Change management: staying competitive, efficient and innovative
Change management is a crucial process to employ, when leading an organization from its current state, to its desired future state. All organizations undergo changes that regard either their business processes, their organizational structures, strategies, or maybe even their personnel.
Anyone who has experienced change, within their organization, can tell that change management is one of the most difficult parts of managerial work.
Part 1: Common pitfalls when implementing change
While it is meant to ensure that the company stays competitive, efficient and innovative, poorly managed changes can result in chaos, reluctance, delays, decline in morale and productivity losses. Ultimately, stakeholders can be negatively impacted by something that was meant to improve the organization.
Organizations in the context of the 21st century experience change almost constantly, but not all of them are aware of change management techniques that they can use to minimize the risks and maximize the results. Stability and predictability are not characteristics of today’s business climate, and leaders & managers need to understand that and act accordingly.
This has never been truer than in the world of performance management, where we are constantly reminded about the importance of planning and development, while keeping our strategy in sight. However, how can we keep aligning our activities and projects to our values, vision and goals, if nothing ever goes as planned?
Well, first of all, successful change management involves and engages the key stakeholders. It is important to keep key external stakeholders (such as customers, suppliers, the local community) informed. That being said, this external form of communication is a broader subject, and will not be discussed in the context of this article.
What I consider crucial, though, is understanding that internal stakeholders are at the core of change management. Therefore, this article focuses on presenting the most important reasons behind failure in change management. Part 2 will focus on some best practices through which one can remedy such situations.
Before moving forward, let us consider, in black and white, a statistic often quoted by Forbes Magazine: around 70% of transformation efforts fail.
Why do most change management efforts fail?
No risk assessment
Identifying the areas where our organization can be vulnerable is crucial in preparing for change, and avoiding the mindset of „putting out fires”, when those risks actually manifest themselves and become reality.
By failing to assess potential risks, managing change will be considerably harder, because changes will not be expected, nor documented. This’ll make it so that resource allocation and buy-in will represent big challenges for one’s leadership.
Lack of resources
A common pitfall of change management is the lack of resources or inefficient distribution. Unfortunately, too many times, leaders only think of the direct costs of implementing change, and don’t take into consideration the costs & time investment associated with adopting, communicating and sustaining the planned changes.
No emphasis on buy-in from employees
The „you just have to get used to change” attitude destroys any attempt of implementing change efficiently, more often than not. This is closely linked to the first point – of not considering the effort needed to adopt said change, as adopting doesn’t mean an executive decision that it will be implemented.
Change management is something that will never work without employee buy-in. We need to make employees realize the benefits of change, the positive outcomes and how these can contribute to their everyday work.
The impact of incorrect change management: change fatigue and change saturation
The main effect of the aforementioned inconsistencies and mistakes is something called „change fatigue”. This means increased stress, decreased commitment and general apathy when implementing change.
It doesn’t have to mean that employees openly oppose changes, but it’s not much better if they just do what they’re told and nothing more.
Change fatigue is a type of behavior that will appear if any of the other reasons above (no risk assessment, lack of resources, or no buy-in) manifest themselves.
Now, the easiest option for leaders is to explain this phenomenon as „well, we all know that people are naturally afraid of change, too lazy to get out of their comfort zone, but they will have to get used to change in today’s climate”.
There are two things wrong with this approach: first of all, people resist change when they are not aware how that change could be in their best interest.
Secondly, while one could say that employees do „have to” get used to change, in the meantime, leaders will experience some changes in organizational performance as well. Therefore, many things can be affected by „change fatigue” or incorrect change management.
If you’re wondering whether there are some metrics to gauge change management, here are some KPIs that, if measured correctly, will surely signal issues with the attitude of „ you have to get used to it”:
- % Employee absenteeism
- # Hours lost due to absenteeism
- % Employee turnover
- % Grievance rate
- % Low performing employees
- % Human Capital Return on Investment
These are just a few KPIs that will most likely be affected by inadequate change management and the wrong attitude from one’s leadership.
In addition to all of the matters we’ve touched on so far, there is the notion of change saturation. This phenomenon occurs when the number of change initiatives in implementation exceed the capacity of the organization to implement them.
When there are too many change-related projects and employees don’t see the big picture or the collective impact of changes, they will manifest negative behaviors, such as change fatigue.
Organizations need to invest in learning how to overcome the above-mentioned roadblocks, otherwise they will not be able to keep up with their constantly changing environment, and in the long term, they will lose any sort of competitive advantage they might have had.
Part 2 of this article will present some techniques associated with successful change management, such as gamification, culture mapping or identifying champions of change.
Tags: Change Management, Employee Engagement, HR, Human Resources performance, KPI, Organizational Performance, Stakeholders