As an employer, you may need to make a change or transition in your company at some point in order for it to remain sustainable and scalable.
As the business owner, you are responsible for change management and must know the precise procedures that should be followed and know who to appoint to carry out change processes.
Poor change management increases your organisation's costs and detriments your profits. You also run the risk of resource availability issues and employee resistance.
In this guide, we'll go over the concept of change management, different types of organisational change, and advice on managing change effectively.
What is change management?
Change management is the process of leading organisational change to completion.
It starts from the initial stages of conception and preparation, through implementation, and finally ends in resolution.
Why is change management important?
Change management, as a theoretical framework for people, processes, and the organisation, boosts a company's ability for quick adaptation and raises the success of key projects.
It ensures that the human part of a company is not neglected by standardising the consistency and effectiveness of assigned tasks.
Change management helps staff members in comprehending their new responsibilities when work changes and fosters a more process-driven culture.
Additionally, change management promotes future business growth by allowing it to stay dynamic in the face of financial pressures.
Benefits of change management
Change management has the ability to provide numerous benefits. A structured approach to change management helps your organisation in:
- Mitigating disruption.
- Lowering costs.
- Driving innovation.
- Increasing employee morale.
- Decreasing the time required to implement change.
- Supporting employees and helping them master the change process.
- Minimising resistance to change.
The people who work with you are a critical aspect in the process of moving the change forward. This is why human resources professionals play a significant role in running effective transformation projects.
They are responsible for the human side of change and ensure that clear communication is addressed responsibly and successfully as part of organisational change management.
Challenges of change management
Throughout change management processes, organisations and companies implementing a change management plan from the ground up frequently face difficult challenges.
Change management, which is a systematic approach to dealing with transformational change, requires a deep awareness of the company culture.
The following are some of the challenges associated with change management:
When adopting change, managing the organisation's physical, human, informational, and intangible assets becomes increasingly difficult. This can have a negative impact on operational efficiency throughout the process.
Employees and the executive team who are most affected by a change may be resistant to it. Continuous resistance is frequent on the human side of change since any change may result in unwanted extra work.
Companies frequently fail to explain change programs consistently or to involve their employees in the process. This requires an adequate number of messages, the involvement of sufficient stakeholders, and the use of multiple communication tools and techniques.
The use of new technologies might completely disrupt an employee's workflow. Senior executives can improve new technology adoption by forming a network of early adopters or a volunteer army to promote the new technology to their colleagues.
Multiple points of view
People's success factors in any change initiative vary depending on their responsibilities in the organisation and their incentives. Managing change effectively will be challenging when there are different priorities.
It's difficult to decide whether a change program will be long or short-term and to precisely define milestone due dates. While some businesses think that shorter change projects are more successful, others think that a more gradual approach to change results in less resistance and mistakes.
Change management process
Change processes begin with a set of initial conditions and end with a functional endpoint. The intermediate process is dynamic and unfolds in the following stages:
For an organisation to successfully pursue and implement change, it must be prepared both logistically and culturally. Before diving into logistics, cultural preparation is required.
During the preparation phase, the manager focuses on assisting employees in recognising and comprehending the need for change and making necessary adjustments.
They increase awareness of the numerous issues or problems confronting the organisation, which operate as change agents and create dissatisfaction with the status quo.
Crafting a vision and plan
When the organisation is ready to embrace change, managers must devise a comprehensive and realistic plan for implementing change. The plan should include the following:
- Strategic goals: What goals does this change help the organisation in achieving?
- Key performance indicators: How is success going to be measured?
- Key stakeholders and team: Who will be in charge of implementing change?
- Project scope: What specific procedures and actions would the project entail? What isn't included in the project scope?
All that remains after creating the plan is to follow the actions indicated within it to achieve the proposed changes. The specifics of the change initiative will determine if it entails changes to the company's structure, strategy, systems, procedures, employee habits, or other components.
Once the change initiative is done, change managers must prevent a reversion to the previous condition or status quo. This is especially true for organisational change involving processes, workflows, culture, and strategies.
Employees may revert to old habits if no plan is in place, but by incorporating improvements into the company's culture, it becomes more difficult for this to happen. New organisational structures, controls, and reward systems should all be viewed as tools to assist in making change stick.
Reviewing progress and analysing results
The completion of a change initiative doesn't necessarily imply its success. Analysing and reviewing, or conducting an investigation can help company leaders assess whether a change initiative was a success, failure, or mixed result.
