Changing lanes
Article Date: Jan 11 2007Redirecting the focus of a company through change management can test a CEO’s powers of persuasion to the limit. John Courtney, chairman of Strategy Consulting, a business strategist to both private and public companies, regularly encounters management teams who only make changes when the going gets tough.
Rather than being reactive, Courtney believes directors and CEOs should actively set targets and develop plans throughout the financial year, regardless of a company’s performance.
‘This is the major problem for most companies, particularly SMEs – they are not clear about where they want to get to,’ says Courtney. ‘It’s all woolly: “We want to get bigger, grow more and have more profits,”, but [directors] are not very clear about how to get there.’
For Courtney, you need to step back and assess what direction your business is going in: ‘Unless you have your basic plan sorted out, how are you going to make money? All companies, even start-ups, should review their business strategy once a year at the very least.’
Richard Law, chief executive of AIM-listed software company GB Group, endorses this type of approach. After becoming CEO in 2002, he saw that although the business was ‘operating in a nice area’ and generating turnover of around £10 million, the market ‘had become saturated’.
At this time, GB Group specialised in taking postcodes and house numbers and using this information as a rapid data capture tool. ‘When I took over I saw that there was not much potential for growth.
‘I thought that if we took the technology and existing database and repackaged it for a different market it would provide significant opportunities. So we looked for potential ways to use the software to provide a different service.’
Fake IDs
Law explains that around this time ID fraud started to hit the headlines as advances in desktop publishing meant the production of high-quality fake ID became easier.
‘In 2002 we said it would be inconceivable that paper-based evidence would continue as it was without it being replaced by electronic processes, which could bring the time down to seconds [when authenticating ID],’ notes Law.
After teaming up with telecoms giant BT, the decision to branch out – GB Group still provides its original data capture offering – has allowed the company to move to a position of strength. Two-years ago it launched URU, which enables companies that supply any form of credit contract to quickly check the veracity of the information provided by the potential customer.
‘From a standing start, the last half year produced £2.5 million of sales from URU,’ says Law. He expects £6 million for the full year. Revenue for financial year-end 2006 is just short of £13 million.
It’s an example of a CEO driving change through a company and, like Courtney suggests, not allowing the business to be stuck in a rut. ‘You’ve got to have something better than the competition or you won’t sell it,’ says Law.
As for how he persuaded GB Group’s employees, customers and stakeholders to be confident about the proposed changes, Law says it’s important to consider how to articulate a new plan. ‘You need effective communication plus longevity. So sit down and work out what you want to achieve,’ he remarks.
Earlier this year, recruitment practice Executives Online (EO) released the Challenge of Change, which surveyed opinions on change management from 200 businesses across the UK. Anne Beitel, marketing director at EO, acknowledges change management encompasses a range of skills from specific training and role definition,
such as the implementation of an IT system, to altering a company’s culture and addressing levels of employee satisfaction.
