Change is a necessary aspect of life – and this also applies to business. The last few years have underlined that change really is a constant. Yet managing change successfully is an elusive skill – only 34% of change initiatives succeed.
Taking the right approach to change management makes all the difference. Effective change management processes and approaches increase the likelihood that the changes initiated and executed will take hold within an organisation with the minimum of friction.
Successful businesses grow and evolve in response to ever-changing signals in industry and marketplaces. That’s why we’ve created this guide to provide you with clarity on what goes into change management so that you can manage change successfully in your business when the need arises. This is what will help you stay relevant and ahead of the competition and best serve your employees and customers alike.
In this guide we’ll cover:
- The four principles of change management
- The key to successful change
- Key trends in change management for 2023
- How to overcome resistance change,
- And so much more.
Disclaimer: The information in this article is current as at 10 November 2022, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article.You should undertake your own research and to seek professional advice before making any decisions or relying on the information in this article.
Whether you’re a small business or large enterprise, you’re likely to encounter change on a daily basis – anything from tweaking a product or service in response to customer feedback, to scaling up a business. Change is everywhere. In fact, according to Forbes, 93% of US based companies are in the process of making changes to their business model.
What is change management?
Forbes defines change management as “a structured process for planning and implementing new ways of operating within an organisation”. The purpose of change management is to put in place clear processes and strategies to execute the change successfully while also supporting those impacted to adapt to the change.
Ultimately, change management is about applying a systematic approach to dealing with the transition or transformation of an organisation’s goals, processes or technologies.
Why is a change management process important?
Change is part of doing business – and that’s why having a robust process for handling it is vital. The need for change can come from outside or within a business. Drivers can range from customer pressure, consumer preferences, changing trends, changing regulations, new technology, acquisitions and mergers, competition – and even from suggestions from your own employees on how to improve processes.
Whether the change was planned or reactive, a change management process is essential to execute change smoothly and successfully.
Are there different types of change management models?
There are many different ways to approach change management – here are just a few well known models:
- Kübler-Ross Change Model
- Lewin’s Change Management Model
- McKinsey 7-S Model
- Nudge Theory
- The ADKAR Change Management Model
However, of the various change management models in the field, one of the most well known thought leaders is John Kotter, a professor at Harvard Business School and Founder of the management consulting firm Kotter International.
Kotter’s 8-Step model is based on four key principles and eight steps. The four principles are;
- Select few + diverse many
- Have to + want to
- Head + heart
- Management + leadership
The eight steps then create a process for leading change within an organisation:
- Create a sense of urgency.
- Build a guiding coalition.
- Form a strategic vision and initiatives.
- Enlist volunteers.
- Enable action by removing barriers.
- Generate short-term wins.
- Sustain acceleration.
- Anchor the changes in organisational culture.We dive into a deeper understanding of Kotter’s model in our Guide to Change Management.
Examples of when a change management strategy is needed
1. Company merger or acquisition
Mergers and acquisitions (M&A) can be an exciting but intensely stressful time for organisations. M&A can lead to increased service provision and product diversification, as well as location changes, triggering downsizing or increasing team size.
The transition can be difficult for leaders and employees alike, and for this reason, a change management strategy can help smooth that journey. A change management strategy can help get everyone on the same page, align with the same priorities and values, and reduce any downtime from the disruption.
2. Moving from a legacy system to a new system
A legacy system is an outdated software or hardware that is still in use but relies on older technologies that may no longer meet the requirements, or be supported or maintained by the vendor.
Migrating from a legacy system to a new platform or infrastructure can seem like an obvious step to improve security, speed up processes and improve the performance and productivity of your organisation, but it’s important to take into consideration the impact that this transition will have on the team.
Planning a system migration can be a lengthy process, and that’s where a change management process can be very helpful indeed. A robust process will help an organisation drive such a transition with minimum disruption.
Who is responsible for managing change initiatives?
When a business embarks on a change management initiative, it is likely that they will appoint a change manager or a change agent, or a team of change agents.
These individuals may be internal staff members such as employees or managers. They may also be experts brought in to deliver a specific change project, and therefore may be appointed as external contractors or consultants who are in charge of overseeing the change process.
