Enterprise change management during transformations is a critical success factor. For an organization to thrive, change is not only unavoidable, but it is also essential. Changes to technology, job roles, conventional processes, and organizational structures address central problems, improve performance, and advance opportunities for growth.

Top-down initiatives for change that are imposed on an organization instead of carefully facilitated through effective change management rarely achieve the intended outcomes. Primarily, this is because it is the employees who will inevitably need to change how they work for the expected changes to be realized.

Change management should be an integral part of major enterprise transformations – Digital transformation, HR transformation, CRM transformation, Supply Chain Transformation, Marketing Transformation, Finance Transformation, Business Intelligence Transformation and the like.

Effective change management provides the framework for mindset, cultural, and process change and puts the focuses on the people who make up your organization.

Change Management Defined

Change management comprises some structured approaches that aid organizations in implementing successful change initiatives.

The desired change initiatives that can be brought successfully to fruition by adopting a change management model may reference any aspect of the operation. Changes to job roles, processes, organizational structures, corporate strategies, procedures, business environment, technologies, and other issues of service can all be fully realized through change management.

The Society for Human Resource Management (SHRM) defines change management as “the systematic approach and application of knowledge, tools, and resources to deal with change.” According to Harvard Business Review, “The goal [of change management] has been to cope with a new, more challenging market by changing the way business is conducted.” Prosci puts it this way: “Change management is the process, tools, and techniques to manage the people side of change to achieve the required business outcome.”

The Importance of Change Management

“If you do not like change, you will like irrelevance even less.”

            – General Eric Shinseki, U.S. Army

It may be tempting for leaders to assume that as long as they have the best project management and the most elegant technical solutions, any new project and initiative can be rolled and achieve success. However, when such a seemingly perfect plan fails, the explanation can be complicated to discern from a leadership position. Why would a surefire project fail when another similarly executed project achieve success?

Effective change management provides the framework for mindset, cultural, and process change and puts the focuses on the people who make up your organization.

In most situations, the cause of failure is a lack of focus on the people who will be most affected by the changes being implemented. Any significant change initiative will intensely impact how each within your organization performs their work. Leaders know this. According to Strategy&, “Fifty-nine percent of supervising executives agree with the statement: ‘A successful transformation is due more to the ”people” initiatives than to other elements of the program.’ ” An attempted transformation that lacks careful consideration of the people will either fail outright or achieve only truncated success.

Change management addresses this problem directly and creates effective management of change for every level of an organization. Still, however, utilizing effective change management to facilitate change remains an afterthought for many organization leaders. Moreover, even when a change management model is implemented, it is often under-budgeted and not completely followed through.

An adequately budgeted change management model that is entirely carried out within the framework of your organization’s intended transformation is the key to change success.

A few key reasons why change management is so important:

  • Increase your project’s chances of success

According to Prosci, when excellent change management is used with change initiatives, they are six times more likely to succeed and achieve the desired objectives.

  • Improve employee morale

Content employees who feel integral to the organization they work for are an invaluable asset, and treating them with respect and support during a massive organizational change is essential. Change management puts the focus on these individuals and facilitates their transformations as they relate to your change project.

  • Meet change requirements and delivery results

It is not uncommon for transformations to meet intended requirements but still not deliver the desired results. Change management avoids this conundrum by helping organizations focus on achieving the benefits of the solution instead of just focusing on the solution process.

  •  Mitigate risk and save time and money on reworking

If a change initiative in your organization does not have the proper framework for success, it is more likely to fail. Therefore, setting up a change without the use of active change management creates a grave risk for your business’ future. It also inevitably avoids the need to rework, redesign, revisit, and rescope your project.

Still, however, utilizing effective change management to facilitate change remains an afterthought for many organization leaders. Moreover, even when a change management model is implemented, it is often under-budgeted and not completely followed through.

Change Management Models

Organizations choose one of the many change management models available. Each change model has its approach to change and may benefit certain types of organizations over others, based on their unique attitudes toward training and operation or their specific work structure model.

  • ADKAR

ADKAR stands for the five outcomes that are necessary for successful change within the model:

Awareness

Desire

Knowledge

Ability

Reinforcement

The goal-oriented format of the ADKAR model achieves results by allowing teams and leaders to look at change on the individual level and steer things from this juncture. The model was founded by the founder of Prosci, Jeff Hiatt.

