Ready, Set, ... Lead
Even if company stakeholders all agree that moving to a B2B subscription commerce model is the right strategic step for your company, achieving success requires more than a good strategy. To be successful, your company needs a subscription commerce leader who’s willing to challenge the status quo, push past obstacles, and create sustainable growth and innovation by helping the company embrace a recurring revenue model.
Let’s face it: change is difficult.
There will be resistance, even when everyone supports the ultimate goal. There are also organizational dynamics that come into play where culture, history, and mindset can thwart even the most clearly beneficial efforts.
To achieve big breakthroughs, such as subscription commerce, you must effectively manage change across the organization. Are you ready? It’s time to prepare yourself to lead the subscription commerce charge.
This chapter covers:
- Tactics you can use to drive change within your organization
Stepping into the Leadership Role
Innovator. Trailblazer. Mover and Shaker. Visionary. Commander. Pathfinder.
There are many ways to define a leader. And there are just as many traits associated with successful leaders—authenticity, passion, commitment, patience, courage, perspective, and the list goes on.
What kind of leader do you need to be to steer your company towards subscription commerce success? While the traits above are certainly a good start, here are some of characteristics that will help when it comes to shifting to a new recurring revenue model:
A forward-thinker who isn’t afraid to do things that haven’t been done before
The authority to invest in and empower change management (typically this means being a member of the c-suite or a top executive with a mandate from the c-suite)
The desire and absolute knowledge that you must expedite your company’s move to recurring revenue
The ability and understanding needed to persuade and incentivize different areas of the company to adopt the new business model
Anticipating the Hard Part
You and your team have already laid the proper foundation for your company’s move to subscription commerce. You’ve done everything right so far: you’ve aligned the strategy with the different stakeholder groups across the company, defined your goals for recurring revenue and how you’ll measure success, developed your product offering, validated the critical capabilities you’ll need when you launch your subscription-based offerings, and you are preparing for launch.
However, some of the most difficult work still lies ahead. That’s because change is never easy. Regardless of the level—organization, team, or individual—people don’t universally embrace change. Some may actively seek to sabotage it.
That’s why it’s important to anticipate the challenges of changing established processes, tasks, responsibilities, and mindsets across the company as you adapt to a new business model. Taking the time to understand what to expect can help you determine the best path forward and then navigate smoothly around the obstacles and areas of resistance.
“The need to shift mind-sets is the biggest block to successful transformations. The key lies in making the shift both individual and institutional—at the same time.”
“The need to shift mind-sets is the biggest block to successful transformations. The key lies in making the shift both individual and institutional—at the same time.”
Assessing Organizational Dynamics
Part of your approach to leading the subscription commerce shift needs to consider your company culture, history, and mindset. Are people at your company ready to let go of the status quo?
Today’s business landscape is anything but stable and predictable. Disruption is the new normal and companies live in states of permanent, or semi-permanent, disruption.
Yet, some middle managers and even executives continue to hold onto old business models, trying to find ways to replicate past successes and maintain the status quo. You can call this a fixed mindset.
As you formulate your plan for shifting to a recurring revenue model, ask yourself these questions about the current state of your company:
- Is the current legacy leadership accustomed to operating in one way for the history of the company?
- Are there operational and leadership silos?
- Does the company culture and mindset embrace continuous innovation?
To succeed, you’ll need to find a way to help people within your company let go of approaches that worked in the past and embrace an innovative and open mindset.
“Executives at exactly zero companies that disregarded an analysis of employee mind-sets during a change program rated the transformation as ‘extremely successful.’ Conversely, executives at companies that took the time and trouble to address mind-sets were four times more likely than those that didn’t to rate their change programs as at least ‘successful.’”
“Executives at exactly zero companies that disregarded an analysis of employee mind-sets during a change program rated the transformation as ‘extremely successful.’ Conversely, executives at companies that took the time and trouble to address mind-sets were four times more likely than those that didn’t to rate their change programs as at least ‘successful.’”
