Analysis Paralysis: Change Management Case Study

By Carlos Lameiro posted 04-08-2016 13:35

  

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?  



#Communication #ChangeManagement #ConsultingProcess
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04-15-2016 19:00

Hi Dawn, great approach! Your suggestions to carry out research and get feedback is key to know where they actually stand. In this case, the organization does not really have a culture that is information-centric, but instead, guides its actions via conjecture and opinions. Action plans under this scenario tend to be complex and always involve having backup plans of backup plans, "if this, then that, otherwise something else, but only if..", and so on.
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This may well be the reason that they are unsure of actually going forward - they fail to understand the facts (customer satisfaction or dissatisfaction, and the reasons for it).
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How would we address their fear of changing things and making a bad situation worse?

04-14-2016 20:22

First, I would explore the extent to which this organization has deployed best management practices in the customer area (i.e. Use research to define and segment customers, Determine customer needs and expectations, Communicate the value of service to the customer, Align employees on the importance of the customer, Train and empower employees to be advocates for the customer, Ensure positive customer experience by identifying and managing customer contact points, Make it easy for the customer to do business and provide feedback, Respond successfully to customer feedback, Reaffirm presence in established markets or the requirement to change market approach). Second, I would explore the most direct relationships between the customer practices and other practices in the management system to identify further strengths and opportunities for improvement. Third, I would work with the organization to address gaps, set performance targets, and undertake improvement activities.
There are a couple quotes from Peter Drucker that might come in handy for this client: (1) "Quality in a service or product is not what you put into it. It is what the client or customer gets out of it". (2) "The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself".