3.6.2 and 3.6.3 Key factors in change and scenario planning Flashcards
What are the key factors in change?
- organisational culture
- size of organisation
- time and speed of change
What are the key factors in change? - organisational culture
- if a leader is implementing change in an organisation then they need to work with the culture
- if what they are trying to achieve is not consistent with the culture, they will likely fail as people will not support the change
- a new leader should communicate with key individuals within the organisation to understand the culture and get their buy in or support for the change for it to be successful
- listening and consultation are important
How do you manage resistance to change?
- explain the need for change - but this requires trust
- involvement of key players
- incentives to change
- incorporate views of staff views into the changes
- helps and lets the staff help set the time lines
- so they feel ownership of the changes
What are the key factors in change? - size of organisation
-large organisations
- understanding staff and their individual needs is harder due to their being many in lots of departments
- different departments or divisions may need to implement change differently leading to complex plan
- communication change and need for change is more difficult in tall organisational structures
- leaders and employees - relationship can be difficult
What are the key factors in change? - size of organisation
-small organisations
- staff may be personally invested in the business and more passionate about resisting change
- may be family members or friends involved which make things more personal
- small businesses may have less financial, human and physical resources with which to bring about change
What are the key factors in change? - time and speed of change
- depends on whether the change is incremental or step change
- incremental change is easier to implement then step change as the business has time to manage resistance to change
- disruptive change cannot be anticipated - so this is even harder as it involves step change that you didn’t know you needed to make
Risk
the possibility of loss or business damage
- a threat that may prevent or hinder the ability to achieve the business objectives
- the probability that a hoped for outcome will not occur
How can a business deal with risk?
- ignore it and wait and see
- reduce probability of risk
- share or deflect the risk - insurance
- make scenario plans - prepare for it
- treat risk as an opportunity - particularly if it also affects other competitors
risk management for marketing
- avoid over reliance on customers or product
- develop multiple distribution channels
- test marketing for new products
risk management for operations
- hold spare capacity
- quality assurance and control
risk management for finance
- insurance against bad debts or negative outcomes
- investment appraisal techniques
risk management for people
- key man insurance - protect against loss of key staff
- rigourous recruitment and selection procedures
Planning for risk mitigation
critical
predictable uncertain
low importance
Methods to reduce risk
- risk management - identifying and dealing with the risks threatening a business
- scenario planning contingency plans - planning for unforeseen event
- crisis management - handling potentially dangerous events for a business
Scenario planning
the process of anticipating possible changes in a business situation and devising ways to deal with them
risk assessment
a systematic process of evaluating the potential risks that may be involved in a projected activity or undertaking
Possible risk
- natural disasters
- IT systems failure
- loss of key staff
natural disasters - examples
-Floods, earthquakes, cyclones, hurricanes, tornadoes, volcanoes, tsunamis, bushfires and droughts
what does a business need when a natural disaster occur?
-Vital information, contacts for key internal personnel, procedures to ensure site safety such as shut down processes, evacuation plans, communication strategy, recovery processes (relocation plans), back up system details
How should a business mitigate against the impacts of a natural disaster?
-Diversify operational sites, storing backup systems of vital information at a separate location,
General threats to IT systems and data include:
- hardware and software failure - such as power loss or data corruption
- malware - malicious software designed to disrupt computer operation
- viruses - computer code that can copy itself and spread from one computer to another, often disrupting computer operations
- spam, scams and phishing - unsolicited email that seeks to fool people into revealing personal details or buying fraudulent goods
- human error - incorrect data processing, careless data disposal, or accidental opening of infected email attachments.
Specific or targeted criminal threats to IT systems and data include:
- hackers - people who illegally break into computer systems
- fraud - using a computer to alter data for illegal benefit
- passwords theft - often a target for malicious hackers
- denial-of-service - online attacks that prevent website access for authorised users
- security breaches - includes physical break-ins as well as online intrusion
- staff dishonesty - theft of data or sensitive information, such as customer details.
What are key staff?
those who have skills that are uniquely valuable to a company’s success
Risks of loss of key stage is not managed properly:
-Risks include loss of profit, productivity and confidence amongst remaining employees – share price might also be affected if investors also lose confidence
Identify 7 ways to mitigate the risk of loss of key staff
- Identify who the key staff are (these may not be the obvious, high-up staff members)
- identify subordinates who could step up and cover parts of the job
- key person insurance
- conduct succession planning, spread knowledge and responsibility amongst a team (do not rely too much on one single person)
- have written documentation (customer contact database for example)
- written project planning and progress
- get key people to mentor subordinates
- concentrate of key positions rather than people.
What is the way you plan for risk mitigation?
succession planning
Succession planning
planning ahead for when a leader needs to be replaced
What are the key steps in succession planning?
- who the key people are
- identify possible subordinates
- start to delegate responsibilities to different subordinates
- provide mentoring and training for possible successors
- consult with stakeholders
- gradually take over with supervision and guidance
What is business continuity?
methods of returning a business to normal after a disaster or shock
- ensure the business has cash reserves to deal with unexpected events
- develop a team of staff responsible for planning and implementing a business continuity plan.
What is a business continuity plan?
- avoid risk by diversifying sites and strengthening sites
- avoid risk by providing back up power and water
- prepare an evacuation plan and communication plan
- have alternative sites or home working ready to activate
- have back up IT systems and processes for distribution stock or processing orders
- test systems regularly to see where the weaknesses are - review and revise plans
