Table of Contents
Tired of paperwork?
Change management has now widely accepted definition, as different stakeholders use it for different reasons. Despite the different approaches, the framework that is used across disciplines shares common benefits and challenges that we plan to address here.
Change is a necessary, yet risky investment for executives, management and the overall business.
Gartner has defined change as a “constant” observed on all types of businesses across industries. However, despite the popular belief that change is good, studies suggest quite the opposite. According to Gartner’s 2018 study on organizational change management,
Approximately, 50% of organizations that try to undergo any change, ultimately fail to achieve their goal.
There are two extremes to change. Most of the time businesses change as a response to a positive stimulus. But, there are cases when businesses are forced to do so in an attempt to adapt to industry disruptors that threaten their existence. In this blog, we will look at the key factors that contribute to successful change, and we will dive into the factors through the lens of change management tools and how companies have used the tools to succeed in their change efforts.
Change Management Type I: Adapting to Positive Change
Let’s start by assuming that you are running a 2-year-old manufacturing business who was just offered a project which is twice the size of your business. The current structure does not support such a massive undertaking, therefore demanding that you change some aspect of it. In this case, as the executive, you would have to recruit fast and smart, expand capacities and train new hires at the same time. Additionally, the recruitment process will inevitably change the organizational culture, and impact the way internal employees perform. So, focusing your attention solely on HR leads to productivity concerns.
Therefore, management plays an institutional role in the change management process of any business. According to former Bain & Company consultant, Phil Davis, leadership within a business has to acknowledge what’s real. The idea of standing grounded to reality and understanding what is happening now, relative to what was happening in the past is a big part of the discussion between consultancies and companies that are undergoing change. Common questions that have to be addressed are:
- What is really the core of this shift?
- What’s the main goal that the company should pursue?
- What are the sacrifices that the company has to make to add value in light of the change?
- A clear and concise change management plan is often overlooked by managers - which is the main reason why we see many businesses fail to implement the change they desire.
Change Management Type II: Overcoming Disruptive Change
Change doesn't always stem from a positive stimulus. There are certain situations that force a business to change. A great example of this is Netflix and their successful adaptation to the biggest disruption of all time caused by the internet.
In 1987, Netflix began as a DVD-rental service company that navigated a monopolized industry with great success. However, the disruptive nature of emerging technology threatened the reliability and scalability of their industry; As such, they decided to fight disruption with disruption. As a result of this change, Netflix.com emerged which recorded $5.2 billion in earnings in its third quarter of 2019. And, Netflix is not the only company that has sustained such a change, other famous brands like Disney and Starbucks have a similar story to tell.
Yet, for every happy case, there is a sad one. Relevant to the topic here is the Blockbuster Video case - the leader of the DVD rental service space at the time when Netflix started operating. Blockbuster has gone from owning 9,904 stores in 2004 to only one in 2019. Another recent example is Forever21 that has declared bankruptcy in the age of fast-fashion. There are many other recognized brands that have not sustained the test of time. The main reasons why they haven’t changed or adapted successfully relate to the advice that we of Phil Davis, management plays an integral role in predicting and managing change, and they have to be grounded in order to see what's ahead of the market.
Change Management Factors To Consider
Change management can be analyzed from various perspectives. In this blog, we will be looking through internal and organizational factors that influence change for better or worse. However, there is no general agreement that points to the importance of factors with respect to change management.
Note that we will be using management and leadership interchangeably across this writing.
Improving Managerial Capabilities
As humans, we are accustomed to heading towards a single direction. Stepping outside the comfort zone can be a challenging and difficult process, not only for individuals but businesses as well. But, in today's shifting economy those that head towards a single direction will quickly find themselves atop a cliff.
There are a number of things that successful companies do, and many of those things revolve around managerial capabilities. Change management is a by-product of management, as they are the ones required to communicate and implement the changes to the overall business.
Instead of walking towards the cliff, leadership has to steer the crowd towards an alternative route. The analogy of steering refers to the need for leadership to clearly explain a vision of change. This includes defining specific outcomes, setting expectations, and addressing the needs that employees may have.
Unfortunately, leadership across organizations is not always skillful enough to carry the business through a change - which partly explains the low rate of success mentioned earlier.
According to a Towers Watson Change and Communication ROI Survey found that 87 percent of employers train managers on effective change management; however, only one-quarter of those employers found the training to be effective
How to be a leader that drives change?
