**Updated 7/26/2016 to include company vision, mission, culture, etc ("Why" in Simon Sinek terms) as a consideration.**
Obviously, there are reasons to make changes in an organization. Simply put, companies evolve or die. If GE had maintained the same product line it started with when the company was known as Edison General Electric (i.e. Edison bulbs and direct current), the company would never have grown to become the multibillion-dollar multinational conglomerate it is now. However, like New Coke and Crystal Clear Pepsi, some changes are just not warranted. If the rationale for a proposed change includes any of the following phrases, you might want to take a deeper look at how appropriate that change will be for your organization.
1.) Anything that starts with “Wouldn't it be cool if…”
In the abstract, “Wouldn't it be cool if…” isn't such a bad thing. I’m sure someone over at Apple once said “Wouldn't it be cool if we had a small device that would allow people to carry all of their music with them?” However, I highly doubt that statement was the final pitch to the board and investors. There were facts and figures. Someone figured out how much revenue would be generated, etc. etc. etc. In the end, they decided the iPod was a product that fit within the context of what they wanted Apple to be and, more importantly, people would buy it.
The same thought process is applicable to operations changes. The brainstorming session that eventually lead to Six Sigma may have started with “Wouldn't it be cool if…” but I don't think it ended there. Interestingly, I have most often run into this rational when dealing with records management. People want to be able to say, "We have eliminated paper records." I'm not talking about making new records electronic—I am all for removing paper whenever it is possible. However, if the paper already exists, there needs to be some additional analysis done before implementing a policy of digitization. It might sound cool to say that that 100% of your records are digitized but if 99.999% of these records don’t see the light of day from the time the top goes on to the box to the time they hit the shredder many years later, there really is no operational benefit for that change.
2.) “It’s time for a change”
I’m never really sure what this means. I have designed and implemented quite a few processes and procedures in my time and they have never come with an expiration date. If technology, trends, or regulations have evolved to the point that your processes no longer make revenue, efficiency, or cost sense then, yes, it is time for a change. However, environmental factors, not the passage of time, are the impetus for change in that situation. Boredom with the status quo should not be the sole change trigger.
3.) “This is how they do it at ‘x’ firm.”
This is how they do it at ‘x’ firm is the biggest reason NOT to do something. (This is especially true if the ‘x’ variable is “my old firm.”) Motorola developed Six Sigma (“6σ”) and Toyota has the Toyota Production System (“TPS”). While these systems have been adapted for general use, I believe that an important concept is often overlooked. These companies developed these systems because they wanted something that fit their company and their philosophy. If 6σ, TPS, PMP, Agile, Lean or any other system, process, or procedure for any aspect of operations fits your company, then by all means adopt it. Don’t, however, adopt any of these, or any other policy, process, or procedure simply because someone else did. Amazon did not become Amazon by looking at how Barnes and Noble were handling things. Uber didn’t become Uber by copying the Lyft, taxi, and livery-service operating models. Amazon and Uber became successful by figuring out what would work for them in their operation.
If my change doesn’t fit within those parameters, does that mean it’s good?
The short answer is maybe. While the aforementioned rationale are the three most common warning signs I have encountered when a misguided change is floated, they are by no means the “end all be all” in terms of evaluation. In general, all changes must be tested against four benchmarks.
1) Founding principles, corporate purpose, "Why"*
2) Effects on revenue
3) Effects on efficiency
4) Effects on costs
If a proposed change has a negative impact on any of these areas that is not negated by an equal or greater improvement in another area*, it simply must not be adopted. The bottom line is change cannot be made for change’s sake. There must be a real operational rationale for real operational changes. Changes should be made because they are part of a strategic goal and make operational sense--not because “it would be cool if,” "it is time for a change," or company x is doing something we aren’t. Sometimes a change is called for but sometimes things are just fine the way they are.
*In July of 2016, I reread this post and realized that I had left off a major reason to or not to change. The purpose of the company--the raison d'etre.
Every company was founded with one. No successful company starts with "We can make a ton of money doing X." It starts the other way, "We want to do X." or "People need X." Then comes "There is a chance we can make money doing it." That factor, the "Why" in Simon Sinek's Golden Circle, is key to each and every decision a company makes. It is instrumental in deciding how we treat our employees, suppliers, and customers. It should be a key determinant not only in what we sell, but how we make it, where we sell it, and the manner in which we market it. Even if the decision being weighed will bring in huge revenue, increase efficiency astronomically, AND reduce costs exponentially, it must be scrutinized heavily if it doesn't fit the mission, the purpose, the "Why" of the firm.
This goes for every decision a company makes--from whether we alienate our existing buyers by expanding to big box stores which will undercut them; to whether we buy are pens from a local store; to whether we even buy pens. I'm not taking a stand here on what would be the right decision in any situation as every company's "Why" is different. As such, looking at all of these decisions through the lens of "Why" may result in different decisions for each firm. What I am taking a stand on is that every decision is important and must be made from within the framework of the raison d'etre--the "Why".
Change is not a reason for change.
Best Regards,
