The Keys to Effective Organizational Change
Change is the only certainty in business: markets fluctuate, innovations disrupt operations, and customer needs evolve. Organizational change requires competent leadership and strategic planning to implement. Unfortunately, successful change management is often out of reach.
Data shows that about half of all change initiatives fail, and only 34% of businesses report a clear implementation success. How can business leaders effectively manage organizational change? Let’s explore the essentials of change management with ten key strategies to improve your outcomes.
Change Management Defined
Change management is a structured approach to implementing new operational strategies that drive an organization forward. Organizational change takes many forms that affect a company’s structure, culture, technology, policies, and procedures.
These changes can occur overnight due to unanticipated disruptions or over a long time following extensive planning. Either way, businesses must adapt and adjust to remain competitive and profitable.
What Triggers Organizational Change?
Organizational change often comes as a result of the following triggers:
- An unforeseen crisis, e.g. a natural disaster, product recall, financial downturn, or a global pandemic
- A gap in talent and performance
- A need for more efficient or economic operations
- Widespread technological changes
- New leadership with innovative ideas
- New opportunities in the marketplace that increase competition
- New business models that challenge the status quo
- Internal and external organizational pressures, e.g. government policies, union actions, or challenges with workplace culture
- Mergers and acquisitions
- Discontinuing weak products, markets, or partnerships
- Following other organizations’ successful change strategies
Three Top Benefits of Change Management
When you know how to implement organizational change successfully, your company can benefit in the following ways:
1. Keeping Costs Down
Organizational change often implies expenses such as extra time required for projects, hiring new employees, investing in a new venture, or even downsizing to manage the company budget. Change management policies ensure business continuity in the face of new challenges and avoid wasting resources on unproductive projects.
2. Easing Employee Anxiety
Employees often treat organizational change as a threat and fear losing their jobs or falling behind the new developments. Good change management means that teams adapt to challenges with a minimal negative impact on morale, loyalty, and engagement.
3. Aligning Company Values with Operations
Businesses need to focus on their core values as they pursue growth and profits. Changes within and outside a company may shift this focus and result in losing employees, clients, and revenue. Therefore, business leaders should know how to successfully implement organizational change to keep their companies moving in the right direction.
How To Implement Organizational Change: 10 Key Strategies
The right change management approach is the difference between a successful implementation and an organizational disaster. Leaders must know which changes to make and how to make them while keeping employees and customers engaged. Use the strategies outlined below to guide your change management process.
1. Establish a Sense of Urgency
First, ensure that at least ¾ of your team understands that the organization must change or suffer consequences. Explain why it’s better to overcome the fear of the unknown than maintain your current course. Once you demonstrate how the organizational change impacts your team, you eliminate the cynicism and anxiety that come with change. Offer a compelling rationale to get all your stakeholders on board.
2. Form A Powerful Leadership Team
Leading a transformation is different from conducting daily operations. Therefore, a change management leadership group, preferably comprised of senior managers, is essential to success. Choose a change management leader who understands the delicate balance between making critical trade-offs for change and maintaining vital business functions and ongoing projects in the company.
3. Create A Specific Vision
Outline what the organizational change seeks to accomplish alongside the strategies to achieve it. Remember that you’re transitioning your organization from old to new ways, so anchor your change management process upon a clear vision. Treat change management as a journey leading to a concrete, rewarding destination.
4. Communicate the Vision
Use as many channels as possible to communicate your change management vision to your team consistently. Even with a strong business case for change, you still need to win your stakeholders with engaging communications to get them involved. Open two-way communication channels to welcome feedback and practice active listening to encourage dialog.
5. Empower Others to Act on The Vision
You’ve made your compelling case for organizational change and communicated your vision and strategy. The next step is to give your team all the necessary tools to implement the change. These include project management tools like process maps, Gantt charts, and change models.
Eliminate any obstacles that block the organizational evolution by addressing your team’s concerns, rewarding support for the change, and encouraging creative ideas and actions that drive the vision forward.
6. Monitor Progress
Set milestones for the change management process and mark them as you achieve them. This step is crucial if you work with a third-party change management consultant, such as a digital transformation expert. Communicate the progress through established channels, hold follow-up meetings, and assess your organizational change using clear criteria. Base your change management decisions on accurate, relevant business data.
7. Create and Acknowledge Small Victories
Small wins are incredibly motivating during organizational change, particularly in a broad-sweeping, long-term process. It’s easy for employees to get overwhelmed or lost in the initiative without adequate recognition. Set short-term targets and mark their success, sharing every team member’s contribution to the group effort and rewarding them appropriately.
8. Consolidate Improvements and Build on Change
Building on the small victories, promote and nurture the team members that champion the change based on their early successes. This is an effective way to maintain momentum and encourage positive organizational culture change. Remember to course-correct your strategy based on your stakeholders’ feedback, especially if your business is facing rapid changes that could easily throw you off-target.
9. Institutionalize New Approaches
When you reward innovation, you build an environment that values creativity, open minds, and adaptation to change. When business leaders champion this approach, everyone else follows suit and drives organizational change. Remember that how to implement organizational change successfully depends on consistent leadership.
10. Utilize Expert Advice
The scale and scope of change determine whether you can handle it in-house or require experts to know how to implement organizational change. Some changes are relatively easy to manage internally, such as team building and communication, corporate culture shifts, and restructuring resources. Others, such as technological changes including enterprise platform implementations, require expertise.
Sphere Partners can show you how to successfully implement organizational change as a tech executive in a rapidly evolving business environment. Our tech advisory team can help your business set goals, manage shareholders, and optimize organizational structures to achieve your vision—partner with Sphere for a smooth, transformative change management process. Talk to our team today.