Monday, October 22, 2012


The most important lesson to learn from Relative Perception and Limited Resources is that small changes (or proportional changes) are more likely to succeed.

Exercising Incrementalism is one of the best change management techniques.  Breaking a planned larger change into a series of smaller incremental changes is more likely to achieve the desired end result with less overall negative impact on the organization.  However, incrementalizm alone is not a silver bullet.  Granted it is possible to make changes so small that the effect of the downward spike goes unobserved, but frankly, when it comes to real life business, there are few changes that fly under the radar screen.  For example, we know that a massive doubling of a company’s sales force can create chaos,  but even a small change has negative consequences.  To illustrate, assume that a company adds just one new sales person.  That change might not have had a material negative impact on the entire organization, but the salesman sharing office space with the new person is likely to see a drop in his commissions as he unavoidably gets drawn into some degree of a mentoring or training role.
Virtually all change becomes, at a minimum, a short-term investment paid in the form of lower productivity, decreased performance or lower satisfaction.  We make changes because in the long run, we expect a payoff in terms of increased productivity, performance, or satisfaction.  The better we manage change, the smaller the frontend cost and the sooner targeted gains are realized. 
The right way to implement change is proportional to the ability of the organization to deal with and absorb the downward spike of the Change Curve and in many cases that will dictate the need to pursue the desired end result through a series of incremental steps using the “change management” technique of Incrementalism.

To illustrate the need to keep change proportional to the organization’s ability to absorb the change, consider a successful restaurant that wants to expand.  The owners decide to open a second facility across town.  It is easy to imagine the downward spike in terms of performance and customer satisfaction at the existing facility as management’s attention is redirected and existing staff begins to train additional staff.  Image the consequences when some of the best members of the kitchen and wait staff are transferred to the new facility.  That doubling of the organization requires a significant, hopefully short-term, negative investment that can put the business as a whole at risk.  Yes there are things that can be done to flatten the downward spike of the Change Curve and facilitate an early upward movement.  Unfortunately most small businesses making a similar move will fail to do those things, and their customers and pocketbook will suffer as a result.
Now consider the impact on existing facilities upon opening a third location.  The organization’s initial expansion has led to increased depth among its management team.  There is a larger existing staff to draw from for the purpose of training new additions, and there is backup that allows some transfers to the new location without excessively cannibalizing the existing facilities.  Opening a fourth location will have even less of a negative impact on existing facilities.  With continued growth the organization can develop and financially support people dedicated to the specialized task of project management involved in bringing a new location on board, and the larger and larger organization spread over more and more facilities means that transfers have a smaller negative impact.  So as the base organization gets larger the size of digestible incremental change increases; however what makes the larger changes digestible is that each successive incremental changes becomes smaller in relative size—the percent of change related to the base organization is smaller.
The undeniable conclusion is that the right way to make change is to do it step by step—incrementally.  You might say that is not always possible.  The growing food chain has to take that first big step—opening its second facility.  But even there it is possible to find a way to break the project into multiple steps designed to minimize the downward spike.  For example, additional staff can be added ahead of time in small digestible steps not after the fact.  What about the added cost?  If you can’t afford it, don’t do it, because the alternative is to bet the company!
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