How to manage change in an age of uncertainty.

• Author: Stollery, Robert

How to manage change in an age of uncertainty

It's easy to insist that all your internal departments be consistent in operation and output. But, in doing so, are you encouraging your employees to become uncreative or, worse, inflexible? One Canadian executive thinks an error-proof company is a doomed one. Here's his management approach. Customer needs and market sectors are in a continous state of flux these days. Staying on top of the changing requirements over a sustained period of time is probably the most difficult part of managing our business today. It means continously changing one's way of doing business and changing the way we are organized.

As we all know from experience, changing is much tougher--and much more important--than most people realize. Unfortunately, business organizations are, by their very nature, not very dynamic or flexible. Our existing policies, attitudes, and values tend to get in the way of change. So why do it? What is forcing us to adapt, to continously seek new revenue opportunities for our companies, to reallocate resources, and to redirect capital?

Why even consider changing?

There are five important factors that force us to change: globalization, market segmentation, government policy, technology, and values. Globalization--Whether we want them to or not, businesses are competing in a world market. PCL Construction regularly competes in the North American construction market with Japanese, German, Korean, French, Italian, British, and Norwegian firms, as well as the many local American and Canadian contractors. And the construction business is rather typical in this regard. The purely local, regional, or national markets are becoming a thing of the past.

Canada and the U.S. no longer have insular economies dominated by products made in North America. Today, I think it would be hard to find half of the products on our Canadian store shelves with a Canadian label on them.

Multinational corporations from other countries often take a longer range perspective in developing our markets. For example, these past few years my firm has been involved in joint ventures with Japanese contractors in such projects as the Toyota plant in Cambridge, Ontario. The Japanese watched our operation for a few months, then asked if we would take on some of their sharp young engineers, to teach them English and to teach them Canadian construction methods. We asked, "Why should we train a new crop of competitors?" Their reply: "We will never be able to compete with you on normal-sized jobs in Canada, and we will always need a competent joint venture partner in larger Canadian jobs. Let's work together for the future." Market segmentation--The niching of markets is a very significant trend. Many of us are trying to be innovative enough to find such a niche--some distinctive area where our particular talents shine. If we can find that slot before others do, we can reap significant rewards. Government policy--Depending on your point of view, regulation can be friend or foe. But anyone who ignores the issues of regulation and deregulation does so at his peril. The airline industry is a classic example of change brought on because of revisions in government attitudes about regulation.

The role of governments in the world of business is an increasingly complex issue. Most companies today work with a number of government organizations and jurisdictions. With three political parties in Canada and two in the U.S. and with different federal, provincial, state, or municipality governments, business has to stick-handle its way among them all and survive. Really, what we look for most is a level playing field in any jurisdiction, with no unsual preferences, so we have a fair chance of developing a potential new market in a particular location. Technology--Over the past few years, more than half of our productivity growth has come from technological innovations. Today, technology affects virtually every phase of our life. As someone coming from the City of Champions, I note that technology has shaped the keels of 23-meter yachts off the...