What Happens To Your Organisation When You Ignore Change Management
Every time I walk into a new client's office, I am still surprised by the number of people who tell me that 'we just need some change management to address some communication and training' or 'we don't need change management, our people know what they're doing'. It can be difficult to convince people about the importance of change management practices when they don't understand the breadth, depth and benefits of using a holistic change management approach.
It doesn't mean that you need to hire a full-time change manager to work on your project (I know, they're expensive!) - but it does mean that you need to address all of the aspects of change in your project plan, and if you don't have the resources to drive the activities then yes, you do need to engage help.
In this 3-part series, I explore 1) What change management is and why it's important to your business, 2) How anyone can use it in their role and 3) How to apply change management to automation projects.
We've done some research and the numbers are very compelling.
The problem that organisations face
Organisations are facing more organisational-wide and complex changes to maintain a competitive edge in the market. However, according to Implementation Management Associates (2018), the well-known statistic that 70% of projects fail is still a reality.
The reason for this staggeringly high statistic is due to organisations sub-optimising or failing to recognise the ‘human side’ of organisational change. In a global survey conducted by the Project Management Institute (PMI) of 500 executives, C-suite executives recognised three of the top five factors lead which led to the failure of projects were related to Change Management (PMI 2016). The factors were:
Insufficient commitment by senior management (20%)
Employee resistance (18%)
Poor communication (14%)
The human aspect in projects is critical to the success of your projects and Change Management focuses, mitigates and alleviates the issues that arise during the projects.
Change management plans address these challenges through detailed assessments of impacts to people and teams, which lead to the creation of leadership and stakeholder engagement plans, resistance management programs and clear communication and training plans which all address the needs of the people within the organisation.
So, what is change management?
Change management focuses on driving lasting change to individuals and teams from the current state to the future state. In the simplest terms, it addresses what each individual and team need to be doing differently and provides the support to each person across the organisation as they change how they operate on a day-to-day basis.
Change management does this through a structured approach with an emphasis on people and behaviours at all levels of an organisation. This may be achieved through focused workshops, communications, training, briefings, 1:1 coaching, roadshows and much more. In short, change management is the discipline that guides how leaders prepare, equip and support their teams to adopt change successfully to drive organisational success and outcomes. Leaders can take actions to influence their people in their individual transitions when all changes are unique, and all individuals are unique, too (Sparr 2018).
The fact is, people don’t like to change and will resist at all costs. The reasons for resistance include fear of uncertainty, vested interest in the status quo, lack of understanding and a natural feeling of apathy (Emma Jeanes 2019). However, if you engage your people throughout the change program, you will find that they will adopt the changes more readily and will begin to show their support.
When it comes to how implementing change management, it is recommended to take a formal approach. There are several change management models which can be used. One of the classic models is Kotter’s 8-Step Process (Kotter 1995). This model sets out the 8 key steps of the change process, arguing that neglecting any of the steps can be enough for the whole initiative to fail.
Why do you need Change Management?
There are five critical reasons why you need change management:
1. Change Management is closely linked to Project Success
Change management is vital in driving project success. A study from Prosci (2018) has proved that the more change management principles are implemented to your project, the more chance you are to meet or exceed your project objectives.
Good change management practice significantly increases the probability of achieving project outcomes. Specifically, it:
• Reduces project risk
• Reduces ‘RE’ costs - redesign, rework, redo
• Increases employee engagement, retention, productivity
• Significantly reduces impact on customers
2. Change Management Drives Leaders Need to Own the Change
A consistent challenge that project and program managers face is planning for and dealing with the stakeholders’ reactions to the changes produced in the program. When projects fail to carefully account for the human element, Program Managers can find roadblocks and resistance in places that weren’t expected. This impacts the Program Manager, who may discover that they are spending most of their time struggling to communicate with disenfranchised, resistant, or avoidant stakeholders (Rittenhouse 2015)
The PMI 2016 report noted that a critical factor in project failure is the lack of commitment by senior management. When leaders drive and support the change, their team members are more likely to support it as well.
