How flexible is your structure?

When it comes to structuring your business, the forces of continuity and change require you to perform a balancing act. You need to balance your effort between making today’s structure work and ensuring you can develop the structure you will need going forward. In short, you need to be flexible.

It’s no use having your head in the clouds and building your structure around the world of tomorrow. If you’re operating inefficiently today, you may never reach that tomorrow. At the same time, establishing a rigid structure today might bring short-term success but how will it cope with change?

And there will be change. Some change will be on your terms. Hopefully you have plans for growth and a long-term vision. There will also be change that is beyond your control – the economy, technology and your client base all present a level of unpredictability to varying degrees.

External changes are not necessarily negative – a technological breakthrough may present your business with a huge opportunity, if adopted and leveraged correctly. However, it will change your plans. It is therefore better to ensure that your structure is based less around your plans and more around your goals.

A band’s goal might be to have their music listened to by people the world over. The plan to achieve this may have involved selling a lot of CDs. Now that more music is downloaded than physically purchased, the goal remains the same but the plan may change, the structure will have to adapt.

Sticking with the band scenario – processes and structures need to be in place to create the music, let people hear it and provide opportunities to buy it. Aspects such as format, pricing or medium might change but the structure can adapt. Structure based around minutiae cannot.

As a start-up or growing business, you’re at a marked advantage. You’re arriving into a world we all know changes very rapidly. You’re able to build a flexible structure from the very beginning. Many established companies are now undergoing a tortuous process of unravelling their structure, trying to make their entrenched systems more adaptable and compatible with the way the world moves.

You’re able to create something appropriate from scratch – a method of operating that performs the balancing act. You cannot ignore the short term but it is healthy to remain focused on the longer term. You can do this by creating structure based around what your goals.

Helping yourself and others cope with change

Individuals with high emotional intelligence may be more effective in managing change than individuals with low emotional intelligence is a key suggestion taken from Goleman’s 1998 Working With Emotional Intelligence. This makes a lot of sense.

Change of any sort provokes emotions. You’re not the emotionless business robot you might like to think you are and neither are the people around you. It is difficult to separate change management from emotional intelligence.

Organisational change will affect your mood, your mood will affect your behaviour and your behaviour will affect your performance. It’s far better to be aware of your emotions and the emotions of those around you rather than trying to pretend you’re detached if you intend to maintain or improve your performance.

There is a general belief that the emotional reaction to change is resistance. Continuity is safe and people are happy. Change means something new and new can be scary. You won’t be surprised to learn that it’s slightly more complex than this.

Death is an extreme form of change, but the Kubler-Ross grief cycle has been successfully applied to many other forms of change – especially organisational changes within a business. Plotting morale and competence against time, those undergoing change pass through several stages:

Shock, Denial, Frustration, Depression, Excitement, Decision and Integration.

Whether you’re adjusting to change yourself or helping others adjust to the change process, it’s clear that the same approach won’t work for someone in denial and someone full of excitement. Emotional intelligence and empathy allow you to understand where someone is on this change curve and therefore how best to support them.

This model captures an individual’s reaction to change rather well and allows you to form the basis of an effective communication strategy with them. The model has its limitations – it is, after all, only a model. Each individual’s journey is different, passing through stages at different rates, even in a different order or perhaps skipping some altogether. It certainly can’t be applied to a group.

However, while no models are perfect, all models are useful. The change curve provides a starting point – an aide-memoire to your own emotional intelligence. You might not know quite how someone is reacting to change, but you can look for tell-tale signs that indicate where they may be on this journey.

Understanding where you are, or where someone else is during the change process is only the first part of the story. But it’s a good start. Your knowledge of yourself and your staff will have to inform what you do with this information and help you form an effective strategy for change based on where people currently sit on the change curve.

Further emotional intelligence, empathy and communications skills will be required to successfully manage the change for your whole team, but knowing where to start is a huge help.

Facing your Fears

How do you feel about moving from surviving to prospering? This is a positive step, so it should feel good. However, this step also takes us out of our comfort zones and removes the safety net. Success increases responsibility and expectations – which can be a cause for fear.

