive them forward?Whether you’re trying to proactively implement change in your organization or it is being thrust upon you, the skills required to survive, thrive and generate competitive advantage are those involved with managing change.

    Nothing suggests that the future will get easier. In fact, every indication is that the ride will get wilder than it is today. From a competitive standpoint, the question then becomes: How do we implement positive and necessary change better than anyone else?

    A Model for Successful Change

    The following model provides the perfect answer to this question:

    C  (d, p, l)

    Simply put, the cost of change (C) must be less than or equal to a function of a combination of three things:

  • d represents dissatisfaction with the way things are at present (why change?)
  • p represents a picture of a clearly defined future state/vision (what the change will positively create)
  • l stands for the logical first steps/a plan (how to change)Increasing any or all of these factors engages people to make change more likely.To better understand this model, let’s consider an everyday example of change — the desire to lose weight.
  • C (cost of change). The negative aspect of any change is the cost associated with that change. We can imagine the variety of costs associated with losing weight — not being able to eat cake, not eating buttered popcorn at the movies, being restricted to low-fat or lesser amounts of food.
  • d (dissatisfaction with the way things are). If we are very comfortable with the way things are, we are not likely to support change. As our discomfort increases, we become more likely to change. In our dieting example, dissatisfaction could be unhappiness with the way we look, the fact that our clothes don’t fit, and/or health concerns.
  • p (picture of a clearly defined future state/vision ). Increasing the probability of change requires painting a clear and inviting picture of the way things can be once the change is accomplished. Clear visions increase the drive toward making the change possible. When we create an inviting vision, we are more likely to engage and will put our energies toward the desired outcome. For example, we might create a vision of what we will look like in that new bathing suit next summer, that tux at our daughter’s wedding, or in that favorite dress we no longer fit into.
  • l (logical first steps/a plan). Change generally occurs with a straightforward idea on how to accomplish the first steps and a plan that will ensure success. In our example of starting a new diet, a significant number of companies, such as Jenny Craig, Slim Fast and Weight Watchers, have become very successful by offering logical first steps and a well laid-out plan.We can see from this example that some combination of the factors d, p and l must exceed or at least equal the cost of being on a diet in order for the diet to work. However, the applicability of this model goes far beyond a mere diet. It applies to every personal or business change in your life.
  • The Role of Leadership in Successful ChangeCreating healthy change — one focused on ensuring your competitive advantage — starts with the CEO or business owner asking two critical questions:
  • How can we structure the change so that our employees have ownership?
  • How can we reduce the fears associated with the cost of change?You can’t expect people to take responsibility when they don’t feel some sense of ownership. And that’s the key challenge — understanding how to motivate your people to take responsibility during times of change. The truth is you can’t motivate another person. But you can create an environment for them to motivate themselves. This requires strong, focused and consistent leadership.Consider our change model again:
  • Identify the change (a shifting market for your services, demands for cost reductions, the impact of new technology, etc.).
  • Fill in each factor with applicable words related to your specific change.
  • Determine a well-communicated game plan to ensure success based on the combination of factors.
  • Pick a change example and start describing each factor in the model. (This will kick-start your thinking so that a plan will naturally fall out.)At some point in their histories, most truly successful organizations take on overwhelming tasks. For example, Boeing building the 707 and 747 airplanes, Motorola pushing for “Six-Sigma” levels of quality, or Walt Disney creating Snow White. These companies identified goals that were truly outrageous in size. And in every case, the goals came in response to changes in their environments — the maturing of animation, advances in aircraft technologies, and revolutionary manufacturing processes.By taking on and communicating a dissatisfaction with the current state (internal or external), their vision, and a clear path forward, these companies captured the imagination and energy of everyone in their organization. As a result, they were able to create an environment in which their employees were motivated not just to accept, but to embrace change. By focusing on their own capacities to create something new, these companies surged ahead of the competition and gained positions as market leaders that lasted for decades.Organizations that survive change and thrive over a long period of time do not ask, “How can we beat the competition?” Instead, they ask, “How can we outdo ourselves?” By mastering the fundamentals of change management, you, too, can use change to create true competitive advantage.

    Scott Playfair is president of P Squared Consulting, a Houston-based management consulting firm.

Leave a Reply

Your email address will not be published. Required fields are marked *