Understand Change and Change Management
Before we begin, I’d like to ask you to do a little bit of thinking!
Finished? Chances are, you haven’t had time to list even a third of what happened to you!
Heraclitus, a Greek philosopher, once said:
Change is the only constant in life.
Change is not the exception, it’s the rule. We all face changes every day—sometimes simple and small ones, but other times they can be more challenging or even overwhelming. Also, change is harder on some people than on others.
But what exactly is change?
Change can be intrinsically initiated. Let’s say you’re looking to improve your health and decide to go to the gym regularly. You can only rely on yourself and your own motivation to bring about that change in your life.
Change can also be caused by external factors. In this case, we are forced to implement it. That’s what often happens in cases of organizational change that we’ll be talking about in this course.
Since it’s imposed, it’s crucial for everyone involved to understand the need for change, and to be supported through this process.
According to research by McKinsey, 70% of change management projects fail due to employee resistance and lack of management support.
This is where change management comes in. Actively managing change raises the likelihood of a change project being a success.
But what is change management?
Harvard Business School defines it as the following:
Why is change management so important?
Besides a successful change initiative, proper change management can help to achieve goals faster and more efficiently, and bring benefits like:
Improved communication
Increased productivity
Improved decision-making
A more positive work environment
Higher employee morale
Enhanced creativity
Reduced stress
Discover the Different Types of Organizational Change
Of course, not all organizational changes look the same. The reasons for change can be different in nature, scale, and impact. Some events, like Y2K, impacted companies all over the world, while subtle changes in company culture can be invisible to outsiders.
Let’s dive into some types of business change you might encounter and explore some examples from the past. I’m sure that you’ve been confronted with one of them in your workplace, or perhaps even faced several at once.
Digital or Business Transformation
Netflix is an example of a company that successfully implemented technological change when transforming their business from DVD rental to streaming. At first, Netflix began offering a small library of streamable content while still offering DVDs to rent. Over time, though, streaming became a big deal, whereas renting DVDs gradually fell out of fashion.
Kodak, on the other hand, failed with their change process when they underestimated the uptake of digital cameras. Their existing business was still very profitable, but when companies like Fujifilm started to sell digital cameras, Kodak struggled to keep up and ultimately lost significant market share.
Change in Leadership
Change in leadership can come about for lots of reasons, such as business slowdown, growth, succession plans, performance issues, or new product development. It can affect the company’s business goals, directly or indirectly, and in a positive or negative way.
A positive example was when Satya Nadella took the helm at Microsoft in 2014. Different departments within the organization had been acting like rivals, even creating competing products. But restructuring and introducing shared goals brought the company back to success.
At one point, Google, was working on so many different projects that it became hard for management to focus and prioritize. In the end, they carried out successful change by splitting into multiple, more focused companies, with each structure’s management reporting to the Alphabet corporation.
Company Restructure
Company restructuring can be caused by reorganization, going public, and mergers and acquisitions. It often goes hand-in-hand with a leadership change.
The Exxon and Mobil merger in 1998—the first- and second-largest oil producers in the United States—is a great example. Although this integration was viewed with great skepticism, it’s now considered the most successful merger in history and has been reaping big profits for investors ever since.
On the other hand, when H.J. Heinz Co. and Kraft Foods Group merged, promising to become a top 10 food company, expectations were sadly left unfulfilled. The companies had aimed to reduce running costs, increase their product ranges, and provide a better return for shareholders. This is an example of a merger that didn’t manage to deliver on these benefits.
Change in Culture
Alongside digital transformations, many organizations also undergo cultural changes. At Microsoft, a massive culture shift was initiated when the new CEO, Satya Nadella, “hit refresh” in 2014.
By anchoring the culture to the concept of having a growth mindset and focusing more on people and teams, a significant shift from a “know-it-all” to a “learn-it-all” culture began.
As you can see, there are many types of change that companies can go through—and this isn’t even an exhaustive list. A company can go through multiple types of change all at once. To make this process a positive and successful one, it’s crucial to set up an appropriate management process, and that’s where change agents like you come in!
Understand Your Role in Change
Everyone in the organization is involved in change, but the level of participation can vary. In your company, you might meet sponsors, change managers, other middle managers, or project managers.
Change managers for instance work across the whole organization to develop and execute change management plans. In smaller companies, these roles can merge.
What is the role of middle managers in change?
If you’re a middle manager, chances are high that you’re the “person in the middle” wearing many hats. While you’re exposed to change yourself, you’re also the link between senior management and employees, and you’re tasked with promoting and driving change forward.
Middle managers are mostly responsible for planning, guiding, and driving change within their teams. Employees are the people most impacted by change and who need to implement it and make it stick. Without their engagement, successful change will not happen.
Traditionally, interacting with people and teams means you are responsible for:
Planning
Budgeting
Organizing
Staffing
Controlling
Problem-solving
Often, the focus is only on what needs to change, like a new department to be created, or a new process to be implemented.
Due to increased complexity and rapid changes in the workplace, you play a more fundamental role now. In addition to managing the process change, you also need to manage the people change.
We don’t want managers to manage change. We want leaders to LEAD our PROGRESS. — Dean Lindsay, change management speaker and author.
Even better, join the army of change agents in your company and act as an advocate of change. A change agent can be anyone in the company who enables cross-hierarchical changes and proactively promotes the new way of doing things, anywhere in the organization, regardless of position and title.
So, what are my responsibilities as a change agent?
Here are the key roles that can be taken on by a middle manager as a change agent in order to deliver on communication and support, and coach teams through their transition.
The communicator has the most important role in change. People managers are considered trustworthy and are well-placed to communicate the benefits of organizational change to their employees. You convey what needs to happen, new ways of working, and different team structures. By making the roles understandable to your employees, you’re helping to build a personal connection with the change.
The liaison maintains relationships with stakeholders. Interaction with the other teams allows them to take directions and provide feedback as needed.
Be an advocate and do not oppose change. Develop a change mindset yourself and act as a change agent who gets more managers and people on board.
As a resistance manager, get to know your people well to better prepare, equip, and support them. This will allow you to fulfill their needs and help them to overcome challenges.
A coach helps employees through their personal transitions by identifying how they feel and staying positive towards change.
Let’s Recap!
Change is the only constant in life. Successful change means bridging the gap between current and future states.
Organizational change can be triggered by a variety of events, such as digital transformation, change in leadership, company restructure, and more.
Everyone in the company is involved in change in one way or another.
There are many roles in change, but the most important one is that of a communicator.
Now that you’ve understood what company change is and how diverse it can be, you are probably wondering if people’s reactions to change vary in the same way. Your guess is absolutely right, and in the next chapter, we’ll explore the human factor of change.
