Guide to Change Management for Organizational Transformation

By Aradhya Kumar

Last updated on Dec 30 2020

Guide to Change Management for Organizational Transformation

A Comprehensive Guide to Change Management 

 

Many managing seniors today are assertively trying to transform their companies to improve performance by changing activities and abilities throughout the organization. Unfortunately, professional managers lack in understanding the pathway to bring the desired change needed to transform the organization. 

 

However, today, creating and executing such changes in performance lie in many professional managers' hands. If the manager cannot bring about an effective change, then the chances of developing a productive, substantial, and manageable project of change get reduced.

 

For achieving such a level of change, the proper conversation is necessary, which means having a shared framework of structured activities and processes, a pathway for laying out the framework in proper sequence, and a set of guiding principles about the "natural laws" that govern organizational transformations. All three—framework, pathway, and guiding principles—are necessary for a successful conversation. Change management comes to play, which helps the manager bring about the organization's required improvement. 

 

What is Change management?

 

Change management manages a series of structured actions and processes by which an organization transitions from its current situation into a new desired situation. The principal aims to reach a new situation in the most effective way. 

 

The art of Change Management is knowing exactly where you want to end up. For instance, if the company wants to resize from a thousand employers to eight hundred employers, it can then use the Change Management process to get the company's desired future state, which will cause the company to have eight hundred cheerful people. We must see change Management as a process by which you manage everything that needs to be done to get from the current situation to the desired situation at a specific time (maybe within some years). 

 

Change Management helps the organization understand the risks and maintain or work to minimize the risks in an IT environment. Hence, Change Management is a service that we are seeing come up more and more among the managing clients, typically endeavoring on a new project means some level of change. Change Management can act as a consultant to communicate with the employees and provide them with direction and guidance on their new function. It ensures that the company has the discipline and minimizes waste during project execution by maximizing resources on the things that need to be achieved. It goes ahead and ensures that the team members are in alignment. 

 

Change Management Methodology

 

Change Management Methodology consists :

  • A sense of urgency is essential among executives, so they can accept the change and work in a manner that is required to bring change. 

 

  • The reason behind the change must be explained in a clear and understanding of why Individuals should understand the need for change and be able to act upon it.

 

  • Increasing the company's ability for desired change. Companies should be flexible enough in order to undergo such a change. Without flexibility, the companies may undergo revolution within the organization created by the change, therefore, uprooting the entire workforce.

 

  • Communication is essential and vital. Information concerning the change must be well communicated from managers evoking change to those who are affected by it in a reliable and timely manner.

 

  • The leaders should engage themselves in the change process and embrace it, then they can easily manage the team members' reaction to the change. By having potent and upskill leadership, the process of change will be executed more smoothly.

 

  • By implementing project management strategies with the change, an organization will have a greater chance at success and meeting company objectives, hence, helping in better improvement of the organization

 

  • Enhancing the performance of the employers and reinforcing their behaviors that are required to bring about a desired change in the company. By doing this, the process of changing the project becomes resistant. 

 

Once these factors in change management methodology are acknowledged, they can execute change management.

 

How Change Management Works

 

There are going to be unanticipated events that occur during the execution of any project, and these unanticipated events are the principal cause of the change. In order to handle undesired events and maintain stability, the process of execution has to deviate from what was planned initially.

The significant change in a project needs to be documented and communicated to the entire project team to maintain alignment. 

These objectives are achieved by using a Change Management process. 

 

Identify the change–The first step is to perform an analysis that will help in identifying the type of change and the reason behind the change. After analyzing, they also keep change in mind, which will help in comparing the current state of the organization to its future state. These can include assessments of people, cost, the behavior of the team, information, and other areas that would affect the change project.

 

Implementation–Once the analysis is complete, the project manager will implement the action plan, resistance plan, potential strategies, and escalation processes.  

 

Generating awareness for change–Better communication with the team becomes essential to earn employee support and understanding. This will help in generating awareness of the need for change. With better communication, employees will understand what the change is, why it needs to be done, and will create a sense of urgency.

 

Providing the skill-set – In order to actually execute a change project, employers must have the right skill-set and tools. For example, cases like digital adoption projects involve onboarding, training, and education. 

 

Optimizing the Project–Managers have to keep monitoring the change process of the project. The data got, and feedback can help the managers to make adjustments in order to bring desired outcomes or even make a few essential changes if needed. 

 

 

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Reinforcement–After the competition of the project, changes that were brought within the organization should be reinforced in order to make sure that these changes remain intact until the next change takes place. 

 

With the help of the Change Management approach, the results of any specific organizational change can dramatically improve. With the immense involvement and complication of organizational transformations, a modern and advanced approach to change management becomes essential for success.

 

When is change management needed? 

 

With all the changes taking place within the business world, change management is now becoming one of the most important methods used by companies around the globe.

