Business Change Phases – A Three Card Trick (the trick is knowing the different challenges they each pose!)

By | April 23, 2007
When a business is going through business change it needs a high degree of awareness of the context it finds itself in. Change does not happen in a vacuum, things have led up to the change and things will follow. The trick relates to being aware of your current change phase you are on so you can apply the appropriate strategies.

Phase 1: Stabilisation
There is no point planning key developments, attempting to grow the business or even being more ambitious with dramatic change, acquisition or partnership unless the business is on a secure footing. Phase 1 then is to stabilise the business fundamentals. In a turn-around this means things like cash management (in and out), key customers and employees, securing supplies and building the order bank. In a new role/function it means grasping the numbers, delivering on the key metrics, delivering the short term.

Phase 2: Development
When the fundamentals are secure and understood, development can take place. This is about optimising the current business model, making sure all opportunities are being grasped and generally getting the organisation/division/function/team to the levels of performance it is capable of. This is typically characterised as a growth phase.

Phase 3: Break-Out
This phase should only be considered when the other phases are ‘nailed’. Break-out is about taking the organisation to new places, changing the business model, taking more (balanced) risk.

For a model execution of the three phases look at how Stuart Rose CEO of Marks & Spencer has transformed the business. Starting in Stabilisation he looked to get back to the core values of the M&S proposition, selling/shutting unproven distractions, normalising the relationship with George Davis leader of Per Una, and getting the ranges right. Currently in the development phase pushing on with maximising sales and getting the ‘buzz’ back into the stores.

Break-out ideas are starting to circulate with talk of overseas expansion (franchising would be a development strategy), stretching the brand etc.

To help with managing your own change phases please contact us.

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One thought on “Business Change Phases – A Three Card Trick (the trick is knowing the different challenges they each pose!)

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