Change Management is designed to have the internal leaders and stakeholders drive change throughout the organisation. A change management plan is simply an enabler – the leaders need to use it to take their own people on the change journey. Tailored communication strategies and participation opportunities for stakeholders and training throughout the transition period dramatically improves your project performance (Capterra 2018).
3. Change management allows organisations to control the change
Change management enables companies to control the implementation of new processes and strategies which enable the realisation of business benefits. Project timelines are important to keep to, as well as controlling scope creep. Change management allows your leaders to identify and mitigate those types of risks throughout the project. It monitors the progress at which the change is happening and ensuring the transition is smoothly implemented under budget or ahead of schedule. In the diagram below (Prosci 2018), you can see the more you effectively manage the people side of the project, the more likely you are to finish on time, saving your company money and achieving ROI faster.
4. Managing change is a competitive advantage
An organisation that manages change effectively will be able to capitalise on more opportunities than an organisation that does not. Mining Companies have reported their project’s budget blowing out of proportions by an average of 43% (Mckinsey 2017). This trend limits the number of future options an organisation has. Therefore, managing your change is a competitive advantage, because properly managing your change initiatives allowed companies to stay on or under budget so then they can capitalise on more opportunities. In the diagram below, you can see that change management reduces the change of projects going out of budget (Prosci 2018).
5. Change management minimises resistance and increases adoption
Resistance management and adoption rate are large risks to a project’s success. Change management focuses in trying to identify the root cause of the resistance. By understanding why people are resistant, change management can prepare a plan to alleviate the situation and provide compelling cases for the need to change. According to a Prosci benchmarking study (2013) the primary reasons for resistance are:
Lack of awareness of why the change was being made
Impact on current job role
Organisation’s past performance with change
Lack of visible support and commitment from managers
Fear of job loss
Resistance is one of the most common and difficult barriers to address during a project. Being able to minimise the detrimental effects of resistance will increase the success of your projects. Change management effectively seeks to address these common barriers through personal conversations, targeting the ‘right’ resistance managers and communicating the value of the project. Ultimately, change management dramatically improves the performance of your projects by effectively managing the resistance encountered and increases the adoption rate by strategizing ways on how to increase understanding the value of the projects.
Are you convinced?
Change Management is not that 'soft and fluffy' activity - it has real correlations to meeting business objectives and achieving ROI. If you think a project will 'just work' or that your people 'will work it out' - you're taking a huge risk and most likely wasting your money.
This article explained what change management is - next week we cover how it works. Stay tuned!
Sources:
Alsher P (2018) The truth behind why 70% of organisational change projects are still failing. In: IMA Worldwide Blog. Available at https://www.imaworldwide.com/blog/the-truth-behind-why-70-of-organizational-change-projects-are-still-failing (accessed 14 February 2020)
Jeanes, Emma (2019) A Dictionary of Organizational Behaviour, Oxford University Press, eISBN: 9780191843273.
Kotter, John P. (1995) Leading Change, Harvard Business Review.
Kuvshinikov M, Pikul P, and Samek R (2017) Getting big mining projects right: Lessons from (and for) the industry. In: Mckinsey & Company Insights. Available at https://www.mckinsey.com/industries/metals-and-mining/our-insights/getting-big-mining-projects-right-lessons-from-and-for-the-industry (accessed 14 February 2020)
Prosci (2018) Best Practices in Change Management, https://www.prosci.com/resources/articles/change-management-best-practices.
Rittenhouse J (2015) Improving outcomes through change management: integrating tools to the program management life cycle. Paper presented at PMI® Global Congress 2015—EMEA, London, England. Newtown Square, PA: Project Management Institute.https://www.pmi.org/learning/library/improving-outcomes-change-management-9668
Sparr J (2019) Paradoxes in Organizational Change: The Crucial Role of Leaders’ Sensegiving. http://www.semanticscholar.org
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