Entrepreneurship 101: How to lead change in your start up

Change is a natural process in companies, part of ‘business as usual’. But in the current market conditions, change might be heading at you like truck lights in a dark road, and you want to be prepared. Layoffs, restructuring, attrition and the need to re-invent the company’s business model are some of the few changes that start up companies are going through now, more than ever before.

There are many different theories for how to lead change, but perhaps the most prominent one was asserted by marketing guru professor John P Kotter. A Harvard Business School professor, he’s the author of 15 books, including “Leading Change”. In a recent class at London Business School, we reviewed the eight step process for leading change in the organization- it’s was designed for big companies, but it fits start ups as well.

Eight steps for transforming your start up company

1.Establish a sense of urgency

• Are you completely depending on advertising revenue to survive? Identify the threats on your business and examine opportunities that should be exploited.
• Face reality – if you’re not hitting your milestones and growth is much slower than projected – something ain’t right. This is the time to examine the competitive reality in the market.

2.Create the guiding coalition

• You need people to ‘buy in’ to the change need if you want to get anything done. Form a task force or get the team to work together on the change effort.
• A retreat, or a management meeting outside of the office might be a good idea.

3.Establish a transformational vision and strategy

• When you start talking about change with your team, there’s probably gong to be a few ideas floating around. If you don’t know where you’re headed, you’re bound to get lost. CREATE A VISION. For example: an image storing service might decide: we will be the leading destination on the web for baby pictures.
• Now that you know what the vision is, set the strategy to achieve it. Everyone in your “change team” should be able to explain the vision and the strategy in five minutes, so keep it simple.

4.Communicate the change vision

• Once you feel like you communicated the vision enough – then it’s the time to START communicating. All the communication channels are kosher to get the message across: get in front of your people. Talk to the guys working remotely. Record a clip and put it on the company’s intranet. Email.

• Teach by example – if your change is about providing better customer service, make sure that you’re changing internally to support that change – performance reviews, training, and even the company’s business plan need to tie back to the vision. Don’t skip this step if you want to be taken seriously.

5.Empower others to act

• Hire change leaders, or reward people that are making the change happen.
• Look at your organizational structure, job descriptions, and performance and compensation systems to ensure they’re in line with your vision.
• Some people will always resist to change, but as a start up, you can’t afford the opposition. If the barriers are to high to deal with, make sure they are removed.

6.Create short-term wins

• Plan on visible performance improvements – keep the goals short term, and don’t choose expensive early targets.
• Try to pick goals that can overpass those who resist the change. Failing to achieve the early goal could risk your entire change operation.

7.Consolidate gains and produce more change

• After every short term win, analyze what has worked and what needs improving – keep the momentum high.
• Use the credibility you’ve gained to change systems, structures and policies that don’t fit the vision anymore.
• Gather new targets and ideas from people in the organization. Acknowledge employees that implement the vision.

8. Anchor new approaches into the culture

• In order for the change to stick, it needs to be part of the core of your start up. Is the change seen in every aspect of your organization? Are you recruiting people who fit with the change?
  Make sure your recruiters include the change ideals and values when hiring and training new staff.
• Create a succession plan for change leaders. It’s only natural for them to move on, and you want to make sure that their legacy is passed on to the next generation of managers.

It takes time and a lot of work to achieve real change in an organization. If you try to rush the process too much, it is likely to fail. Therefore, build a strong foundation and improve your chances of success. If you’re successful, you can sit back and relax, as your company emerges triumphant from the current market crisis.

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