Optus Research Reveals Only One In Four Aussie Businesses Prepared For Change
Optus’ 2015 Future of Business report: Road to Growth sheds light on the methods employed by successful businesses in managing and anticipating change, exploring the relationship between change readiness, performance and growth.
Among the report’s findings is that 23 per cent of Australian businesses are highly prepared for change, with 55 per cent displaying some change readiness and 22 per cent showing low readiness.
The report additionally reveals a perception gap between perceived readiness and actual ability to implement change, with 85 per cent of senior Australian business decision makers “confident or highly confident” in their organisation’s readiness for change.
While 77 per cent of Australian organisations aren’t “highly prepared”, 86 per cent experienced “moderate-to-large” changes in the past two to three years, with the same number expecting to have the same degree or more change in the next two to three years.
Optus measured change readiness via its Australian Business Change Readiness Score, determining the level to which businesses are equipped to deal with change, based on factors including how well business leaders understand the need for change, the benefits it can deliver and how capable they believe they are of implementing real changes.
Considered across four key elements – people and culture, systems and process, external environment, and product and services – change-ready organisations demonstrate flexibility, agility, openness and an ability to listen and collaborate.
Change-ready businesses are outperforming their counterparts, with nearly 60 per cent of change-ready businesses performing more strongly than their competitors, compared with 32 per cent of less change-ready businesses, with change-ready businesses twice as likely to have overachieved on growth targets over the past two years compared to less change-ready businesses.
Businesses that scored highly for change readiness reported success with 75 per cent of their transformation initiatives, while under-prepared businesses on average fail in 41 per cent of their change initiatives.
“Change-ready businesses are not only prepared for, but also anticipate and predict change,”John Paitaridis, Optus Business managing director, commented. “Disruption is happening everywhere and businesses of every size and in every industry need to be prepared to deal with rapid technological change and shifting consumer expectations.”
Processes and systems have the highest impact on managing change, Optus found, contributing to 49 per cent of change readiness, followed by products and services (26 per cent), highlighting the importance of adaptable processes and systems.
Among change-ready leading organisations, 93 per cent cited the desire to meet customer needs as the top trigger for transformation, followed by improving product or service delivery (90 per cent), with less change-ready businesses primarily driven to change to reduce costs (55 per cent).
Technology has had a positive impact on 93 per cent of change-ready leaders, with more than 80 per cent of change-ready businesses identifying knowledge sharing (84 per cent), purpose-built tools and systems (80 per cent), collaboration (80 per cent) and targeted customer engagement (80 per cent) as the top benefits of technology.
Less change-ready businesses, meanwhile, cited cost reduction (73 per cent) as the most important benefit of technology.
Change-ready businesses additionally see technology such as legacy systems as restrictive, as opposed to “agile technology”, such as cloud.
“Today, effectively every business is a technology organisation,” Paitaridis stated. “Becoming more change ready requires business leaders to support the adoption of agile technology across every facet of their business – from processes and systems, products and services and people.
“By adopting collaborative and flexible as-a-service tools, and shifting the focus from cost reduction to a compelling, business-wide strategy, businesses will be able to not just weather future changes, but to use them to their competitive advantage.”