Managing Change

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MANAGING CHANGE

The Internet revolution of the late 1990s challenged the change management capabilities of businesses of all kinds. Many existing companies began to develop Web sites as marketing tools, while others began to sell their products and services via the Internet. Some companies even abandoned their "bricks-and-mortar" operations altogether to focus solely on online activities. In addition, dot-com companies like eBay, Amazon, and Yahoo! began to garner significant attention as their Web traffic exploded and stock prices soared. When the dot-com industry began to collapse in 2000 and the North American economy weakened, many of the firms that had wholeheartedly embraced Internet technology were forced to scale back their e-commerce operations and rethink management strategies. At the same time, however, the Internet continued to present opportunities for companies able to identify and serve various niche markets. The businesses that proved the most nimble at responding to these rapidly evolving market conditions tended to be more successful than those that struggled to implement changes.

CHANGING STRATEGIES

The e-commerce industry remains a highly unstable one. Whether you are creating a brand new online business, simply developing a Web site as a marketing tool for your existing business, or planning to offer your existing products and services via the Internet, the one thing you can be certain of is continual change. To best handle the volatility of the e-commerce arena, you should consider carefully how the rapid pace of change in this industry will impact the following activities:

Developing and modifying a business strategy
Training employees
Adopting new technology
Handling customer relationships

DEVELOPING AND MODIFYING A BUSINESS STRAT EGY.

To create an effective e-commerce strategy, you must first develop goals. What do you wish to achieve via online operations? You should decide why you are going online and what benefits the Internet can provide to your business. You also need to identify your target market. Are you going to target existing customers or try to attract new ones? Other topics to consider include advertising methods, competition, and market conditions. One of the most important, and often overlooked, issues in developing an effective e-commerce strategy is how to manage change. A small business might follow a business strategy that proves successful during the first year of operation yet becomes obsolete shortly thereafter. A study done by Andersen Consulting and the Economist Intelligence Unit in July 2000 predicts that by 2005, more than half of Web-based initiatives will operate on plans that last no longer than 12 months, a practice that forces companies to revisit their strategies on a regular basis. At the same time, however, implementing too many changes can exhaust both employees and management. Being able to link planned changes directly to concrete goals is a key component of effective change management, as is the ability to clarify exactly how changes are going to be implemented.

TRAINING EMPLOYEES.

The most successful e-commerce ventures have employees who are open to change and able to learn new skills quickly. If, for example, your company has decided to sell products online for the first time, employment issues to consider include deciding whether to use existing staff, hire new information technology (IT) employees, create new departments, or outsource related tasks. In each case, employees must be able to work effectively in a continually evolving environment that might include having to work with new short-term independent contractors or taking on new responsibilities themselves.

ADOPTING NEW TECHNOLOGY.

No matter how many individuals you employ, or plan to employ, their ability to adapt to new technology is crucial. As your company grows, the adoption of new technology will likely prove critical. In some cases, this might mean upgrading from an analog modem to a high-speed Internet connection. In other cases, you might decide to begin utilizing wireless technology. To manage changes like these effectively, you will need employees willing and able to undergo necessary training. While finding qualified IT employees proved difficult in the late 1990s, by the early 2000s, the bankruptcies of numerous dot-com firms had helped to fuel unemployment, particularly in North America. As a result, businesses found it easier to recruit individuals used to working in a fast-paced, high-technology environment. According to Tracy Tang in a July 2001 article in Entrepreneur, savvy business owners could take advantage of this abrupt change in the e-commerce landscape via online recruitment sites like Monster.com. "These unemployed workers are flocking to the Web to find you—and you should, too, to find experienced employees for your Web business."

CUSTOMER RELATIONSHIP MANAGEMENT.

Change management is also important to consider while devising customer service strategies. As Web consumers demand higher levels of customer service, enterprises that offer products and services online must be able to quickly and effectively respond to customer demands. Businesses with effective change management practices in place will find it easier to adapt to evolving demands and run less risk of losing customers. According to Jeff Pulver, an E.phiphany business development executive quoted in an October 2001 issue of CRMDaily.com, companies "must undergo a transformation that places the customers at the center of all activity. Core business processes must be reconfigured to reflect the new strategy." To make such a change, businesses must change with the needs and wants of their clients, and how they manage this change is crucial to their success.