“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us.” – Marianne Williamson

The fact that most new businesses fail is a sobering thought when starting out. Being one of the start-ups that has ‘made it’ can therefore be a source of comfort. Accepting the fact that you’re no longer just surviving, but prospering elevates you to a new league though.

You’re no longer the big fish in a small pond, you’re a prosperous business potentially in direct competition with other prosperous businesses. There is no ‘I’m only just starting out’ line to fall back on – you’ve passed through the slings and arrows of outrageous fortune and are now responsible.

Blending in with the crowd is easy. Standing out and emerging as a success puts a spotlight on you and, as well as handling the positives, it means dealing with rejection or failure rather than passing it off as ‘one of those things’ that happens to small businesses from time to time.

This may sound completely alien to you, but it often works subconsciously. Many people might not think they have a fear of success but have stacks of ideas they’ve never put into practice, objectives and goals from five or ten years ago that are still on their vision board and who talk about what they are going to do far more than they ever do it.

Often it is not fear of failure that stifles these plans – it is a fear of them working. Failure is a known. It is a step back to where we’ve come from and, though unpleasant, is familiar. Success is unknown, which can be scarier.

Imagine your business journey as a physical journey. Taking a wrong turn and having to retrace your steps through a mangrove swamp would be unpleasant, but nowhere near as daunting as stepping off the map into uncharted territory.

This feeling is tied into the bigger idea of a fear of change. To confront this you need to chart that territory. Consult with your mentor, read relevant books and (to push the journey metaphor a bit) speak with the locals to get a better picture of life beyond the map. With that information, work out what it is you really want and where you want to go and how you plan to get there.

Having plans in place and being clear on your direction and destination helps to remove the fear that change (even positive change) can cause. There will still be surprises and unexpected developments, which is no bad thing – let’s not forget the amazing and liberating side to venturing into the unknown.

Moving from surviving to prospering is a positive step and should feel good. With the right goals identified, the right systems in place and the right people around you, it will.

Enjoy the ride!

There is a lot of commentary available about the gamification of life and business. We are all encouraged to collect followers on twitter and likes on LinkedIn. These ‘rewards’ conferred on us by our peers often increase our visibility and status, and may bring us to the attention of potential clients but have no intrinsic value in themselves.

So is this trend a bad thing? That’s not really for me to say. There are plenty of debates currently going on between people with far more experience in this field than I, which you can look into if you’re interested. What I do find interesting is this: that there is an open-ended aspect to gamification which actually mirrors business quite well. Ask yourself – how many followers is ‘enough’?

The thing with games is that your reward is usually a harder challenge. Put the time and effort required into conquering a level and you are rewarded with a harder level. The opposition becomes tougher, the course trickier or (if you’re from my generation) the space invaders zig-zag faster.

Most people who’ve started their own business agree that it’s the most difficult thing they’ve ever done. The uncomfortable fact is that most new businesses fail. If yours still exists and is making a profit three years after launch day you are generally considered to have succeeded. What is the reward for this success? New challenges.

In my books and articles I refer to these challenges as Growing Pains and, if you have them, it means you’re doing something right.

Just when you thought you’d passed through the ‘tough times’, others businesses start responding to your success and the competitive pressure begins to grow. You may find that customers demand more of you, so there’s pressure on product development. You may have to learn or re-learn leadership, management and emotional intelligence skills as you take on staff.

This doesn’t mean that by starting your own business you’re embarking on a road of permanent misery, it means that new challenges will always be there and you will often be busy but always interested. There will be opportunities to rest on your laurels, but often people who have the drive to start their own business have the mind-set to actively want to keep striving.

The game lasts as long as you want it to and growing pains represent a positive type of pressure – evidence that you’re winning.

Change – have we an app for that?

As large companies plod inexorably forward, small businesses have the opportunity to dash ahead. Flexible and agile – like a lithe boxer dancing around a lumbering opponent – small businesses use their size to their advantage when in competition with the big boys.

