Change is difficult. Change is good.
Change can mean progress, improvement, growth.
Stability can be caused by a lack of change. It can lead to repeating the same mistakes, being stuck in the same old ways, or sitting still while others move ahead.
Leaders of small businesses need to embrace change. The difference between a successful and unsuccessful business is knowing when and how to make changes.
Prosci says that companies with great change management are six times more likely than companies with poor change management to achieve their goals.
When it comes to change management, small business leaders have little leeway. If you make a mistake more than once, your business may not be able to do it again.
It doesn’t matter if you’re moving into a new building or implementing a project management system. Or introducing a new leader to your team, effective change management is vital.
Three stories that your business can learn from about effective change management
There are many stories of companies that have successfully navigated change (and plenty more that didn’t) that we can learn from.
These are three stories from companies that made the right changes, and lessons you can learn when managing change in your own small business.
1. Netflix is confident in its digital plan
Netflix (Source).
Netflix was originally launched in 1998 as a DVD mail service. The company created a film queue and mailed DVDs to users’ homes. Each disc was returned in its original order. It was a great business model in the late 1990s and early 2000s. Netflix gained hundreds of thousand of subscribers and went public with it in 2002.
Entertainment changed and so did the way that consumers watched it. Netflix would have seen its growth slow if it had continued to mail fragile physical discs in sealed envelopes. This is due to external factors like the capabilities of the U.S. post service, the life span of the DVD format and its physical inventory.
Amazon started offering video streaming services in 2006. Blockbuster, a physical media-based blockbuster, was grasping at straws and sinking fast.
Netflix was at a crossroads and its long-term sustainability was dependent on how it managed the transition to a digital future.
Managing the Change: We all know the ending. Netflix subscribers increased from 23 million in 2011, to more than 13 million in 2018.
However, the company’s approach to change management was not easy. Customers were initially furious at the announcement that Netflix would charge separate fees for digital streaming and DVDs. 800,000 customers left the service in the latter half of 2011. In just four months, Netflix stock fell by 77%
Despite initial turmoil, Netflix leaders were determined to continue the process of change. Management regrouped to form a united front and the company continued to invest in digital streaming and original programming. Netflix had more subscribers than any U.S. cable company in 2017.
The key takeaway from change management: Change rarely happens without adversity. It can take much longer than expected for signs to appear of progress.
It’s important to stick to your plan and not lose sight of it. This is easier if your plan is sound.
Reed Hastings, Netflix CEO, knew DVDs were in decline and that his company needed to adapt to the digital future. He stated to Bloomberg in February 2009 that he had one objective: “Be successful streaming.”
You need to do the same as Netflix and Hastings.