CHANGE READY BUSINESSES ENJOY THE STRONGEST GROWTH AND PERFORMANCE

Change readiness: key growth enabler for Australian enterprise according to new Optus research.

Research released today by Optus reveals that change readiness is a key indicator for business growth, yet the majority of Australian businesses are not in an ideal position to manage change. The 2015 Optus Future of Business report: Road to Growth sheds new light on the way successful organisations prepare themselves for disruption and change implementation and highlights the direct relationship between change readiness, performance and growth, regardless of industry.

The Optus Australian Business Change Readiness Score[1] measures the level to which businesses are equipped to deal with change. Change ready organisations demonstrate flexibility, agility, openness and an ability to listen and collaborate. Change readiness was considered across four key elements: people and culture, systems and process, external environment and product and services[2].

Change ready = growth ready

The research reveals that change leaders are growing faster, outperforming their industry counterparts, and are more successful in dealing with change. Nearly 60% of change ready businesses are performing more strongly than their competitors, compared with 32% of ‘less change ready’ businesses. They are also more than twice as likely to have overachieved on growth targets over the past two years, compared to less change ready businesses.

Almost half of change initiatives fail for underprepared businesses

Businesses that scored highly on the Change Readiness Score also reported success with 75% of their transformation initiatives, whilst on average underprepared businesses fail in 41% of their change initiatives.

Perception gaps

While 85% of senior Australian business decision makers feel ‘confident or highly confident’ in their organisation’s readiness for change, only 23% of these organisations are actually ‘highly ready’.

This signals a worrying gap between decision makers’ perception of their organisation’s capacity to change versus the attributes and attitudes required to implement change.  Whilst 77% of Australian organisations aren’t ‘highly prepared’ , 86% experienced ‘moderate to large’ changes in the past two to three years and the same number are expecting to have the same degree or more change in the next two to three years.

“Change ready businesses are not only prepared for, but also anticipate and predict change. 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,” said John Paitaridis, Managing Director, Optus Business.

Processes and systems are key

Of the four key business areas identified, processes and systems have the highest effect on managing and responding to change, contributing half (49%) to overall change readiness followed by products and services (26%). This highlights the importance for business to have adaptable systems and processes in place to easily react to and respond to change.

Change ready businesses are proactive, focus on the customer and external factors

Change readiness is not restricted to any particular type, size of business or industry. Change ready businesses are determined by external factors (like customer needs, competitors, and trends), whilst non change ready businesses are internally focussed.

In fact, 93% of change leading organisations cited the desire to meet customer needs as the top trigger for transformation, closely followed by improving product or service delivery (90%). Less change ready businesses are primarily driven to change in order to reduce costs (55%).

Commenting on this finding, Mr Paitaridis noted that when businesses focus on customer needs, have strong leaders and adaptable processes and systems, they begin to see change as a positive force rather than a force that they have to respond to. “While all businesses are concerned with reducing costs and improving efficiency, it is important they don’t get stuck in a defensive, inward-facing mind set. In leading organisations, change readiness is part of the business DNA. Change leaders are proactive and they change for positive reasons. They do this to improve collaboration among their people, to engage with customers in more targeted ways and to create new revenue streams,” said Mr Paitaridis.

Technology as an enabler and a barrier

 93% of change ready leaders report that technology has a positive impact on their organisation.

The research demonstrates the different requirements businesses want from technology based on their level of change readiness. More than 80% of change ready businesses identified knowledge sharing (84%), purpose built-tools and systems (80%), collaboration (80%) and targeted customer engagement (80%) as the top benefits of technology. Conversely, least change-ready businesses have a more limited view of technology, with cost reduction (73%) cited as the most important benefit of technology.

Change ready businesses also see technology such as legacy systems as ‘restrictive’, as opposed to the importance of ‘agile technology’, such as Cloud. In fact, forty-five per cent of the most tech-savvy change ready businesses see restrictive technology as a barrier to change.

“Today, effectively every business is a technology organisation. 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,” says Mr Paitaridis.

“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.”

To download a copy of the report which includes quotes from key Australian organisations involved in the development of the report visit: optus.com.au/futureofbusiness

Media contacts

Steve Batten

Optus Corporate Affairs
T: (02) 8082 8750

E: Steve.Batten@optus.com.au

Mihika Gujral/Wendy Ko
Text100 Public Relations
T: 02 9956 5733
E: sydneyoptusteam@text100.com.au

[1] The Optus Australian Business Change Readiness Score is based on the change readiness models, constructs and measures developed by Professor Achilles Armenakis from Auburn University and Daniel Holt from the US Air Force Institute of Technology.

[2] processes and systems – the way their organisation operates, that is the processes, systems and structures; products and services – the product or service they offer to their customers; people and culture – the employees and internal culture of a business; external factors – how a business deals with external pressures.