Many things can go wrong during a normal working week. However, there is a clear difference between everyday mistakes and basic problems. In order to avoid a downward spiral, it is advisable to be able to recognize this difference quickly. Here you will learn how to recognize the need for change before it is too late.
Internal signs
Basically, there are two different types of indicators, internal and external. Internal indicators are particularly important because they are controllable by the company. Here, it is possible to deal with problems from the inside or to take preventive measures.
Performance indicators
Performance indicators can provide clear indications of a possible need for transformation. These include, for example, a significant increase or decrease in economic productivity or profit. You can get a good overview by analyzing key performance indicators (KPIs) such as revenue growth. The performance indicators usually serve as the basis for future decisions. For future productivity and profit increases, the transformation may involve an expansion. The danger is that the signs will not be detected in time. For example, declining productivity and falling profits lead to a creeping decay process that is more comparable to a contrary transformation. The consequences are often fewer investments and redundancies and a resulting downward spiral that is difficult to stop again.
Technical indicators
Another internal sign is the technical indicator. This indicator includes all change processes triggered by technical progress. Because if your competitors have gained an insurmountable advantage through high-tech tools, you should also think about a digital transformation. However, technical progress may have changed your service/product so fundamentally that further structural changes are now required.
Social indicators
Social indicators, on the other hand, deal with aspects such as the working climate. Is the team motivated and ready to work or does frustration often occur? Do structural problems really hide behind leaving employees? The working atmosphere in the company can be a very strong indicator of the need for change. As soon as the majority of employees are frustrated, demotivated and lacking energy, this is probably also evident in their company balance sheets. A clear sign that it is time to change something.
External signs
In addition to the internal characters, external characters can also provide important information. Although external signs are outside the company, they have a strong influence on its performance. Compared to internal signs, external aspects cannot be directly controlled or changed. Only reactionary actions can help here.
Feedback indicator
External signs include customer feedback in particular. Questions, comments or suggestions about various products or better service can be a sign of changing customer needs and thus of the need for change.
Market indicator
But not only customers should be taken into consideration, because developments on the market are also important. If there is a change in an industry, this often includes production costs. On the one hand, these influence the quantity to be produced, but on the other hand they also influence the price at which they are sold. Depending on how elastic the price is, a transformation is needed to avoid a large loss of customers. A further market change can also be caused by legal requirements. This, too, usually results in a need for change because companies have to adapt.
Burned out yet?
Dr. Michael Kres, who specializes in corporate transformation, called for a new era of management in 2017. He is convinced that successful transformations can only succeed with courageous managers. He also talks about various indicators of change and their severity. To be more precise, how a company can suffer from burnout to varying degrees:
- If a company suffers from a latent burnout, this can be recognized by a decreasing productivity rate and motivation of its employees.
- If it falls into an acute burnout, the original dynamics of the company are lost. The expectations to the management rise and the individual commitment sinks. Due to the low work motivation, the willingness to innovate also decreases constantly.
- As soon as most departments feel powerless and the management is completely isolated from the daily business, a chronic burnout can be diagnosed. This often correlates with an unexpected change in management positions and increasing fluctuations.
- After all, a company can suffer from a lethal burnout. If this is the case, managers have little influence on other departments, and the resulting total loss of control causes great frustration among employees.
Dr. Kres argues that a company can only reach its full potential if it is courageous enough to change and transform itself. He strongly advises against suffering from this burnout and urges all those affected to think about a fundamental corporate transformation at the first sign of it. In a further article you learn more about business transformation.
Implementing change projects with Falcon
In order to identify these problems as quickly as possible, the indicators need to be evaluated regularly. This is very important, because the harder the burnout, the less likely a successful transformation is.
Falcon is a software that has been specially developed for the planning and implementation of demanding transformation projects. With intelligent tools and smart functions, the software makes planning, progress control and reporting intuitive. Falcon helps you realize the full potential of your business by clearly and easily controlling transformation processes and facilitating communication between different departments. Above all, Falcon simplifies project management, regardless of the degree of burnout a company suffers from.
Learn more about our PPM software Falcon!
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