Change in Business Change in Business

Consulting Inc.Consulting Inc.

Professor GunholdProfessor Gunhold

Case StudyCase Study

IntroductionIntroduction

► Overview of Business Consulting Inc.Overview of Business Consulting Inc.► Analysis of current work situationAnalysis of current work situation► StrengthsStrengths► WeaknessesWeaknesses► Improvement planImprovement plan► Organizational action planOrganizational action plan► Timeline for completionTimeline for completion► Conclusion and ReferencesConclusion and References

Background - Business Background - Business Consulting Inc.Consulting Inc.

► Rated an “A+”by the Better Business Rated an “A+”by the Better Business Bureau, Business Consulting Inc. Bureau, Business Consulting Inc. opened its doors in 1983.opened its doors in 1983.

► Offering public and private accounting Offering public and private accounting and consulting services, Business and consulting services, Business Consulting Inc. has grown from a Consulting Inc. has grown from a start-up company with 1 employee to start-up company with 1 employee to a mature business with 7 employees.a mature business with 7 employees.

► As the original owner aged, the As the original owner aged, the business has aged with him.business has aged with him.

► Now faced with retirement of the Now faced with retirement of the principal owner, Business Consulting principal owner, Business Consulting Inc. is in the aristocracy phase of Inc. is in the aristocracy phase of organizational development.organizational development.

► Change is necessary Change is necessary in order for in order for Business Consulting Inc. to remain Business Consulting Inc. to remain competitive.competitive.

What is Business Consulting?What is Business Consulting?

► Business consulting is the process of Business consulting is the process of meeting clients’ business needs.meeting clients’ business needs.

► These include:These include:• Basic: Required to meet governmental, Basic: Required to meet governmental,

banking, and other regulations and banking, and other regulations and agreements.agreements.

• Dynamic: Different industries require Dynamic: Different industries require businesses to have different needs.businesses to have different needs.

• Timely: Governmental tax reporting, Timely: Governmental tax reporting, payments of loan installments, etc. have payments of loan installments, etc. have required filing and remittance deadlines.required filing and remittance deadlines.

Activities Specific to Business Activities Specific to Business Consulting Inc.Consulting Inc.

► Provide small business clients with accounting, Provide small business clients with accounting, payroll, and tax reporting support.payroll, and tax reporting support.

► Fulfill governmental requirements such as liquor Fulfill governmental requirements such as liquor license applications.license applications.

► Perform lease and loan agreement reviews. Perform lease and loan agreement reviews. ► Services are dynamic based upon the needs of Services are dynamic based upon the needs of

the clients.the clients.► Client base is comprised of businesses in Client base is comprised of businesses in

Washington, Oregon, Iowa, Idaho, Washington, Oregon, Iowa, Idaho, Wisconsin, and Florida.Wisconsin, and Florida.

Analysis of Current Work Analysis of Current Work SituationSituation► Accounting (Approximately 80% of the volume of work/tasks Accounting (Approximately 80% of the volume of work/tasks

performed):performed):Timely filing of tax reporting and any required Timely filing of tax reporting and any required

remittance such as remittance such as quarterly IRS Employer’s Quarterly quarterly IRS Employer’s Quarterly Federal Tax Return Federal Tax Return (reconciliation of FICA and FIT withheld (reconciliation of FICA and FIT withheld and remitted).and remitted).

Accountants Payable: Invoices vouchered and paid Accountants Payable: Invoices vouchered and paid promptly to promptly to vendors; this improves relationships and there vendors; this improves relationships and there are no service are no service disruptions.disruptions.

Payrolls are processed for business clients.Payrolls are processed for business clients.► Tax Reporting (annual):Tax Reporting (annual):

Corporation, LLC, and other tax filing requirements.Corporation, LLC, and other tax filing requirements.Individual: based upon the business tax filing status, Individual: based upon the business tax filing status,

personal tax personal tax returns are processed.returns are processed.► Reviews and/or assistance of preparation of contractual Reviews and/or assistance of preparation of contractual

requirements: lease agreements, loans, state liquor license requirements: lease agreements, loans, state liquor license applications, and other state, county, or city requirements.applications, and other state, county, or city requirements.

