Organizational Change Management Guide for Developing Innovators & Leaders
What Is Organizational Change Management?
Why Is Change Management Important?
- Adopting new technology systems
- Solidifying new processes
- Integrating acquired businesses
- Restructuring departments and leaders
Who Conducts Change Management?
Organizational Change Management Strategies
Planning for Change
1. Create a change team:
2. Assess the impact:
3. Create a timeline:
4. Identify potential people issues:
5. Notify key employees:
Strategies for Change
- Communicate honestly. Leaders should make sure that the reasons for change are easy to understand. A sense of urgency should be created around why the business needs to transform, whether to combat competitive challenges, meet changing customer needs, or upgrade to modern technologies that will enhance the business.Communication lines should be kept open so that employees can contribute. Sugarcoating the reasons for a change and the challenges that will come with it only alienates workers and creates distrust.
- Engage employees. Employees need to believe that the change will improve the business and that they’ll benefit from the transition. Organizational transformations are most successful when workers feel involved, empowered, essential, and supported.Companies can offer coaching programs, personal development tools, and rewards systems to help maintain positive morale. Employee input should be gathered throughout the process to determine if the strategies or timelines should be adjusted.
- Show positivity. Leaders of change initiatives can appeal to employees’ emotions by creating excitement around achieving the new corporate vision. When workers struggle with change, they need positive encouragement and inspiration from their managers.Managers can show empathy by recognizing how anxiety and fatigue can impact performance, according to the article “10 Principles of Workforce Transformation” from Strategy+Business. Leaders should avoid imposing negativity on employees by expressing their own anger or doubts.
- Enact visionary change. Though organizational change often equals progress, employees benefit from a sense of stability and purpose. Leaders should connect the new, transformational vision to the company’s long-term strategy, while honoring the organization’s history and past successes. When workers have a clear picture of where the company has been and where it’s going, they’re more invested in the transformation.
- Be persistent. Organizational transformations don’t take place overnight. Most successful transitions are rolled out gradually to keep operations flowing smoothly. Leaders should show persistence in monitoring change and pivoting when the direction strays from the goals.The transition team needs to revisit goals and timelines throughout the transition to determine whether adjustments are needed. Frequent surveys can help leaders gauge employee commitment, and interventions may be needed for groups or individuals struggling to accept the change, according to this organizational transformation guide from CIO contributor Bart Perkins. In addition to persistence in carrying out these steps, leaders must show patience in allowing employees the time they need to adjust to change.
- Use online tools and resources. A number of tools can be useful for organizational change planning and deployment.
- Prosci ADKAR Model — a model for planning change management programs
- Creately — an online tool for creating flowcharts and other change diagrams
- Gantt chart — a timeline tracking chart for change programs
- The Change Compass — a cloud-based platform for change analytics and planning
- The Change Shop — a software platform for tracking change management tasks
- John Kotter’s 8-Step Process for Leading Change — a guide for leading organizational change
Organizational Change Examples
Common Organizational Changes
New process or programs, including digital transformation.
New job tasks.
Reorganization of business units or departments.
Corporate merger and acquisition events.
Notable Examples of Organizational Change
Successful Transformation Cases
- Amazon’s evolution. In a matter of decades, Amazon evolved from a small online bookstore into a global online retail powerhouse. Amazon invested heavily in technology from the beginning, staying ahead of competition from larger booksellers by providing customer-friendly online sales tools. It gradually widened its online offerings; expanded overseas; and branched into web hosting, electronic, robotics, and other fields. Amazon now accounts for nearly half of U.S. online retail sales.
- Apple’s revolution. Apple was on the verge of bankruptcy in 1997 when it received a cash infusion from Microsoft and underwent a major restructuring led by co-founder Steve Jobs. Apple gradually overhauled its product offerings, creating modern, desirable products including the iMac and iBook. The firm created a nimble, out-of-the-box design strategy that allowed it to meet customer needs, and Jobs led the firm to massive success with the launch of the Apple Store, iPod, iTunes, and iPhone.
- Toyota’s production system. One of the best-known transformation stories is Toyota’s development of what’s now known as the lean manufacturing philosophy. The strategy focused on eliminating waste in manufacturing processes, keeping minimal products in inventory, and pivoting quickly when improvements were needed. The philosophy made Toyota one of the top global carmakers, and thousands of companies around the world have adopted lean operating processes.
Failed Transformation Cases
- Blockbuster’s rise and fall. Blockbuster’s collapse is a classic example of a company failing to keep up with the competition. The company formed an innovative business model for rapid growth in the movie rental store industry, but focused too closely on growing its brick-and-mortar chain and botched an attempt to compete with Netflix in the mail-order and digital movie marketplace.
- Motorola’s failure. The dawn of the smartphone brought on deep organizational challenges for Motorola, despite the company’s history of innovation and risk taking. The company failed to recognize a culture shift in how consumers wanted to use their cellphones, and internal discord among management led to a sharp decline in innovative product launches.
- The downfall of the once-top retailer Sears. Like many other brick-and-mortar retailers, Sears struggled to keep pace with online competition. The company filed for bankruptcy after closing hundreds of stores. Its downfall was largely blamed on top management’s unwillingness to invest in updating stores or bringing in new product offerings, focusing instead on cutting expenses in the face of slowing sales.
How to Change Organizational Culture
Why Is Organizational Culture Important?
Steps for Changing Organizational Culture
1. Assess existing culture and values.
2. Set organizational goals.
3. Implement transformation slowly.
4. Coach team members.
5. Monitor progress.
Resources for Organizational Change Management
- Association of Change Management Professionals: Membership association connecting companies with change management resources and professionals
- Project Management Institute: Project management organization providing articles and tools for change management and related topics
- Change Management Institute: Global nonprofit organization promoting professional development in change management
- Prosci: Change management firm providing training programs and resources
- Society for Human Resource Management: Membership organization for HR professionals and business leaders
- McKinsey & Company: Management consulting firm providing articles and reports on business transformation and related topics