Strategic Change Management: 10 Steps to Successful Change
Financial services firms of all sizes face an existential problem: slow top line growth coupled with rising operating expenses, in part due to increasingly complex regulations. Companies cannot easily grow or innovate their way out of this problem, yet growth and innovation are critical to success.
Operating expense reductions run the risk of negatively affecting core activities such as customer service and most importantly cost reductions can impact a company’s strategic flexibility, its ability to identify strategic threats and its ability to innovate.
Senior management needs to think about innovation broadly – from revenue to expense and from loans to liabilities to capital planning – and build a rapid and coordinated innovation process that is cost-effective and swift. A comprehensive approach to innovation requires a robust approach to strategic change management.
We believe that all significant innovation should be managed through one consistent approach to strategic change. Launching new products, entering new markets, creating processes for new regulation and undertaking major expense
reductions should all be managed through a consistent strategic change management approach.
At Speritas Advisors, we believe the core elements of strategic change management comprise these 10 steps:
1. Detailed description of the innovation. Examples include: new product/service development,
new technology implementation, aligning compensation with new strategic goals,
and stress testing related to capital planning or liquidity risk management;
2. Data and business logic impact analysis;
3. Business process change analysis;
4. Cost analysis;
5. Assessment of impact on enterprise risk management and stress testing framework;
6. Decision to proceed, with clarity on ownership, cost,
revenue, milestones and project sponsorship and project management;
7. Alignment of key stakeholders and executive
management;
8. Implementation with appropriate project management
infrastructure and accountability;
9. Introduction of innovation;
10. Close-out review of process effectiveness and identification of improvements.
A disciplined approach reduces time to market, improves ownership and alignment, and morale
and reduces operational risks.