What is change management

Mergers, new hires, layoffs, and process changes – companies go through constant change. Along with the internal reorganisations companies are confronted with, their framework conditions constantly change.

Change management offers methods and approaches to guide the internal and external change processes of a company. A major challenge is overcoming resistance to change – initiated by individuals, groups, and outdated systems and their functions.

Here you’ll learn how to successfully manage change in your company, the typical mistakes, and which methods will help you sustain your changes.

Change management vs. business transformation

In the literature, we often use change management and business transformation interchangeably. But how do these terms differ from one another? Change management stems from circumstances that trigger the reaction to plan for change with a fixed end goal. However, business transformation is primarily about the holistic reinvention of a company. Therefore, change management refers to minor processes, whereas business transformation encapsulates profound changes across the company. Furthermore, it’s a long-term process with no fixed target date (Behrend, n.d.).

“Change fixes the past, transformation creates the future”.

Tanmay Vora
Director R&D from India

The four typical reasons change management fails

Traditional change management relies on project management principles where fixed deadlines, by which the “change” project, are implemented. The change is therefore processed like a defined project with static phases.

However, these recent years, there’s been an intense rethinking of change management. Changes work best when shaped agilely from the bottom-up and not when imposed from the top-down. Studies have shown that changes driven from the bottom-up are implemented more effectively because employees can use their structural power (Kellogg, 2019).

1. Lack of focus on people

Every change must come from within. Those driving changes precisely know why they’re implementing them, as well as the vision behind it. However, those affected by the changes are rarely aware of that background. This results in a lack of motivation to implement the changes and to maintain them in the long run. As employees are the driving force behind lasting change, we must convince them of the project above all.

2. Lack of reflection on the change process

For change, it’s essential to project oneself into the future, reflect on what has happened so far and be wary of where the challenges and obstacles lie. Change is rarely a linear process; it works best when we constantly adapt the path leading to the objectives, based on a series of feedback loops.

3. Rigid framework conditions

Lack of resources, insufficient support, and rigid organisational structures - if the framework conditions for change aren’t in place, the project often fails before it has begun. It’s even worse when you’re in the middle of the change, and the resources aren’t sufficient to achieve the goal. Therefore, it’s crucial to define the framework conditions and thoroughly plan before starting the change process.

4. Lack of feedback

Regularly, those responsible for change don’t gather enough feedback from the people directly affected by it. This results in a blind spot for unplanned consequences and prevents them from adapting flexibly to new developments. Therefore, holding regular feedback rounds with all those involved in the change makes sense.

To reflect on the process and whether change is implemented effectively and sustainably, you can guide yourself with the following questions:

Guiding questions during the change process:

  • Have you set realistic goals for change?
  • Are those responsible for the changes communicating their background and objectives effectively to all stakeholders?
  • Are all the stakeholders involved and communicating with each other during the process?
  • Are uncertainties addressed and dealt with in a goal-oriented manner?
  • Are the leaders seeking feedback on the process and obstacles?

What are the success factors in change management?

We often praise Google for its innovative and science-driven practices, especially in HR. However, Google also found itself in a situation where many planned changes were insufficiently successful or not prosperous at all. So, they tested different reorganisation approaches and discovered, thanks to surveys, that less than 50% of employees understood the rationale behind the changes. Similarly, less than 50% of employees felt inspired by their leaders during the change process. Their solution? Employees shouldn’t be part of the change process at the very end but should be involved from the beginning. Instead of having to implement predefined changes, they were made part of the 4-step decision-making process at an early stage:

The four key questions to ask before the change:

  • Why? The reason for the changes
  • What? The vision of how it should be in the future
  • Who? Key stakeholders affected by the changes
  • How? How the changes should be implemented

Why employee surveys are the key element for goal-oriented change management

By modifying the change management process, they ensured that 100% of the managers and 80% of the employees understood the reasons behind the changes and implemented them with a success rate of 90%. The critical elements were the teams’ open communication in answering the central questions and regular employee feedback. This was the only way to uncover the real burning issues and adapt the strategy accordingly.

Thanks to the early involvement of the employees and regular feedback, you create:

  • Sustainably enthusiastic employees
  • Identification with the corporate values
  • Ongoing cultural change strengthened by the employees

Shaping the future with courage

Change often means uncertainty and unclear goals for employees because the top of the hierarchy confronts them with their final decisions. This enhances the importance of working out the measures and allowing employees to actively shape the company and work out their processes and ideas.

