Manage change to get ready for business of the future

BY BOB MIODONSKI OF CONTRACTOR'S STAFF ORLANDO, FLA. James Champy, who urged U.S. executives to "re-engineer" their companies in the early 1990s, was looking ahead toward changing business conditions during his address Feb. 28 here at the annual convention of the Mechanical Contractors Association of America. Although re-engineering became another term for "downsizing" at many firms, he defined it

BY BOB MIODONSKI
OF CONTRACTOR'S STAFF

ORLANDO, FLA. — James Champy, who urged U.S. executives to "re-engineer" their companies in the early 1990s, was looking ahead toward changing business conditions during his address Feb. 28 here at the annual convention of the Mechanical Contractors Association of America.

Although re-engineering became another term for "downsizing" at many firms, he defined it as "the fundamental redesign of work through processes to drastically change the result of business."

"Today we have more transparency in business and more sophisticated customers, but the case for change is much the same now as in the 1990s," Champy told MCAA members. "There's demand to change business, but few are."

Transparency means that companies have to be increasingly open with their customers, he said. For example, better informed customers want to know what your costs are to make sure they are getting a fair price.

The principles of managing change are similar, however, to what they were almost two decades ago. Champy, author of the books Reengineering the Corporation and X-Engineering the Corporation, offered a list to MCAA members:

  • Elevate your ambition. The quality and character of your business ultimately will determine what you do.

"If your goal is to make incremental changes, you will make incremental changes," he said. "If you set a goal that is truly ambitious, it will force you to radically think of how to change your business."

  • Make the change real for your people. Employees want to know how change will affect them.

"What you think about change is an abstract many times," Champy said. "Make change as substantive as possible and get to the implementation as quickly as possible. The faster you get out of the debate about who gains and who loses, the better off everyone will be."

You must be empathetic toward people going through the change process, however, and tell everyone everything you know.

  • Embrace technology. Particularly using information technology, you should understand how your clients use technology and how that affects what they expect from you.

"It's the Google effect," he said. "People want to get instantaneous information, not lack of response. Go far enough with your process and technology change to leave the old work behind."

  • Be a low-cost producer. You have to drive toward efficiency.
  • Don't focus on low cost alone. As you lower your dollar cost, focus on value and the nature of the value.

"Customers are expecting more with less cost, not just a lower price," Champy said.

  • Fish upstream. The more you can find out about how your customers use the facility that you design and where you install equipment, the more you can affect the design.
  • Build a sense of meritocracy. People should be paid based on what they produce. A meritocracy builds trust that employees will be rewarded on what they deliver.
  • Chart breakdowns. Find out where things break down or go wrong in your company.
  • Keep your glass half full. You always should maintain a sense of optimism of where you are going.

"Thinking about and articulating what the future will be is the first point of excitement," Champy said. "The more articulate you can be, the more people will follow you.

"Be sure that your teammates are with you when you get into the details of how you change. Make sure people have the willingness to do it."

  • Go beyond product and service. Opportunities for change transcend both. You should think about a new business model and changing the nature of the customer experience. Champy defined a business model as what you promise to your customer and how you deliver on that promise.
  • Find a model outside your industry. If you want to change your company's business model, you should change it to a business model outside your own industry, Champy said. Shared characteristics of new business models include:
  • They leverage process and technology very well.
  • They're very lean. They have few people, but they do not feel overworked because process and technology work well.
  • They deliver value beyond the product.
  • They deliver a higher sense of value.
  • They embrace transparency and connectivity with customers and vendors, with whom they aggressively pursue technology.