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Focusing on the Human Aspects of Change
A leader teaches people the “what, why, and how” of the changes that need to be made. This requires change competency, an essential skill for a subscription commerce leader.
Investing in change management is one of the smartest things your company can do to help it successfully pivot to a new business model. Without it, your company may never realize the full potential of a recurring revenue model because the people involved didn’t embrace the change.
According to Prosci, a change management research and consulting firm, change management comprises processes, tools, and techniques to manage people and achieve desired business outcomes. It focuses on the human factor of organizational change by helping the people in your company embrace the transformation effectively and adapt to their new environment quickly.
Leading Change During COVID
“Don’t allow the crisis of the Now stop you from moving toward the Next. Reserve two hours per day for work focused on getting your organization and your workforce to the future. It’ll feel like you’re ignoring the urgent, but two hours, wisely spent, will help move your organization beyond the urgent and prepare for the future.”
“Don’t allow the crisis of the Now stop you from moving toward the Next. Reserve two hours per day for work focused on getting your organization and your workforce to the future. It’ll feel like you’re ignoring the urgent, but two hours, wisely spent, will help move your organization beyond the urgent and prepare for the future.”
Achieving Your Objectives
While there are multiple, different frameworks and approaches for change management—the ADKAR model from Prosci, John Kotter’s Change Management Model, McKinsey 7-S Change Management Model, Kübler-Ross Five Stage Change Management Model, and others—the important success factor is that you pick one and use it.
Using a structured, formal approach to change management helps you stay on track, undertake the right activities, and monitor progress. According to Prosci, the advantages of using a structured methodology include:
- Provides structure and rigor for the people side of change
- Enables repeatability and scalability
- Addresses all key components of the changes needed
- Avoids missing important steps
- Draws on the lessons learned by others
“In the roughly 70 percent of change programs that fail to deliver results, the vast majority of problems can be attributed to the “soft stuff”: employee resistance to change and inappropriate leadership behavior.”
“In the roughly 70 percent of change programs that fail to deliver results, the vast majority of problems can be attributed to the “soft stuff”: employee resistance to change and inappropriate leadership behavior.”
Helping Customers Adopt Your Changes
While managing change focuses primarily on employees, don’t forget about the changes your customers will face. Are they ready and accepting of a recurring revenue model or will they walk away from your company? It all depends on how you manage the changeover.
With the move to a subscription commerce model, your company won’t be the only beneficiary. It can, and should be, a win-win for both your business and your customers. B2B subscription commerce aligns your solution around customer value, helping them better plan and budget, reduce costs, and lower risk at the same time.
Communicating the benefits of your new business model to your customers can help improve adoption and reduce customer churn. Furthermore, make sure your team has considered and properly planned for the impact, both upside and downside, on your customers, including:
- Communicating early and often about the change to your customers
- Anticipating how customers will likely react and creating compelling incentives in response
- Developing a transition plan for helping customers move to the new model
“We’re changing the world for developers and small businesses. We intend to build a dynamic small business economy designed to make developers successful and enable them to do what they’re really good at — and that’s developing innovative solutions that small business can’t live without.”
“We’re changing the world for developers and small businesses. We intend to build a dynamic small business economy designed to make developers successful and enable them to do what they’re really good at — and that’s developing innovative solutions that small business can’t live without.”
Chapter 11
Key Takeaway:
We’d be remiss if we insisted that subscription commerce success happens overnight. It’s perfectly clear that leading the change that transforms your business model, increases your market capitalization, grows revenues, expands your market share, and differentiates your brand is not a trivial undertaking.
But it’s also not an undertaking that your company must take on alone. AppDirect is here to help. As a trusted advisor to industry leaders such as Jaguar Land Rover, Comcast, ADP, and Deutsche Telekom, we’ve worked with many companies to help them achieve their subscription commerce vision. We can help your business, too.
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