What Is Change Management?

To change means to evolve, and to deny moving forward will only stunt your growth.

“The rate of change is not going to slow down anytime soon. If anything, competition in most industries will probably speed up even more in the next few decades.”

                                         John P. Kotter, American Emeritus Professor, Harvard University

If we look around us, nothing is as it was just a year ago – from people’s thought processes, technology, and economy to customer demands. That’s why businesses and organizations need to break out of their shells whenever required.

However, making changes on a large scale can be challenging and chaotic. Also, change is often hard to accept, and resistance is natural.

And that may lead to failure and losses in the long run.

That’s where effective change management comes into play. With proper planning and strategies in place, organizations can ensure a seamless and successful transition.

Continue reading to learn more about the advantages, challenges, and significance of change management and how your company can easily transition to newer dimensions.

Did you know?

According to a study by Gartner, only 34% of change initiatives are a clear success, while 50% are failures. However, organizations can vastly improve these figures if they have an effective change management strategy in place.

What is Change Management?

We can define change management as a technique and methodology that can help manage, implement, and measure the impact of any sweeping changes across the workforce of an organization, such as digital transformations, organizational goals, core values, and processes.

It ensures that any transition is introduced gradually throughout the organization, giving everyone involved in the process the time to adapt and understand everything around them.

With the assistance of a good change management strategy, organizations can:

• review reasons for change
• create strategies to prepare everyone for what’s to come and gain their support
• deploy all changes thoughtfully over time
• approach the change deliberately and work on it from different perspectives to get desired outcomes

Now that we understand what change management is and how it empowers us let’s look at its importance in transforming companies.

Importance of Change Management

Other than the fact that change management gives you more control over the entire transition process, there are many other reasons why it’s key to the growth of an organization. Let’s have a look at them in detail:

Creates a Solid Foundation

There has never been a project management initiative that started with a plan and simply moved along exactly as required. There are always major or minor changes in the process. Change management techniques prepare organizations for such changes, internally or externally, especially on a big scale.

With change management strategies in place, any transition can easily take place in your organization’s life cycle. It gives everyone the time and space to anticipate change and come to grips rather than making the transition disruptive and throwing your operations off-track.

Creates Stronger Adaptability Mechanisms

Accepting sudden change is difficult for organizations everywhere. It’s like receiving a hard blow to your gut, leaving you dizzy and confused. That being the case, sometimes it becomes hard for an organizational structure to adapt to changing trends, resulting in failure.

But change management strategies soften the blow by giving organizations a vision and a roadmap. This prepares them for any changes in the future, thus strengthening their adaptability mechanisms as a whole.

For example, when the pandemic hit, fitness brand ‘Innovative Fitness’ had to shutdown its branches but they were able to take their business online in just 5 days. In just 48 hours, they were able to grow to a community of 1,500 members and started offering 30-day online fitness plans to not only keep their business afloat but also expand their prospects and audience.

Doing this in the face of looming uncertainty was possible because of properly structured change management plans and mechanisms.

Decreases Resource Risks

Sweeping organizational changes always come with risks, especially related to the resources involved. Plans aren’t always executed as required when transitions are made on a large scale. That’s why resource management becomes important.

However, this can be avoided using a solid change management plan.

But how does it help?

By pinpointing the right type of resources like people, processes, and/or systems that can be used to effectively execute your modified plans.

Delivers a Competitive Edge

We live in a digital age where organizations must constantly stay updated to cater to the needs of their clients, employees, and customers alike. Change management strategies help organizations embrace this present-day reality to achieve success over competitors as well as improve employee satisfaction and communications.

Furthermore, organizations with a good change management strategy-

• are more skillful in responding to market changes
• are quicker in marketing new products and services
• have a higher rate of productivity
• can lower their operating costs

Predicts Changing Customer Needs

Understanding customers’ requirements has constantly been a challenge for organizations, owing to the world changing around us. Change management strategies help organizations walk hand in hand with evolving trends, technologies, culture, and economy to ensure that they aren’t left behind in the race.

Customer requirements become clearer with change management strategies. This helps organizations understand customer behavior trends while aiding your team to develop methods to satisfy customers’ needs way ahead of competitors.

