A worrying gap has emerged between business leaders' perceptions of their their organisation’s "change readiness" versus the attributes and attitudes required to implement change.
That's according to research released today by Optus which 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 measures the level to which businesses are equipped to deal with change.
Change readiness was considered across four key elements: people and culture, systems and process, external environment and product and services
The report found that while 85 per cent of senior Australian business decision makers felt ‘confident or highly confident’ in their organisation’s readiness for change, only 23 per cent of these organisations are actually ‘highly ready’.
It also found 77 per cent of Australian organisations were not ‘highly prepared’, but 86 per cent 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.
Optus Business managing director, John Paitarides, said change ready businesses were not only prepared for, but also anticipated and predicted 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," he said.
Of the four key business areas identified, processes and systems have the highest effect on managing and responding to change, contributing half (49 per cent) to overall change readiness followed by products and services (26 per cent).
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 focused.
In fact, 93 per cent 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 per cent).
Less change ready businesses are primarily driven to change in order to reduce costs (55 per cent).
Paitaridis said that when businesses focused on customer needs, had strong leaders and adaptable processes and systems, they started to see change as a positive force rather than a force that they had 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," he said.
"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.
The research also revealed 93 per cent of change ready leaders reported that technology had a positive impact on their organisation.
More than 80 per cent of change ready businesses identified 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.
Conversely, least change-ready businesses have a more limited view of technology, with cost reduction (73 per cent) 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, 45 per cent of the most tech-savvy change ready businesses see restrictive technology as a barrier to change.
Paitaridis said every business was now 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,” he said.
“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.”