When a business changes
When a business changes confidentiality of business plan is required by law when the value of shares might be affected and knowledge could result in insider trading. When I started conversations which could lead to the sale of Cerebos Pacific Ltd I watched my shares every hour for signs that there was a leak – and sure enough eventually I saw it. So I asked the Stock Exchange to suspend trading until I could make an announcement.
In today’s world when events move fast it can be especially important to maintain secrecy about possible next steps until they are clear enough to be made public. Shrewd employees – and others – will, however, get a whiff that something is going on. Putting two and two together may not be that difficult. How do you manage a business that is subject to swift and unexpected changes? What keeps the business working and what threatens its stability?
Every executive should be on the lookout for change. If ownership of the business is not involved, inventory, culture, process, purpose almost certainly will be. AI, robotics, digitisation and just plain change stalk every hour. Competition no longer comes from others producing the same as you but from newly-identified, newly-met needs, changed technologies and discoveries about the human condition that allow better control over it.
Just as a doctor watches all the worsening or improving signs of a condition in a patient so too managers must observe straws in the wind that presage change. Customers give the first clue. They are besieged by others wanting to sell to them. Providing information is a way to make a sale. Some of it will be real, some fake. When the former, it has intrinsic value; when the latter, its purpose is worth studying. A competitor on the run is good news.
Most managers will try to keep potential change quiet so as not to rock the boat. This is a mistake. The boat is most rocked by rumour; facts tend to stabilise it. So it pays to get everyone talking about potential change while they can without infringing insider rules. Speculation is often thought of as unhealthy. The opposite is usually true. Assessing what is likely to happen to your business next is the responsibility of everyone who works in it.
It is also wise to think about what contingency planning is needed if there are to be major upheavals. Some people will quit; they will be the ones who were not sure-footed in the first place. Sensible employees will sound out the possibility of other jobs. If you discover that they are being offered better terms, think about adjusting yours. Competition in the labour market has been thrown open by change but reviews remain doggedly annual.
Don’t frighten your employees with implied threats of a Big Bad Takeover. Help them quietly and sensibly to understand the pace of business today. Reassure them of your loyalty to them and your intention to see that whatever happens they will get the best deal you can negotiate. Let them think as widely as possible about what may be going to happen.
Even the problems of possible nuclear war are best put on the table and inspected. The future path of your employment is a subject just as close to your heart as theirs is to them. Get them thinking about it positively before it gets them thinking about it negatively.
The company that shares well, fares well.