Improves Business Processes

Change management greatly facilitates cultural, technological or other types of changes necessary for improving an organization’s processes to make room for itself in a dynamic marketplace. The strategy allows organizations to focus on the overall effects of change and eliminate any problems before they arise.

Helps Retain the Best Talent

With an effective change management strategy in place, all the transitions become clear and can then be well-explained to the employees. This way, you can keep everyone in the loop about what’s going on and how it’ll affect them going forward.

Keeping information about change transparent with employees shows they are heard and cared for. This increases their morale, making them more productive and loyal to the organization.

Types of Change Management

Change management varies from one organization to the next, and its meaning may differ from person to person. Broadly, there are three main types of change management that organizations require. They are as follows:

Evolutionary Change Management

This is the most common type of change management required by organizations. Evolutionary change takes place gradually over time, to ensure the survival of an organization. This change is often a result of competition, like managing the needs of customers or having to keep up with technology.

Evolutionary change management involves the following strategies to achieve fruition:

• Utilizing cutting-edge global technology to reach customers
• Gradual improvement of customer service
• Correction of inconsistencies in current operations’ strategies
• Upgrading equipment to make workers’ performance efficient enough to respond quickly to market demands

Revolutionary Change Management

Organizations are often forced to undergo revolutionary change to stay ahead of their competitors. Large power shifts normally accompany such changes often realigning strategic objectives that radically transform attitudes or behaviors.

With the revolutionary change, organizations might undergo a complete turnover that could be devastating at times.

Revolutionary change management helps project managers strategize while dealing with challenges like:

• Reshaping organizational structure due to unforeseen crisis, which adversely affects how and where businesses work. For example, COVID-19 brought about a revolutionary change to the work culture of many organizations, also bringing the concept of work-from-home into the picture.
• A merger or acquisition that can adversely affect processes, job roles, technology, structures, and work culture.
• Altered business models to form a new mission and vision for the organization.

Directed Change Management

This type of organizational change is also known as ‘planned’ or ‘managed’ change. Despite its complexity and relative lack of success, its ability to achieve a specific purpose makes it popular among organizations.

Directed change management aligns the management, workforce, and organizational culture with the strategies, structure, processes, and systems to achieve a desired vision.

Directed change is further divided into three more types which are as follows-

Developmental Change Management

This is the simplest form of directed change management which aims at improving an organization’s existing skills, performance standards, and other internal conditions. With developmental change management, organizations can-

• increase their sales
• improve their quality
• provide interpersonal communication training
• improve simple work processes, team development, and problem-solving efforts

Transitional Change Management

This form of directed change management replaces the old with the new in an organization. This means that individuals working in an organization must give up old practices of running operations to allow change to happen. With the help of transitional change management, organizations can clearly visualize their final goal in great detail before any changes take place.

It may include managing simple to complex challenges like:

• Mergers or acquisitions at a simple level
• Reorganization of departments or the company as a whole
• Building new products or starting services in place of existing ones

Transformational Change Management

This is a more challenging change management process since the final goal isn’t clear and cannot be detailed. Change is integrated as a result of trial and error. This type of change is often disruptive and is sparked by both Internal and external factors for organizations to remain profitable and relevant in the market.

Transformational change management involves managing the following challenges:

• Changes in technology to remain competitive in the new economic and business environment
• Establishing new channels of communication across and within departments and defining new roles for employees of the organization to meet new requirements
• Restructuring products or services to attract a specific target audience

5 Core Principles of Change Management

There are 5 key principles of change management that organizations must focus on to achieve transformation success. Let’s walk through these key principles to understand them better.

Identify the Benefits That Come With Change

Change impacts many spheres of an organization – from stakeholders to finance and more. Understanding the benefits of change management is essential to gain the cooperation and trust of those impacted by it.

However, here’s what most organizations forget to ask:

• In what way will the organization benefit from the change?
• How much will the organization benefit from the organizational change?

A detailed understanding, by all individuals in an organization, of ‘what’ requires change and ‘why’ is key to an organization’s success. By defining these two questions, you can start to craft your plan.

