Organisations are at their most vulnerable during periods of change. There is always a risk when trying something new, and in business this risk can carry very high financial and reputational costs.
But, that doesn’t mean businesses should avoid change. In fact, they need to embrace it.
Change is a necessary thing for any business wishing to thrive. The pace of change in our national and international markets means that, for many sectors, it’s no longer enough to stick to the same tried and tested formula to experience healthy growth. Instead, businesses must progress and innovate to keep pace with changing economies, continually developing technologies and evolving customer expectations.
However, according to research, only around half of corporate change initiatives are successful. So, how can you avoid becoming one of those who fail?
The answer is stringent change management practices. Here are some key points to consider:
Drivers of change and ownership
Often companies take a top down approach to new business initiatives, as these tend to be initiated and driven by senior management. While this obviously has the benefits of allowing planning and risk assessing to happen without the input of too many people, there should be a point – quite early on in the process – where management begins to involve the lower-level employees.
Providing employees with a sense of ownership in this way can help ensure the whole organisation is bought into the initiative, and can also reveal valuable insights from front-line staff that may have been overlooked by management. Buy-in is important. A survey of 2,200 executives, managers and employees indicated that when employees resist change, in 82% of cases it’s because they don’t understand the change they are being asked to make, or they don’t agree with it.
There are many ways of pursuing lower-level employee involvement and buy-in. HMRC introduced an electronic system called Fresh Thinking in 2014 as part of a change initiative that encouraged staff input. The icon for Fresh Thinking sits on the desktop of every employee’s computer and through it they can submit ideas, comment on the ideas of others, and vote for the changes they would like to see implemented. Importantly, they can also see the progress of their ideas in real-time, evidencing the value placed on their suggestions.
Planning and preparation
Change initiatives are often complex and resource intensive undertakings. It is, therefore, important to only focus on the most important initiatives, and within those initiatives focus on the key root causes. Trying to address too many initiatives simultaneously will lead to “change fatigue” and resistance throughout the organisation. This is, in fact, one of the top reasons many change initiatives fail.
Once the change initiative has been selected, the change leader needs to establish a representative team to drive implementation. The team first needs to define the scope of the initiative and agree roles and responsibilities.
Then the planning phase starts by the team doing a root cause analysis. Once the underlying issues to be addressed have been identifies, the overall objective can be broken down into sub-objectives and associated key actions.
As mentioned earlier, the change initiative will not be successful without the buy-in of key stakeholders. So, it’s critical that the change team manages stakeholders appropriately. To do that, the team first needs to conduct a stakeholder analysis. The analysis will form an initial picture of how the change team views key stakeholders in terms of their power in the organisation versus the degree to which they support the change initiative. At this stage this may be a “first educated guess”, and the analysis will be further refined as the team engages more with individual stakeholders.
The benefit of doing a stakeholder analysis is to identify who is likely to be in support if the initiative and who is not. Actions can then be planned to capitalise on the support that exists and win over, or neutralise, those against the initiative. Such actions often take the form of communication, so a good stakeholder analysis forms the basis for crafting an effective communication plan.
Risk management is also an important part of the planning phase. New technology may not work, training may take longer than expected, contractors may let you down, despite best efforts you may not get the buy-in from that critical stakeholder, etc, etc. The probability and impact of such events will determine what measures you put in place to deal with them. At one end of the scale you may have events that are very unlikely to occur, and if they do occur the negative impact will be minimal. Those can be ignored. On the other end of the scale there will be events with potentially disastrous consequences, where fully fledged contingency plans need to be in place.
Make sure you document every aspect of the change implementation plan, as well as any contingency plans and expected outcomes. Ensuring all parties are entering the transition with the same information and expectations can negate a lot of problems further down the line.
Communication
The stakeholder analysis will indicate which stakeholders, or stakeholder groups, need to be influenced, consulted or informed though communication. The task is now to develop a communication plan that describes and sequences those communication actions in an impactful way. Accountabilities and responsibilities for the individual parts of the plan can then be assigned to team members.
Even when employees are being consulted on a proposed initiative – and especially in cases where that isn’t possible or wouldn’t be appropriate – clear communication needs to take place at all times. Ensuring everyone knows what is currently happening, and what is due to happen, will help to protect the organisation’s emotional climate.
It’s important to remember that employees may, quite reasonably, be worrying about changes resulting in the need to make redundancies. But even the thought of moving teams or having to learn about new software and processes can make even the most loyal of staff feel unsettled and wary.
This can lead to low morale, high turnover and, in the worse cases, employees refusing to align with the new practices. And, without key teams moving forward as one, the negative impacts can reverberate across the whole of your organisation.
Part of your planning and preparation should include pre-empting possible staff questions and ensuring everyone will be providing the same answers to them. The old adage of ‘If it’s not broken, don’t try to fix it’ may ring true for many employees, especially those who have been in the company for a long time, so all of their concerns need to be addressed quickly and fully.
The aim is to preserve a positive work environment and high morale among employees.
Strong leadership
It is not good enough for business leaders to propose a change and then dis-engage after delegating the implementation. They need to remain visible and engaged until completion to demonstrate their commitment to it. Additionally, as sponsors of their initiatives, their roles are to act as ambassadors for their respective initiatives. This involves removing blockers and influencing other leaders to become advocates. Essentially, strong leaders create a conducive environment for their change initiatives from beginning to end by inspiring their leadership peers. Depending on the change initiative in question, this may or may not involve creating a leadership steering group.
A great example of strong leadership is when Shell introduced a new structure and processes across all of its subsidiaries worldwide. This was proposed in response to the organisation facing falling share prices due to a number of reasons. However, it meant that the brand would lose market share in some countries. While the adoption of the new processes was mandated, it also meant that the project needed very careful management to bring all parties on board.
The newly appointed group chairman, Jeroen van der Veer, drove the organisation’s transformation not only from its inception, but throughout the whole implementation process. He carefully compiled a leadership team to support him, but remained visible throughout – consistently reinforcing that it was the best possible solution for the company.
Planning, open communication and careful relationship management need to combine in various ways to create a successful change management strategy. With the right approach, change initiatives – from mergers to the introduction of software – can help businesses grow and become more competitive. However, for the change to be sustained over time, it needs to become part of the new culture – part of the way of doing things. Measuring the impact of the initiative through carefully selected metrics, is a way of reinforcing messages that the new ways of working continue to benefit the organisation.
Business Focused Procurement
Change management tends to be an inherent part of large procurement projects. For example, a Business Process Outsourcing initiative I led for a FTSE100 company, affected hundreds of employees in terms of redundancies and fundamentally changed processes and ways of working.
But, Procurement can also help with change management initiatives by sourcing the right external change management consultants. These consultants form part of the £9 billion UK management consulting industry. Buying these types of professional services comes with its own set of challenges, such as ensuring quality and the needs of internal stakeholders are met. This is, however, something a Business Focused Procurement approach can help you navigate.
If you’d like to find out how we can help and support you through planning and implementing a change management strategy, get in touch.
