A Guide to Organizational Change Management
By: Liz Sheffield
Whether it’s new leadership, a new mission, company direction, or a merger and acquisition, organizational change is a constant reality for employers and employees. Given the amount of change that occurs in today’s work environment, businesses seeking to answer the question “What is change management for our organization?” should tackle managing change not only as a process but also as a competency. If organizational change management isn’t handled well, you increase the level of risk. Not only will you face the risks associated with the change, but you may lose top talent, put unnecessary stress on the organization, and potentially reduce your brand position.
An effective change initiative process includes preparing, managing, and reinforcing change. It also requires strong leadership abilities to lead a company through change. Leaders must use effective communication techniques, serve as a sponsor of change, and demonstrate their commitment to change, as well as the company’s commitment. When intentional change management techniques are in place, the change process may not be perfect but it’s more likely you’ll gain employee buy-in and ultimately achieve the business transformation and results which the change is intended to create.
What is Change Management?
When organizations face change, it’s tempting to assume that everyone will be on board and accept the change without question. In those situations, leaders may ask: “What is change management and why do we need it?”
The Change Management Learning Center defines change management as, “the process, tools, and techniques to manage the people-side of business change to achieve the required business outcome, and to realize that business change effectively within the social infrastructure of the workplace.”
Business Dictionary highlights the organizational design impact of its change management definition: “Minimizing resistance to organizational change through involvement of key players and stakeholders.”
Indeed, change management is the process of facilitating change at any level and requires full organizational support to be effective. Although change often impacts the entire workforce, it’s up to executive teams and HR leaders to decide how to address and manage organizational changes.
A survey of more than 500 executives conducted by Forbes Insights and PMI found that 85% of respondents say change management is extremely important to their success in these disruptive times.
“No longer can workers simply react to change in a highly competitive marketplace. Rather, they must prepare for seismic shifts in the way they lead teams, manage projects and address ambiguities,” according to Forbes.
One reason organizations ask “what is change management” is because they may have experience with change “un-management”–when initiatives have failed due to lack of planning. It only takes one failure for executives to understand it’s worth investing time and energy in managing change because poor organizational change management can rack up significant costs for an organization.
From project issues to lower employee morale to customer dissatisfaction to a failure to implement, there are serious risks when you don’t manage change, including:
Additional budget expense
Product redesign or rework
Employee stress and confusion
Low morale due to excessive change
Failure to meet financial projections
The resistance to change is real. The Forbes Insight survey found that 38% of respondents believe their employees see change as, “too much of a threat.” Change can create fear and frustration for employees. It’s essential for management to reduce the potential for resistance by communicating the importance of the change, guiding teams and providing a clear vision to assist with the transition.
If you’re asking what is change management for your organization, make sure you address these human elements of a strategic change management model:
Address the “Human Side” of Change Systematically
Develop a formal approach for managing change and addressing the human side systematically. Begin with the leadership team. Employees look to the leader in times of change so they must be educated and onboard. They’ll need talking points that help them address and reinforce your core values communication approach.
Get the right executive sponsor
Engaging key stakeholders and leaders early in the process is key. Influencing positive receptions to change is a time when emotional intelligence in the workplace is paramount. You need stakeholders and leaders with the ability to read others’ emotions and respond appropriately to a given situation. These leaders should be adept at allowing others to share their ideas and acknowledging input from everyone involved. Engaging employees and responding to their concerns in a way that they feel heard will create support and drive the change forward.
Asses the cultural landscape
Through cultural diagnostics such as employee surveys and focus groups, you can evaluate organizational readiness to change, bring problems to the surface, and highlight potential conflicts. Strategic employee communication software can help you identify the core values, beliefs, behaviors, and perceptions that must be understood for successful change to occur. When you define and recognize these factors in advance you can work with leaders to influence resistance.
It can’t be stressed enough that the human side of change management is what will make or break an initiative. According to a LeadershipIQ survey, 45% of frontline employees say they generally like to remain in the status quo. Executives and business leaders may envision great results from a forthcoming change, but to successfully implement it, you must be intentional about how you communicate and equip your workforce to accept, adjust to, and endorse the change.
What is the Change Management Process?
Once you have a plan in place that explains what change management is from the human side, you’re ready to tackle the process elements that make for effective organizational change management. Establishing a systematic framework and approach to change is beneficial for leaders to understand what’s required, and it also plays an essential role in engaging the entire organization in the process. The change management model you develop should be used with each new initiative, and be included as part of your internal project management approach.