Strengths Strengths Strengths of the firm include:Strengths of the firm include:

► No hourly fees.No hourly fees.► Outside of the corporate and personal tax filing Outside of the corporate and personal tax filing

windows (March and April 15windows (March and April 15thth, respectively), no , respectively), no appointments are necessary, and even so, Business appointments are necessary, and even so, Business Consulting Inc. encourages walk-in clients.Consulting Inc. encourages walk-in clients.

► Owners of the firm are an EA (licensed Enrolled Agent Owners of the firm are an EA (licensed Enrolled Agent in the State of Washington authorized to practice tax in the State of Washington authorized to practice tax law before the IRS) and a CPA – there is experience in law before the IRS) and a CPA – there is experience in the field of accounting and tax.the field of accounting and tax.

► Experience – current management has 20 years of Experience – current management has 20 years of combined business consulting experience.combined business consulting experience.

► Solid customer base.Solid customer base.

WeaknessesWeaknessesInternal and external weaknesses of the firm include:Internal and external weaknesses of the firm include:

Internal:Internal:► Uneven volume of work. Reactionary response to unscheduled work. Uneven volume of work. Reactionary response to unscheduled work. ► No clear marketing strategy.No clear marketing strategy.► Employee culture & vision is unclear.Employee culture & vision is unclear.► Lack of employee training.Lack of employee training.► Inefficient systems & processes.Inefficient systems & processes.

External:External:► Stagnant client base. Stagnant client base. ► Technological changes.Technological changes.► Legislation.Legislation.

Theory of Lifecycle ChangeTheory of Lifecycle Change► As the business grows and matures it As the business grows and matures it

inevitably changes.inevitably changes. ► Changes are built upon a groundwork of Changes are built upon a groundwork of

earlier stages.earlier stages.► 5 stages in an organization’s life cycle 5 stages in an organization’s life cycle

include: the startup phase, direction, include: the startup phase, direction, delegation , coordination, and collaboration.delegation , coordination, and collaboration.

Linear growth - Lifecycle

0

1

2

3

4

5

6

startup phase direction delegation coordination collaboration

Stages of Growth

Business Inc. - Problems Business Inc. - Problems Associated with Lifecycle Associated with Lifecycle

StagnationStagnation

►Slow and unexciting.Slow and unexciting. ►Losing market share to competitors, new Losing market share to competitors, new

technologies and trends.technologies and trends. ►Doubts, problems, threats and internal Doubts, problems, threats and internal

issues overshadow the original purposes.issues overshadow the original purposes. ► Inward-focused administrationInward-focused administration seeking seeking

exit and divestment.exit and divestment. ►Many operating and marketing Many operating and marketing

challenges (Adizes, 2006). challenges (Adizes, 2006).

Improvement PlanImprovement Plan

How to Grow: How to Grow: ►Leverage current offering to enter a Leverage current offering to enter a

new market or to expand the reach in new market or to expand the reach in existing market. existing market.

►Develop a new offering.Develop a new offering. ►Perform market research.Perform market research.► Increase advertising.Increase advertising.

Improvement Plan (cont.)Improvement Plan (cont.)

How to Maintain:How to Maintain: ► Add value.Add value.► Attract and retain great people.Attract and retain great people.► Constantly adjust to changing realities.Constantly adjust to changing realities.► Maintain a nimble culture that pays attention Maintain a nimble culture that pays attention

to environmental and market changes.to environmental and market changes.► Incentives and rewards for successful change Incentives and rewards for successful change

and adaptation. and adaptation. ► Leverage current offering to enter a new Leverage current offering to enter a new

market or expand the reach in existing market. market or expand the reach in existing market.

Improvement Plan (cont.)Improvement Plan (cont.)

