It is important for businesses to manage the process of cost reduction well in any change management strategy to ensure that they do not unwittingly compromise their product quality or service standards.
Cost-cutting is a short-term strategy. It is far more important that companies take a long-term view to build and strengthen their organization and its capabilities now, positioning themselves for the eventual economic recovery.
Throughout the years businesses have put in much effort to win customers to be where they are today. Research have shown that it costs up to six times more money to acquire a new customers than to keep an existing one. In a sluggish economy, it would probably be more expensive to win a new account.
Businesses must have an unrelenting focus on delivering the best customer experience. There must be a line of sight from the top to the bottom of the organization. Take care of that and you will enjoy customer loyalty – and revenues and profitability will follow.
Most companies find that 20 percent of their customers contribute over 80 percent of their revenue. Thus, high levels of repeat customers will lead to higher levels of profit. To achieve that companies must be always be vigilant about the changing requirements of their customers, understand their business models and the markets they operate in, know what their customer want and deliver these to help their customers business succeed.
To achieve business excellence, everyone in the organization needs to concentrate on delivering customer satisfaction by taking personal responsibility for improving processes and be empowered to make changes.
Departments need to become self-managed teams; cross-functional teams are needed at the company level; and more efficient for decision-making and response. When the company discovers a problem or a chance for improvement outside, they must collaborate quickly to find the solution.
For that to happen and for that change management processes to be successful and sustainable, a holistically integrated approach to business excellence, which engages all parts and elements of the organization and its leadership is required.Executives must lead the business change management activities, from thinking about productivity and quality to create an organization that consistently delivers high value and customer satisfaction.
They must establish a culture of continuous improvement that seeks to remove bottlenecks, eliminate sources of waste and customer dissatisfaction, and become efficient and effective. There must be a focus on decreasing sales cycle time, quickly transforming knowledge and delighting the customer – these help the enterprise to maintain its competitive edge.
Management must also be quick to detect changing customer preferences, be aware of the changing competitive environment, leverage on advances in technology & IT, seize opportunities and implement new solutions rapidly. Product and service standards have to stretch from the top to the bottom of the organization and need cut across all departmental lines.
The organization’s own learning and development process must be structured, systematic and focused on building on its strengths. Critical systems that supports training, recognition, career advancement and information access need to be in place. Organizations can reorganize, downsize and streamline their way to efficiency. These approaches are necessary but often not sufficient to quickly move organizations into high-performance mode because they ignore one necessary component of performance – engaging employees in their work. To mobilize the entire organization, leaders need to request for employees input and their involvement, especially in areas that need improvement. Every worker must be trained and
equipped to go from ‘good to excellent” in the business change management processes.
For companies to be successful in their business change management, they need to be responsive to their customer’s needs at every step of the business processes involving every function, employee and leader. Anything short of a total approach is unlikely to deliver the desired results. Organizational transformation is a long-term process requiring a fundamental change in management practices and culture – a paradigm shift.
Finally, the organizational direction that advocates the strategic intent has to be clear about the objectives that needed to be achieved, the type of values and capabilities that are needed and how all this is going to be implemented for effective change management to occur.