Build Alliances

“When people fail to develop the coalition needed to guide change, the most common reason is that down deep they really don’t think a transformation is necessary or they don’t think a strong team is needed to direct the change. Skill at team building is rarely the central problem.”

                                                                                                                         ― John P. Kotter

As quoted above by John Kotter, developer of the 8-Step Model for Leading Change, it’s important to build partnerships with the people involved in the transition. This partnership is key to having a successful transition.

Remember the following:

• Bringing change is not a one-person job and requires all the support to make it work
• If there’s a vision, it needs to be shared, especially with stakeholders, so that the change can be analyzed and guided in the right direction.
• You may have an idea and it may not always be right. Open the communication channels between team members and key stakeholders. Explain the nature of the change that’s happening and actively listen to any concerns that come your way.

Doing so can help you build engagement with influential people, ensuring that you have the support you need at the right time.

Evaluate the Preparedness of Your Organization

Ask yourself, “Is my organization ready for a change?”

If not, then how are you going to deal with it?

You might not realize it, but these questions form an integral part of the principles of Change Management. Failing to comprehend the repercussions of change for a company, both organizational and cultural, will create obstructions in your path going forward.

There are three types of assessments to evaluate the readiness of your organization before you implement any change:

• Change Management Readiness Assessments
• Behavioral and Cultural Readiness Assessments
• Change Management Impact Assessments

Customize Relevant Changes for Everyone Affected

People within an organization have their individual experiences. That’s why their change journey will also be personal to them. Making change relevant to every individual who is going to be affected by the change, is, therefore, the fourth principle of change management.

Unless this happens, any transition that happens is bound to fail. So it’s important that each employee feels a keen participation in the personal benefits that come with change.

You can use a robust ‘Change Agent Network’ to promote the engagement of stakeholders as well as communications for the duration of the entire change life cycle. Including change agents in an organization’s mid and lower tiers guarantees that any change message is relayed from a respected source.

Measure to Sustain the Performance of Change​

Last but not least, the final principle that organizations must focus on is nourishing stakeholders with awareness around the change. Large-scale transformational programs will face some heat and resistance from individuals who may feel that change could adversely affect them.

In such cases, try running the preparedness assessment again to identify the pain points. This way, senior management gets the opportunity to accurately plan future interventions to support the change.
Once you’ve highlighted the areas requiring attention, work collaboratively through the identified challenges and develop robust solutions.

Change management requires certain structured steps that guarantee success. Discover them in the next section.

Critical Steps in the Change Management Process

Here are 5 key steps in the change management process that can guide organizational change to completion and guarantee a successful transition.

Step #1 Prepare For a Cultural Shift

Cultural preparation is key to organizational change before you start a project. During this phase, the manager works with the employees to determine the elements that may cause obstacles and the need for change. Additionally, this step aids employees in understanding the value of the change as well as its overall positive impact on the organization.

It’s important to identify the goals and focus of the project during this stage to guarantee that the organizational change happens successfully.

Step #2 Undertake Project Mapping

The next step after cultural preparations is to have a clear vision to aid in mapping the change. With this step, you can identify the project’s scope and whether the transition has any type of resource gaps. With the help of project mapping, any type of change can be completed in a structured manner.

Having clear goals beforehand minimizes negative impact on a business and its work process.

Step #3 Implement Change

Now that you’re done with the first two steps, start implementing the outlined plan and bring in the changes. As this phase begins, managers should be more focused on delegating team members to reach project goals while recognizing any potential obstacles along the way.

Eventually, managers must consistently communicate the organization’s vision and goals to their team members to keep everyone in the loop as they proceed.

Step #4 Incorporate Change

In this step, change managers remain focused on incorporating the change into the organization’s process while the team members move on to different projects. Change managers must also ensure that individuals within the organization don’t go back to their old ways of doing things once the focus shifts.

This step is the most important for organizations that are implementing sweeping changes.

It can be challenging to change the culture and practices of an organization, especially when employees are not incentivized. Including an effective reward system can help move the changes forward.

Step #5 Analyze Results

This is one of the most important steps of change management. During this step, change managers must constantly review the results brought about by the implemented changes. Doing so empowers them to identify any differences that might crop up between actual and expected outcomes.