It can also provide useful insights into project management that can be applied to future change efforts and help project teams achieve success.
Types of organisational change
Many different organisational changes can be managed through the use of change management. The following are the top three types:
- Developmental change: Any organisational change that improves on already established processes and procedures.
- Transitional change: Change that transfers an organisation from its existing condition to a new state in order to solve a problem. Mergers and acquisitions and automation can lead to the formation of a new organisation.
- Transformational change: Change that substantially transforms an organisation's culture and operations. The outcome of transformational change could be unknown. For example, a company might explore totally different products or markets.
Organisational change management models
Best practice models can help change managers align the scope of suggested changes with existing digital and nondigital resources by providing guiding principles. The following are examples of some popular models for managing change:
The ADKAR model
Jeff Hiatt developed the ADKAR model in 2006 as a framework for change. The acronym ADKAR stands for the five components that make up successful change:
- Awareness of the need for change.
- Desire to participate and support the change.
- Knowledge of how to change.
- Ability to implement desired behaviours and skills.
- Reinforcement for sustaining the change.
The mentioned model is prescriptive and goal-oriented, and success is defined by achieving each milestone. It uses a 1-5 scale to assess how strong each milestone is met.
John Kotter's 8-step process for leading change
The 8-Step Model of Change was proposed by John Kotter, a professor at Harvard Business School and well-known change expert, in his book "Leading Change". He created this based on research he conducted on 100 firms that were undergoing a change process.
The eight steps are explained below:
- Creating an urgency: Identify and emphasise potential threats and consequences that may arise in the future. Request the participation and assistance of change management professionals, important stakeholders, and customers on the issue of change.
- Forming powerful guiding coalitions: Identify the effective change leaders in your organisation and request their involvement and commitment to the entire change process.
- Developing a vision and a strategic direction: Define the fundamental principles, the ultimate vision, and the change management strategy for your organisation.
- Communicating the vision: Communicate the change management process in the vision frequently and powerfully. Connect the vision to all critical components across the whole organisation.
- Removing obstacles: Ensure that the processes and structure are in place and aligned with the broader organisational vision. Constantly check for obstacles or any resistance to change and take proactive steps for overcoming resistance.
- Creating short-term wins: You may give a sense of victory in the early phases of change by establishing short-term wins early in the change process. Create several short-term goals instead of one long-term goal that are more attainable and less expensive.
- Consolidating gains: Achieve continual growth by analysing individual success stories and learning from those experiences.
- Anchoring change in the company culture: At every opportunity, share success stories about change initiatives. Ensure that the change is embedded at the organisational level.
McKinsey 7-S model
Business consultants Tom Peters and Robert H. Waterman Jr. created a model to take a comprehensive look at seven aspects that influence change:
- Strategy: This is how your company intends to gain and keep a competitive advantage over its competitors.
- Structure: This is how your company is set up.
- Systems: The routines that your staff follow to complete their day-to-day work.
- Shared values: These indicate the company's core values and the general company culture.
- Style: The leadership skills used by senior management.
- Staff: The employees and their overall abilities.
- Skills: The employees' actual talents and competencies in the company.
How to manage change effectively
Change initiatives typically follow a similar process. Managers and leaders should properly understand the stages involved in order to effectively manage change and improve change effectiveness.
Other suggestions for managing organisational change include asking yourself the following questions:
- Do you understand the forces making change necessary? Without this understanding, it might be difficult to effectively address the fundamental reasons of change, limiting your potential to succeed.
- Do you have a plan? It might be difficult to see a change initiative through to completion without a thorough plan and a strategic vision.
- How will you communicate? Effective communication with both team members and key stakeholders is required for successful change management. It's vital to have a communication strategy that acknowledges this fact.
- Have you identified potential barriers? While it's hard to forecast everything that could go wrong in project management, planning ahead of time to anticipate potential barriers and developing mitigation strategies is generally a smart idea.
Get advice on change management with Peninsula
Change management is a critical component in running a business. It involves leading organisational changes to success. Using best practice change management models can help managers match the extent of necessary changes to available resources.
Poor change management drives up expenses for your business and reduces your profits. Aside from organisational process failures, other risks include the human side of change and resource availability.
Peninsula offers 24/7 HR advice which is available 365 days a year. Want to find out more? We take care of everything when you work with our HR experts. Contact us on 0800 051 3687 and book a free consultation with one of our HR consultants.