“Everyone thinks of changing the world, but no one thinks of changing himself,” said Leo Tolstoy. Yet, in the commercial world of the early 21st century, ‘change’ is a vital part of staying relevant as the world changes around us.
For a master class in change management, one need look no further than the natural world. In his excellent BBC documentary ‘Metamorphosis – The Science of Change’, Professor Stuart Reynolds shows in detail and with extraordinary filmed sequences, how a fully developed butterfly must pass first through the phases of being an egg, larvae and pupa. Like an actor changing its clothes, the butterfly plays different parts as its development requires different things. The whole process is called moulting, a term that correctly captures the idea of shedding old clothes, but fails to mention the importance of first acquiring a pristine set of new ones.
Metamorphosis, which comes from the Greek word meaning ‘transformations’, means that the different stages of development allow for specialisation – the caterpillar is just an eating machine, feeding as fast as it can to grow big and strong, whereas the adult butterfly is designed to reproduce, to grow wings and fly so it can look for a mate and find suitable food for its eggs.
Professor Reynolds says: “…by being quick, the period spent exposed to potential predators and parasites is minimized. One of the ways in which speed is gained is by postponing all the difficult bits of development until later; insects don’t metamorphose until they have finished eating. But when enough has been eaten, the insect can retreat to a safe place (underground or inside a silken cocoon) and take its time to transform.”
The commercial message gleaned from science is that businesses of all types, including those in private equity need to adapt and, like the caterpillar or the adult butterfly, need to focus on particular areas of change or specialisms rather than completely reinventing the wheel every few months. Change needs to happen but it needs to be controlled or managed. It needs to be comfortable and achievable. Many people set out each January to introduce positive change but few will be successful without a thought-out plan!
There are some changes that can be proactively introduced, others that will be outside our control, yet all will be changes that we will have to learn to adapt to or evolve with. As the world stage moves on, for example, with it will come inevitable changes in financial regulation, tax transparency and beneficial ownership and failure to keep up with these changes will simply not be an option.
Technology is another huge driver of change and the rate is accelerating every year as processes leave their analogue past and enter a bright digital and virtual future. Not being up-to-date and relevant for clients and ignoring the seismic revolutions and transformations that point to the future, is a sure-fire way of being out of a job.
Pressures for efficiency drive change too and can introduce challenges in keeping your business model lean as the adjustments you make to the way you work will come at a cost. The skills, knowledge and expertise of your staff are the most valuable commodity that you have, so it is vital to ensure that they embrace these changes too. You don’t want them paying lip service to any transformation – you want them to be champions for the cause, armed with understanding, focus and enthusiasm. That is something we have successfully built into our culture at PEA.
The key thing to remember in the midst of swirling and potentially tempestuous seas of change is to not lose sight of your values and objectives. As change takes place you must remember who you are and what you stand for. As Professor Reynolds says about butterflies, ‘… despite all the shape-shifting, the new creature is in essence still the same individual.’
Vive la change!
James Orrick holds a Masters in Corporate Governance from Bournemouth University, a BSc (Hons) in Accounting and Finance from the University of Essex, is a Fellow of the Association of Chartered Certified Accountants and the Institute of Chartered Secretaries and Administrators.