Based on the extracted results, you’ll need to take necessary actions to put a stop to any obstacles. Remember to ask for feedback from teams every now and then to identify and tackle any areas of concern.

Such analysis can provide change managers with insights into whether the changes can be long-lasting or if there’s still a need for additional training, support, and/or guidance to maximize return on investment.

Challenges of Organizational Change Management

While change management has its benefits, it also brings along many challenges. Some of the challenges that change managers can encounter during a transition are as follows.

Challenge #1: Resistance

Not everyone within an organization is going to readily accept change, especially the ones who’ll be most affected by it. So you’ll need to be prepared for people to become confused and curious about what’s in it for them, feeling hesitant towards taking up certain tasks, feeling defensive and more.

Solution: Resistance is a common challenge and can be tackled by providing training, enhancing the communication channels, encouraging transparency, and implementing proper planning strategies.

Challenge #2: Lack of Communication

A lack of communication often poses a challenge during organizational change. If people within an organization are kept in the dark about the change happening and how it could affect them, it could result in chaos.

Solution: Keep multiple communication channels open amongst all tiers of an organization. Also, ensure that the communication is done frequently and as early as possible. Be clear in communication and open to feedback. It’s also important to reach out through the right set of people. Doing these things will ensure full cooperation when the transition process begins.

Challenge #3: The Introduction of New Technology

Employees are usually accustomed to using a certain type of technology for years. Hence, the sudden introduction of new technology can disrupt their entire workflow.

Solution: If you’re really set on bringing new technology into the workplace, it’s advisable to introduce it gradually. You can start by creating a network of people who can easily learn to use it and then later train their colleagues about the same.

How to Manage Change Effectively

It can be difficult to manage organizational change. To make things easier, below are the five ways or best practices using which organizations can effectively manage change to reach their goals.

Prioritize People

The mantra for a successful change management strategy is giving people priority above all. Any change initiative is useless unless the people involved clearly understand it. If this isn’t done, they’ll refuse to even believe or engage in the change process.

Employee engagement is key to making transitions easier. This can be achieved via proactive change management communication.

Utilize Change Management Models

Organizational leaders require the right tools to make change happen. Leaders can easily bring their business strategies into action and increase the likelihood of success with these tools.

Today, a variety of change management tools are available to choose from. Change managers can choose any one of these tools since they all follow identical core principles of identifying needs as well as planning for and implementing change.

Initiate Active Leadership

Active leadership is one of the top reasons why change initiatives succeed. That’s why leaders who are heading the change must be well-educated about their roles to enable them to advance successfully.
Leaders play the following roles during an organizational change:

• They are accountable for executing change goals from the beginning to the end.
• Leaders aid organizations in understanding and interpreting the meaning of change in terms of the teams, the organization, and the marketplace.
• They ensure the involvement of people who enable organizational change.
• Leaders are there to set the roadmap for change

Observe the Highs and Lows

During a change initiative, there’ll be highs and lows. Leaders are supposed to manage them proactively while taking advantage of them in time. While high points are a reason to cheer, low points are a cue to reset communication strategies.

This is a time to listen carefully to employee inputs while building trust and support.

Don’t Overlook the Resistance

Resistance to organizational transformation is a dangerous trait. Change managers or leaders must always be observant of the signs of change resistance and deal with it as soon as they come across it.

These include the spread of rumors, procrastination, lack of action, and/or the withholding of information. Identifying resistance by communicating with team members and devising feedback loops like surveys, feedback channels, and input sessions can help.

Now that we know how to manage change effectively, let’s take a look at some of the best management models available.

Top 5 Change Management Models

Change management models are concepts that work as a guide for organizations when they plan to make changes.

Organizations must be aware of the basic tenets of some of the popular change management models and frameworks. With this, they can reap benefits by leveraging best practices, techniques, and methods when streamlining change.

Change projects can sometimes be an expensive investment for organizations. Relying on one or more of these models can make it easy for organizations to successfully navigate through to the end.
However, not all change management models are alike. While some models are the best fit for a more complex and organization-wide change, a less complex model is better for working on smaller projects.

Having said so, below are 5 top change management models that have been proven to be effective. As you consider each, stay open-minded to sometimes simultaneously using more than one model.

