Change is about the only thing constant in the world of startups. Despite their focus on changing the world, they often forget that they, too, have to change rapidly and often as the market evolves. Too many find that out too late and are left chasing a rabbit that is long gone.
The solution is to establish and maintain a culture and processes that don’t view change as a discrete event to be spotted and managed but as an ongoing opportunity to improve competitiveness. Chris Musselwhite and Tammie Plouffe, in an HBR article last year on change readiness for large companies, define it as “the ability to continuously initiate and respond to change in ways that create advantage, minimize risk, and sustain performance.”
Since the startup environment is usually more volatile, the challenge there in balancing advantage, risk, and performance is more critical than in big companies. The following initiatives that Chris and Tammie define for large companies apply just as directly to startups:
- Improve change awareness. How good are you and everyone on your team at proactively scanning the environment for opportunities for market penetration, emerging trends, and customer feedback? This contextual focus is critical to innovation and survival – the right product at the right time.
- Increase change agility. Change agility represents a startup’s ability to immediately and effectively engage everyone in pending changes and innovations. It starts at the top with the founder and CEO but has to extend quickly to the bottom of the organization. This requires leadership, teamwork, and trust at all levels.
- Expedite change reaction. This is the ability to appropriately analyze problems, assess risks, and take responsibility for problem-dictated and market-dictated changes while still sustaining the day-to-day business activities. It’s called managing unplanned changes or how well your startup reacts to crises.
- Implement change mechanisms. Every organization needs specific mechanisms to facilitate change, including regular effective communication, reward systems that reinforce desired change behavior, and accountability for results. These won’t work in an autocratic or dysfunctional management environment.
- Build a change readiness culture. Change readiness is hard work and requires creativity, sometimes in conflict with task orientation. People must have the right attitudes from the beginning to be ready to change at any time. They need a sense of urgency to handle change and confidence in their leaders.
- Imbue customer change focus. The more everyone in the startup is obsessed with satisfying customer needs and providing better customer service, the more the startup will adapt to change. Provide direct customer contact to everyone, as well as training.
Experts say that we live in a world where the pace of change is accelerating at the fastest rate in recorded history. On the other hand, change management practices adapt very slowly, resulting in a 70% failure rate of change initiatives. Failure rates this high demand a new mindset.
For starters, the whole team needs to be constantly trained and encouraged to develop their skills. Relevant skills include continuously improving existing methods and processes against quality metrics. The ultimate skills leading to innovation and new strategies usually come from experimentation and special studies.
In summary, change will happen. If your people and your startup do not change, statistics say you won’t succeed. It’s up to you to get out of your comfort zone and make things happen in your startup rather than let things happen to your business.