New systems and strategies can be highly disruptive to your business. Organizational change management can help ensure your transition to new processes goes smoothly.
What is Change Management?
Change management (sometimes abbreviated as CM) is a collective term for all approaches to prepare, support, and help individuals, teams, and organizations in making organizational change. The most common change drivers include technological evolution, process reviews, crisis, and consumer habit changes; pressure from new business entrants, acquisitions, mergers, and organizational restructuring. It includes methods that redirect or redefine the use of resources, business process, budget allocations, or other modes of operation that significantly change a company or organization. Organizational change management (OCM) considers the full organization and what needs to change,[ while change management may be used solely to refer to how people and teams are affected by such organizational transition. It deals with many different disciplines, from behavioural and social sciences to information technology and business solutions.
What are the benefits of Change Management?
Change management reduces the risk that a new system or other change will be rejected by the enterprise. By itself OCM does not reduce costs or increase sales. Instead, it increases the teamwork required for the enterprise accept the change and operate more efficiently.
When is organizational Change Management needed?
OCM is needed whenever the enterprise undertakes a program or event that interrupts day-to-day operations. Such an undertaking will impact:
The work content of Individual Jobs.
Many jobs require individuals or groups to perform tasks repeatedly. An accounting department has daily, weekly, monthly, and annual activities. Over time, most people become comfortable with the tools provided and the rhythm of the work calendar. Even simple changes may disrupt the workflow and be disconcerting for the staff.
The roles of Individual Employees.
Many people view their value to the organization as being a good technical architect, programmer, or security specialist. When asked to take on a different role, they may become very uncomfortable. People with excellent technical skills often struggle when asked to become managers. Rather than performing all of the tasks, they have to learn to work through other people.
The Organization Itself.
Executive teams debate major changes for months before making final decisions, enabling each member to gain a deeper understanding of the effects the change will have on the enterprise. Even if they don’t agree with the final decision, they have time to determine whether to accept the new direction or to depart gracefully. Individuals lower in the hierarchy rarely have time to process major changes.
Executives do not want employees to worry about events that may never happen until it is clear the change will take place. In addition, tighter insider trading enforcement prohibits executives from sharing information about upcoming mergers, acquisitions, or divestitures. Individuals who are not part of the executive team have much less time to prepare for the planned change and
may decide to leave while the change is undertaken, making change management more difficult.
What are the requirements for Change Management success?
Organization change management programs require several things to be successful:
The Right Executive Sponsor.
The OCM sponsor is responsible for developing the case for change and obtaining the necessary OCM resources. For this, the sponsor needs the support of the CEO to make it clear that the effort is important.
The sponsor must understand the case for change clearly enough have a detailed discussion about the challenges that created the need for a different way of operating. She should be confident enough to confront skeptics and close enough to the details to justify the approach selected and the reasons the alternatives were rejected.
The sponsor needs to understand the impact on the staff. Good sponsors are concerned about the people who will be affected by the change. These sponsors communicate honestly while treating everyone fairly and respectfully. Rather than merely relating the facts, they take the time to listen to people and to empathize with the individuals who dislike the new way of operating. They explain why the change was necessary, and do what they can to smooth the transition for individuals whose jobs are transformed. The best sponsors help everyone losing a job find the next opportunity
Cultural willingness to Adapt and Change.
All organizations resist change to some degree, but ones that follow the dictum “if it ain’t broke don’t fix it” often need a major wake-up call to behave differently. The public revelation of sexual misconduct allegations against Harvey Weinstein provides a dramatic example of a call to address a long standing problem. A number of enterprises that had done little to stop sexual harassment suddenly took action.
Skilled change management teams embrace the organization’s emotional energy. These teams celebrate behaviours they wish to encourage by publicly recognizing individuals exhibiting these behaviours. Change management teams use every opportunity to reinforce the way the change helps the enterprise.
Individual willingness to Change.
Individuals must be willing to examine new information and adopt new behaviours and approaches. Since most people prefer the status quo, this can be difficult. Typically, most people only accept changes that make sense and improve their job content or their work environment.
Rewards and Consequences.
Rewards and consequences are major changes need to be reinforced by. Individual performance plans with specific, measurable results need to reinforce the desired future state. Individuals who meet their objectives need to be rewarded appropriately and those that do not need to face consequences.
