This article originally appeared in the May 2011 issue of Smart Business Philadelphia magazine.

As businesses continue to evolve, innovation and creating a culture of change are critical to growing a profitable organization. The companies that are succeeding are the ones that are taking a good look at themselves and considering ways to work smarter, improve efficiencies and, as a result, drive profits.

"It certainly is a new world," says Stephen Christian, director at Kreischer Miller, Horsham, Pa. "Customers’ needs and demands have changed, and employees’ needs and demands have changed, as well. Companies must adapt in response to these changes. But that does not mean you disregard all the good things that got you to where you are today. Instead, by innovating and adapting you can strengthen your organization and look at the challenges as an opportunity to move forward. Without change there is no progress."

Smart Business spoke with Christian about how to implement changes in an organization to create value.

How can innovation and change lead to opportunities?

Businesses cannot keep operating the same way given the impact of changing times. You can define success in many ways, but one way to define it is financially, by selling more or improving efficiencies to drive down costs.

Regardless of your industry, examine your product portfolio for new opportunities. Can you sell your existing products to different customers, or develop new products to provide more value and options to current customers? Can you enhance product differentiation by adding more pre- or post-sales services?

You should consider process changes, additional automation, investing in technology, improving inventory controls and re-evaluating manufacturing processes to increase efficiencies and gain economies of scale. You should also evaluate your compensation system. Is compensation aligned with performance and desired results? Should more of the compensation be variable in nature?

The list goes on — everything is on the table. Your goal is to challenge the status quo. Ask yourself why you do things the way you do. Is there a better way to do them?

How can an organization decide where to focus its time?

The questions most executives ask are, ‘Where do I start? What areas do I focus on, and what changes will make the most positive impact on my bottom line?’

The first step is to determine your critical success factors. What makes your company tick? How can you make more money?

Focus on the controllable. Talk to customers candidly to gain their insight during this period of self-evaluation. Find out why your customers buy so you can anticipate their needs and adapt to meet them.

Remember, your employees are the ones doing the work. Your salespeople, your workers who produce products and your customer service personnel are the people on the front lines and behind the scenes who keep your company running and who will ultimately implement change. So involve them in the discussion and ask them where opportunities lie.

Also, network with other business owners and take advantage of trade organizations to get ideas from peers. You’ll find that identifying opportunities to innovate is the easy part. It’s implementing change that is tough.

What barriers get in the way of change?

Often, inertia — a lack of momentum, or not having any real action plan to move a change strategy forward — is a barrier to change. Another is not listening to customers and employees.

You might think that business is great now, so there is no reason to change. Short-term, immediate successes can get in the way of achieving long-term goals. Fear of the unknown is an obstacle. We all like certainty; it’s comfortable to do things ‘just like always.’ But that attitude will cause a business to become stagnant.

And simply treading water instead of advancing forward is a sure killer in this economy.

How can management put a business in the best position to embrace change?

It’s important to make the case for change. The days of dictating and legislating change are over. Explain why change needs to happen and why you are evaluating something new.

Obtain buy-in from key stakeholders and make it clear that once a path is selected, everyone must be on board. Emphasize that change is a team effort and a team process. It’s not going to happen overnight.

Encourage risk-taking and be willing to make adjustments on the fly as you head down the path of change. Acknowledge when you make mistakes and ask stakeholders for ways to improve. Constantly measure your progress and celebrate successes along the way.

Organizations that embrace innovation and change and are willing to adapt will succeed in rapidly evolving times. Acknowledge that change is difficult, commit to innovate to enhance opportunities and have the courage and confidence to follow a plan to accomplish your goals, and growth and profits will come your way. ●