Managing Change Enquiry and Action

□ Introduction

Organisations are significantly shaped and influenced by the customers they choose to serve. As organisations seek to grow and develop, they do so by adding increasing value for the customers they currently serve. This can be done by adding new product lines or seeking new ways to add value for customer types that they are yet to acquire. Using some of the diagnostic approaches from the enquiry–action framework (presented in Part A of this book) it can be concluded that change most commonly involves organisations adapting to meet the demands of their customers and positioning themselves to compete effectively within their chosen markets. The need to undergo changes that help match internal organisational arrangements with the external organisational environment is a constant and evolving one. Organisations, however, must choose to continue to serve only current customers or to pursue new customers and challenge new competitors in the pursuit of profitable growth. This is the essential work of business strategy. It is equally relevant, and helpful, to conceptualise such choices in the context of public, voluntary and charitable organisations (See Extended Case: Australian Red Cross). We return to this theme later in the chapter. First we begin by considering two related but distinct changes that an organisation may engage with: choosing and changing customers. In the second half of the chapter we will examine the strategic change associated with changing competitors by entering new markets.

□ Choosing customers

Choosing which customers to serve and in what way is a fundamental strategic decision that can shape an organisation. Smaller businesses may make this choice based on factors related to the founder(s) – their professions, their interests, or it may even be an inherited family business. Entrepreneurs may identify new opportunities to add superior value for specific target groups even in areas in which they have little or no prior experience.

Most successful companies make a deliberate choice in who to serve as the result of considered assessment or detailed analysis. These organisations, large or small, are able to add more value for their chosen groups of customers than less-focused competitors.