According to global management consulting firm McKinsey & Company, over 70 percent of change management efforts fail. No surprise, this is due to several reasons: low employee engagement, lack of management support, poor collaboration, and no accountability. The real surprise is why – after knowing the reasons and the odds that change efforts fail – we haven’t found a way to remedy the situation.
Because the benefits of conducting change management activities are significant. A different McKinsey study points out that companies with excellent change management efforts gained an average of 143 percent of the returns they expected. So, when organizations manage change well, they see a positive change to the bottom-line.
When Should You Think About Change Management
It would be tempting to say, “all the time”, but that’s not really a fair answer. However, there are moments when organizations should consciously ask the question, “Would it be helpful to include a change management activity in our plans?” Here are five regularly occurring situations where it could make some sense:
- When there’s something new happening. Many organizations think about change management for large-scale implementations like bringing a new technology solution in house or adding a new product line. But what about the small changes like a new policy or procedure? Those are often the types of changes that frustrate employees the most. Not because the change is bad or wrong, but because employees weren’t adequately prepared.
Organizations would benefit by thinking about change activity in small changes as well as large ones. It’s an opportunity to set expectations and make sure everyone is on the same page.
- When something needs to be fixed. Companies regularly find out that a process they thought was working fine isn’t working anymore. Or they discover that a piece of equipment is broken and instead of repairing it, they’re going to have to replace it with a newer (and different) model. Stuff happens, and organizations have to react accordingly. Makes total business sense. But that doesn’t mean the process of fixing what’s broken is easy.
Creating process maps can help organizations communicate with employees about the process of change. Managers can share the steps to move from the current state to the desired one.
- When business is falling behind. We’re not just talking about the sales numbers here. Companies might find that a lack of infrastructure is holding them back. For example, lots of companies today rely on technology to reduce redundancies and help their business grow. Older hardware and software could create outages that limit the company’s ability to service customers.
Technology is a part of the company’s brand, both for customers and employees. When people can deposit checks, book their next vacation, schedule a doctor’s appointment, and much more on the internet…they expect to do the same at work. Organizations cannot afford to fall behind customer and employee expectations.
- When the company wants to lead the competition. Every organization has to make the strategic decision whether they will lead or lag the market. There are pros and cons to each. Part of the decision could be based on the likelihood of your industry for disruption. For organizations that choose to lead, that means change will happen proactively, faster, and more frequently. And for organizations that choose to lag, be prepared to react to the surrounding change.
Whether you lead or lag, change management to some extent becomes a part of culture. But dealing with change proactively is significantly different than reacting to it. Employees need to know how to deal with both effectively.
- When an employee leaves. Or arrives for that matter. The four situations we’ve discussed so far have dealt with changes in processes and strategy. Change management is also necessary when the organization makes people changes. Again, it’s not because the new hire or the departing employee are terrible employees. Every individual is different and we all have to get used to new working methods, communication preferences, and leadership styles.
In an article on LinkedIn, author Abby Falik suggests that individuals should create “user manuals” to share how we like to work and our quirks. This could be a powerful orientation or onboarding activity.
Something to note: While I’ve described these five situations in the context of organizational change, we can also look at each of the 5 situations above and apply them to ourselves personally. All of us have personal goals to accomplish and obstacles to overcome. We experience change when we get a promotion or change companies. So, we have to master change management at an individual level as well.
Formal Change Management Efforts Pay Off
Some might look at this list and say, “This sure looks like we should consider change management ‘all the time’.” But when you look closer, that’s not the case. There is some truth to the statement “If it ain’t broke, don’t fix it.”
But when change is necessary, organizations need to embrace change management and not make assumptions like “it’s a small change” or “no one will notice” or “we did change management training a couple of years ago”. Investing in change management is not only about mitigating setbacks. It’s about realizing gains.
P.S. Speaking of realizing gains, I hope you’ll join me and the Udemy for Business team on Wednesday, September 19, 2018 at 9:30a Pacific/11:30a Central/12:30p Eastern for a discussion about “5 Ways to Use Change Management for Positive Impact”. Think of the webinar as part two in a series about change management. We’ll be offering real-life examples of how to implement change management in these situations. Oh, and if you can’t join us, sign up anyway and we’ll make sure you get the recording. I look forward to seeing you then!
Image captured by Sharlyn Lauby after speaking at the SHRM Annual Conference in Washington, DC17