Three Filters To Assess The Impact Of Change On Your Business

Change is a constant, and some changes will be important to your business, and others won’t impact it at all. Some changes will be announced with trumpets, and others will be far more subtle and may emerge unnoticed. Change may require that you adapt, or it may represent a window of opportunity. However you view change, as a leader, you must have an approach to ensure you are never surprised by change and opportunities are not foregone.

Active Knowledge Question:

How Do You Keep An Eye Out For Change?

An Anchor

Your business operates in a continuous changing environment. Change should never be considered static or something that happens every now and then. Change is not just something that you do in your business; it is all around you all the time. The challenge becomes one of what do I need to pay attention to and what can I simply ignore?

To allow you to lead your business in an environment of change, it is necessary that you are able to anchor yourself in a position that strengthens your ability to judge and discern what areas of change require your attention. This anchor acts as a filter through which some areas of change simply pass through. Others are flagged to be monitored. Some require an immediate response, and others catch your interest for the opportunities they may present.

Profit should never be your prime filter, but the catalysts of profit certainly will be. Three key filters should be applied to change. These filters allow you to scan change, identify what you need to pay attention to and provide you with a guide to the breath of change you must filter.

These three filters will allow you to sustain and strengthen your offerings into the marketplace, discover new opportunities into which you can expand, and enhance the effectiveness and efficiency of your operations.

What Business Am I In?

Being able to define what business you are in succinctly is the starting point to establishing your anchor. The way you understand and respond to this question is probably the most important aspect of your leadership.

Some leaders may say we are in the business, as all businesses are, of making money. This view is very limiting as it is one that sees profit as purpose and motive.

Other leaders may see the products or services they produce as defining their business, for example, the equipment they manufacture, the design service they render, etc. Again, this view is limiting as you are viewing the business through the lens of its production.

An alternate way to view your business is through need, that is, customer need. Within this view, you are seeing the business through the eyes of your customers and more specifically the need, their need, which you fulfil. This view allows you to become customer-centric so that you can filter change by the impact it will have on customer need.

Building out from this customer-centric view, there are two levels of depth that you can and should bring to this perspective:

  • When considering customer need, think customer value. What is not only the physical/practical need that your product/service fulfils, but how might that be expressed in a way that captures value? Often this value can be an expression of brand, for example, the customer chose a Mercedes Benz as they attribute success to driving this car. Or it could be that someone purchased an Apple computer, as they believe its functionality enhances their creative expression. Value can be represented by the brand equity that a product carries, or it could be in the belief that the product’s functionality will allow someone to excel at a task, for example, creative design. The point being, what value do my customers attribute to the product?
  • There is a deeper aspect to value, and that is purpose. For what purpose does your business exist? An example might be the earlier days of Apple when Steve Jobs saw Apple’s purpose to be ‘to make a contribution to the world by making tools for the mind that advance mankind’.

Shifting your anchor from profit to products/services delivered against customer need and then customer value, and finally, purpose broadens and deepens the filters you apply to change.

In what I would term the first filter of change, the customer filter, you seek to sift the changes occurring by the impact or opportunity they may have on the need and value you deliver to your customers.

How Do I Compete?

A second filter that you may apply to change is that of your competitive posture. In simple terms, competitive posture refers to how you have decided to compete in your chosen marketplace to deliver a value that you believe will outcompete all others in that chosen market.

Your competitive posture brings to the forefront those capabilities at which you excel, and which underpin the customer value you deliver. In crafting your competitive posture, you will have regard to the customer need that you seek to fulfil, how other suppliers have positioned themselves in the competitive landscape and how your strengths will enable you to outcompete them.

As you scan and filter change that is occurring you are asking, how may this change impact the way we have positioned ourselves in the marketplace? Will it degrade our competitive posture, or will it provide an opportunity to enhance it?

But you also asking, how may this change allow us to expand our marketplace? Are there emerging needs with our existing customers that we may be able to step into fulfilling? Or are there new markets emerging that our capabilities are well suited to and into which we can expand and be competitive?

How Is Your Business Designed To Operate?

The third filter to be applied to change is the design of your business. Often, we think an organisational chart reflects the design of a business, but that chart only reflects lines of responsibility. You should structure your business to underpin and enable the customer value on which your competitive posture is positioned. And by structure, I mean how the various activities that create the customer value you seek to deliver are linked and integrated. Your business should be designed to bring the greatest effectiveness and efficiency possible to your operations to strengthen your competitiveness.

Within this filter, you are scanning for change that may degrade or even better enhance the performance of your business.

Change is occurring every moment of every day. Some of it is vital to the success of your business, and much of it may be irrelevant. You can’t scope everything which is occurring, so you must define boundaries and possess a means of filtering change. The filters of customer need/value, competitive posture and organisational design will allow to you recognise what is important and what can simply pass through.

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All the best in the success of your business,

Richard Shrapnel

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