Higher profits and improved business cash flow are governed by your ability to manage change

Change is defined as “to make or become different.”  The core question associated with any form of change comes down to what’s driving the change?  In business, are you choosing to change to make your business different because you want to or because it’s being forced upon you?   Whether a needed change is proactive or reactive, the objective for working through the change is the same, and it is to minimize resistance to the change from those needed to make the change the new reality.

Businesses that make it through the Stretch profit progression stage into the Substantial stage have people employed that embrace rapid change.  Those who embrace change always look to make things better by doing things differently to capitalize on the growth opportunities before it.  In the other three profit progression stages of Stable, Stuck, and Survival, people employed in these businesses are more change-resistant.

Interestingly, businesses that fall out of the Substantial stage into the Stuck or Survival stage have either stifled or gotten rid of their change leaders.  They replace these people pushing to do things better with those who are change-averse.  Those afraid of losing what exists are quick to silence those seeking to improve the status quo.

Change is Vital to both Personal and Business Success

In Psychology Today, the quote associated with the definition of insanity—“doing something over and over again and expecting a different result”—has been attributed to Albert Einstein, Benjamin Franklin, and Mark Twain.

No matter who said it, the premise is significant. If you want a different result, you have to implement changes.  And most humans find change to be difficult, and they struggle to keep up in a rapidly changing world that requires us to adapt and do things differently from before. Those succeeding are developing and adopting new methods of doing business.

Technological innovations change how people react to their environments, and these interruptions to our habits are becoming more disruptive.  Consider how frequently you upgrade your smartphone to take advantage of the latest new features or to have the latest and greatest phone?

Planned change is either incremental or all at once.

Your business cash flow and profits are governed by your ability to manage change because change is never easy.  As a result, planned change is either incremental or all at once.  The key to successful business lies in focusing on what truly matters based on the planned outcomes you want to generate, as established in BusinessCPR™  Step 2–Plan for Your Profits.

If your goal is to earn significantly more than you have in the past, planning for change is time well spent.  The same is true if you are only concerned about getting your business into the next month, quarter, and year.

One of the obstacles to seeing a change through to better results is the failure to plan for the change.  The reason for this is the far too frequent problem of reacting before any thought to what needs to be different and why.  Jumping into solving costly business problems without a plan is why these problems go unresolved, and the losses only mount.  When the problem isn’t well defined, it’s impossible to plan for the changes required to solve the problem.

You protect yourself from failing to see a change to better results by being very clear on what needs to be done to become different.  When you think through what needs to be different and why you are putting the change into practice, you are practicing the Theory of Business Relativity that is reflected in the following formula:

Event + Response = Outcome

Any intentional change starts with the conscious decision to change and, as a result, will produce events that surface issues and responses that will either be positive, neutral, or negative.  Depending on the response to the change event, you will either meet with success or experience poor acceptance that results in a failed change implementation.  The other way to think about this is no decision means there is no response to trigger an outcome which guarantees there will be no planned outcome, only outcomes that come by chance.

There is always a relationship between one’s performance and behavior that leads to their results over time.  For example, when you are satisfied with the results you are getting, the odds are high you are satisfied with the performance and behaviors of those involved, and as a result, there is likely no planned change because there is no pain to get rid of or gain to realize.

When you aren’t satisfied with the results you are getting or have an increasing fear of something that could happen, performance and behavior issues become obstacles to overcome.  When these dynamics exist is when changes start to get considered.

Successful change efforts start with well-defined change objectives

Framing your planned change around one of the two driving reasons to change is the simplest and most effective method for managing a successful change management process.  It’s effective because people will change for only one of two reasons:

1. Fear and Pain: they want to change their behavior to avoid consequences they are afraid of happening or already in pain over because they are happening.
2. Greed or Gain: they want to change their behaviors to realize something they aren’t getting through their current behaviors and performance.

You overcome obstacles to change through the successful execution of a change management process that begins with the shared commitment by those expected to change their performance and behavior so that together you produce better results as outlined in the company’s strategy and profit plan.