The most common examples when change management is necessary in order to successfully achieve changes for the betterment of the organization include: 

  • Implementation of a new technology
  • Mergers & acquisitions
  • Change in leadership
  • Change in organizational culture
  • Times of a crisis

 

Common Challenges of Change Management

 

Because of the dynamic customer expectations and the competition globally, the branch of organizational change is itself constantly changing. The human aspect of change management may be one of the most difficult to navigate because people rarely accept the change or adjust to it well. 

Most of the change methodology agrees that change is difficult and inconvenient. Therefore, involving individuals at an early stage, implementing change management processes, and constantly adjusting the functions for improvement is vital for success. This includes in-depth planning, implementation, communication, and constant evaluation.

 

ORGANIZATIONAL CHANGE MANAGEMENT

 

Anything to do with changing people and getting them aligned in ensuring that the human organizational aspect of the company's transformation is being addressed. Organizational change management understands what tools can help individuals to make changes successfully within a specific time.

While change happens specifically, there are processes and tools that can help in achieving this change across companies and organizations. Not having a structured approach, change management gets limited to just training and communication. When there is an organizational change management outlook, a Change Management process comes out with a set of principles and methods in order to perform change management activities and how to use the entire set of tools available for project managers and business leaders. 

They need organizational Change Management whenever the company undertakes a project or event that interrupts day-to-day operations. Such circumstances affect the workflow of the organization. 

Many jobs need candidates or teams to perform tasks frequently. For instance, an accounting department has daily, yearly activities. Over time, most working individuals become comfortable with the tools provided and develop a knack for the ongoing job. Even simple changes may disrupt the workflow and be displeasing for the employers.

The roles of individual workers also get affected as many individuals view their roles as precious to the organization as being a good technical architect, security specialist, or programmer. When these individuals are asked to take on a unique role, they may become very uncomfortable. People with outstanding technical skills often find it hard when asked to become managers.

Executive teams debate on major changes for months before making any final decisions, enabling each member to gain a profound understanding of the outcome that the change will have on the industry. Even if the teams don't agree with the final decision, they need time to see whether to just accept the new direction or to depart graciously. Executives do not want employers to be concerned about events that may never happen until the change will take place. Tighter trading social control prohibits executives from sharing information about upcoming mergers, acquisitions, or divestitures. 

Firms such as ACMP (The Association of Change Management Professionals), PROSCI, IOCMI (The Innovation and Organizational Change Management Institute), and others consider change management from an organizational view. While each organizational group has its own approaches, frameworks, and language, these groups all face the human side of change in the organizational environment. 

 

Types of Organizational Changes

 

The common organizational change includes:

 

Developmental change - Any organizational change that upgrades and improves on previously established strategies, processes, and procedures.

Transitional change–This Change moves an organization away from its current state to a new desired state in order to solve a problem, such as mergers and automation. 

Transformational change - Change that entirely and redesign the culture core values and operations.

 

How Can Change Management Improve Organizational Transformation?

 

It composes the organizational transformations of various interdependent organizational change projects. Managing such transformations within the organization is difficult to achieve. 

 

Effective Change Management has many benefits:

 

  • Better results. Projects that are managed are more likely to meet or exceed the desired target objectives. 

 

  • A greater chance of success. Sometimes transformation and many organizational changes fail. Effective change management improves the chances of success. Thus, making change management even more essential for complex organizational transformations.

 

  • Greater efficiency. Change management helps in decreasing project expenses, streamline execution, keeping organized projects, and reduce waste.

 

  • Risk mitigation. Every business project around the globe comes with some risks. This is especially true for projects on a large scale, such as organizational transformation. The right change management process helps to analyze and mitigate potential risks.

 

  • Reduce negative effects on the business. Projects that are poorly managed can have a negative impact on many aspects of the business, from execution to staff productivity. Having good management seeks to minimize or remove such negative effects.

 

  • More support from employees. Having enough support from the workers can actually help in changing projects. Most change management frameworks put workers at the center of their efforts. The support of employers becomes essential for the success of any project.

 

Examples of Change Management

 

Any change management framework must discover the scope of future risks, deal with the needs of everyone in the business, and link the gap between the expectations of executives and those affected by the change.

 

Here are a few examples of successful change management in business.

  1. British Airways
  2. Netflix
  3. Lego
  4. Domino's Pizza
  5. A Regular Church
  6. Nokia
  7. Coca-Cola

 

BRITISH AIRWAYS

 

In 1981, British Airways nominated a new chairperson, John King. Early on, it was noticed that the company was ineffectual, and a lot of valuable enterprises were being wasted.

 

To help the business become more favorable, the chairperson restructured the entire business project. His decision was that the most constructive way to do this was through a change management process.

 

The organization reduced its staff. Before he completed this, the chairperson - with his change management guidance - furnished the business with reasons for restructuring British Airways to help prepare the employees for the forthcoming change.

 

His plan saw him 22,000 jobs - adding half of the board - replacing older planes with modern jets and eliminate unprofitable routes. One of John King's successor, Martin Broughton, said: "Lord King changed the business from a position of state-owned weakness to one of financial dominance and international renown as a pioneer privatized carrier."

