Change Management: Everything You Need to Know
Change is an integral part of lives and the transition from A to B is a process that takes time, efforts and acceptance of the need for change. The same holds true as far as project management and business administration are concerned. In this article, we shall learn what change management is and how it can prove to be beneficial for a business and those who constitute it.
We shall take a look at 1) what is change management, 2) benefits of change management, 3) the process of change management, and 4) the 5 steps needed to complete successful change management.
WHAT IS CHANGE MANAGEMENT?
Change Management is a method or approach of changing or transitioning companies, people or groups of people with the aim of preparing them for a desired outcome in the future. This term is used mostly in the context of businesses or project management and in such a background, it can be referred to as a process in which changes are introduced and approved formally as far as the scope of the project is concerned. It is important to remember that change management is not a stand-alone process or solution for a business’s problem but is the collective change in tools, techniques as well as people for managing a business solution.
For every organization’s constant improvement and performance upgradation, change management is a vital process. It is a continuous process improvement technique without which no successful organization has ever been able to move ahead. It can be understood as the application of a planned or structured process together with certain tools for bringing about a people side of change in order to get a desired result. Change does not take place in isolation and affects the entire company or organization. It not only impacts the organization as a whole, but each and every member associated with it.
Change Management is a very broad field which is related to managing the changes in a particular field well. The approaches needed to bring about these changes may be different for different companies or projects running in those companies. To bring about change or to manage it, a company or an organization must focus on certain objectives and they include:
- Involvement of people
- Sponsorship available or possible to achieve
- Communication with people
- Gaining buy-in
- Readiness to adapt the changes.
RISKS OF NOT MANAGING CHANGE EFFECTIVELY
It is a fact that the projects that have top level change management effectiveness are about six times more likely to meet desired objectives or outcomes. By application of a structured framework of the method, change management increases the success probability of an organization. But on the other hand, if change is not managed effectively, it can lead to certain negative impacts or puts the company at a risk of certain things which are given as follows:
- Low morale: One of the first risks involved is that the deterioration in the morale of the company or people involved takes place, and this can have a serious impact on the company.
- Lower productivity: Another risk is the declination of the overall productivity of a business.
- Projects are overdue: Projects go past their deadlines in the case when change management is not applied effectively.
- Projects surpass budget: Also, projects go past their budget when the management of changes is not structured or pre-planned.
- Key people leave: Another risk involved with the improper application of change management is that important employees may quit the company, effecting productivity even further.
- Turmoil: In some cases, divides may also be created in the company due to this.
- Path of no return: Organization may also experience painful and failed changes that could be hard to bounce back from.
- Active resistance comes out as a result of improper application of change management.
- Passive resistance escalates as well.
BENEFITS OF CHANGE MANAGEMENT
Now you know what could go wrong with change management. Imagine you would execute your change management correctly, so you would be able to enjoy the following benefits:
- Alignment of existing resources – One of the main benefits of change management is that it helps the alignment and combination of existing resources with the new resources. When a change management process is being held at an organization, there is no need to eliminate all the existing knowledge base, resources etc. The key is to combine new resources with existing intelligence in order to run an effective change management plan. Only on doing this right and selecting the right combination can one truly make the most of the existing with the one on which investment is being made.
- Maintenance of everyday functions and operations – It is true that every organization has to make certain sacrifices in order to reach a desired outcome, but the key is to implement or run the changes without letting them have a negative impact on the current operations. In order to achieve this, organizations must consider what the business and individuals need in order to adapt to the change readily and at the same time maintain the day-to-day operations smoothly. Thus, one of the benefits of effective change management is the maintenance of the day-to-day functions.
- Better opportunities for the future – When a business or an organization along with its people is going through change management, it has a bright opportunity to grow more and focus more on areas where improvements can be made. During the phase of transition, the best practices for growth can be identified and focused upon. Also, one tends to realize how to maintain these practices to lead to innovation. Thus, there emerges a huge scope to grow and taste success in the future.
- Lowering inefficiency and risk – If you implement a change management process right now, then it will help you to lower down the risks for the future. It is about being prepared for the future and starting to adapt to the changes from now onwards. Not only does this reduces the risk but also reduces the inefficiency. When we create a plan keeping in mind the business as a whole as well as the people involved in it, we only reduce the chances of an unsuccessful attempt at transition. This way, we also reduce the time taken to implement those changes.
- Employee problem consideration – When change management takes place, organizations need to consider the challenges being faced by their employees in order to adapt to the changes. What this does is that it makes companies more considerate towards problems of their employees and try to reduce them as much as possible. Thus by developing a change management plan, an organization can address the various concerns better and this also clears way for more communication. This in turn results in the employees feeling valued and important and may help to boost their morale.
- Reduction in costs – Creating or developing a change management plan before time also offers the benefit of reducing the overall costs since being prepared in advance gives you the time to manage your budget in a much better way. The waste, the inefficiencies, etc. can be greatly reduced, thus reducing the overall costs. If the right individuals are involved in the process of change management, then this helps to avoid the situation of going over budget and further contributes to saving costs.
- Facing challenges gets easy – Every organization faces certain challenges on the way to success but dealing with them can take both time as well as money. But a change management plan is usually made in such a way that it takes into account or consideration all the future challenges and roadblocks. When one is prepared for these roadblocks, he/she can face them easily and is more equipped to eliminate them and move forward. This means that no challenge stuns the organization or makes it difficult for it to handle them. This is another major benefit of an effective change management process.
