Strategic change is aimed at giving companies a competitive advantage in their market.
It is big-picture business change, designed to help companies:
- Increase revenue
- Gain an edge over competitors
- Evolve to meet customers’ changing needs
- Take advantage of growth opportunities
And so forth.
Let’s look at what strategic change is and why it’s so important – especially in today’s fast-paced economy.
Strategic Change 101: What It Is and Why It Matters
Strategic changes are designed to make organizations more competitive.
There are many types of business change that aren’t strategic.
A few examples include changes to:
- Business Processes
- Work Environment
Of course, some of these changes can be strategic in nature.
What characterizes a strategic change is its purpose, rather than the type of change taking place.
At its deepest levels, strategic changes shift the very core of a business.
Such shifts can affect a company’s:
- Target market
However, not all strategic changes are so sweeping.
Many other factors impact an organization’s competitiveness.
These are frequently the focal points for strategic changes.
- Product Market Fit
- Cost Reduction
Again, the underlying question is a change’s purpose. Does it aim to improve a company’s competitive position?
Changing location, for instance, is not a strategic change unless it helps a company gain an edge.
If an online business changed to a new location, this wouldn’t affect its strategy.
If a physical business moved to a new city to target a different market, though, this would be a strategic change.
How Strategic Change Works
Strategic change is clearly related to business strategy.
There are several other areas that are directly connected to strategic change, including:
- Strategic Analysis – Analyzing opportunities, challenges, and problems facing a business
- Strategic Planning – Developing a forward-thinking strategy for a business, after a strategic analysis
- Strategic Change Management – The business discipline that manages strategic changes
- Strategic Management – Managing an organization’s overall strategy
Roughly, strategic changes occur in the order outlined above.
That is, after strategic analysis and planning, the change is managed, then maintained over time.
Naturally, no change is permanent.
Because markets and people constantly change, so too must businesses.
This is why adaptability is one of the key traits for today’s most successful companies, as we’ll see below.
Three of Today’s Biggest Competitive Advantages
Each market is unique.
And every business is unique.
However, there are a few overarching ways that companies gain and maintain competitive advantages … especially in today’s globalizing marketplace.
Three of the biggest drivers for strategic change are:
- Innovation – The ability of an organization to develop new ideas, new strategies, new products, and new approaches
- Agility – Adaptability, flexibility, and responsiveness to changes, both internal and external
- Technology – Digital technology, such as software platforms and hardware, can offer a significant edge
Everyone is well aware that technology has drastically changed our lives.
Digital technology in particular has had a huge impact, both in the way we do business and the way we live.
It has made employees more productive and work life much easier. And the internet, software, desktop computing, and mobile have fueled many of today’s most successful enterprises.
Thanks to this big technological shift, many of today’s strategic changes are driven by the three reasons mentioned above.
Companies that can innovate, adapt, and adopt technology are much more likely to succeed than those that can’t.
Tips for Getting Started
If your organization feels the need to make a strategic change, where should you go from here?
Below are a few tips for getting started:
Define your aim. Chances are, you already have an idea of the problem you are trying to solve. Define this problem as clearly as possible – even though that definition may change as your research progresses.
Do your research. Your research should be as deep and wide as possible. Include your marketplace, competitors, the target audience, and the history of your industry. Also look forward, at trends and forecasts.
Analyze and plan thoroughly. A SWOT analysis is the best place to start when doing an analysis. Base your action plan on this analysis and the research you’ve already completed.
Prepare a formal proposal. Proposal templates are easy to come by. They can guide you through the process of planning and creating your strategic plan.
Manage your change carefully. Change management is a discipline in its own right. It is vitally important to manage your strategic changes – if you don’t, your initiatives could fail.
The bottom line is to create a process – analyze, plan, change, and manage – then follow that process carefully.
Strategic change and strategic change management are critical in today’s volatile market.
Disruption and innovation continue to upset industries. Some organizations are driven to success and others to failure.
To stay competitive, organizations must be agile, innovative, and adaptable – and they must be able to change strategically and manage that change effectively.