Adding too much structure and process to a small business seems, on the face of it, to be removing this key advantage. However, change and change management is just as big an issue in small companies as it is in big ones.Accepting this and dealing with it does not necessarily mean hamstringing your company.

Change management policies have been seen as overly prohibitive and not relevant for a business until it reaches a certain size – say over 100 employees. There is a certain truth to this – holding formal change management meetings involving three or four employees may seem excessive.

In a small business where the employees meet regularly and everyone feels that they are ‘on the same page’ and headed in the same direction change management may look very different. However, it still needs to be seen.

If you are meeting regularly you are probably discussing and implementing changes anyway. Without holding a formal meeting or setting in place an agreed upon process you are already informally doing the job. What remains is to take that extra time to document these agreements.

In the unlikely event that there is any miscommunication within our small group, you have a process to refer to. More importantly, if you have the ambition to grow your business, you have begun creating a process history for the way change is implemented.

A history of change management is invaluable when the time comes for you to grow your infrastructure. By the time several products or services being developed and offered, staff and teams are working remotely or each original employee now manages a department, you have a documented list of systems and processes to ensure that your operations run smoothly.

If you cross the threshold and are no longer considered a small business, no change management plan will magically appear on your desk. Creating one from scratch for a now not-so-small business is a big task; evolving your existing process is far easier. Artificially bolting on a new process is also more likely to have the hamstringing effect mentioned earlier. A process which has evolved naturally with the business as it has grown is likely to be appropriate, compatible and efficient.

Change management is not just for the big companies. It’s a process that needs to grow alongside your business and it’s never too early to plant the seeds.

How did that happen?

The Law of Unintended Consequences is a general theory encompassing the many ways in which an implemented change can have unforeseen effects. These can be positive, negative or, as in the most famously cited examples, specifically negative in that they exacerbate the exact problem the change was intended to solve. It’s a law that can only really be understood in hindsight but one which serves as a great warning for anyone thinking of implementing change (however small) to stop and think of potential outcomes.

The Cobra Effect describes the third subset of unintended consequences and derives its name from a most likely fictional episode in Colonial India. According to the anecdote, British authorities, alarmed by the prevalence of venomous cobras in Delhi, paid reward money in exchange for dead snakes. Enterprising locals then started farming cobras to get rich from the reward money. Once the government was alerted to this practice the rewards were stopped, and consequently large numbers of now worthless snakes were released from their farms, increasing the local cobra population dramatically.

A real life example of this effect was the local government’s attempt to reduce traffic pollution in Mexico City by allocating different number plates to different days. As you could only drive on a certain day with a corresponding number plate, locals bought up cheap old cars in order to own a vehicle for each day with the correct plates. The same numbers were driving and, now that they were driving older cars the pollution levels became worse.

These interventions made the situation worse and there are other occasions when implementing a change has led to a completely new problem, such as the introduction of cane toads to Australia to combat a pest problem who themselves became a different type of pest. However, as these issues are only obvious with hindsight, is there anything to be learnt from them? Obviously you can’t foresee the unforeseen, but the moral of these tales has to be to give serious, serious thought to any change you have in mind.

You can’t anticipate every outcome, but thorough research can never hurt. Some of the most common negative unforeseen consequences these days occur from ill thought out social media strategies. Social media is a valuable and essential platform for any business and it is a platform which gives a potential audience of billions the opportunity to connect with you. A potential audience of billions; not all of whom are necessarily ‘on your side’.

Waitrose, Macdonald’s, the NYPD and many other businesses and organisations have had Twitter campaigns backfire when users ‘hijacked’ their hashtags to ridicule and complain. Social media is a public forum and, like a canny politician who knows the prevailing opinion before he calls for the vote, you need to have a good idea of how you are publicly perceived before asking open questions about your product or service.

We can all suffer from confirmation bias, hearing only the responses we want to when sounding out an idea for change. However, this is no excuse not to seek out external opinions from trusted advisors. If you happen to be a trusted advisor then it is vitally important that you provide honest feedback, as you may well have spotted the potential pitfalls that your client has not. You can’t escape unforeseen consequences but you can try to foresee as many as possible.