Change is a response to shifts and disruptions in an environment’s conditions. It’s brought about by factors influencing demand, preferences, tastes, needs, and thought processes.
Technology, laws and regulations, politics, supply availability, and the financial and economic situation can trigger change.
Failure to adapt to change can lead to your business closing down.
How Does Change Affect Business?
Russia and Ukraine account for ⅓ of the global production of wheat. Likewise, both countries produce ¼ of the worldwide supply of barley and ¾ of sunflower oil.
When Russia invaded Ukraine in 2022, it prevented farmers from working in the fields. Russia also blocked shipments passing through Ukraine’s Black Sea ports.
The cumulative effect of Russia’s actions disrupted the supply chain of these agricultural products worldwide.
Businesses had to find alternative sources for wheat, barley, and sunflower oil. Eventually, governments opened trade arrangements with countries like Argentina, Latvia, Lithuania, and Poland.
However, as a consequence of Russia’s invasion, world prices of agricultural commodities and petroleum products increased. These circumstances applied inflationary pressure to the prices of products and services.
Businesses would have to find ways to manage the higher cost of production.
How?
How To Adapt To Changes In The Business Environment
If production costs increased because of the Russia – Ukraine war, here are a few options you can consider to adapt to the change in the business environment:
- Raise prices
- Look for alternative suppliers
- Create new streams of revenue
- Introduce new products with higher profit margins
- Actively promote products with higher profit margins
- Lower costs by outsourcing services
- Reduce inventories
Your strategy map could combine a few of these options. You could develop a business development timeline incorporating these strategies.
Stage 1: Address rising production costs. Lower monthly operating costs by outsourcing services. You might want to outsource digital marketing services, accounting, human resources, and customer support instead of handling them in-house.
Stage 2: Introduce new products with better margins. Look for alternative suppliers with the materials needed to create new products with higher profit margins.
Stage 3: Create new streams of revenue. Actively promote the new items to customers. Open an online store or create an e-commerce website to offer the items that aren’t available in your physical stores.
Stage 4: Improve operating efficiency. After three months, review your product mix. Assess which products are selling fast. Eliminate slow-moving items with poor profit margins to reduce inventory costs.
Stage 5: Raise the prices of your signature items. Don’t be afraid of raising prices. Many customers are aware of your situation. If they love your signature product, they will buy it even at higher prices. Besides, higher prices add a premium value.
By implementing anti-inflation strategies, you provide customers with options to shift their purchases towards lower-cost items that offer higher profit margins if your core products are priced higher.
7 Ways Businesses Can Adapt To Change
If you believe you’ve got everything figured out, you’re wrong. Success can breed complacency. The only thing certain about business is its uncertainty. Business conditions can change without warning.
Here are seven ways your business can adapt to change and thrive despite unfavorable conditions.
1. Stay Informed
The best way to anticipate change is to stay informed about the latest developments in your industry, business, technology, consumer behavior, the local and global economy, and other triggers.
- Get Google Alerts.
- Join community groups on social media.
- Attend seminars.
- Engage your audience and solicit their input.
- Research and then create content on these topics based on your findings.
If you have a team, schedule a discussion session every Monday morning.
- Before the workweek ends, assign a topic to each team member, and require everyone to prepare a five-minute presentation for the following Monday.
- Conduct a Q and A session after each presentation. Keep the sessions to 30 minutes and switch topics weekly.
- During the group discussion, ask your team to identify potential threats and triggers of change that could affect business performance.
Group discussions are a fun and effective way of developing critical thinking skills and team engagement.
2. Improve Business Agility
Agility is the skill needed to change direction on the fly. If things don’t go according to plan, agility allows you to implement an alternative course of action immediately.
Agility is a mindset. You acknowledge there’s no such thing as a perfect, flawless plan. You don’t assume that you’ve covered all the bases and have factored in all potential risks.
You view financial projections as possibilities even if the numbers are optimistic. An agile mindset will run the financial projections against multiple unfavorable scenarios to estimate the potential business costs.
Be confident and competent… but not stubborn.
A rigid and inflexible business strategy will render you helpless when change happens.
3. Adopt a Growth Mindset
Let’s play a game of “Jeopardy.”
What is: Climbing a mountain, pushing a stalled car, a weight-loss journey, Day #1 in school, and starting a new business?
Answer: Things that are hard at the start, but easy once you get going.
Change often equates to challenge. It can disrupt the course of business, especially if you didn’t anticipate the event that triggered the change.
Instead of viewing change as an “Oh no!” moment, consider it an opportunity to grow your business.
Have you heard of the “Retail Apocalypse?”
