How to implement change in an organization that knows it must change, but seems to be paralyzed, and everyone knows that, too?
It’s not unusual to come across an organization where those closer to the customers know there is unrest that needs to be addressed. In this case study we find that customers are dissatisfied with the subscription-service of an organization, and as a result, the customers are not renewing their subscriptions at an alarming rate. The organization has felt the drop in revenues, and has already gone through some down-sizing.
The line Managers draw up plans on how to address the customer dissatisfaction, but the VPs they report to, also conscious of the issue, are completely paralyzed to bring them to the attention of the President in order to implement the required initiatives to ensure the survival of the organization. The VPs are afraid of being exposed by proposing changes to the long-standing subscription service delivery model.
Not surprisingly, the President too, is aware of the issues of customer dissatisfaction, but again, is reluctant to attempt to bring this issue up with the Board of Directors. Lastly, we find that the Board of Directors is also aware of the pressing need to address the existing dissatisfaction with customers who no longer renew subscriptions to their services, but they also appear to be paralyzed to do anything about it. Why the paralysis?
Although we are not surprised to find each individual organizational level incapable of acting on relevant and urgent information, it is surprising to find that the whole organization KNOWS that it must change to address the increasing customer dissatisfaction, but fails to do anything substantive about it. After all, from a closer inspection, everyone seems to already know there is an issue and there are countless committees that are currently actively setup to look at the issues in detail, and define initiatives. So why the failure to change?
It turns out that the problem is known: there is a net decline in subscriptions as a result of a larger rate of subscription non-renewals (losses) as compared the rate of new subscriptions (wins). The real cause of the problem, however, and how to resolve it, is up for debate.
Two obvious ways to correct the net decline in subscriptions are: 1) address the customer dissatisfaction to increase subscription renewals by improving the subscription service, and/or 2) increase sales efforts to increase the rate of new subscribers without changing the underlying service, and thereby cover the subscription losses.
As additional information, with a declining subscription base the organization cannot lower prices, and may actually have to increase subscription prices (both new and renewals) given a reduction in the subscription base. Additionally, any attempt to change the subscription service is viewed with fear of getting it wrong, worsening the original problem of declining subscription renewals.
As a result, it would appear at first glance that the organization doesn't move forward due to Analysis Paralysis. They continue planning and discussing alternatives, but don't seem to get into implementation mode to make the change happen.
As a management consultant, how would you approach this client? Is there an opportunity for you to help this organization? Where would you look for problems? How would you propose to go about the change management that is so urgently needed?
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