Make a formal case
Why is this change necessary? Whether it’s a new process, a new leadership team, or new product offering, make a case that addresses the current reality and articulates a convincing need for change.
Immediately identify and provide a reason when addressing what change management is and why it is important. Having a formal, well-articulated case demonstrates that the company has a viable future and the leadership to get there. This case also serves as the first part of a road map you’ll use to guide behavior and make decisions.
Communicate changes effectively
As stated earlier, employees often resist change. The potential for resistance makes it essential that you communicate effectively from the very beginning. Keeping employees involved, informed and empowered makes an immense difference in not only the outcome of the change but in employee engagement as well. Research from McKinsey indicates that 70% of change programs fail, largely due to employee resistance.
Make sure your communication strategy:
Clearly explains the reason for the change
Acknowledges the emotional impact of change
Informs employees how the change will benefit them
Includes opportunities to ask questions and engage in discussion
Cascades throughout the organization
Honest employee communication is an integral part of any healthy organizational culture; however, it’s of paramount importance during times of change. If you want to achieve any employee buy-in, communication has to be a top priority throughout your change management process.
Prepare for the unexpected
By nature, a change initiative will encounter…changes. Be proactive about assessing the impact of change and make adjustments as necessary. Likewise, prepare for the unexpected. While you can’t predict what will happen, try to imagine some “what if” scenarios. Use those to brainstorm possible outcomes and reactions, as well as how you’ll handle the unexpected if it comes up.
For example, what if you put a new leader in place and employees balk–or, even worse, what if they quit? By preparing for this “what if” scenario in advance you may be able to prevent it from happening, or you’ll have some ideas of the next steps if it does happen.
Part of preparing for the unexpected is assessing what tools you’ll need and how you’ll use them. Before anything happens, consider how you will react and respond. Establish a core team of decision-makers who are empowered to flex and modify the change management plan as needed. Create templates in your employee communication software that you can quickly put to use to communicate updates.
Find advocates in every part of the company
Not every change will impact every employee or every department directly. However, if you don’t inform everyone, it will create unnecessary concern and skepticism about the plan. A change management plan that focuses only on managers or leaders or one department is more likely to fail than the plan that includes all levels and parts of the business.
Instead of fueling concerns, find advocates in every part of the company. They will help keep everyone informed, share how the change impacts their group, and hopefully promote the change in a way that reassures others.
An adjunct professor of executive leadership at Northwestern’s Kellogg School of Management advises three key skills advocates must have to effectively lead and support change management:
Data: Advocates should be able to present a balanced view of data related to the change. They need data that both supports the reason for change and data that acknowledges the challenges.
Personal experiences: The best advocates will have experiences they can share and relate to others around the change. Maybe they’ve experienced a similar change in another organization, or have personal examples of how a new approach will work. They can share this knowledge to highlight the positive impact the change will have.
Assumptions and beliefs: By understanding their assumptions, as well as those of other members of the organization, an advocate can more effectively engage in honest discussions to create excitement and address concerns.
As you select advocates during your change management process, keep these three points in mind. Support the advocates with the data they need, and remind them of the power they have in sharing their experiences as well as acknowledging existing assumptions and beliefs.
Many industries are looking at how to change so they remain competitive. Other industries are trying to change to stay in front of the curve. Functional areas face changes inspired by new technology and digital disruption. Other external forces such as political, environmental, and generational require change for organizations to stay relevant and engaged. The speed of change often makes it difficult for organizations to adjust.
By itself, organizational change management does not guarantee positive results. But defining change management and identifying why it is important does help reduce the risk that a new structure, leader, or endeavor will be rejected entirely. By acknowledging the human element, making a formal case, communicating effectively, preparing for the unexpected, and enlisting the support of advocates, a change process can achieve great levels of success.
“Unless an organization sees that its task is to lead change,” Peter Drucker, the father of modern management, wrote, “that organization—whether a business, a university or a hospital—will not survive. In a period of rapid structural change, the only organizations that survive are the change leaders.”
It’s imperative that if an organization is going to skillfully navigate and adapt to change, a high level of teamwork and commitment is required from everyone. Without the ability to effectively lead change, the organization may not be able to survive in today’s fast-paced environment.
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