Understanding Change Management
Customer wants can quickly turn into customer expectations.

Stanley A. Marash, Ph.D.
smarash@qualitydigest.com

Alphonse Karr, a French journalist, once said that the more things change, the more they remain the same. To a certain extent, that's been true of many aspects of the quality and perfor-mance excellence movement during the past half-century. However, the future does bring change, and our ability to manage in a changing world is essential to survival. So the question is: Why do the same tools keep getting reinvented under different names? The answer is that internal and external forces change--leadership, technology, market demands, world situations, competition and the economy--and we fail to manage for change.

It's generally agreed that management commitment is key to a successful change-management process, and all performance excellence models include leadership or management commitment as primary criteria. Most executives, however, are convinced that they've always had a "performance excellence focus" and that it's their subordinates who must pay more attention to improving product or service quality. Such an attitude demonstrates that these executives don't comprehend the true meaning of commitment.

For an organization to truly commit itself to the change process, its entire management team must be able to answer the following questions:

Why do we need to change?

What are the financial implications of change, and how do we measure them?

What do we expect the change to accomplish?

What must we do to achieve change?

What are the barriers to change, and how do we overcome them?

What resources are required?

What priorities should we set?

What process will we apply?

Each of these items is essential to an organization's strategic plan. Let's examine the first: Why do we need to change?

One of the overriding motivations for change is competition. The globalization of markets has made it imperative for companies to continually improve. It's no longer enough to say, "Our performance, quality, productivity or cost is equal to, or better than, the rest of our industry." We must also look at how well we're satisfying the wants and needs of our customers, then seek ways to exceed their expectations. This imperative requires a better understanding of our customers and benchmarking against the best in class, regardless of industry.

Let's review some definitions. To satisfy a customer's needs, a product must provide some essential requirements. A want is something nice to have but not usually included with a particular product or service. An expectation is something the customer previously received or knows that other people received. A delight is some feature the customer didn't need or expect but makes the product more desirable--that makes it exceed expectations.

Consider, for example, an automobile. You need a vehicle to get you from point A to point B reliably and efficiently. You may want it to have a CD player, but if it's not available or is too expensive, you might be willing to settle for a radio. Undoubtedly, you expect the car to have windshield wipers. If yours doesn't, you'll be upset. But if it has windshield wipers that turn on automatically when it starts raining, you have a feature that exceeds your expectations, one that might delight you. The next time you buy a car, automatic windshield wipers might be a want or even an expectation.

Now, if a competitor's automobile, in addition to everything else, includes a CD player at the same price, you might be tempted to purchase that vehicle. Customers are drawn to products that satisfy wants as well as needs. In fact, they may even switch to an auto that satisfies wants but costs more. Eventually, as we know, wants become needs and even expectations. Years ago, an automatic transmission was a want for most drivers; today, it's a need or even an expectation.

The concept of benchmarking as a change-management driver is another idea that many don't fully understand. Traditional thinking about benchmarking focuses on how we rate against competitors within our industry. This thinking often gives us a false sense of security: If we're operating at a high level compared to our competition, there's no reason to improve. Such complacency enables nontraditional competitors to overtake and surpass established providers, resulting in loss of market share and, in many cases, the demise of a profitable business.

The concept of benchmarking against the best in class leads us to look outside our own industries to improve our business operations. For example, we can identify companies, irrespective of industry, that are the leaders in such activities as financial services, customer follow-up, distribution, human resources management and information technology.

Because no single organization is the best in every category, the key is to learn what each one does best and how it does it.

Why change? Because we must continually improve until we match or exceed the best in each and every category.

About the author

Stanley A. Marash, Ph.D., is chairman and CEO of The SAM Group, which includes STAT-A-MATRIX Inc. and Oriel Inc. This article is adapted from Marash's upcoming book, Fusion Management. Note: Fusion Management is a trademark of STAT-A-MATRIX Inc. ©2002 STAT-A-MATRIX Inc. All rights reserved. Letters to the editor regarding this column can be e-mailed to letters@qualitydigest.com.