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:

• Mergers and acquisitions.
• Crisis management.
• Change in leadership or leadership style.
• Improving company culture.
• Technology implementation.

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.

Main Guides:

• Business Models
• Business Strategy
• Business Development
• Distribution Channels
• Marketing Strategy
• Platform Business Models
• Network Effects

Main Case Studies:

• Amazon Business Model
• Apple Mission Statement
• Nike Mission Statement
• Amazon Mission Statement
• Apple Distribution

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