How to Implement a Business Model Transition

Implementing a business model transition requires a change model that fits your company's products, processes, management style, personnel, and financial capacity. You can make changes by mandating employees to work differently, by firing current employees and hiring new ones, by establishing change objectives and organizing employees to plan ways to meet the objectives, or by hiring outside consultants to help the current or new employees to make the necessary changes.

Instructions

1. Conduct the research necessary to transition from one business model to a different one without doing harm to your business or its customers, employees, vendors or investors. In addition to concern about these stakeholders, explore the financial and social costs required to make the change. Describe the effects any changes might have on your company's product development, manufacturing processes and costs, and related equipment, supply, and space expenses. Examine the culture of the company and its overall management style.

2. Prepare a change model based on your research findings. Describe your strategy in terms of who must approve your plan, who implements it and who assesses the results. Usually members of the board of directors and senior managers decide to make significant changes. They do not necessarily decide how those changes should be made.

   A decision to fire many current employees so that new personnel can learn the new procedures without referring to the former systems may present problems. The company has to train new employees without the benefit of personnel who may have vital information and it may have trouble finding suitable new employees.

3. Explain the long- and short-term objectives and how they can be reached if the change strategy calls for training current employees. Describe the benefits the changes offer to the company and to the employees. Expect resistance from some personnel, indifference from some, and resignations from a few. Involve employees in the process of making the changes. You will probably find they learn more, have more cooperative attitudes, and develop new skills more readily.

4. Make careful calculations of the costs for the changes. Determine if there will be greater equipment, space, personnel, or consultant costs. Find ways to offset increased costs with savings in other areas.

5. State specific measures you intend to use to determine how effective the changes have been and what additional steps can improve the results. Change can affect stakeholders in the company in positive and negative ways. The primary effect of change should be to improve products, services and costs for consumers, and profit for the company. Investors, vendors and personnel need to see that they too benefit from a changed business model.

Tips & Warnings

• Change can be dictated by the social and business environment. American auto makers had to build longer lasting, more fuel efficient cars to stay in business,

References

• Associated Content: Change management models

Resources

• Massachusetts Institute of Technology: Changes in business models