Kotter’s Theory

This 8-step change management model is the brainchild of John P. Kotter, the Konosuke Matsushita Professor of Leadership, Emeritus, at the Harvard Business School.

Kotter’s theory is divided into 8 steps which are-

• Establish a feeling of urgency towards making change
• Form a team to make the change
• Create a strategy that aligns with your vision of change
• Convey your vision of change to stakeholders and teams
• Get rid of bottlenecks
• Focus on short-term goals
• Maintain momentum
• Incorporate new and more promising changes in the workplace

Kotter’s 8-Step Change Management Model builds keenness towards change and develops an understanding of the need for change via a checklist that serves as a guide for the people undergoing it.

Cons: The model does not focus on employee feedback, risking resistance that could stall the process. This model is not suitable for smaller organizations where employee feedback plays a critical role. It can, however, be paired with other models so that employees are not left out when going through the process.

Lewin’s Change Management Model

This is a popular 3-Stage Model of Change developed by Kurt Lewin. The model breaks down any big changes into more manageable parts, making the journey easier.

The three stages of Lewin’s Change Management Model are-

• Unfreeze and analyze the current work process to see how it can be improved so that everyone involved understands why the change is needed.
• Change and instruct employees throughout the change process
• Refreeze or solidify the new work process after the changes are established, based on employee feedback.

Cons: Since the phases are few, the model does not ensure a quick transition. Lewin’s Model focuses more on spreading change over the entire organization over a long period to overcome resistance and provide adequate training. Hence, the model is best suited when there’s strong support from senior management and a requirement to make sweeping organizational changes.

McKinsey’s 7-S Model

This is one of the most complex yet pivotal and vastly applied change management models that organizations use the present day.

Though complex, McKinsey’s 7-S Model is an absolute necessity to implement complicated organization-wide changes. There’s no specific order in which the seven elements can be used. Instead, they are assessed based on how they affect each other to identify any weaknesses in the change process.

The seven elements of the McKinsey model are as follows-

1. Staff
2. Skills
3. Systems
4. Shared Values
5. Strategy
6. Structure
7. Style

The first four elements, as mentioned above, are considered soft elements. These elements are harder to describe and the organization’s culture controls them. Conversely, the last three elements are the hard elements. Hard elements are easier to pinpoint and are controlled by the organization’s management.

This model is perfect for addressing confusing issues within an organization. The seven elements of the McKinsey 7-S model work as a guide after the required changes are identified to maintain a balance within the organization.

Cons: The model can only be used after extensive research and benchmarking are done making it a longer affair. Also, McKinsey’s 7-S Model does not consider the impact of external factors on businesses, which again is crucial for the company’s growth.

Nudge Theory

As the name suggests, the Nudge Theory actually nudges individuals to make difficult decisions that can benefit them for a long time. Economist Richard Thaler had introduced the theory in 2008.

This theory depends on nuanced and indirect recommendations which are supported by evidence. This ensures that employees are nudged in the desired direction of change. The theory believes that nudging change is more compelling than strictly enforcing it.

Some of the basic principles of the Nudge Theory are-

• Define the changes clearly
• Consider the perspective of your employees when considering a change
• Use evidence to show the best change options
• Put forward change as an option
• Listen to feedback from employees
• Limit obstacles
• Maintain momentum with short-term wins

Nudge theory guides employees on the change options that management wants them to choose to ensure their full support while keeping them in the loop. Hence, there’s little room left for resistance.

Cons: Nudging is however difficult to implement because the outcomes are not always easy to predict.

Even though the behavioral effects of intervention seem obvious, the theory has every chance of backfiring and might lead to entirely opposite outcomes. This theory brings out the best results when combined with other models.

Maurer 3 Levels of Resistance and Change Model

This is a unique 3-level model developed by Rick Maurer that concentrates on the causes of why change fails. According to this, up to two-thirds of significant organizational changes fail because of three critical levels of employee resistance, which are:

• I don’t get it

It denotes the rejection of change by people who don’t understand why the change is needed. This is the first step of failure in organizational change.

