The corporate world is always evolving. In order to remain competitive, businesses need to be flexible and responsive to changes in the market, in technology, and in customer preferences. Otherwise, they will be vulnerable to disruption by start-ups who are more attuned to the current marketplace.
It seems like evolution and change would be easy and straightforward, but it most certainly is not. Inertia is a powerful force within a company, and just as in physics where larger bodies of mass are harder to move– larger companies are harder to change than smaller ones.
This is why we need change management. It provides us with a set of tools that we can use to keep our companies from going the way of the dinosaurs.
What is Change Management?
Change management is the process of preparing, supporting, and helping individuals, teams, and organizations transition from a current state to a desired future state. It involves a structured approach to managing the people, processes, and systems affected by the change. Change management helps organizations effectively plan and implement changes, minimize resistance, and maximize the benefits of the change.
Why is Change Management Essential for Business Success?
I began my career at GE, which was at the time under the leadership of Jack Welch, who is considered by many to be the best CEO of all time. However, what many people might not know is that top-notch change management was responsible for much of this success. The company had a strong culture of continuous improvement. One of the most valued attributes on your performance review was whether or not you were a “change agent”. Furthermore, there was always a corporate initiative directed at improving the company (when I was there it was a quality-first program), and if you didn’t participate in this change, you would certainly lose your job to someone who did. This strategy clearly paid off, as GE was the most valuable company in the world when Jack Welch finally retired in 2001.
On the flip side, I also spent many years of my career working at an organization that did not handle change management well. This organization and others like it were often pilloried in the media as being “dinosaurs” who refused to join the 21st century, and they weren’t wrong! Change was frowned upon. If anyone tried to present senior leadership with a new revenue idea, they would be told to “stay in your lane”, which meant they were expected to do their job as written, nothing more. Needless to say, this company didn’t perform well. It lost HALF of its revenue in just 10 years.
I share these anecdotes with you because I know first hand that change management is hard. The natural tendency for companies is to encourage employees to stay in their lanes, and to hope that the people and processes that enabled the company to succeed in the first place will continue to work ad infinitum. Needless to say, this worldview is entirely detached from reality. Organizations must be ready to change in response to change in consumer expectations, not the other way around.
Common Challenges in Change Management
Almost all companies would say that they want to keep up with the times, but very few actually do. Why? There have been many different studies on the causes of change failure, below are the four most mentioned reasons:
- Resistance caused by Risk Aversive Behavior: Companies are made up of people, and people don’t like to leave their comfort zone. They’re naturally risk averse. They’re afraid of looking bad, afraid of failure, and afraid of losing their jobs. People think that if they try something new, they might fail, and if they fail, they might lose their jobs. Unwillingness to leave one’s comfort zones is present everywhere in a company: including employees, customers, suppliers, investors, and even executives. Consequently, you can expect quiet resistance to any effort to change a company in any meaningful way. People will either completely ignore the initiative, or they will make excuses as to why they can’t participate.
- Lack of Resources: Adequate resources, including funding, staff, and technology, are essential for change management success. You might need additional staff in order to ease the burden on your “day jobs” while the change is taking place, you might need additional training, you might need “motivational” marketing materials to keep employees motivated, etc. Without these resources, employees may get resentful and they may use the lack-of-resources as an excuse to avoid participation in the change initiative.
- Lack of Communication: Good communication is one of the most important parts of change management. Communication helps people understand, trust, and get involved with the change initiative. It can also help find and solve problems that may come up during the change. Jack Welch was a master at this. Even in the days before the internet, he would send video tapes to all GE offices of him answering FAQs, giving motivational speeches, and recognizing the achievements of others.
- Lack of Leadership: For change management to work, there must be good leadership. Leaders are very important for setting the vision and direction for the change initiative, getting people on board, and making it easier for stakeholders to talk to each other and work together. Employees are always taking their cues from the executives– so if they don’t perceive that the execs are passionate about change, they will be more likely to resist it.
How to Implement Change Management in Your Business
Implementing effective change management requires a structured approach. Here is a common but effective process for implementing change management:
- Define: The first step in managing change is to be clear about what needs to be changed. This means figuring out why the change is being made, what the goals are, and, most importantly, WHY is it necessary.
- Plan: Once the change has been defined, a detailed plan must be developed. This means figuring out what resources are needed, how long the change will take, and who is in charge of making and keeping an eye on the change.
- Communicate: Effective communication is essential for successful change management. All stakeholders, including employees, customers, and suppliers, must be informed about the change, its purpose, and its expected outcomes.
- Implement: After the plan has been developed and communicated, it is time to implement the change. This involves executing the plan and making the necessary changes to processes, systems, and behaviors.
- Monitor and Evaluate: The last step in change management is to monitor and evaluate the change to make sure it is meeting its goals. This means keeping track of progress, getting feedback, and making changes when needed.
It’s important to note that change management is an ongoing process, and the steps outlined above may need to be repeated several times to ensure that the change is fully integrated into the organization. Additionally, change management should be approached as a collaborative effort that involves all stakeholders, including employees, customers, and suppliers.
Change is inevitable in business, and organizations must be prepared to adapt to stay competitive. Change management is essential for business success because it helps effectively plan and implement changes, minimize resistance, and maximize the benefits of the change. Hope this article helps you to have a more structured view of change management and find the right strategy for strong change management in your business.