What are some challenges when implementing an organisational change?
According to one study, one in three CEOs failed to achieve the desired outcome from past transformation initiatives. To avoid this fate, let’s look at two of the most common challenges when it comes to implementing organisational change.
Lack of strategic planning
Juggling multiple simultaneous changes across complex teams is no easy feat. But a lack of strategic planning is sure to cause a change management initiative to fail. It’s critical to scope out the full extent of the change and how it will be delivered, including the timeline.
This requires step-by-step planning, as well as getting buy-in from management and engagement from all team members so that roles, responsibilities and expectations can be clearly communicated.
Many organisations fail to take into account downtime for dealing with hiccups and barriers that are inevitable when navigating change. And of course, planning the budget is also a significant element. In one study, 81% of projects with effective change management came in on or under budget. When change management wasn’t as effective, there was a clear negative fiscal impact.
Resistance to change
People don’t like change… Or is that a myth?
Of course, change can be difficult for many people to process; there’s a feeling of a loss of autonomy and control, and a great deal of fear, anxiety and uncertainty. People can certainly dig their heels in when decisions are imposed on them suddenly, and before they know it, everything is different. Perhaps they had a bad experience in the past. And of course, it can mean more work.
But here’s the thing: 74% of employees say they are willing to support change. However, only one quarter of employees are able to change the way they work when managed from the top down. One thing seems clear: a top down approach is likely to cause significant challenges.
Common change management mistakes to avoid
According to Gartner, only 34% of change initiatives succeed – 66% fail.
There are many reasons why businesses may fail to achieve the desired change, such as a lack of skills, expertise or resources within the organisation. But more typically, it’s for one or more of the following reasons;
- Poorly scoped change management and a lack of understanding of the change and the impact it will have
- Poor communication regarding the proposed change and how it will impact employees
- Failure to engage employees
- A culture of resistance to chance
- Insufficient resources or budget
- Lack of management buy in
- Lack of change champions to drive momentum and deliver change
Don’t fall for these common change management mistakes. Remember, people lie at the heart of your business, and therefore at the core of any change you want to make. Change necessarily requires employee buy-in, but more than 80% of organisations manage change from the top down – which might explain why two thirds of chief human resources officers are dissatisfied with the speed of change implementation.
Engage your employees from the outset. One great way to get buy-in from every employee is to embed the change initiative in your organisational Objectives and Key Results (OKR) framework. This way, every employee will feel part of the change process and motivated to play their part.
What does a successful change management process look like?
The key to change is to place your employees at the focus of the process. The most successful change initiatives view and treat people as the lynchpin of success.
Nearly three quarters of employees say they are willing to support change, yet only one quarter of employees are able to change the way they work when managed from the top down.
How do you change this? The World Economic Forum (WEF) suggests that to create sustainable change, you must build buy-in from across the organisation. Simple considerations can reduce friction to result in smooth transitions and employee resistance to change, but many organisations fail to spend time on these considerations. In fact, 33% of managers completely ignored employees when devising change programmes. Leaving employees out of the process or ignoring employee feedback can have significant impacts on employee behaviour, performance, company culture and even reduced organisational efficiency.
For change to be a success, you need to:
- Engage in continuous feedback;
- Empower your employees to be agents of change;
- Foster inclusive, participatory decision making;
- Manage culture intentionally;
- Communicate clearly and transparently.
Learn more about the change management process
Change is rarely easy, but the fact remains that it’s a necessary part of business. While it can be challenging to navigate, done well it can transform a business and bring employees with you on the journey.
The key is to ensure that your employees are at the heart of your process. It’s vital that you communicate with your employees to let them know why change is happening, what they can expect, and what the vision is.
Getting buy-in relies on communication, connection and compassion. When your employees have a clear understanding of the change management process, it’ll be easier for them to come onboard. Bringing them into the decision making process will speed up the change process and ensure that the transition is smooth across the business. This is easy to do when it is baked into your company values and your performance management processes.
For a deeper dive on change management, download the guide now.
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