Why are some businesses resistant to change?
My company handles the books for about 20 different businesses across many different industries remotely through the cloud most of them being in the construction industry. As technology advances, we find that businesses in the construction industry are the most resistant to grasp more efficient and accurate ways of handling their books.
For example, when it comes to accounts payable, many business owners/project managers need to have their hands on every bill before it gets to accounting. By doing this, it creates a bottleneck where the PM is hoarding bills because they don't have time to approve them and send them on to accounting. We have designed efficient processes where they can still see the bills weekly, but we get them and put them into the system. Nothing gets paid without their approval, but they still feel the need to do it the old way where they touch the bills first and approve them before sending them to accounting. It leads to delayed closings and inaccurate WIP schedules.
Answers (1-10)
This topic has been talked about in a couple of accounting groups lately. I have a couple of thoughts on this.
Suggestion: Draw out a simple flow chart of what the process looks like, show them the checks and balances (bill entered but not paid until approved by owner or project manager) and how it can improve their cash flow. Visuals can be very effective if clear and precise.
I hope this text doesn't post as big as it appears when I'm typing it - posting with uncertainty ;-)
In addition to what has already been stated, my experience has taught me three additional reasons to resistance to change.
Of course, those three can be expanded but when it is summarized; fear, trust and lack of good communication are big reasons for resistance to change or stated another way, resistance to listening to good advice.
Too much effort and money required.
Businesses are resistant to change because most people are resistant to change. People like to feel comfortable and they are comfortable with what they know. Change requires new thinking and or new processes. People are afraid of the unknown. When leading change in an organization it is important to share information and provide training and education in order to lessen the fear and have people move forward with the new requirements.
Change is always difficult. Just think about moving homes or jobs, it takes effort, there is a loss of control and a lot of uncertainty. With our business, we automate many processes and invariably, proven many times over by our clients, the company sees the savings in real dollars. However, change management is huge part of our business because someone sees that changing to using our systems, there will be job losses or more often than not, control loss. Similarly, in the case of the PM, it isn't that he doesn't have the trust that the bills won't be paid until he approves them, its the fact that he has always done it this way. Further, it may be that he won't be the first one to see a mistake and fix it rather the accounting department - this makes him feel he is providing more value and therefore more security to himself. A value that necessarily doesn't have any value in the grand scheme of things and nothing to do with his job security. But you are trying to take away something he currently does which in his eyes could reduce his value.
Business owners, especially over the age of 45 seem reluctant to want to become educated on new technology and systems that replace the old tried and true way of handling money and keeping records simply to understand. And, keeping it out the hands of anyone besides whom they want to see. Technology is great and yet has been proven to be subject to great risks. I do not see business people changing this attitude anytime soon.
As a consultant, I believe it is the same in life. I find most people are resistant to change because they are comfortable with the status quo. Also, they don't like to let people know they don't know how to do something such as learning a new technique in a program. The bottom line is its Fear of the unknown. The solution is to make the transition as simple as possible and maybe in phases.
In the past I have found that companies like that are dealing more with a micro manager and managers that feel that their way is the only way. I have worked for people like that and it becomes a big problem when vendors are looking for payment and they are being held up. That is a company that has to rush to pay things and makes it hard to keep their finances accurate.
I think many small businesses think processes remain the same, even if the situations change how business is done based on operational procedures. Like in my industry of merchant processing there so many updates that effect how a business even identifies who they are as the owner. My advice is really all you can do is present what is updating related to your industry and proceed from there. There are many times when our clients do not realize when we're actually trying to look out for them.
Many business owners have not arrived to the 21st century. You have to prove to them the new way works. Numbers don't lie so show them stats on how much savings they will have in time and money when they follow the new process, without sacrificing controls. Have crystal clear presentations to show them how it works. Tell them even the IRS accepts digital copies of invoices/receipts. If all that doesn't work, raise your prices.