- Determine your qualities
- Determine employee needs and wants
- Support employee development
- Develop trust
- Be the colleague, not the boss
These are only a few tips that we have discussed in our blog “The Qualities of a Great Leader: How to be a good boss”.
Identifying the Core Process and Objectives
Critical reasoning is an essential component of any change management plan. It is easy to say “I want to change this part of the business” but saying it is one thing, and doing it is quite another. In fact, taking a transformational initiative without properly addressing the underlying factors that have influenced it will make the job of leadership tremendously difficult to accomplish.
As such, if you were to ask a consultancy about change management than you might hear advice related to “filtering through to core” or “identifying milestones for shareholders of the project”. In this respect, a business is built around core and adjacent activities - where core activities are profitable, and the adjacent ones are not. It is important to understand what exactly is working for a company (the core) and what needs to change (the adjacent).
To relate, consider the following example; A 2-year-old manufacturing company decides to abruptly change certain business operations as a direct response to changing trends in consumer behavior. However, prior to implementing the change, the leadership team had not specified the activities to be impacted by the initiative, neither did they map out clear goals for it. As a result of these mishaps, the completion of the project got delayed, and the costs of keeping the project running had increased. At this point, oftentimes it is more efficient for businesses to withdraw from the project and save the company further losses.
Even if the project were not to be delayed, the mere fact that core operations were not left out of the change management plan presented a substantial long-term risk for the company. If something is not broken, don’t fix it, just optimize it.
Change Analysis Framework
As we looked at the reasons why businesses change, we also defined two key factors that influence the outcome of a change management process. The next chapter translates the aforementioned factors into a framework that will allow leaders to evaluate their transformational leadership initiatives.
The goal of this framework is to set priorities straight for the business. First, management needs to jot down activities that are related to the change. These activities are later evaluated based on a scale from 1 to 10 depending on their importance for the business. So for example, an activity that is contributing towards 40% of the revenues generated by the business would score higher than one that generates 10-20% - unless there is some certainty that the latter will eventually outweigh the first. Basically, we are looking at profitability and relevance to determine the right path of the process.
This framework, although subjective, gives leadership the ability to carry out informed decisions on how to go about an organizational change. Moreover, the scaling system ensures that activities are evaluated properly, and goals are set appropriately.
The results obtained from the framework can be retained for future comparative analysis between similar undertakings. In essence, this framework works with executives to prevent the challenges that we have been mentioning throughout the reading.
Change Management Tools
The following list of management tools is most effective when used in combination. The best change management tools are those that specialize in specific functions. Thus, without further ado, here are our three hand-picked complementary tools that you can use to drive successful change in your business.
ATTO is a digital time and location tracking solution that helps small and medium businesses keep track of productivity across employees and projects. The highly specialized features of this app, coupled with a great user experience make the app easy and effective to use. Additionally, its location tracking capabilities help executives monitor remote projects in real-time directly from their phone; And, if you miss real-time data than simply navigate to the timesheet section of the app where you will be able to generate a comprehensive report that highlights all the data needed.
Start Managing Change Initiatives The Right Way
Learn how a change management tool like ATTO can help transform the operations of your business.Learn More
In a time of automation, it’s a shame not to at least try this revolutionary technology.
Managing activities with Trello
In addition to managing time and costs, executives have to pay attention to specific activities within projects.
- Who is responsible for activity X?
- Who or what is delaying the completion of the project?
- In what part of the process are we?
- What are the struggles that employees are facing?
To answer these questions, you can go around asking people individually, retrieving comments, documenting the comments and then reporting on the status of the change initiative. But, as Thomas Edison once said,
“There’s a way to do it better – find it.”
And, Trello is the better way.
Instant communication with Slack or Microsoft Teams
We have already established that change initiatives start at the top, and they gradually cascade down every layer of the hierarchy. As the change management plan moves through the structure it is important to make sure that the communication between top-level management, middle management and employees is as clear as it can be.
Change management tools that help in this case are instant communication platforms like Slack and Microsoft Teams. Unlike personal messaging platforms like Facebook’s Messenger and WhatsApp, the previous two are highly specialized for professional use. We use Slack as our daily driver to communicate important updates, review open tasks and even discuss what to get for lunch with coworkers.
Similarly, it is the role of leadership to create a focused vision and strategy around the change that can be communicated clearly and instantly to employees in both written and spoken formats.