change-management

Change Management In A Nutshell

Change is an important and necessary fact of life for all organizations. But change is often unsuccessful because the people within organizations are resistant to change. Change management is a systematic approach to managing the transformation of organizational goals, values, technologies, or processes.

Understanding change management

Indeed, research has found that just 38% of individuals like to leave their comfort zone regularly. For the remaining 62%, change in a workplace setting is met with apprehension. Thoughts may turn to job security or whether they might be required to take on new roles or responsibilities.

Through a range of strategies, change management smooths the transition process for all employees. It is also important in ensuring that businesses remain financially viable long after the change has been implemented.

Change management is useful in a variety of scenarios, including:

The four principles of change management

To navigate successful change, a business must focus on four core principles:

  1. Understand change. Decision-makers must first understand the reasons for change before promoting change to subordinates. Benefits of change to the employee and the business should be communicated first and foremost. But it’s also important to stress the costs or negative outcomes of not changing. Ultimately, employees need to feel confident a change initiative is worth the effort.
  2. Plan change. Transformation does not happen overnight, nor does it happen by chance. Change strategies should identify the personnel most suited to supporting and mobilizing support for change. The business must also define what successful change looks like by setting appropriate goals. Popular planning tools for change include SIPOC diagrams and the Burke-Litwin Change Model.
  3. Implement change. Change measures should be implemented with a sense of urgency incorporating small, achievable wins to build momentum and employee motivation. Each employee should understand what is required of them and be offered support if they are having difficulty in transitioning. Some businesses choose to appoint staff whose primary role is to model new behaviors or actions.
  4. Communicate change. Change should be communicated so that it aligns with the company’s mission statement or vision. This “bigger picture” thinking inspires employees to act purposefully, safe in the knowledge that they are contributing to the success of the organization. The ADKAR model provides a helpful framework for communicating change at the individual level.

Consequences of poor change management practices

Businesses that fail to recognize the importance of people in successful change are likely to experience a raft of negative consequences.

Some of the more high-impact consequences are outlined below:

  • Poor project management. A lack of suitable change management can result in projects running over budget with missed deadlines. In extreme cases, projects fail to deliver and can be abandoned entirely. This is invariably caused by employees with low morale and low productivity because of poorly defined goals or change measures.
  • Employee resignation. Valuable members of staff who experience poor change management at the project and organizational level are more likely to resign. The cost of losing experienced employees is obviously high, but mass departures also create a cultural legacy of failed change which becomes hard to reverse.
  • Incomplete implementation. Change management that ignores people as a key driver is less likely to deliver results or meet outcomes. Goals may include reducing expenses, increasing productivity, capturing market share, or meeting certain regulations. In this scenario, the business is left with a change management plan not fully realized. Without direction, the business is unlikely to recoup costs and move forward without significant difficulty.

Key takeaways

  • Change management is a systematic, people-centric approach to handling change within an organization.
  • Change management is useful in scenarios where people are less likely to leave their comfort zones. These scenarios include crisis management and a change in leadership change or company culture.
  • The costs of poor change management are high. Businesses are likely to lose experienced employees to other organizations and not be able to recoup project costs if they do not maintain a focus on people.

Related Business Concepts

rasci-matrix
A RASCI matrix is used to assign and then display the various roles and responsibilities in a project, service, or process. It is sometimes called a RASCI Responsibility Matrix. The RASCI matrix is essentially a project management tool that provides important clarification for organizations involved in complex projects.
flat-organizational-structure
In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.
tactical-management
Tactical management involves choosing an appropriate course of action to achieve a strategic plan or objective. Therefore, tactical management comprises the set of daily operations that support long strategy delivery. It may involve risk management, regular meetings, conflict resolution, and problem-solving.
high-performance-management
High-performance management involves the implementation of HR practices that are internally consistent and aligned with organizational strategy. Importantly, high-performance management is a continual process where several different but integrated activities create a performance management cycle. It is not a process that should be performed once a year and then hidden in a filing cabinet.
project-execution-plan
A Project Execution Plan (PEP) details the strategy required for managing a project. It is sometimes referred to as a project management plan. Generally speaking, PEPs are drafted by the client’s project director or similarly skilled project manager. Each plan must have the appropriate systems in place and be supported by the right tools and resources. This increases project performance and helps mitigate risk in the process.
scientific-management
Scientific Management Theory was created by Frederick Winslow Taylor in 1911 as a means of encouraging industrial companies to switch to mass production. With a background in mechanical engineering, he applied engineering principles to workplace productivity on the factory floor. Scientific Management Theory seeks to find the most efficient way of performing a job in the workplace.
delta-model
The delta model is a customer-centric approach created by Dean Wilde and Arnoldo Hax which deals with the implementation and management of corporate strategies. The delta model argues that business strategy and management should focus on the needs of the end-user. Indeed, unlike many strategic frameworks based on the competitor or the product, the delta model is based on consumer theory.
agile-program-management
Agile Program Management is a means of managing, planning, and coordinating interrelated work in such a way that value delivery is emphasized for all key stakeholders. Agile Program Management (AgilePgM) is a disciplined yet flexible agile approach to managing transformational change within an organization.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"