How to Combat Stagnation:How to Combat Stagnation:►Go back to basicsGo back to basics and focus on core and focus on core

business activities.business activities.►Pause and evaluate current practices.Pause and evaluate current practices.►Simplify business processes in order to Simplify business processes in order to

increase growth.increase growth.

Key Metrics to Measure Key Metrics to Measure SuccessSuccess

► Track sales of new offerings.Track sales of new offerings.► Measure additional client base generated from new Measure additional client base generated from new

advertising.advertising.► Create metrics to show efficiencies gained from Create metrics to show efficiencies gained from

refined business processes.refined business processes.

Key Change Metrics

020

4060

80100

120

Sales of NewOfferings

Additional Clients Increased TasksPerformed by

Staff

Description

An

nu

al

Current

Projected

Creating an Improvement Creating an Improvement PlanPlan

Satir Change ModelSatir Change ModelStage 1 Late Status Quo: Stage 1 Late Status Quo: ► Stakeholders’ survey to solicit feedback on Stakeholders’ survey to solicit feedback on

strengths, weaknesses, mission, objectives, strengths, weaknesses, mission, objectives, critical success factors, and needed changes.critical success factors, and needed changes.

► Have feedback visually and physically available Have feedback visually and physically available for stakeholders to discuss in an honest, open for stakeholders to discuss in an honest, open forum. forum.

► Define the mission and objectives of the Define the mission and objectives of the organization, and discuss implementation organization, and discuss implementation strategies.strategies.

Creating an Improvement Creating an Improvement Plan (cont.)Plan (cont.)

Stage 2 Resistance: Stage 2 Resistance: ► Based on meeting feedback, compile a plan based Based on meeting feedback, compile a plan based

on the group consensus.on the group consensus.► Distribute this plan to the group in advance of a Distribute this plan to the group in advance of a

meeting to provide time for reflection.meeting to provide time for reflection.► At the meeting, present and discuss the plan as a At the meeting, present and discuss the plan as a

group. Further refine the change model to fit the group. Further refine the change model to fit the organization as defined by the business mission, organization as defined by the business mission, objectives and stakeholders involved. objectives and stakeholders involved.

► Encourage open communication of both positive Encourage open communication of both positive and negative opinions and views. and negative opinions and views.

► Engage the group as owner of the plan. Engage the group as owner of the plan.

Organizational Action PlanOrganizational Action PlanStage 3 Chaos:Stage 3 Chaos:

““Use a systematic approach to change that is focused on Use a systematic approach to change that is focused on outcomes” (IBM, 2008, p 3).outcomes” (IBM, 2008, p 3).

► Staff must find a “safe environment that enables them to Staff must find a “safe environment that enables them to focus on their feelings, acknowledge their fear, and use their focus on their feelings, acknowledge their fear, and use their support systems” to overcome the newness of change until support systems” to overcome the newness of change until they have assimilated to integration, competence, and they have assimilated to integration, competence, and confidence (Smith, 2008).confidence (Smith, 2008).

► Management must allow staff to learn through the process Management must allow staff to learn through the process and should not seek to rescue or alleviate the initial pain of and should not seek to rescue or alleviate the initial pain of learning change; this would “short circuit” the learning stage learning change; this would “short circuit” the learning stage of successful change implementation (Smith, 2008).of successful change implementation (Smith, 2008).

  

IntegrationIntegrationStage 4 Integration:Stage 4 Integration:► Leverage resources appropriately to demonstrate Leverage resources appropriately to demonstrate

top management skills (IBM, 2008, p. 3).top management skills (IBM, 2008, p. 3).► Change managers must work to “offer reassurance” Change managers must work to “offer reassurance”

and also help their staff to “[find] new methods for and also help their staff to “[find] new methods for coping with difficulties” (Smith, 2008). coping with difficulties” (Smith, 2008).

Stage 5 New Status Quo: Stage 5 New Status Quo: ► Management must provide an environment of Management must provide an environment of

“[safety]” and encouragement so staff “can “[safety]” and encouragement so staff “can practice” their learning of change for successful practice” their learning of change for successful implementation, skill building, and refinement implementation, skill building, and refinement (Smith, 2008). (Smith, 2008).