  • Kotter’s 8 Steps for Leading Organizational Change

Dr. Kotter, leadership and change management expert, created the Kotter model, which involves eight steps — all of which combat what Kotter himself saw as the 8 leading reasons why organizations were frustrated in their efforts to change. The eight changes are as follows:

  1. Establish a sense of urgency for change.
  2. Form a powerful coalition.
  3. Create a vision for change.
  4. Communicate the vision.
  5. Remove the obstacles.
  6. Create short-term wins.
  7. Build on the change.
  8. Anchor the changes in corporate culture. 

As opposed to “managing” change, Kotter promoted leading it — and put the weight of the load on top-tier management. Their support and fostering of the eight steps of change will ultimately be what effects the change and makes it successful.

  • Lewin’s Change Management Model

Lewin’s Model is widespread and relatively simple to implement. Eventually, it breaks a substantial transformation change into easy bite-size steps. These three steps are: unfreeze, change, and rephrase.

Mainly, the unfreeze stage takes apart (or “unfreezes”) the entirety of an organization to analyze and look for potential improvements, and the latter two steps both target and implement the necessary changes needed to improve the current situation of the company. This model was created by Kurt Lewin, a German-American psychologist.

Change Management Best Practices and Guiding Principles

To efficiently handle changing market conditions, shifting technologies, fluctuating customer demands, and new competition, businesses must learn to adapt, or they risk closing their doors. An effective change management plan should incorporate the following best practices and change management principles as a result:

  1. Understand that change has to organize at the top …

When a transformation is imminent, the direction, strength, and motivation for the change will need to come from leadership positions. It is important that CEOs and executive leaders act the part as well. Preaching a change but not taking part will not position other employees for success.

  1. … and mobilize at the bottom.

Real change occurs at the bottom. It must be engaged by leaders at every level of the organization. Often, this means encouraging and creating new leaders at the lower layers of the company — those who will help other employees at their respective levels establish ownership of the new changes.

  1. Make “over-communication” the norm.

An essential element of any significant transformation is ensuring that everyone knows the plan. However, those most involved will often assume that by osmosis, all other levels share their knowledge set automatically. As this is never the case, one essential element of change management is over-communication — reiterating the same, consistent and agreed up, easy-to-digest transformation procedure again and again until it sticks.

  1. Demonstrate faith and create a vision.

Individuals may not initially grasp or be enthusiastic about impending change. However, when top leadership embodies the faith needed for any significant transformation to occur and creates a clear vision for what is to come, this will cascade down the ranks and permeate all levels to act.

  1. Emphasize ownership of the change.

Creating ownership of change often starts by allowing input at all levels. Involving everyone in the problem-identifying and the solution-creating process is essential to a successful transition. It is also vital to ensure that the why of change is emphasized and reinforced because quality change will doubtless bring positive results for all involved.

  1. Prepare for change within change.

In other words, prepare for the unexpected to occur. Planning is essential in this process, but even the best-laid plans can go awry. Expecting and preparing for change can help you work as a team through snags and find the motivation to persist through resistance.

When a transformation is imminent, the direction, strength, and motivation for the change will need to come from leadership positions. It is important that CEOs and executive leaders act the part as well. Preaching a change but not taking part will not position other employees for success.

Key Steps in Change Management

“Your success in life is not based on your ability to change simply. It is based on your ability to change faster than your competition, customers, and business.” 

            – Mark Sanborn

Each change management methodology is different; however, most all methods include these necessary steps:

  1. Decide what change(s) need to occur.

The natural first step to any transformation is locating the problem(s). Not all issues can be changed at once, but identifying all difficulties first and finding the most effective changes for as many issues as possible will eliminate the need for excessive or repeat change in the future.

  1. Prepare for change at all levels and develop a communication plan.

Understand who will be affected by the decided upon changes and how. Create a communication plan for effective dissemination and training of these changes, remembering to over-communicate whenever necessary so that everyone understands the process.

  1. Implement change management training at all levels.

After training is carried out at the management level, employee level training should begin. Most transformations work in layers down the ranks, with the leaders from each level of management teaching their staff what they have learned in training.

