There’s a lot of allure to the world of entrepreneurialism. The idea of being independent and following your own course is a big part of it, as much as the gratification of seeing your product or service take off with customers.
It’s the kind of environment where people may think that concepts like business forecasting or change management are all well and good, but really the province of big businesses – not more fledgling organizations.
But Jonathon Karelse says they couldn’t be more wrong. And entrepreneurs who think that way may be hobbling the future growth and overall success of their ventures.
Jonathon Karelse is co-founder and a partner at NorthFind Partners, a Canadian-based, global consultancy that helps businesses transform through the use of data driven analytics, forecasting and planning, and change management strategies. He is also a thought leader on demand planning who has employed it with other strategies to help companies of various sizes succeed with their change agendas.
Karelse explains demand planning as a multi-step operational supply chain management process that results in reliable forecasts for revenue and the peaks and valleys in demand. Change management, of course, encompasses the processes, techniques and tools that an organization utilizes to move successfully to new or better circumstances.
The fact is, Karelse says, that smaller and entrepreneurial businesses often are caught short when their marketplace changes and they haven’t adjusted their change agenda in response. It happens because they often neglect the forecasting and planning that helps them prepare. It’s a sure way to hamper their nimbleness in responding to market changes.
“Their forecasting doesn’t necessarily have to be rooted in demand planning, specifically,” Jonathon Karelse adds. “Any form of forecasting, done accurately, will provide the necessary measurements for planning and goal setting to guide management for the future and help it avoid risks.”
While forecasting is important for guiding a business on a daily basis as well the long term, it also informs the change agenda. Karelse says entrepreneurs may think of change management as irrelevant to their businesses, but the very fragility of a startup means its preparedness for adapting is paramount for long-term survival.
“What many in the entrepreneurial community may not think about is that change management will help an organization of any size minimize the negative aspects of change,” Karelse explains.
“Where they may have an advantage over is in their ability to pivot fast when they are prepared to do so. The scope of the change can be as small as a move to a new office or as significant as an acquisition or a merger. There’s a difference in scale compared to larger businesses, but change can be intimidating whatever your size.”
Ultimately, Karelse believes, entrepreneurs should be as focused on driving the ongoing transformation of their businesses as any other concern. It takes discipline and foresight and the use of all the analytic and forecasting tools at their disposal to not just plan for their future, but to manage effectively through the changes that will come.
He discussed these and other issues in our interview.
Many entrepreneurial businesses believe they are too busy or too small to tackle the more rigorous sort of forecasting or planning you undertake. Can you give us an example of a more entrepreneurial concern (cloaked, if necessary) that has done this, what, specifically, they’ve done, and how it has helped them manage their growth over time?
Jonathon Karelse: A very common mistake made by organizations undergoing change, regardless of size, is spending too much of their time, focus and resources in the short-term, fighting fires. When our team initially engages with companies, we often hear, “We understand the need to plan more strategically, but we are too busy taking care of daily business.” The reality is, if your focus never shifts from fire-fighting to fire prevention, you will never make the transition. There is always time, regardless of the size of your enterprise.
What do you believe are the biggest mistakes that entrepreneurial ventures make in laying the groundwork for analytics and planning that can drive success?
Jonathon Karelse: Once organizations get introduced to better metrics and scorecards, they often swing too far in the other direction and get too consumed by slicing and dicing them. Analytics are a tool; good management is the lever. They should be used for root cause and corrective action, and the focus should always be on “Is this course of analysis actionable?”
Conversely, what are their biggest advantages, and how might those be better leveraged?
Jonathon Karelse: Entrepreneurs who have taken their organizations from an environment without planning to an environment where data-driven decision making is the norm have essentially turned on the lights. The advantages will literally touch every part of the organization. The biggest advantage that a smaller-scale business will enjoy as a result is the increased agility, and in today’s marketplace, supply chain agility trumps product innovation over the long-term.
What are some of the steps or considerations that smaller or more entrepreneurial ventures should think about when it comes to how they might want to handle change management issues for their organizations?
Jonathon Karelse: Change management is often an undertaking whose payoffs are difficult to immediately quantify, which is why many people shy away from engaging it wholeheartedly. The payoffs are always there, however, and with a well-defined plan with KSF (Key Success Factors), it is easier to get stretched resources behind it.