Change Management

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What Is Change Management?

Organizational change management refers to the structured approach in the transitioning of teams, organizations, and individuals from the prevailing state to the desired future state. [1]

It is increasingly critical as companies become more and more agile and socially oriented. [2] In addition, the speed and uncontrolled nature of information and use of artificial intelligence will enable disruption to be more widespread than in the past. [3]

Change initiatives can be for example about organisational structures, processes, or organization culture. A common platform for the implementation of large-scale corporate change is a project.

Change can be incremental (a change will take place over a long period of time) or radical (immediate and dramatic change is required over a short time period). Radical changes require more change management.

Change Happens on Two Dimensions

Change happens on two dimensions – there is the business side of change and the people side of change. To change successfully, these both dimensions need to mature simultaneously (see the figure above). [4,5]

That means that effective change management requires processes and tools both for organizational change management and for individual change management. [4]

The people side of change and the business side of change are explained more in details in the sections below.

People Side of Change

In order for an organization to change, all the individuals within the organization must change. That is why it is important to understand how to affect individual change. [5]

Understanding and Managing Individual Change

The ADKAR Model is a framework for understanding and managing individual change. It outlines the individual’s journey through change. To effectively manage the people side of change, the five key goals are: [5,6,7]

  • Awareness of the need to change. People need to understand what the nature of the change is, why it is being made, how it will impact the organization/individuals, what the risks of not changing are.
  • Desire to support and participate in the change. This is ultimately about personal choice, influenced by the questions above, an individual’s personal situation, and his/her intrinsic motivators (i.e., motivation that comes from within).
  • Knowledge of how to change. People need to have information about behaviours, processes, tools, systems etc. that are needed to implement the change. This is impacted by the current knowledge base, the capability to learn, the access to knowledge, and the resources available for training and education.
  • Ability to implement required skills and behaviours. Knowledge does not help if it is not turned into action.
  • Reinforcement to sustain the change. Sustaining a change is difficult as it is a natural tendency to revert back to what we know. That is why reinforcement is critical. External reinforcements could be for example recognition, rewards, and feedback. Internal reinforcements, in turn, could be e.g. a person’s internal satisfaction with his/her achievement.

Important Aspects

Important aspects regarding the people side of change are the barriers to change, how people prepare for change, and communication.

The Barriers to Change

The nature of change creates conflict. The conflict is both internal and external: [2]

  • Internal barriers are fear, trust issues, control issues, insecurity, motivation issues, learned helplessness, apathy, and change fatigue.
  • External barriers are complexity, clarity of the vision and direction, management of expectations, and capability and capacity for the specific changes.

In combination, these factors create a wall that becomes a barrier to implementing change. Any organizational change initiative must address these barriers. [2]

How People Prepare for Change

Often people prepare for change by first internalizing it and moving through the five stages of grief, and only then they can accept change.

According to Kübler-Ross [8], when people are confronted with grief, they go through emotional cycles of denial, anger, bargaining, depression, and finally acceptance. People deal with these very same cycles when they are confronted with change, especially when the change is dramatic. However, it is important to understand and remember that the final stage, acceptance, does not automatically mean buy-in or engagement.

Knowing a person’s attitude (a way of thinking or feeling that is often reflected in behaviour) helps you to predict their behaviour when it comes to how they will react to and adopt change. [2]

The Importance of Communication

Both listening and delivering messages are important in the change process.

Listening means paying attention to and hearing what others are saying. The messages that people send can be both verbal and nonverbal – that is why both seeing and hearing are important. Active listening is a method which helps to hear and understand the concerns, considerations, and needs of another person. It includes four basic steps: [2]

  • Listen with many senses.
  • Paraphrase what you believe the person has said and meant.
  • Clarify – ask the person to validate your interpretation.
  • Respond – ensure that the response addresses what has already been said.

Delivering messages to the people impacted by change is just as important as listening them. Be careful to avoid delivering messages that give two meanings or are ambiguous – being precise in our language choices helps to avoid misunderstandings. [2]

Business Side of Change

Change Management Process

Change management is architected by change management professionals, and executed by many players in an organization, from top-level executives to front-line supervisors. [4]

To be effective at leading change, you must customize and scale your change management efforts based on the characteristics of the change and the attributes of the organization. [4]

Based on Prosci’s research in change management, the most effective change management process consists of three phases including [4]:

Phase 1 – Preparing for change

  • Understand the change and the organization impacted by the change
  • Define your change management strategy
  • Prepare you change management team
  • Develop your sponsorship model

Phase 2 – Managing change

  • Develop change management plans (e.g. communication plans, training plans and resistance management plans)
  • Take action and implement plans

Phase 3 – Reinforcing change

  • Collect and analyse feedback
  • Diagnose gaps and manage resistance
  • Implement corrective actions and celebrate successes.

Other organization change management approaches are for example: [2]

  • The Kotter model. An eight-step framework for leading change and transformational efforts.
  • IIEMO. An approach that was developed out of conflict resolution and mediation theories as a means of engaging and collaborating with people through change.
  • AIDA. A marketing framework that can be used in change management – change management is ultimately a big sales job, as you are convincing people to stop what they are doing and to do something else.

Understanding the Business and the Change

An organization is comprised of two equally important parts – the business ecosystem and the climate. Understanding of these two, coupled with the details of the specific changes, will enable the successful planning and execution of a transformation. [2]

  • Business ecosystem. Details of the business ecosystem include things like the overall business model, the internal/external key relationships of the business, and the organizational structure.
  • Business climate. The business climate refers to the environment in which the employees operate daily. It includes things like the organization culture, vision, and mission; whether or not an organization is performance-based / profit-based, customer loyalty, and brand strength.
  • Specific changes. Details of the changes include things like the business goals and drivers, the people impacted (their needs), the processes, and the specific technology being changed.

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Further reading

Sources

  1. Duck, J.D. (2003). Managing change: the art of balancing. Harvard Business Review, 71 (6):109-18.
  2. Davis, Barbara (2017). Mastering Organizational Change Management. J. Ross Publishing.
  3. Donald, Mathew (2019). Leading and Managing Change in the Age of Disruption and Artificial Intelligence. Emerald Publishing.
  4. Hiatt, Jeffrey M. and Creasey, Timothy J. (2012). Change Management: The People Side of Change (Second Edition). Prosci Learning Center Publications.
  5. Prosci. The Prosci ADKAR Model eBook.
  6. Hiatt, Jeffrey M. (2006). ADKAR – A Model for Change in Business, Government and our Community.
  7. Prosci. Reinforcement – The Prosci ADKAR Model. Retrieved 28 January 2021.
  8. Kübler-Ross, Elisabeth (1969). On Death and Dying. Routledge.