  1. Manage resistance.

What resistance can you expect from this project? Not everyone will be motivated to implement the changes you have planned, but foreseeing threats to the project and reasons why employees and staff may oppose your planned changes can thwart the problems before they start.

  1. Review the change.

Finally, gather feedback from everyone involved and review how successful the changes are over time. When you see successes, celebrate them. Where there is a failure, reassess what exactly went wrong, attempt to correct if possible, and plan for adjustment down the line.

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Key Components of Change Management

Drawing from decades of research and trial and error, Prosci recommends these critical components for any change management plan:

  • Readiness preparation

Once a change or set of changes has been agreed upon, decide how ready the organization is to begin. What challenges will you face? How big of a change will this be and who will be affected?

  • Sponsorship willingness and preparedness

Critical roles will be played by CEOs and other company leaders. Ensure that their desire to participate is in place, but also ensure that they are prepared with their own roadmap for action and participation.

  • Structured methodology

By using a structured change management methodology, you will see marked success in your transformation. Proven methodologies facilitate an “all-in” dedication to the change project and create a structure that cannot be found with a lax approach.

  • Customization of that methodology

Starting with a proven methodology is key; however, every institution requires modifications to their plan. This customization is essential in making sure that changes occur on the organization’s terms and that all staff members and leaders can see that this is not a one-size-fits-all transformation.

  • A communication plan

Communication planning is a central issue that must continually be addressed throughout the change process. The dissemination of information and explanation of the methodology and unique plan aspects has to have a structure.

  • Adequate training for all levels of management

All levels of an organization must be adequately trained based on the behavior, knowledge, and skill that the changes will require.

  • Post-project overview and review

Once a change transformation has occurred, assembling feedback from those involved and creating an overview of the successes and failures is essential. Where problems occur, if corrective action is possible, action should be taken.

Change Management in the Digital Age

The digital age has brought about numerous changes for all types of organizations. From government institutions to multi-billion dollar companies to start-ups and mom and pops, there’s no moving forward without the right technology.

Like any discipline, change management has not been untouched by the evolution of technology. Not only is the format of change management models changing, but how often changes are prompted because of the evolution of technology is also changing.

Reacting to External Digital Change

Technology is no longer isolated within a single department in your organization. It is a pervasive aspect of the industry, integral to all units and management levels. However, as the digital world continues to reinvent itself, it can be difficult for organizations to keep up.

It is up to leadership and human resources departments to discern which new technological approaches should be adopted and how. When a digital transformation is ultimately decided upon, even more, challenges may face those who are leading the change management of the transformation:

  • A multi-generational workplace that includes Millenials, Generation X-ers, and Baby Boomers — all with varying degrees of digital knowledge and expertise
  • Employees who have hyper-connected work and personal lives
  • Business plans that can’t get off the ground because of digital change that is too rapid
  • Employees who are unwilling to learn new technologies

Specific industries and individual organizations will not survive the era of the digitization rush. However, not all “recommended” digital changes should be implemented without thorough consideration.

Keeping up with external digital trends is where to begin, but organizations must also be discerning about which changes to broach. To do these, essential leadership skills must be present in the deciding leadership:

  • A keen understanding of the digital market
  • A thorough understanding of precisely who will be affected by digital change and in what specific ways
  • An innovative, farsighted mindset for the potential benefits of various forms of technology
  • Quick, analytic-based decision-making skills
  • A flexible attitude to adapt to different employees’ skillsets and user preferences
  • Financial skills to accurately calculate the potential ROI for various forms of digital change
  • Qualified management skills for effectively leading the digital change across multiple job settings
  • The ability to provide real-time feedback on the successes or failures of a recently implemented digital change

From fine technology tweaks to substantial platform overhauls, all digital changes must be facilitated with a robust change management model to achieve the desired outcomes. Without change management, an organization may go through the motions of digital transition, but the actual benefits of these changes may never be realized.

Like any discipline, change management has not been untouched by the evolution of technology. Not only is the format of change management models changing, but how often changes are prompted because of the evolution of technology is also changing.

Implementing a Change Management Plan

Leaders who intend to achieve the goals of a widespread change within their organization should consider change management their number one key to success. By using the information and guiding principles outlined above and implementing a proven change management model, it is possible for any organization to effectively address problems, improve performance, and surpass the competition.

 

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