What is Change Management?
Change was, in a bygone era, something management and boards were happy to avoid. Change meant risk, instability, and uncertainty. Growth was steady, so why change?
The world changed, forcing organisations of all sizes to adapt or die. Globalisation, technology, changeable capital flows, population growth, and new consumer demands; during changing times businesses have been both leaders and followers.
The most innovative, such as IBM, Microsoft and Apple have created new markets, driven the change forward, whereas others are struggling to profit from new opportunities or hold onto markets they once dominated.
How Organisations Benefit From Change Management
Consequently, change management is necessary for survival. As Harvard Business School professor Rosabeth Moss Kanter said, successful companies develop ‘a culture that just keeps moving all the time.’ There are several definitions for change management, the most commonly accepted being:
‘The coordination of a structured period of transition from situation A to situation B in order to achieve lasting change within an organization.’ (BNET Business Dictionary)
In this post we explore the reasons organisations should embrace change, and how to successfully implement a change management programme.
Change In An Ever Changing World
When senior executives are managing change, the idea that a well thought out strategic plan will get an organisation from A to B can be misguided. Change happens when every employee buys into and implements the necessary changes. The best-laid plans can fall apart when the human side of the equation is overlooked.
Leaders know this. It keeps CEOs awake at night, especially when they are answerable to board and shareholders. Having a clear understanding of the principles behind change management should help leaders sleep easier at night.
Organisational transformation is characterised by the following factors:
- Scale: How much of the company will be involved, directly or indirectly?
- Magnitude: How significant are these changes?
- Timescale: How many months or years will this transformation take?
- Strategic importance: How big a win/loss are we talking, if we do/don’t implement this?
Whether you appoint an interim manager or director, a team of interims, or manage this in-house, those responsible will need to consider these principles for this change to be successful.
1. Assess the “human side” first
Realistically, appraise the likely impact of the changes you are weighing up, on the people tasked with carrying this out. Start with the leadership team, especially when bringing in interims, then collect data on the affected team(s).
When you start this journey, situation B is the destination. Effective change management means creating the process that will get the organisation from situation A to B. This needs to be achieved without alienating staff, stakeholders or customers. Therefore understanding beforehand how people could react is easier than doing damage control after springing changes on unsuspecting staff.
2. Prepare the leadership team
When change means embodying new ways of working, new mindsets, new ways of thinking and acting, there is no substitute for action. Leaders must embrace change wholeheartedly, doing so as a unified team, publicly and around colleagues.
This will be a time of uncertainty and stress for them, too, making it essential that they have the necessary support to manage this change.
3. Cascade change throughout the organisation
Every layer of the organisation will need to be involved, at some point. The most successful method for implementing change is through a cascade effect. Start with the leadership, and then work down the value stream.
For example, an insurance company in the US, with flat earnings, wanted to improve performance and earnings before going public. A three-tier approach was taken, with ten officers setting the strategy and targets, before sixty senior executives designed how to implement these changes. Once complete, they engaged over five hundred managers to deliver changes throughout the company. The result was that earnings doubled ahead of schedule and a new generation of leaders was discovered among the organisation.
4. Make the case to overcome roadblocks
No one, at any level of an organisation, responds well to being told they need to do something because a superior gave them an order. Humans are inherently rational. Don’t be afraid to explain why change is needed. There’s a simple three-step approach for making a case:
- Change is necessary, often because doing nothing would risk a company’s future. Whenever possible, explain this reality, whilst making a strong case for the need to for change.
- Next, show that you have the right leadership team, managers and staff to do what needs to be done, including any interims you have recruited for the task.
- Finally: outline the roadmap that will achieve these changes, modifying the details depending on the audience you are addressing.
- Own the change
Passive agreement won’t get the job done, not when extensive change is needed. Interims can play a key role in this, supporting management teams, working with stakeholders throughout the organisation; but one day that support will be gone.
Change must be owned throughout. Those with operational responsibilities will probably be working longer hours than normal to make the case, manage, monitor then modify, based on team feedback and unforeseen challenges.
A more historic example happened from the 1990’s involved a visionary Internal Revenue Service (IRS) commissioner, Charles O. Rossotti. He wanted to transform a government bureaucracy into a world-class service organisation. His mantra? Treat taxpayers like customers. Within structural changes was a systematic, always engaged communication strategy, long before social media existed. Training sessions, videos, memos, voice mails, all hands meetings and other strategies helped modify the attitudes of over 100,000 staff. Within a decade, the IRS was ranked above fast food chains and airlines for customer service reviews.
When managing change, plans and procedures are easier for leaders to handle. They don’t ask questions or challenge assumptions. The “human side” isn’t part of the equation – it’s the most important part of the equation.
Change won’t happen without real, committed, full team buy-in. Mastering the “soft skills” will not only make change management easier but also ensure success continues long after the dust has settled.
If you would like to find out how Alium Partners can assist with your change management programme, please call us on 01793 398 7500 or email email@example.com