- Boosts confidence – In every organization, boosting the employees’ confidence or morale can be the most effective way to gain more productivity and hence more profits. When an effective change management plan is made and implemented, it makes the employees feel that the organization is taking out time to help them adapt to the changes, and this boosts their morale and confidence by a big factor. They feel that their efforts, needs, and wants are valued, and this makes them perform better. They get more involved in the process of change, and the end results are favorable to the organization.
- Improved ROI – Besides cutting down on the overall costs and spendings, another benefit of change management is that it also leads to an increase in the return on investment or ROI as well. With the right process and a structured plan in place, an organization is more likely to see and experience improved profits. What happens is that when a company invests on changes, it prepares its people for the future a little ahead of time. This has a positive effect on them and results in better productivity and hence better ROI.
THE PROCESS OF CHANGE MANAGEMENT
The process of managing change is a process that involves a series of activities or steps which a change management team has to follow in order to implement the changes to a certain project or desired outcome. This very process is not a time bound effort but is an ongoing endeavor towards continuous improvement and upgradation of the company’s policies, methodologies, and tools.
PHASE 1: Preparation
The first phase of change management is preparing for change. This methodology by Prosci calls for getting ready to start managing the change and to know how much of change management would be needed to meet current goals or run the current project. This phase is related to having awareness of the situation and is highly effective for successful transition management. It involves certain steps which are given as follows:
- Defining change management strategy – The first step of this phase involves defining the change management strategy for the project or desired outcome. This means that an organization must first figure out why it needs the change and how can change management help. Based on this, a strategy must be defined.
- Preparing the change management team – Once the strategy has been defined, the next step is to bring together a team of people who will be implementing the change and running it. The team must be carefully selected and put together.
- Developing sponsorship model – Every change management needs funds, and these funds have to be arranged through sponsors or financial aids. The next step involves developing a full-fledged and well worked out sponsorship mode to make managing of the change possible.
PHASE 2: Management
After preparing for change management, the next phase involves its management and administration. This phase includes the creation of plans and strategies to implement the change. These plans are clubbed with project activities, and some of these include sponsorship plan, communication plan, coaching plan, training plan as well as resistance management plan. It is a good idea to have a well-structured plan that is also excellently integrated with existing tools, resources and expertise. The following are the steps involved in this phase:
- Develop change management plan – The first step is to come up with a proper model or plan on the basis of which the change will be introduced and implemented. The plan must take into consideration the budget, the people involved, the objectives desired and the time frame available.
- Take actions – The next step involves the implementation of the plans made and taking actions on ideas that have been worked out. One must go step by step in implementing the strategy and ensure that each step is carefully taken.
PHASE 3: Reinforcement
The third phase of the process of change management is one of the most important ones, yet the most undervalued. It is true that planning and implementation of change are highly important but if the action plans are not reinforced in the future course, then all the previous hard work can come falling down. The change must be sustained through efforts and corrective actions.
- Gather and evaluate feedback – In order to take corrective actions, one must gather or collect feedbacks and then analyze them to see where they are going wrong. Also, the areas where change is being managed effectively can also be figured out in order to sustain the positives.
- Diagnose problems – The next step is to diagnose the various roadblocks, challenges and problems in order to manage the resistance and get past it.
- Execute actions – Once gaps have been diagnosed, it is time to implement corrective actions. After execution of actions for reinforcement, the final step is to celebrate the success and appreciate the hard work done.
5 STEPS TO SUCCESSFUL CHANGE MANAGEMENT
Another way to describe how you could go about your change management is shown below:
1. Understand need for change: In order to bring about successful change, it is highly important to first acknowledge and understand the need for change. One must avoid fixing a problem as soon as he/she spots it and should rather take time to understand the root cause and then work out a plan to make improvements. The improvement plan must include people, the right resources, the right tools as well as a structured approach. The complexity of the situation must be addressed in such a way that besides elimination of the issue, improvements in methodologies also takes place.
2. Communicate the need for change and involve people: Another way in which one can lead to successful change management is through effective and open communication of the need for change with the people or employees of the organization. The people working with you have the right to know and understand the situation so that they accept and be part of the change willingly. Some people who must be included in this are the beneficiaries, the employees, the stakeholders and the managers.
3. Create change strategies and plans: After proper communication about the need for change, the next step towards successful change management involves creating plans to achieve the objective in the most economical and effective way. This step involves several small measures such as deciding on performance measures, training workers for change, figuring out desired outcomes, dividing the process into mini goals and coming up with strategies that can benefit the organization as a whole.
4. Implement plans: To ensure success, the plans and strategies created must be executed smartly and in a way that doesn’t harm the people or business in the process. Implementation is what really matters and must be done in a structured way. Implementation of plans or execution of strategies must not just take place on a broad level but should be done at an individual level. It also involves observing how people are getting affected by the change and making sure that they get everything they want to adapt to it.
5. Analyze progress: When all the hard work is done and results have been achieved, it is time to analyze and evaluate the progress made. When a business figures out what is going well, it can begin to sustain the positives and eliminate the negatives. Only then can it be appreciative towards the efforts of others, thus boosting their moral and leading to improved productivity. It is important to celebrate success when success has been achieved effectively.
So, what experiences did you make in your company related to change management? What went well? What could have been improved?
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