The Retail Apocalypse refers to the closure of numerous physical retail stores due to declining sales.
The following factors are identified as the main triggers of the Retail Apocalypse:
- Rising costs of production.
- Rising debt.
- The collapse of the equities and property market.
- Global unrest.
- Changes in consumer behavior.
The retail stores that survived were the businesses that adapted to change.
Since costs were rising and consumers were shifting their purchasing preferences from physical stores to online, likewise, businesses decided to shift their business model.
They opened online versions of their retail stores and invested in e-commerce websites.
- Business costs were lower. They outsourced services such as digital marketing, customer service, logistics, warehousing, and back-office operations.
- Business was open 24/7 and accessible to remote locations and the global market.
- The e-commerce website opened a new stream of revenue, improved customer service, and comprehensively promoted the products.
Not only did these businesses survive.
They thrived.
With a growth mindset, you view challenges as obstacles that you need to overcome. Your business grows whenever you overcome a challenge.
4. Embrace Innovation
Innovation happens because we’re constantly looking for ways to improve efficiency and productivity.
Those of you who worked during the 90s and the mid-2000s can appreciate the evolution of communication.
From the pager to the mobile phone, fax machine to email, dial-up Internet to broadband technology, the mobile phone to the smartphone, websites to apps… technology continues to introduce innovations that make life and work easier.
The pandemic ushered innovations that responded to shifts in business modeling from brick-and-mortar to remote work.
- Healthcare companies introduced online consultation.
- Schools expanded coverage through online classes.
- Businesses offered telecommuting arrangements.
- Restaurants collaborated with logistics companies to improve delivery services.
- Supermarkets included home deliveries for groceries.
- A rise in subscription services for gift boxes, media and entertainment, and necessities.
These services wouldn’t be possible if businesses didn’t embrace technological innovations.
5. Expand Business Skills
You can’t run a business by yourself. It’s smart to delegate tasks to other people or outsource services to qualified third parties. It’s also a good idea to learn the tasks and services you outsourced to develop an understanding of how they work.
For example, learn the basics of digital marketing before outsourcing it. When the digital ad agency provides its performance review, you will understand the metrics and have the insight to ask relevant questions.
Do you check the boxes for these in-demand hard skills?
- Computer technology
- Accounting
- Project management
- Written and verbal communication
- Customer service
It’s never too late to add to your business acumen toolbox!
Speaking of not running a business by yourself…
6. Hire Right-Fit People
Whether you’re hiring full-time employees or remote workers, prioritize hiring right-fit people for your business.
What does right-fit mean?
Right-fit people subscribe to the same or similar values, acknowledge your purpose, and are committed to helping you achieve your vision.
Aligned values, purpose, and vision is a powerful thing!
When you surround yourself with like-minded people, every challenge can be overcome.
Yes, they’re looking after their interests. That’s normal. However, people who are aligned with you understand that to meet their interests, you must achieve yours.
With right-fit people, collaboration is possible.
7. Frequently Measure Business Performance
All courses of action are theoretical until implemented, tested, proven, and supported by numbers to be effective. Decisions based on guesswork or intuition are subjective and will put your business at risk.
Numbers don’t lie. The metrics summarizing the results of the solutions you put in place provide the empirical basis for evaluating business performance. You can arrive at an objective decision when it’s based on actual data.
If the numbers fall short of your targets, don’t assume the course of action you took was wrong. Numbers also tell you the story. Check which areas need more attention and come up with possible solutions.
Let’s assume you put up an e-commerce website for your sporting goods business. Your website metrics showed an alarmingly high cart abandonment rate. The new cart abandonment email has a lower-than-expected conversion rate.
What should you do?
- Find out the reasons why your users are abandoning their carts.
- Personalize the emails based on purchase history, cart size, product preferences, and amount of purchase.
- Create multiple emails with different messages.
Email “A” reminds the customers of products left in their carts. Email “B” offers customers a special discount. Email “C” gives a product recommendation.
Collect data on the emails and analyze the results.
Remember, keep an open mind. Don’t assume that every action results in the desired outcome. There’s no such thing as a perfect plan but there’s always room for improvement.
Conclusion
The bottom line is don’t ignore signs of change. In a global economy, changes can create a ripple effect that could affect the performance of your business. Move quickly and implement strategies to help your business adapt to change.
A website is a technological innovation that will help you seamlessly adapt to change. Companies that had website versions of their business not only survived the pandemic but were able to introduce their products and services to new markets.
If you don’t have a business website, contact us. We’ll design a website that fits your business needs and goals.
And if you need digital marketing services, we can do that for you as well!