A consulting firm, wanting broader market recognition, encouraged all partners to speak at industry conferences and to write for industry publications. Several partners became very successful at both. While their articles and talks generated new business, the client revenue each partner managed actually decreased. When the compensation plan did not reward them sufficiently for the additional firm revenue to offset their decreased client revenue, they were very unhappy. The firm’s leadership team had to adjust the compensation plan quickly in order to prevent the partners from leaving.
Why is Change Management difficult?
It takes a great deal of time to change attitudes and behaviours. Application implementations, even large ones, are easier to plan and manage; OCM managers have a much harder time measuring progress; gauging support can be tricky. Just when it appears that a key individual supports the change, the person raises another objection and returns to old behaviours.
Executives, often assume that everyone impacted will find the business case so compelling they will automatically accept the new way of operating. But most people resist change or are unpredictable. This creates several difficulties for the OCM team:
Change Management is not Deterministic.
Unlike computer programs, people can be unpredictable and illogical. OCM activities that are effective with one group may be ineffective with another. Messages may resonate with some people but not with others.
Change Management is a Contact Sport.
The OCM team needs to interact one on one with individuals who will need to change. Emails, videos, and other mass communication can reinforce a message, but these don’t make people feel the enterprise cares about their difficulties. Change is personal; sometimes people whose jobs have been transformed need someone else to listen to their frustrations before they will accept the new reality.
Engagement of midlevel and frontline staff
Midlevel and frontline staff can make or break a major program. Since they understand the operational details of the current processes, they can anticipate potential problems and likely customer reactions. Individuals who are not sensitive to the disruption that major change can create often believe it is more efficient to involve fewer people early in the process. While involving more people in the change process creates additional work for the OCM team, it also builds commitment. Midlevel and frontline staff who see their suggestions accepted are more likely to support the final result.
Cultural differences can make OCM difficult.
Cultural norms are different around the globe. The OCM effort needs to be aware of local customs even with a global system intended to standardize enterprise operations.
Care needs to be taken to be sensitive to these and other cultural norms:
➢ Communications Style.
Denmark, Germany, Israel, Netherlands, and the U.S. are very direct. India, Japan, Pakistan, and the Philippines tend to be indirect and believe it is very important for both parties to save face. In these cultures, individuals avoid saying no, and frequently mean, “I understand” rather than “I agree” when they say “yes.”
➢ Time Orientation.
Meetings in Germany, Switzerland, and the U.S. start and end when scheduled. Little time is dedicated to introductions, even when some attendees are meeting each other for the first time. Spain, Thailand, Brazil, and the Caribbean are less concerned about time. Things can wait until later in the day or even tomorrow. In such countries it is impolite to rush into a business discussion; only after the host and the visitor have shared refreshments and pleasantries can business begin.
Australia, Canada, Israel, New Zealand, U.S. have little hierarchy with almost everyone on a first-name basis. Conversely, hierarchy is very important in India, Iran, Japan, Saudi Arabia and other countries. Junior staff in these countries invariably defer to the senior person.
Violating cultural norms can cause great resentment. The best OCM teams are very sensitive to local cultural norms even when the people at headquarters demand a standard project rollout and standard OCM program globally.
Change Management may be an afterthought.
With major IT efforts, the project team is often consumed by business process changes, interfaces to other systems, data cleanup, etc.
If the OCM effort is not started concurrently with the rest of the program, it may only be started when the program team experiences resistance from end-users. Even enterprises that assert that OCM is critical sometimes reduce or eliminate the OCM budget if the overall program gets too expensive.
Change Management can be started too early.
The OCM effort needs to be tightly coupled to the rest of the change program.
This is particularly difficult with major IT programs when the OCM efforts begin before new system details have been finalized. In the absence of tangible information about the new system, the OCM team either sounds vague or describes what they hope the new system will do. When the new system fails to materialize quickly or has less functionality than anticipated, supporters often become disillusioned.
OCM and the Change program may be disconnected.
The rational and emotional cases for change need to be integrated tightly. Frequently, executives communicate a rational, logical case for change that lacks emotional appeal.
People respond to calls to action that make them feel they are part of something that is more important than ,
any single person and are energized by visions that capture their hearts as well as their minds.