Timeline - TasksTimeline - Tasks

Timeline - CalendarTimeline - Calendar

Overview of Critical Components Overview of Critical Components in Change Theoryin Change Theory

► Define the change.Define the change.► Seek stakeholder input.Seek stakeholder input.► Formulate a plan.Formulate a plan.► Communicate the plan.Communicate the plan.► Seek additional stakeholder input.Seek additional stakeholder input.► Implement the plan.Implement the plan.► Continuously document process and Continuously document process and

communicate with stakeholders.communicate with stakeholders.► Make changes as necessary during the Make changes as necessary during the

process (Hayes, 2009).process (Hayes, 2009).

ConclusionConclusion

► The authors of Making Change Work (2008) note The authors of Making Change Work (2008) note that success depends largely on people (pg. 4). that success depends largely on people (pg. 4). The continued viability of Business Consulting Inc. The continued viability of Business Consulting Inc. depends upon timely and thoughtful execution of depends upon timely and thoughtful execution of these strategies.these strategies.

► Real Insights, Real Actions.Real Insights, Real Actions.► Solid Methods, Solid Benefits.Solid Methods, Solid Benefits.► Better Skills, Better Change.Better Skills, Better Change.► Right Investment, Right Impact (IBM, 2008).Right Investment, Right Impact (IBM, 2008).

ReferencesReferences► Adizes, Ichak (2006). Adizes, Ichak (2006). Corporate Life Cycle ModelCorporate Life Cycle Model. Retrieved 2/11/09 from . Retrieved 2/11/09 from

http://www.businessballs.com/adizeslifecycle.htmhttp://www.businessballs.com/adizeslifecycle.htm

► Clark, D. (2008). Clark, D. (2008). Integrated ManagementIntegrated Management. Financial Management . Financial Management (14719185). Retrieved 3/18/09, from Business Source Complete (14719185). Retrieved 3/18/09, from Business Source Complete database.database.

► Gordon, Mark (2001). Gordon, Mark (2001). Change Management at FedEx. Change Management at FedEx. Retrieved 2/25/09 from Retrieved 2/25/09 from http://www.cio.com/article/30233/Changehttp://www.cio.com/article/30233/Change Management_at_FedEx Management_at_FedEx

► Hayes, A. (2009). Hayes, A. (2009). Theories of Change. Theories of Change. City University of Seattle, Seattle, WA.City University of Seattle, Seattle, WA.► IBM (2008). IBM (2008). Making change workMaking change work. Retrieved 3/17/09, from: . Retrieved 3/17/09, from:

http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03100-usen_mcw.pdfhttp://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03100-usen_mcw.pdf    ► IBM (n.d.). IBM (n.d.). Incessant change is the normIncessant change is the norm. Retrieved 3/17/09, from . Retrieved 3/17/09, from http://www-935.ibm.com/services/us/gbs/bus/html/gbs-making-http://www-935.ibm.com/services/us/gbs/bus/html/gbs-making-

change.htmlchange.html► Kay, Alan (n.d.) Kay, Alan (n.d.) Stakeholder ModelStakeholder Model. Retrieved 2/25/09 from . Retrieved 2/25/09 from

http://www.alanfkay.com/successes/stakeholder_model.shtmlhttp://www.alanfkay.com/successes/stakeholder_model.shtml► Kezar, Adrianna (2001). Kezar, Adrianna (2001). Understanding and Facilitating Change in Higher Understanding and Facilitating Change in Higher

Education in the 21st CenturyEducation in the 21st Century. Retrieved 2/7/09 from: . Retrieved 2/7/09 from: http://www.ericdigests.org/2002-2/21st.htmhttp://www.ericdigests.org/2002-2/21st.htm

► Smith, Steven (2008). Smith, Steven (2008). The Satir Change ModelThe Satir Change Model. Retrieved 2/16/09 from . Retrieved 2/16/09 from http://www.stevenmsmith.comhttp://www.stevenmsmith.com