• I don’t like it

It symbolizes the emotional reactions of employees towards change. This can prove to be an obstacle when implementing organizational change. If employees are frustrated or fearful of the change, it’s only natural for them to resist. Preparing and managing this roadblock is important to move forward and implement change.

• I don’t like you

The third and final level of Maurer’s model is – “I don’t like you”, characterized by employees who distrust your judgment and expertise, thus causing resistance. Employees can become more receptive if they are confidently informed about the need for change as well as the process for implementing it.

Cons: Maurer’s 3 levels of resistance are not a complete change framework or method. The model helps you with common problems related to change. The 3 levels are best utilized when simultaneously used with other change management models.

How to Choose a Change Management Tool

There are many change management tools and software available in the market to help organizations make seamless transformations. These software solutions aid businesses in managing, tracking, and executing changes irrespective of the project size.

Using the right change management tool can simplify even the most complex organizational changes and adopt change faster while staying ahead of the game.

To choose the right tool, you’ll need to keep the following factors in mind:

User-friendly

Many employees are already opposed to different types of changes that take place in an organization. The last thing they need is a cumbersome tool to help them adopt the changes. So this should be your first criterion.

Best Resource Management

Maximizing profitability relies heavily on effectively utilizing your resources and managing their billability. And, it can be a daunting task to optimize productivity and efficiency without real-time insights into key metrics.

To tackle this challenge, it is crucial to select a tool specifically designed to leverage comprehensive resource information, encompassing availability, skills, location, rate, employee type, and more. Such a tool can automatically recommend the most suitable resource for your requirements.

By obtaining a unified view through this tool, business leaders can exercise complete control over their resources, schedules, and costs, directly impacting profitability.

Scalability

Today, business goals include entering new markets, establishing multiple domestic and international entities, and growing profits. Therefore, it is important to invest in a solution that can scale up or down based on your business requirement.

Security and Compliance

As organizations are geographically spread, they are being hit with more challenges around labor compliance, work conditions in different countries, time-offs, and the need to comply with various regulations around the world. So, ensure that the tool offers the right features to prevent data loss, data theft etc. and helps you meet various applicable laws and regulations.

Seamless Integration Compatibility

With your existing systems and other applications and software. With the Plug-and-Play feature, you can share the project, resource, time, and cost information with any ecosystem that you choose.

It is crucial for organizations to acknowledge the absence of a unified and reliable source of truth. Without such a source, the process of harnessing and managing data becomes laborious and cost-intensive.

Therefore, companies need to select a change management tool that harnesses the power of Artificial Intelligence (AI) to provide real-time visibility into vital business metrics. This tool should streamline resourcing, financials, and project information, while also delivering an up-to-date live view of the entire business.

An effective change management tool should leverage both historical and real-time data to swiftly adapt to changes and enable managers to make well-informed decisions. By incorporating AI-driven capabilities, organizations can optimize their data management processes and enhance their ability to respond to dynamic business conditions.

Move Forward With Change Management

In conclusion, we can say that change management is not just a process but also a methodology and mindset that organizations can leverage to execute change.

Change management is an enabler for organizations to take advantage of and measure the activities of the individuals affected by the change.

Change management involves more than managing resistance, creating communication channels, and training. Effectively, it’s a more structured approach that requires comprehensive tools to drive overall change. So if you’re planning a change, it’s time to go forward with change management to keep moving forward in the fast-paced business environment.

FAQs

1. What is the change management process in project management?

Change management is the technique organizations use to manage changes that are to take place within a project. In project management, it involves the management and monitoring of a project’s team and activities to ensure that goals are met.

2. What are the different types of organizational change?

Organizational change is broadly categorized as-

• Changes that affect people like job duties, company culture, employee training programs, and customer experience enhancements
• Changes to the Internal processes
• Changes to the company structure, its hierarchy, and management
• Technological changes like the adoption of software and technology

3. What are the duties of a change manager?

The duties of change managers vary from organization to organization. Their duties include-

• Developing communication strategies
• Assessing risk factors, change readiness, and other effects of change.
• Planning and devising project roadmaps
• Managing, monitoring, and analyzing the change process
• Harmonizing different teams and stakeholders
• Working with business leaders, employees from different tiers, and customers to process change successfully