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Journal number 1 ∘ Irma BaratashviliMarika Kldiashvli
CHANGES AND TRANSFORMATIONS IN SMES

Expanded Summary

One of the hallmarks of this century's business environment -is the constant shifting of external factors as well as the internal processes of companies. economic - technological development and globalization as a result of the frequency of changes increases, that makes us think about the fact that the modern business world must receize  current trend changes as a standard and develop appropriate methodologies, to help manage the changes with maximum efficiency and adapt timely to new circumstances. For every 5-7 years, the amount of knowledge that mankind possesses almost doubles. Consequently, the number of new situations that require new decision making and the use of new methods will be doubled. Naturally, this fact significantly increases the importance of managing news and changes. The reasons for organizational changes can be economic, ideological, organizational, informative, human resources, etc. The most common reason is environmental change and technological innovation. Diagnostic indicators of need for change: direct and indirect: Various performance indicators, non-competitive opportunities, low motivated personnel, innovations and innovations, need to punish staff, and more are known.

The news and changes can be classified as follows:

• In line with organizational actions: planned and unplanned (spontaneous);

• In terms of implementation period: short term and long term;

• Purpose: to increase efficiency, increase employee qualification, improve organizational culture and climate, improve product and service;

• According to the implementation approach: experimental (test) and direct (without pre-testing);

• By volume: point, system (technological and organizational systems) and strategic.

In order for a transformation to be successful, it is necessary to analyze its causes, objects, pros and cons, clearly stated goals, and only afterwards implememted changes.

Based on the Agency for Innovation and Technology, the Business Incubator Program was launched in 2016-2018 with the aim of supporting small and medium-sized businesses and rapidly growing startups. During this period, more than 200 incubators were interacted with companies willing to participate, and 30 were fully incubated. The observation revealed that 82% of the companies mentioned were in the creative phase of organizational development with a relevant leadership crisis.

As part of the discussion of the issue, a consultative experiment was conducted that clearly demonstrated the strengths and difficulties of implementing the change.

Brief information about the company where the experiment was conducted (data at the start of consulting): Field of activity - Technologies and finances; Company Establishment Period - 5.08.2017; Number of employees - 25; Number of ongoing projects - 5; Number of completed projects - 0; Decision maker - director; Structure - not clearly defined; Consultation period - 01.11.2018 - 01.09.2019; Problems seen from a management perspective - weaknesses in team qualifications and motivation, delayed response to environmental changes, low efficiency; The task set by management - to make organizational and cultural changes;

To address the problems listed above, the company consulted with a consultant to develop a brief audit and action plan. The audit identified a number of problems, highlighting three: insufficient levels of adaptation to daily changes and innovations, insufficient adherence to the team, inadequate organizational and organizational structure. In the consultant’s assessment, the company was in a creative phase of development with a pronounced leadership crisis. To further investigate the problem, an individual employee survey was conducted, followed by a company outreach event where employees were able to express their views on the causes and ways of resolving problems, and as the company returned from the event, the organization's transformation began.

With the advice of a consultant, the push theory and the Bridges transit model were considered. Managers and employees agreed that the old model of work was ineffective and changeable, and, although the exact way to deal with the problem was not yet clear, most staff members favored positive change. Then, the company's short-term development goals and one-year strategic plan were defined. These documents were immediately presented to the staff and they were also given the opportunity to make some changes and corrections. In consultation with the staff and in agreement with the Company Director, a Board of Directors was established (whose task was to support and secure the Strategic Plan) and a formalized structure, job descriptions were written. The final action plan was detailed with all employees individually. Implementation of flexible management and project management methods, in particular the use of Scrum methodology, was planned. Then, the design teams were re-staffed, roles and schemes were agreed upon, Scrum boards were displayed on the company walls and daily Scrum meetings were planned. As a result, team members got to know each other better, explored each other's activities and problems, and increased engagement across the team, informal communication strengthened. The second effect was observed after team merging, this was a summary of weekly results with both team members and management, and keeping in mind the current news in the next sprint, the quality of the product improved dramatically. After the first results, overall motivation increased, actions accelerated and a pilot version of the product was launched in May. By the end of 2019 there were also 2 product launches and 2 new ideas in the development phase.

In a SME company, the human factor and the willingness of each employee to change is critical to achieving the end result. It is important for the company to have a clear vision of what change is all about, and then communicate quickly, with quality, and with employees and maximize their involvement in decision-making. When making changes, it is necessary to identify the crisis characteristic of the development phase of the organization and to select the model of change implementation. Regardless of which model the company applies when implementing the change, it is necessary to plan the preparatory, basic and stabilization stages. Each stage must have success criteria.