Every business grows and changes. Usually, it's because of company expansion, a business offering new services - or operating under new owners. It can be a very exciting time for any employer, but only if they manage change properly.
This includes creating a change program with strategic direction. And assessing the positive and negative impact of the change management process. Otherwise, it can cost your business financially. And even result in low productivity and employee morale.
In this guide, we'll discuss managing change effectively, the importance of change initiatives, and change management.
What is change management?
Change management is a term that describes a structured approach for individuals, businesses and organisations making transformational changes.
Organisational change management considers a whole company, business or organisation - and what needs to change.
Change initiatives include preparing and supporting transformation projects until they reach completion. To manage transformational changes, companies can implement a change process. This typically involves assessing budget allocation and redirecting resources.
Why is change management important?
Every type of business needs to employ change management. Whether you run a big or small company, change will still affect your employees and business processes. Assessing the impact of change is necessary for its success and can prevent failings
Change management helps to:
- Boost your business's operational efficiency.
- Make you aware of the risks when implementing a change.
- Manage the negative effects of change.
Examples of transformational change
Transformational changes are large in scale and scope. And most commonly indicate a departure from the status quo. There are several different transformational changes a business can go through.
These are:
- Mergers and integration: This is the process of merging or integrating two firms together. For example, two accounting businesses may merge together to reduce operating costs.
- Splitting a business: This is when a company creates another business from one of its existing services. For example, a marketing agency may split its public relations department into a new firm.
- Restructuring: Restructuring is an organisational change within a business. For example, a company may get rid of a particular service because it isn't making money.
- Turnaround: Turnaround happens when a company is failing and experiencing financial pressures. This typically involves replacing those in senior management, and evaluating the critical aspect of each part of the business.
- Outsourcing: This is when a company outsources a department or business processes to an external firm. For example, a company may outsource its human resources (HR) as it is cheaper than hiring an internal HR manager.
- Culture shift: This is when a company changes something fundamental about their culture. For example, they may implement flexible working or a four-day working week. This is a significant change as it affects employees directly.
What are the four things key to change management?
Change management affects every individual in a business or organisation. To implement successful change management, employers must follow four strategic goals.
Let's explore them in further detail.
Understand change
Before you implement change, you need to understand what effects it will have on your employees, and your business. To do this you should ask yourself a number of questions.
These include:
- Why does your company need the change?
- What is the aim of the change?
- How does the change affect your business positively?
- How does the change affect your employees positively?
- How does the change affect your business and employees negatively?
- What will employees need to do differently to embrace change?
Once you answer these questions, you can begin to plan for change.
Plan change
Planning a change initiative takes time and a strategic vision. So, you must ensure you consider every aspect of your business that transformational change could impact.This means thinking about the project scope and who will run change management processes.
You should also consider whether you would assign this responsibility to an executive team. Or if the operation would need change management professionals with certain leadership skills to oversee it.
Furthermore, you also need to think about how you will engage employees throughout the change process. And how you can overcome resistance from employees who are not on board. You must also consider the financial cost of the change, and how your business will manage it.
Implement change
Now you've understood and planned the change you'd like to make, you can begin implementing change management. This means reviewing the change consistently and getting regular feedback from your team on change processes.
Communicate change
Communication plays a significant role in change effectiveness. As an employer, you and your senior executives must be transparent with employees about transformational change.
This will help employees understand the need for change, and prepare for it effectively. It will also provide you with different perspectives, but mostly it can help the change management process run smoother.
Different types of change management models
There are plenty of change management models you can follow to help your company implement it.
These include:
Lewin's change management model
This change management process splits the change process into three key stages: unfreeze, change, refreeze. It advises employers to plan and communicate change, listen to employees, and be aware of when change becomes stable.
Kotter's eight-step change model
This model offers a more organised approach to change management.
The eight steps include:
- Step one: Create urgency. This means identifying why change needs to happen now.
- Step two: Form a powerful coalition. This involves gaining support from people within your company and other key stakeholders.
- Step three: Create a vision for change. For example, what positive impact do you want to create with the change.
- Step four: Communicate the vision. It's important to communicate changes to individuals and teams in your company. And in a way that gets them on board.
- Step five: Remove obstacles. This means assessing who has resistance to change, or other effects that can impact the change management process.
