Managing Change in Your Business

Do you feel blessed to have so many dedicated, effective people working for you? Or do they leave you wanting for better?

Is your business performing like you expect it to, or is it struggling to find good work?

If you answered yes to either of those two questions it's time for a change in the way your business is running.

In this article, we will be focusing on how to drive positive change through your business. The commonly used term for this activity is Change Management.

You see, businesses aren't like cars. You can't just taps the brakes and turn the wheel to change direction. 

Changing direction with your business involves changing priorities, changing work assignments, changing bonus plans. It means changing the habits of every employee that works for you. It also means changing the sales, estimating, production management, costing, and staffing processes.

First and foremost, changing your business means changing the way you think; the way you treat people; the way you treat prospects; the way you treat customers; and ultimately, the way you treat your employees.

Changing your business means you will be making some tough calls on old friends. It means following through on decisions you've put off for a long time as they were distasteful and unwelcomed.

It means everyone's daily grind will feel uncomfortable for a while before the new and better way becomes familiar. Habits are like that.

Change requires having the fortitude to stay the course when doubt creeps into your mind and progress looks hopelessly lost.

What all of the above means is that change must be MANAGED.

Positive change doesn't come about by accident. Positive change doesn't just occur. It must be planned. It must be carried out with ruthless consistency. Positive change is purposeful.

How to change employee behavior

After spending several years working with large businesses as a management consultant, one truth became crystal clear. In the end, all it takes to significantly alter employee behavior is to adjust the performance review and the pay systems.

To start implementing positive change in your business, look at how you review work performance and how you pay your workers. Are they two systems promoting the behaviors that you want? Are they promoting the behaviors that support your strategy? Are you rewarding the right people - the people who work hard, make good decisions and are committed to your company's success?

How often are you giving feedback - positive and negative? Ever?

How often are you double checking individual priorities? Monthly?

How recently have you reviewed the job descriptions and gone over them one-on-one with each member of your organization? Ever?

All three of the above are MUSTS. Failure to do so will result in uneven, or even poor, performance. They also are three of your most important levers for driving change.

Performance management tools are the here-and-now tools for driving behavior. The compensation system is the longer-term tool for driving behavior. Your best employees deserve to make more than your less-than-best. The safest way to pull that off is via a bonus system. A bonus system leaves some pay at risk and better connects performance to W-2. Their wage should be market compatible for their talents, skills and adaptability.

Sales professionals should be rewarded for improving your bottom line. That reward should be directly tied to margin. Do not tie it to volume (i.e. project price). Anyone can land work at the lowest price. That is not a behavior to reward, whether the person is an estimator or a sales professional. To bonus an estimator, focus on his budget accuracy -
specifically how well he predicts man-hours. Bonus (actually pay) salesmen on the gross profit they create.

How to manage strategic change