Change is coming!

Change is in the air. Changes are taking place in how customers shop, where they shop and what they are shopping for. As an example, in a 2011 Harvard Business Review article (The Future of Shopping, December, 2011), the term omnichannel was introduced to identify those retailers that have chosen to comingle multiple channels to reach customers. These channels go beyond simply having both traditional brick and mortar store locations and online shopping websites, to creating an interactive connection to customers.

As a result of these market dynamics, change is also taking place inside retail organizations. The challenge is that it’s taking place at a pace many are unwilling or unable to meet. But, this should not be a surprise. Organizational change is fraught with emotional ties to entrenched mindshare (“we’ve always done it this way”) and often lacks the proper tools and processes to enable organizations to be flexible.

For the past 20 years, I’ve helped some of the world’s largest retailers reinvent their store development organizations in an effort to grow their portfolios more quickly and cost effectively. During this time, I can say without hesitation that the most successful companies consciously and consistently focused on transitioning their people and organizations from the old to the new way of conducting business. In our business, this is called Change Management.

To understand the challenges inherent in change, and the opportunities that the right approach will present, let’s review the key stages of change management and how adopting them can help your organization adapt to and embrace what lies ahead.

The Stages of Change Management

Change Management is a process, a mindset and a methodology which organizations leverage to implement change. Michael Durant, in his article Managing Organizational Change (1999) shares a three stage process to organizational change.

In the first stage, unfreeze, organizations must unlearn bad behavior and old processes before new practices can be absorbed. This is important point to make. In my consulting experience, organizations often want to immediately adopt a new set of practices or technology without understanding how much of a stretch these new ways of doing business are, or whether they are in conflict with current activities.

One of our clients, a large global apparel retailer, embraced the unfreeze stage, by developing an entire “Organizational Transformation” group. They benchmarked current processes against future state processes to assess the degree of change being proposed. Because of this work, they were able to understand the amount of change at the role level and plan change management activities accordingly. This step helped address the potential obstacles often experienced at this stage in the change management process, and provided a roadmap to facilitate the shift.

Once you’ve let go of the old, you can let in the new. In the second stage, change, organizations introduce new business practices, new technology and/or new behaviors. Training and communication are important tools that are used to reinforce the desired change.

The large global retailer that I previously referenced, wanted to better understand where individuals and groups were along the change curve to help facilitate the change stage. So, they conducted extensive surveys to gauge the level of awareness of the impending change, the purpose of the change, its benefits and the individual’s commitment to supporting the project. This information helped them improve communication and thus increase acceptance of the changes taking place.

In general, there are a few key enablers that you can use to increase the adoption of new ways of doing business. First you must communicate the link between what is being changed, why it is being changed and what the differences are between the old and new behaviors. Second, you should provide the necessary support infrastructure to provide assistance to the workforce. Finally, to ensure adoption, you should make the new process or technology as user friendly as possible without sacrificing function.

Now that you’ve implemented new practices, technologies and behaviors, you can move to the third stage of managing organizational change, freezing, which memorializes the change. It is in this stage that the organization must link the new process or behavior to a realistic reward system. Unless an employee is motivated, either by reward or punishment, long term sustainability of the change is unlikely to occur.

I have been a part in a number of projects which embodied successful memorializing activities. In one example, employee compensation and reward criteria were linked to internal customer satisfaction surveys and 360 degree performance reviews. By focusing on how the customers viewed the employee’s behavior (good or bad), staff were quickly rewarded and therefore a direct link between performance and reward was established. This continuous process validated positive behavior and diminished negative behavior.

It is important to note that a long-term focus is important here. Repetitive and continuous reinforcement is crucial for sustainable performance.

The Way Forward

Retail organizations are often at the forefront in identifying market changes. While the majority of organizations do not embrace change due in large part to the “we have always done this way” mentality, the most successful retail organizations will embrace internal changes as a means to improve their operations and, in some cases, to even reinvent themselves.

At Tango we help organizations make this important shift leading to the successful adoption of new systems and ways of doing business. In our recent white paper, “The 8 Myths of SLM & IWMS Implementations”, authors Bart Waldeck and Brad Biagini warn about an ‘if you build it, they will come’ mentality when responding to organizational change related to implementing new systems. They state: “You cannot outrun the lack of change management on system adoption. The ‘soft’ side of implementation has the potential to make or break the success of your implementation.”

Please stay tuned to this blog, where I’ll share ideas and thoughts on user adoption and acceptance of real estate systems as well as ways to improve your program management. If you’d like to learn more, download Tango’s The 8 Myths of SLM & IWMS Implementation below.