By: Lauren Dellarocco
Imagine you’re the owner of a small business that’s suddenly taking off. The current state of the market is optimal for your business’s success, and your company is far exceeding expected profits.
You realize your company needs to undergo a major change for it to meet the current demand. You identify the need to double the number of employees, amend your business strategy, redefine business objectives, and implement an employee communication software that streamlines internal communications.
You decide your company needs to undergo a structural change for it to transform. You don’t have a change management strategy in place, but you implement the change anyway—and things get messy. Employees don’t receive proper training on the new technology, and they resist the change. Project deadlines are missed; deliverables are late; budgets were exceeded. Now what?
If you backtrack and decide to establish a thorough change management process, from the first step of identifying the gaps that need to be filled, to the last step of evaluating the process, change implementation is likely to be a smooth process. Effective change management ensures that change efforts are productive and on-schedule, team members are informed and on-board, and inefficiencies are identified and solved.
Organizational changes are unavoidable in today’s perpetually competitive climate. For a company to secure its longevity and economic success, it needs to continue improving. The change management process is never over; leaders need to be persistent in evaluating all aspects of the company and identifying gaps or oversights in processes and strategies.
As the competition evolves to adopt new technologies, and emerging advancements continue to elicit changes in the consumer’s behavior, companies are required to undergo organizational changes if they want to survive.
What is an organizational change?
When leaders of a company identify an inefficiency or gap in the business’s current state of processes/strategies/technologies, or they encounter an emergency that requires immediate action, the company will undergo an organizational change. Organizational changes are in place to transform either an area of the company or the entire company in its structure, culture, product/service, or digital technology.
The desired outcomes of the organizational change may be to:
- Increase ROI
- Improve work productivity or quality
- Reduce costs to improve cost efficiency
- Improve customer or employee satisfaction
Types of Organizational Change
Organizational changes can be planned or unplanned, depending on the cause of the change initiative.
- Planned: e.g. changes in product or service sold, implementation of a new technology, or changes in the size of the organization
- Unplanned: e.g. new government regulation is established, new competitor emerges, performance or quality declines
Some of the common organizational changes a company might endure in its life cycle include:
- Digital transformation: implement new technology to improve digital tools, systems or resources
- IT transformation: adjust current processes or construct new processes to make technology changes to the company’s processes for storing and retrieving information
- Strategic change: alter the business strategy to meet the changing market
- Structural change: transform organizational structure, i.e. mergers and acquisitions or increased business size
- Cultural change: redefine an approach toward community and culture in the business environment
Importance of Change Management
To implement a successful organizational change, a company needs a structured approach toward managing change. An organizational change that transforms a company will affect everyone in the company, from the project management team to the human resources and customer service departments. Because an organizational change requires all team members to be on-board, these changes require an effective change management process in place.
Changes have to be overseen and guided by change managers and project managers in the company. There must be roadmaps, tasks, milestones, deadlines, and evaluations established to create accountability for team members and to ensure that nothing slips through the cracks throughout the change implementation.
If a change isn’t properly communicated, managed, mapped out or budgeted, the change process can become unproductive and stressful. A stressful change process can lead to lost profits, resistance and frustration from employees.
A well-managed change implementation will work to eliminate risks and disruptions, communicate expectations, prepare team members, and evaluate the change process to identify areas of improvement.
Leaders overseeing change will follow the basic steps of the change management process:
- Create a change management strategy that fills business gaps.
- Prepare team members for the change with clear and productive communication.
- Organize a roadmap to establish milestones and deadlines.
- Anticipate obstacles and employee resistance.
- Initiate and coordinate the change initiative while communicating expectations to team members.
- Gather feedback from team members and evaluate the process by analyzing its efficiency.
- Take corrective action to resolve issues.
- Adjust the process as necessary to make improvements for the future.
Each basic step is vital for leaders to implement a successful change, but the specifics in each step will vary with each change. Companies must take a structured approach by following an effective change management plan to ensure that all goals are met and accountability is established.
Importance of Change Management Roles
An organizational change isn’t going to be implemented by itself. For operations to run smoothly throughout the change process, leaders and team members are required to fulfill critical change management roles that propel the process and monitor progress.
Change Manager: The change manager will manage the people-side of the organizational change. The person in this role is responsible for overseeing the entire change process on a broad level. They will report back to senior management with updates, feedback, assessments and evaluations of efficiency. This position will also determine budgets, determine the scope of the change, and manage the schedule and the availability/allotment of resources. The change manager role is imperative for ensuring buy-in from key stakeholders, monitoring the overall change efforts and reporting progress to senior management.
Project Management: The project manager and the project management team will create a roadmap of milestones, tasks, deliverables, and deadlines that must be met for the change implementation to be successful. The critical role of creating and establishing a strategic communication plan between leaders and employees falls in the project team’s hands. Clear communication is crucial to ensure a productive process that results in successful change.
ECAB: The ECAB (emergency change advisory board) is responsible for keeping the company afloat, should it encounter an emergency change. The ECAB team will review the emergency change efforts after the change has been implemented to evaluate efficiency and effectiveness. The board works to identify solutions that may prevent an emergency of the same nature from reoccurring in the future. Without the ECAB team, a company may continue to face emergencies that result in drastic profit losses, frustrations, or disruptions.
Every team member plays an important role in implementing an organizational change. While some team members are responsible for monitoring and managing the change process, others are responsible for putting the new processes into practice and embracing the change.
Managing an organizational change means managing the people affected by the change. To execute an effective change management strategy, managers must facilitate clear, productive, focused communication among all team members.
Managers often employ software tools like communication journeys to effectively educate and inform employees about change efforts, inspire employees to take action, and provide timely updates as projects are completed.
If goals and milestones aren’t monitored or managed throughout the process, team members are liable to miss deadlines, money and time budgets may exceed availability, and internal communications may be ineffective. The importance of change management throughout the change process is paramount.