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Change Management

Change management

Change management is a structured approach to shifting or transitioning individuals, teams, and organizations from a current state to a desired future state. Change scenarios include; restructuring, mergers and acquisitions, cultural change and IT-based process change. A change process consists of a complex and dynamic interaction of the interests of different individuals and groups. By human nature, individuals affected by change often strongly resist, therefore leading change is essential, but also difficult. Consultants are therefore often used to facilitate change initiatives and implement effective change management programs in organisations.

Successful change requires planning and makes use of performance metrics, such as financial results, operational efficiency, leadership commitment and communication effectiveness. Studies have shown that 70% of all change initiatives fail (Beer and Nohria HBV, 200) and 75% of M&As fail to reach financial objectives (Marks and Mirvis 2001, Academy of Management Executive). Such failure rates can be attributed to managers not realising that transformation in an organisation is a process, not an event. Understanding the process required to make the change and the various stages within, can boost chances of success. Change consultants can therefore make a significant impact on the outcome of a major change in a company.

There are many facets to manage in a successful change program, and these are both process and people oriented. Consultants can choose from a number of models of change management, and consulting companies often devise their own models based on published change theories. Kotter's change model is well accepted and outlines eight critical steps, or success factors, listed below (Kotter, HBR, 2007). It is an excellent starting point for small or large-scale organisational changes.

1) Establishing a sense of urgency
2) Forming a powerful coalition
3) Creating a vision
4) Communicating the vision
5) Empowering others to act on the vision
6) Planning and creating short-term wins
7) Consolidating improvements and producing still more change
8) Institutionalising new approaches

Each of these phases can take a significant amount of time, and over 50% of companies already fail with the first step - establishing urgency. It is therefore vital that the majority of managers in the company are convinced that change is necessary, in order to form a powerful coalition. Developing and communicating a clear vision of the future to the entire organization and how to get there is also imperative. An effective consultant would have to be flexible to select the appropriate model for a particular situation, and focus on the major issues impacted by the change. For example, following a merger or an acquisition, cultural integration is very important, particularly if an acquisition is perceived as hostile, or spans different continents.

As mentioned above, the human aspect of change management is as important as the process chosen. It is important? to have alignment of the company's culture, values, people, and behaviors. Consultants can help manage the emotional journey of individuals affected by the change, by addressing people's specific concerns. Some examples include: involving employees in the change, devising effective education, training and/or skills upgrading schemes, countering resistance and organising personal counselling (if required) to alleviate any change related fears.

Finally, consultants should be prepared for the unexpected. No change program goes completely according to plan. People react in unexpected ways, areas of anticipated resistance fall away, and the external environment shifts. Effectively managing change requires continual reassessment of its impact and the organisation's willingness and ability to adopt the next wave of transformation.