Every successful change begins with determining What to Change.

Once you know what to change, BusinessCPR™ Step 4-Stop the Losses that Keep Your Business at Risk is the essential business changing process to help you bring about the needed change.  The process outlined in this BusinessCPR™ management system step is the most efficient way to discover the profit losses in your business that manifest themselves as Problem Costs (the Pain) and Lost Opportunity (the Gain.)  Click here to learn “How to increase profits from cash flow in five steps.” {S-1 FREE Five proven steps}

The priority you place on any proposed change is made easier through the Theory of Constraints.  When you fix the slowest moving part of any system first, behaviors begin to change.

Those who struggle with change see change as complicated and threatening to be endured, not embraced.  When this view exists, those with it will torpedo any change effort.

Those who embrace change see it as an inevitable part of life.  They know that success is only possible if they and those they work with embrace new ideas and new ways of doing business.

In every change, there are supporters and detractors

Another law of life and business is that any change will impact someone in any change effort.  What’s not certain, yet predictable, is how quickly they will embrace the change being pursued.  This is particularly true in businesses that find it necessary to improve profits and cash flow from operations by doing things differently.

The effective change leader will identify friends and foes early on.  They are proactive in supporting their friends and work hard to convert foes or move them out of the business.

If not managed properly, any planned changes will be missed, and the consequence of the failure to change at best is business back to usual.  The consequence of a failed change is accelerating business deterioration because the failed change efforts put other adverse effects into motion that are now known and unaddressed.

Positioning you and your business to be successful in managing change

Every change has unique dynamics because each change involves unique circumstances, unique processes, and unique personalities.  No matter what is being changed, there are five fundamentals to be managed if the change is lead to things becoming different:

1. Planning: The stage when you are working through your undesirable issues, listing out the tasks that must be completed, focusing responsibility, creating baselines, goals and assigning due dates.
2. Doing: The stage when planned tasks are accomplished.  Deliberate task accomplishment is the best way to build momentum around your planned change.  Your goal as you implement the planned tasks is to focus on simple tasks that can be accomplished rather than the whole picture at once.
3. Tracking: The stage that measures the positive impacts the change has made in short intervals (hours, days, & weeks) to demonstrate the value of the change.  This helps you work through the issues that arise through every change by using company dashboards at the weekly management meetings to confirm if the planned changes are being realized.
4. Correcting: Making informed adjustments to the change plan occurs through reported results that modify the plan until the desired results are realized—adding and eliminating tasks, changing responsible persons, moving due dates, and modifying what performance is being tracked.  This is how you help those affected by the change adopt the required behavior change needed to achieve the desired results.
5. Celebrating: Effective change management processes have established goals that participants understand and accept.  When these are realized, celebrate the wins as they occur to accelerate your change momentum by giving participants a glimpse of what life will look like after the change is made.

Planned change influenced by the BusinessCPR™ Management System will protect your business from failing.  It is the surest way to realize your sales, profit, and wealth creation goals. Cash flow from your operations sets the foundation for the business you are building, while your profits enable your business to exist into the future.

When your actual results are falling short of your planned results, it is time to identify what isn’t working so you can fix any areas in which your business is performing less optimally.  By constantly looking to improve your business, you protect your business by protecting your cash—the lifeblood of any business—first through forecasting weekly cash inflows and outflows, and second, by stopping unnecessary cash outflows that drain cash reserves and contribute to profit leakage.

Highly profitable businesses with cash reserves in the bank use a change management process to prioritize and eliminate unnecessary activity through disciplined follow-through.  The more effective your change management practices, the better results you generate and the fewer hours you have to work to make your money.

How much change does your business need?

If you struggle to hold onto cash or have shrinking profits take the “free” Business Fitness Health Check to learn how healthy your business is.  Click the link below to take this no-obligation business fitness test.

Upon completing the business fitness test, you will receive a risk profile showing how at risk your business is to suffer greater cash flow and profit problems, the primary cause of business cardiac arrest over the next three years.  Use these results to help you identify what areas you need to change.