Managing change for survival
Businesswise, things can change very quickly these days. In my previous role as a senior executive in the telecoms business, a tariff-related change in the not-so-distant past needed up 18 months for preparation, impact analysis and approval (internal...
Businesswise, things can change very quickly these days.
In my previous role as a senior executive in the telecoms business, a tariff-related change in the not-so-distant past needed up 18 months for preparation, impact analysis and approval (internal and external). Because of market pressures all this is expected to be carried out in a matter of weeks.
These days, change is usually forced upon organisations by external circumstances beyond their immediate control. A sudden and severe economic downturn leading to the need to rationalise, an unexpected regulatory constraint, or the need to retaliate through innovation to the new kid on the block in their relevant market are some examples.
This means that they must have an effective change management competency readily in-built into their structures/operations if they are to survive continuous change and avoid expensive failures.
Examples of common business changes (projects or initiatives) that require change management may include redesign of jobs, business process reengineering, organisational restructuring, right-sizing, system upgrades, and new business ventures.
No two projects are alike and a common implementation fit-for-all approach is unadvisable. A basic understanding of common principles is necessary for successful change management.
Once there is understanding, for example,
• that, at the onset of a change, senders of information (e.g., a company explaining a business need to change) and receivers of that information (e.g. employees thinking on personal implications of that change) rarely understand each other;
• that resistance to change is the norm, not the exception;
• that sponsorship for change needs to be both visible and active; or
• that employees experience change in stages as individuals,
then organisations can start thinking about tailor-made change management practices to implement.
Grabbing onto these principles, it is obvious that change management has to do with individuals. It is a structured process for managing the people side of change. It is a competency used by human resources managers, sponsors or supervisors to help employees make the transition from the current state to the future one.
It is finally a strategic organisational competence which also accelerates successful change within the organisation.
In theory, change management is commonly seen as part of a three-legged framework which goes hand in hand with executive leadership (strategy formulation and direction setting) and project management (including design of work tasks and management of resources within a timeframe and a budget).
While the latter two are important, they can both be undone, and projects fail miserably if the people side of change is not dealt with conviction. I have seen this happen. All it takes is one charismatic dissenting stakeholder who can be such a point of resistance that unless identified and tackled early on can easily derail an important project. The situation worsens if the point of resistance is high in the corporate hierarchy.
A change management process can be split into three implementation phases: preparing, managing and reinforcing change. Preparing for change entails developing a change management strategy, organising the team and developing a sponsor model. Managing the change involves using a chosen model (I am mostly familiar with the ADKAR - Awareness, Desire, Knowledge, Ability and Reinforcement - model) to implement the change management programme.
Finally, assessing results, implementing corrective action and celebrating success constitute the reinforcement phase. This final phase in practice is often overlooked. Experience and research have shown that unless the implemented change is defended and reinforced, things will probably slip back to the previous state with a money and effort having been wasted in the process, not to mention the loss of credibility in the whole process.
Worldwide research has continuously emphasised the importance of change management to ensure project success, minimise resistance to change and build organisational change competency. In a 2005 study involving 411 companies worldwide on "the greatest contributors to overall project success" the top five responses in rank order were:
• active and visible sponsorship
• use of change management processes and tools
• effective communications
• employee involvement in the change
• effective project leadership and planning.
A few weeks ago, the annual Foundation for Human Resource Development conference heard how the Boston Consulting Group 2007 research concluded the need for "managing change and cultural transformation" was among the top five future challenges for companies in Europe. Sixty to 70 per cent of mergers and acquisitions fail (Mercers) and fewer than 40 per cent of reorganisations actually meet employee-related objectives like staff morale and retention (CIPD).
In the current economic climate, the need for effective change management is even more acute. Businesses will have to find ways to face up to lower revenues (consumer spending slowdown) mostly through reorganisation and process improvement.
Mr Azzopardi is a consultant on change management and a partner of Training4Change Malta Ltd, an organisation that supports business transformation with a range of professional services.
In my previous role as a senior executive in the telecoms business, a tariff-related change in the not-so-distant past needed up 18 months for preparation, impact analysis and approval (internal and external). Because of market pressures all this is expected to be carried out in a matter of weeks.
These days, change is usually forced upon organisations by external circumstances beyond their immediate control. A sudden and severe economic downturn leading to the need to rationalise, an unexpected regulatory constraint, or the need to retaliate through innovation to the new kid on the block in their relevant market are some examples.
This means that they must have an effective change management competency readily in-built into their structures/operations if they are to survive continuous change and avoid expensive failures.
Examples of common business changes (projects or initiatives) that require change management may include redesign of jobs, business process reengineering, organisational restructuring, right-sizing, system upgrades, and new business ventures.
No two projects are alike and a common implementation fit-for-all approach is unadvisable. A basic understanding of common principles is necessary for successful change management.
Once there is understanding, for example,
• that, at the onset of a change, senders of information (e.g., a company explaining a business need to change) and receivers of that information (e.g. employees thinking on personal implications of that change) rarely understand each other;
• that resistance to change is the norm, not the exception;
• that sponsorship for change needs to be both visible and active; or
• that employees experience change in stages as individuals,
then organisations can start thinking about tailor-made change management practices to implement.
Grabbing onto these principles, it is obvious that change management has to do with individuals. It is a structured process for managing the people side of change. It is a competency used by human resources managers, sponsors or supervisors to help employees make the transition from the current state to the future one.
It is finally a strategic organisational competence which also accelerates successful change within the organisation.
In theory, change management is commonly seen as part of a three-legged framework which goes hand in hand with executive leadership (strategy formulation and direction setting) and project management (including design of work tasks and management of resources within a timeframe and a budget).
While the latter two are important, they can both be undone, and projects fail miserably if the people side of change is not dealt with conviction. I have seen this happen. All it takes is one charismatic dissenting stakeholder who can be such a point of resistance that unless identified and tackled early on can easily derail an important project. The situation worsens if the point of resistance is high in the corporate hierarchy.
A change management process can be split into three implementation phases: preparing, managing and reinforcing change. Preparing for change entails developing a change management strategy, organising the team and developing a sponsor model. Managing the change involves using a chosen model (I am mostly familiar with the ADKAR - Awareness, Desire, Knowledge, Ability and Reinforcement - model) to implement the change management programme.
Finally, assessing results, implementing corrective action and celebrating success constitute the reinforcement phase. This final phase in practice is often overlooked. Experience and research have shown that unless the implemented change is defended and reinforced, things will probably slip back to the previous state with a money and effort having been wasted in the process, not to mention the loss of credibility in the whole process.
Worldwide research has continuously emphasised the importance of change management to ensure project success, minimise resistance to change and build organisational change competency. In a 2005 study involving 411 companies worldwide on "the greatest contributors to overall project success" the top five responses in rank order were:
• active and visible sponsorship
• use of change management processes and tools
• effective communications
• employee involvement in the change
• effective project leadership and planning.
A few weeks ago, the annual Foundation for Human Resource Development conference heard how the Boston Consulting Group 2007 research concluded the need for "managing change and cultural transformation" was among the top five future challenges for companies in Europe. Sixty to 70 per cent of mergers and acquisitions fail (Mercers) and fewer than 40 per cent of reorganisations actually meet employee-related objectives like staff morale and retention (CIPD).
In the current economic climate, the need for effective change management is even more acute. Businesses will have to find ways to face up to lower revenues (consumer spending slowdown) mostly through reorganisation and process improvement.
Mr Azzopardi is a consultant on change management and a partner of Training4Change Malta Ltd, an organisation that supports business transformation with a range of professional services.