- Step six: Create short-term wins. Creating short-term wins will motivate and encourage you to continue implementing the change. This is because you will see improvements from day one, rather than aiming to just achieve one huge objective.
- Step seven: Build on change. Building on change means looking at the change process so far in your business, and how you can improve upon it.
- Step eight: Anchor the changes. This means promoting the success factors of your business following the change. For example, reporting every month on your company's growth.
The change curve
The change curve is a model that describes four stages of an individual or employer's transition through change. Rather than being a process to follow, it helps businesses be aware of how change impacts everyone emotionally.
These include:
- Shock: This is most people's initial reaction to change. As they are comfortable in their present positions, change can disrupt this.
- Anger: Once an individual knows they cannot stop the change, they tend to react negatively. This may include being angry.
- Acceptance: At this stage, there is less focus on what has been lost and more focus on accepting and managing change.
- Commitment: Individuals begin to embrace change once they have accepted it. They may even demonstrate desired behaviours and personal change themselves.
The challenges of change initiatives
So it's important to know what challenges you face when implementing a change management strategy.
These include:
Resistance to change
With any type of change, there is bound to be resistance. And your employees are no exception to this. Resistance can take many forms, and your employees may choose to be vocal about their opposition.
If they are vocal about it, they can influence others to oppose the changes too. This can make it even more difficult to implement change.
Overcoming resistance to change is possible, and if you plan ahead - it's even easier to manage.
Lack of communication
Many companies fail to communicate with their employees when implementing change programs. Or even involve them in the project management to begin with.
Change management requires an effective communication strategy. This includes consulting employees about proposed changes. And providing details about how you plan to implement them. As well as reporting on the results of the change process once it's over.
Managing multiple projects
A change initiative may require an employer to change several processes within a company. So you must ensure your company's ability to manage multiple project teams.
If you have a sufficient amount of staff, you could appoint change leaders. But if you have a smaller team, there may not be enough support to fulfil all your change efforts.
For example, you may decide to appoint a senior staff member to lead a change in one department. But if they become ill and can't work for a few weeks - then you may be left without anyone to manage the change. This could cause the project to fail.
Limited resources
If your business lacks resources, then it could be more difficult to manage change. This is because change management typically requires overhauling how a business operates. And this requires staff, time and money.
For example, as part of your change initiatives, you may wish to review your configuration management. This is the process of maintaining systems, such as computer software and hardware.
But, if your assessment finds that you need to update these systems, this could cost your business financially. Not to mention, the time it will take to get staff up-to-date on the new system. If your business lacks these resources, it could be difficult to apply the change.
Benefits of change management
Whilst change management is a big commitment - and comes with its own challenges - in the long-term, it can have several benefits to your business.
These include:
Minimising the chance of change failure
And change management can minimise the risk of this happening. This is because it assesses how the change will positively and negatively affect the business, its services, as well as its employees.
And once you become aware of the risks, you can mitigate the chances of them happening. For example, during change management, you may find that you haven't got enough time to lead all aspects of change.
Consequently, you may realise you need to appoint senior staff members to be 'change agents'. This ultimately may help the transition run smoother.
Improved communication
Change management ensures transparency and better communication between yourself and your staff. When implementing successful change management, you must be clear and concise about the process. As well as addressing the potential negative effects.
Being transparent with your staff will help to build a better relationship with them. This is because they aren't left in the dark about the change initiative.
And involving them in the process - for instance, asking them for feedback - helps them feel like a valued member of the workplace.
Improved productivity
Change management models can increase productivity at your workplace. This is because you cab plan changes to the very last detail. So everyone is aware of what needs doing and when.
Moreover, if you set goals that you want the change to achieve - everyone at your business will be aware of your objectives. Therefore, they will become aware of what they need to do to to deliver them.
Improved company culture
Your company's culture will also benefit from change management. This is because it helps employees better understand change, and why it will be a benefit for them.
With this incentive in mind, you can motivate employees to deliver the change. And create a workplace culture that is more open-minded and ready for growth.
Get expert advice from Peninsula UK
You must lead change in a way that positively impacts your team. And follow change management models correctly.
Poor change management drives up expenses for your business and reduces your profits. But, if you manage change effectively, you can boost employee engagement and morale. As well as improving company culture.
Peninsula offers you expert 24/7 HR advice and support, to help you enforce effective change projects, manage transformation efforts, as well as offering guidance on implementing new processes. Contact us on 0800 028 2420.