Change management is a feasible challenge that requires thorough planning. The greatest fear is that it will be a bottomless pit without solid results. Sirkin, Keenan, and Jackson (2005) defined the following success factors for change management in the form of the DICE.

DICE as success factors in change management

  • D – Duration: the period of time before the changes are implemented. Target dates for significant milestones are defined for major changes. A longer lapse of time between the beginning of the change process and the target date, with frequent reviews, is the best practice here.
  • I – Integrity: the integrity of the team to implement the changes in the allotted time.
  • C – Commitment: the commitment shown by management and the team affected by the measures.
  • E – Effort: the effort required in addition to the regular work.

Why change management is more than just project management

In addition to affecting simple processes, change also transforms the way those affected by it work. Thus, the change impacts the organisation, the individuals, and the teams. Therefore, it has proven beneficial to compare the differences on several levels to get a holistic overview of all crucial factors of change:

  • Organisation
  • Team
  • Individual

Paying attention to these different levels expands the understanding of the impact of change, therefore, helps to better plan and implement change.

The individual as the centre of change

Those responsible for transformation and change managers should pay special attention to how employees – as individuals – deal with transformation. Only if you have your employees in mind can you implement change effectively and sustainably. The following questions will help you grasp the bigger picture and expose why sensitivity towards fellow human beings is a crucial factor in change management.

  • How and with which factors do individuals’ behaviour change? Why has their behaviour changed?
  • How do individuals learn? How do behavioural changes become a sustainable part of their personality?
  • How does change become attractive?
  • How do people achieve set goals?
  • What happens to people during the change process, and how do they deal with it?
  • How do individual reactions to change differ from one another?
  • What is the best way to implement change effectively, and what’s needed to continuously pave the way for change in the future?

For more information about these questions and how to answer them, we recommend the book The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg (2012).

We’ve found that frequent employee surveys and regular feedback are the core elements for successful change.

Our survey tool, Pulse, helps you get continuous feedback from all the stakeholders. With our free transformation questionnaire, you can confidently guide your employees through the ups and downs of the change process.

Conclusion

Successful change management requires more than good project management. It takes empathic managers who can communicate the reasons and vision behind the change and respond agilely to unexpected challenges while keeping everyone motivated.

The key to success is following a bottom-up approach where employees are involved in the process as early as possible and regularly reflect on the changes.

Before any change, evaluate the basic questions with your team: Why? What? Who? How? Whether the change is necessary, what the reasons are, what the goals are, and how they can be achieved. Using the DICE factors - Duration, Integrity, Commitment, Effort - you evaluate how successfully the change is being implemented.

Our free questionnaire provides you with a valuable tool to guide your team through the change process.

Sources

Hayes, J. (2018). The Theory and Practice of Change Management (5th ed.). London, UK: Palgrave.

Doppler, K. & Lauterburg C. (2008). Change Management. Den Unternehmenswandel gestalten. Frankfurt/New York: Campus Verlag.

Cameron, E. & Green, M. (2020). Making Sense of Change Management (5th ed.). London, UK: KoganPage.

Dr. Behrend, F. N.d. Change und Transformation – Ein Paar Schuhe? Retrieved from https://transformation.work/blog/impulse/change-und-transformation-ein-paar-schuhe/.

Kellogg, K. C. (2019) How to Orchestrate Change from the Bottom Up. Retrieved from https://hbr.org/2019/02/how-to-orchestrate-change-from-the-bottom-up.

Cornett, I. (2019). 8 Principles for Leading Successfull Organisational Change. Retrieved from https://www.eaglesflight.com/blog/8-principles-for-leading-successful-organizational-change#:~:text=Successful%20organizational%20change%20requires%20a,the%20change%20is%20implemented%20effectively.

Michels, D. (2019). Change Is Changing: Coping With The Death Of Traditional Change Management. Retrieved from https://www.forbes.com/sites/davidmichels/2019/04/22/change-is-changing-coping-with-the-death-of-traditional-change-management/.

Pu, L. & Schramm, L. (2018). Changing the change rules at Google. Retrieved from https://rework.withgoogle.com/blog/changing-the-change-rules-at-google/.