Small Business Owners’ Resistance to Change Is Slowly Killing Them

Small Business resistance to changeWe live in economic times where each industry segment can have literally hundreds of companies that could be considered direct competition, all vying for the same business. This increased competition has put significant pressure on businesses to perform like they never have before in order to just stay afloat. Unfortunately, we are finding businesses that were once successful now struggling, and there is an ever increasing gap between those that are successful and those that are now forming. The retail industry is almost a perfect example of what is happening across all industries. Long-time titans of industry such as Sears, Toys R Us and countless others are closing locations or declaring bankruptcy. In contrast, you have others such as Target and Best Buy seeing some of their best success in their recent history. There are many theories and even some very specific root causes that led to the demise of these organizations; however, we believe there is one fundamental element they all have in common: resistance to change. Over the years, we’ve dealt with thousands of businesses of all shapes and sizes, and overwhelmingly, we notice businesses that continue to struggle. The root of the issue is leadership that is resistant to change… This is even more apparent in the small business segment. We find that most small businesses are still owner- or founder-operated, and as a result they have substantially more emotional investment built into the business. This translates to emotion-based business decisions as opposed to business-led decisions, typically resulting in significant resistance to change.

What we find more interesting is that the structure of a small business gives it a huge competitive advantage over the larger businesses in the very same segments. Larger businesses have significantly more structure in place with countless layers of red-tape, which makes getting changes made the equivalent of getting congress to pass a new bill. Another analogy would be the difference between turning an aircraft carrier vs. a speedboat…  BUT due to the emotional attachment, or just straight up resistance to change within small businesses, we find that implementing change can be equally as—if not more—challenging than their larger counterparts. This is why so many businesses are struggling in today’s economic times… Most small business leaders have the best intentions in mind and may not even be aware of their inability to implement change and its direct effect on the businesses.  All is not lost, as again, with small businesses we find that one of their greatest strengths is their ability to be agile and make quick decisions… Before someone can change, they must first be able to identify that they have a problem… Here are the most frequent areas of resistance we come up against:

This is how we’ve been doing it for years – We constantly run up against this hurdle, and the older the business, the more they fall back on this… they are relying on tactics that once helped their businesses become extremely successful, but over time those activities may not be as successful as they once were. However, because of their prior success, we find that leadership is resistant to moving away due to fear of abandoning what they believe to be a successful tactic.

That’s too new / we don’t understand it – Some struggle with new concepts or something that they just do not understand. As a result, they overcomplicate the process by asking their teams to spend a significant amount preparing information and analysis to help leadership understand the nature of the tactic better… This typically takes untold amounts of time, and in some cases leads to decisions that are put off too long.

It takes time – Many small business leaders believe they are doing their teams a favor by implementing a new strategy over time. This results in something that could essentially be addressed directly and within days, taking months if not years of implementation. Consequently, valuable time is lost on the process, along with a significant competitive advantage loss.

We’ll address this next year – We’ve lost count to how many times leadership has “kicked the can down the road” on an idea because they either wanted to take more time to educate themselves or they were just “too busy” to address it now… Sure, everyone is busy, however when it comes to your business, the time is now to seize the moment. In the business environment of today, business is extremely competitive, and any missed opportunity to gain a competitive advantage, allows your competition to move that far ahead of you.

Jim’s not going to like this change – One of the single greatest things about small businesses is that some of us have employees that have been with us for so long that they have practically become family. This is something we all strive for with our business environments as it boosts morale, increasing overall productivity within the team and just generally makes the workplace a better place to be. However, this can also be a huge challenge as many hold off on implementing changes for fear of how their longtime employee may accept the change. As a result, they miss out on competitive advantages that end up hurting the business in the long run.

Jim’s a bottleneck – A bit of a continuation of the above, we sometimes find that those long-term employees that we love can be straight-up bottlenecks for getting things done. As previously stated, many are fearful of implementing change to correct that employee’s working situations, purely because of the relationships that have been built.

We can’t let Jim go ­– Again, a continuation of the previous two bullets and quite honestly one of the hardest to address… Sometimes we become such close friends with our employees that we are emotionally invested in their personal wellbeing. This can be great, but there are times when these employees will take advantage of the situation and frankly let their work slip and become under-performers. As a direct result, the business takes a performance and revenue hit. Now, we are firm believers of giving employees as much opportunity to turn around their behavior, however there are going to be times where you need to make these tough business decisions in order for the business to strive and become successful once again.

The competitive and technological landscape in today’s economy is changing faster than it ever has before, which means that strategies and tactics that were once successful, may no longer be affective… In order for a business to be successful and maintain its competitive advantage, it needs to be constantly on the hunt for new areas of improvement. We use the term “Continuous Improvement,” and if you don’t strive for it, your general resistance to change will slowly kill your business.

Additional Tip: One tip that we always love to share when dealing with leadership that is adverse to change is the “Fail Fast” methodology… The fail fast methodology is essentially a strategy of implementing a virtual “fence” around ideas for change. Fences are metrics which define success for the change along with an allocated timetable of typically a few weeks or months depending on the nature of the changes being implemented. This allows your team to adopt a change and regularly check in against these success metrics as a gut check on progress. As time progresses, you can reflect against those success metrics and work to tweak the program to improve performance. However, if time continues to show little to no success, you pull the plug and walk away… Time and time again, we see too much time and money wasted chasing down a bad idea and working to make it successful, when in the end, not all good ideas will be successful. This methodology provides a happy medium of implementing change or working out new ideas without losing too much time and money in the process.

 

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