Tips To Change An Organisation’s Everlasting Fear of “Change”

A Dummies Guide to How Thousands of Tech Startups Today Will Be Going Out of Business

These are an adaptation of my notes from IT Governence for Monash University (FIT3174 — Week 4)

Strategy?! What’s That?

As we know, doing business in tech involves many facets of challenges and benefits. Here is what your company’s IT strategy will likely talk about

• Transaction Cost: The strategy will address the difference between the total economic benefit of a transaction, not just the cost to implement it. This is important because we must add all costs: transaction costs, contracting costs, coordination costs, and search costs.
• Resource based view: We must realise that IT is rare and valuable, and provides competitive advantage for firm. This should be baked into the strategy.
• Contingent Resource Based Theory: when IT can be bundled with a business service, it becomes more valuable.

How Do I Build the Strategy?

There are 4 parts of an awesome strategy, the only thing that will distinguish you from the millions of others wanting to sit in your high throne.

You need a fucking Mission. This is where your business is currently, and only by looking at your mission can you even get an idea of what to do next.

A vision statement and report must then be made to develop the mission into something that you can dream about while going to bed at night.

Strategies then show you how to get there to your vision, so you can stop creaming to the thought of being on the beach.

And finally, Measures which will keep your business analysts crunching numbers so they can show you neat graphs of indicators of progress.

Principles Of A Strategy Focused Organisation

Have you ever thought “I will work extremely hard today” and then found yourself re-watching Harambe’s death for the 7th time in 3 hours? There are many principles that organisations need to follow to avoid losing track as well.

• Translate the strategy to operational terms — No one wants to read “increase sales by 50%” when you just had your worst quarter ever. Tell us how this will be done!
• Align the organisation to the strategy
• Make strategy everyone’s job.
• Make strategy a continual process.
• Mobilise change through executive leadership

Recognise the Risks

RAWRRR! A wild IT strategy risk appears, and no, none of your potions are very effective. Risks are inevitable, we can only predict them and think about ways to mitigate them.

1. Get a portfolio — what if you had two risky assets instead of one, its the same right? WRONG! If your life depended on cats, would you prefer one Schrodinger's cat, or two?

Mitigate the risks

• Stop strategic drift, which is where strategies develop incrementally on historical and cultural influence, without keeping pace with environment
• Steady as you go: reluctance to move away from already successful strategies
• Building on familiar: sticking to familiar
• Core rigidities: habits are difficult to change
• Relationships hold you back: orgs reluctant to break relationships
• Lagged performance effects: customer loyalty causes greater profits initially (false effect)

I Have A Strategy, Did I Fix All My Change Problems?

Far from it. We need to measure the effectiveness of the strategy. This is done using the Balance Scorecard.

The balance scorecard is used to get a holistic view of organisation. Whether financial, non-financial, short term or long term, a balance scorecard measures the four effective ways to change an organisation’s perspective. A balance scorecard gives two types of indicators:

• Leading Indicators: performance drivers, these are what will drive your business and then allow you to measure your progress towards that direction.
• Lagging indicators: Measures the outcome of an endeavour and how it compared to a predicted outcome

There are lots of other ways that a balance scorecard can help your business it can help you track:

• KPI on business Objectives
• Non value creating activities
• Progress on tasks and changes to organisation
• Accountability for tasks
• Customer expectations

So Much CHANGEEEE! What will happen to me?

What happens when orgs don’t keep up with change?

• Period of flux: disagreement about future direction and customers lost

Most who can’t face change either end up in bankruptcy, taken over, or last moment transformation change is forced upon them.

Wonder Whats Killing You? Your Culture!

Culture is the main aspect of an organisation that prevents an organisation to change. Think about the last TV ad that you actually watched. You know they still pay millions for those?

Different parts of an organisation’s culture?

• Symbols: objects, people or events that convey meaning (christmas party)
• Power structures: status of different people
• Org Structure
• Control systems: routines/procedures followed? (eg. fast food on the floor staff rigid routines are enforced)
• Rituals/routines
• Stories: beliefs/morals in the stories of the organisation

Conclusion

If you’re not thinking about change, you should have started…yesterday. Create a balance scorecard today and get a strategy, we’re going hunting for the next big thing!