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Good change management is vital for modern leaders, on par with entrepreneurial characteristics such as being inspirational, strategic, organised and process driven.
It’s especially important as small businesses traverse an ever-growing web of local and global issues, such as rising interest rates and inflation, an uncertain economic outlook and new geopolitical complexities.
Dealing with these circumstances requires a whole-of-business approach, incorporating organisational culture and genuine financial discipline.
Two CommBank small business customers highlight how great change management can support long-term business goals. Here are their top tips for negotiating all the movable parts small businesses face in a world of constantly moving goal posts.
Jane Robertson is the founder of shoe brand Millwoods Shoes, based in Kooringal in the NSW Riverina. While the business started life as a kid’s brand, Robertson saw there was also a gap in the market for high quality, comfortable women’s shoes. Moving into this market was a substantial turning point, one that fundamentally changed the business’s trajectory.
“As soon as the kids started to talk about how they would only wear our shoes, mums wanted what they had. So we took a punt and did our first women’s loafer, which quickly sold out, to my surprise,” says Jane.
“We had found our true customers, who were parents trying to combine style and comfort. It gave us such a financial start we were able to expand. Five years on, our next drop is seven different styles in 37 different variants,” she adds.
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Cam Grant is the co-founder of Unyoked, launched in 2017, which helps people to see and use the outdoors just like they would a gym or meditation app to escape from the daily grind. The business owns 100 off-the-grid cabins in serene locations a few hours from major cities in Australia and overseas.
Cam has dealt with a changing business landscape throughout the company’s life, having managed everything from bush fires to floods and mouse and snake plagues, not to mention COVID. This experience has taught him great change management must be part of a business’s DNA.
“Expect change and be adaptable to it. Build a team that knows where they are heading and how they can shape things. That’s really important when you can’t control everything,” he recommends.
Businesses that consistently prepare cash flow forecasts and think about their risks and how to mitigate them are in a great position to respond to change. These are some of the variables CommBank looks at when stress testing businesses.
“We ask a lot of questions when we’re looking to support a customer and finance them. We get a really quick sense for fundamental things, like their ability to borrow money at higher interest rates. We are trying to ensure they can be resilient, so we want to understand their sustainability and staffing practices,” says Rebecca Warren, CommBank’s Executive General Manager – Small Business.
Jane warns it can be easy to shy away from numbers if they tell an unpalatable story, but this is a mistake.
“You might find money is going out the door faster than it’s coming in. If it is, it’s time to assess whether finding a market costs more than the value of the market.”
Every fortnight, Jane does a thorough review of the business’s financials, looking at elements like cash flow, changing interest rates and inflation.
“We also need to manage the exchange rate, which changes all the time. All of a sudden, currency movements squeeze your margins and you have to manage that.
“But it’s not all about cutting expenses. Sometimes, doubling down on finding value in your business and working out what you need to delegate is the priority.”
The idea is to learn from changes when they happen and make financial decisions based on sound, up-to-date financial data. That’s the best way to build the skills and experience to withstand changes as they happen and be successful in business.
Want to know more? Click through to find out more about Jane, Cam and Rebecca’s insights into practical change management for small businesses.
Read now: Small businesses embrace sophisticated change management strategies
The Commonwealth Bank (ASX:CBA) is one of Australia’s leading providers of personal banking, business and institutional banking and share broking services. With more than 15 million customers and a history spanning more than a century, the Group’s purpose is to build a brighter future for all. The Commonwealth Bank is Australia’s leader in digital banking and maintains the largest branch network across the country. For more information on Commonwealth Bank, visit commbank.com.au/business.