 

So, through leadership and communication, and the concept of change management, he guided the business through a troublesome time and turned British Airways into a successful business.

 

NETFLIX

 

In 1997, Netflix came up with the gargantuan media-services. Earlier, this version offered consumers subscriptions to have movies posted through mails. This meant they eluded the late fees which customary movie rental business imposed upon clients.

 

From the start, Netflix proved to be an unsettling organization, which has likely resulted in its ability to transform and adapt to the digital environment. Online streaming began in 2007 for the improvement of business, and the subscribers no longer needed to wait for DVDs to come through the mail.

Netflix introduced change management into its business to meet the expectations of the clients that would prefer watching the content online. 

 

Netflix on iPad

 

With the digital environment growing around the world rapidly, there was a massive drop in subscription numbers and stock figures. After surviving the drop, Netflix subscribers grew from 23 million in 2011 to over 137 million in 2018 with the transformation by change management. 

 

LEGO

 

Lego's regeneration has seen its transformation considered as the greatest modification in corporate history. From 1932 to 1998, Lego had never experienced a loss. By 2003, this business started experiencing a downfall, and it was an entirely different story. The company's sales were down by 30% year-after-year, and the business was $800 million in debt. Their situation was helpless because Lego had added nothing of value to its portfolio for a decade.

 

Lego's CEO, Jørgen Vig Knudstorp, admitted that the business is running out of money and that the business wouldn't survive.

Just like Netflix, Lego eventually realized that its physical products would not interest customers for eternity. In 2004, this toy company was near the edge of bankruptcy. With this sensible yet disastrous outcome on the verge, Lego restructured its entire business through change management. 

 

The business started with implementing digital transformation. Instead of putting their entire focus on physical toy products, Lego increased its concentration on uniting the physical and virtual augmented reality (AR) experiences. By 2015, Lego surpassed Ferrari as the world's most influential brand.

 

Lego, with its reconstructed business, devoted a book about its revival - Brick by Brick: How Lego Rewrote the Rules of Innovation. This revival inspired companies like Google, Adidas, and Sony. By finding additional sources of profit, LEGO has transformed its business and has kept up with the requirements of its target audience today.

 

DOMINO'S PIZZA

 

The changes brought about by Domino's Pizza finally resulted in the brand lifting its sales over Pizza Hut for the first time. Using shrewd marketing, creative ordering techniques, and new technology, things were finally moving forward by the end of 2010.

 

Back in 2008, the business was struggling as the stock had hit an all-time low state. Without being affected by the drawbacks, the business had put on maintaining a constructive brand image. The struggles faced by the business were making this a real challenge.

 

In 2012, however, Domino's Pizza was back in business by implementing a change management process. The organization's growth was possible by digital transformation, brought about by change management professionals who are the key transformation players. Eventually, their managing skills proved to guide team members throughout the entire business.

 

The brand introduced new technology to support the change required for the improvement throughout its business. They implemented fresh ways like they introduced a new custom delivery vehicle with a heating oven which acted as an advertisement. The brand sped up its digital efforts in order to meet customers' needs. All modern pathways like Text messages, Alexa, Google Home, Twitter, Facebook, Smart TVs helped the customers to order a pizza. Dominos supported the wealth of customer data through its custom operating system. This helped in keeping the transaction expenses low and provided Domino with insights about its customers. Despite the fortunate change, it hasn't stopped there. The brand is still implementing fresh changes in order to keep up with the growing world of organizations. 

 

NOKIA

 

Before introducing smartphones in the mainstream market, Nokia was enjoying its achievement, which it had accomplished over the past years, as the business had asserted 40% of the market share in the year 2007. Five years later, however, the organization faced some serious downfall. It came closer to the setback as the company's shares started crashing, and the company recorded over 2 billion US Dollars in dealing with losses in the first half of 2012 alone.

 

The problem here was that Nokia had to reconstruct its business process. Nokia realized that it had missed the opportunity to lead the digital evolution. Nokia then hired a new CEO and started the journey to restore itself. After selling its mobile device division to Microsoft, the concentration of its business shifted to networking and mapping new technologies.

 

In 2008, Nokia introduced a Booster Programme that helped the company coordinate with the ever-changing wishes of its customers and new technologies among rivals. Change management professions changed the entire structure of the business units and streamlined development throughout the company.

 

Nokia then purchased Siemens and then Alcatel-Lucent. Because of gaining billions in shareholder value, Nokia became a full-service infrastructure provider. Nokia's valuable transformation from a marginally bankrupt hardware producer to a leading technology producer shows how most organizations can respond to serious disruptions and achieve organizational transformation with the help of change management. 

 

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About the Author

Sprintzeal   Aradhya Kumar

With years of experience in the industry and a vast amount of knowledge in Project Management, Agile Management, Scrum, and other popular domains, Aradhya Kumar is well-versed in creating content for audiences from various fields and industries.

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