Definition, Best Practices, and Example of Change Management

Organizational Transformation

Successful change management has become a pivotal factor for businesses in this evolving world. With the business world changing faster than most organizations know how to keep up with, new technology, market regulations, and customer trends are continuously being questioned.

To achieve business growth and success, organizational change is a necessary endeavor to be able to keep pace with competitors. That is why an efficient change management strategy is so crucial for the survival of any business.

What is Change Management?

Change management refers to the systematic process of transforming an organization’s core values, goals, operations, and technologies.

Successful change management implementation involves instating methods and strategies that effectively change the way a business operates while helping the workforce accept and embrace change.

Organizational changes are widespread in this day and age, and it is increasingly becoming more frequent. Therefore, a sound change management strategy and effective communication teams are critical to achieving desired business outcomes.

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How Organizational Change Benefits a Business

Organizational change occurs when a business makes strategic, policy, cultural, technological, and structural changes. Successful organizational change management means effectively preparing and guiding employees through such changes to prevent turbulence in operations.

Below are the primary reasons why organizational change is necessary:

  • Technology and digital transformation upgrades
  • Adapting to changes in the market
  • Resolving internal issues with organizational bureaucracy and structures
  • Improving procedures and processes
  • Expanding the organization and achieving business growth

The benefits of organizational change programs are virtually limitless, given the wide diversity of organizations worldwide.

Research shows that in order for organizations to survive the evolving business climate, it needs to change a minimum of four times every five years. Organizations need to embrace change to survive, or their competitors will far surpass them.

Although it may seem daunting at first, organizational change can turn an organization into a more effective and competitive business, and with the appropriate change management efforts in place, a positive employee experience is guaranteed.

Achieving successful organizational change is no easy feat, but some examples of successful change management will shed some light on how you can transform your business in the best way.

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When is Change Management Necessary?

Organizational change management programs have become all the more necessary as virtually everything is continuously evolving. Change can be scary, and that’s why change management is such an essential factor for the smooth integration of any new technologies or operations.

Below are some examples of when successful change management implementation is necessary:

  • Acquisitions and mergers
  • Introduction of new technology
  • Leadership change
  • Cultural change in the organization
  • Crisis times

10 Challenges of Change Management

Not everyone perceives change as a good thing, and many employees may resist adapting to changes in the business. Therefore, transformational change must be accompanied by appropriate change management strategies to ensure employees integrate into the workplace changes.

Below are the ten most common challenges change management faces today.

1. Setting Goals Time-Efficiently

Organizational change initiatives are implemented for the purpose of improving products, current processes, services, and company culture. In this process, identifying clear milestones and goals is critical.

Below are some of the most common objectives of change management implementation:

  • Integrate new technology
  • Create an innovative culture
  • Update or alter the organization’s best practices
  • Establish incentives and milestones programs
  • Establish initiatives to share knowledge
  • Shift the business’s target customer base
  • Stay ahead of consumer demand
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2. Poor Leadership and Alignment

The leaders of an organization profoundly impact employee engagement. Any form of organizational change initiative will be challenging to implement if leaders cannot inform and convince employees of its benefits.

The lack of alignment and poor leadership go hand in hand and stand as one of the primary reasons organizational change may fail. Good leaders know which steps to take to inspire employees to embrace change.

3. Determining Which Resources Are Necessary for Successful Organizational Change

Before starting the change implementation process, determine which individuals and resources are necessary to facilitate and lead the change. The challenge most businesses face is planning and budgeting for this process before it commences.

4. Delayed Approval and Lack of Agility

Even in successful companies, a lack of agility makes change implementations very difficult. If the entire organization and all its employees do not approve of change implementation, it results in delays, which defeats the purpose of implementing change to keep up with trends.

Therefore, everyone in the organization must be on the same page for the change to be implemented on time and smoothly.

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5. Planning

Any change management initiative requires a clear step-by-step plan. The plan must include relevant timelines and milestones, as the lack thereof would make it very difficult to comprehend the overall success of the process.

6. Conflict and Fear

Organizational changes can lead to fear and uncertainty in the entire business. This may result in employee backlash and tension between co-workers.

It is the leaders of the organization’s responsibility to mitigate such responses with a sound change management plan.

A good leader must be willing to find the source of the issues at hand and mitigate such challenges with the appropriate change management techniques.

7. Resistance and Lack of Commitment

Many employees are resistant to change and not inclined to commit to or collaborate with any new operations in the workplace.

For a profitable business to sustain profitability, leaders need to address any employee resistance on a deeper level and actively attempt to remove any barriers that lead to resistance to organizational change.

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8. Poor Workplace Communication

To achieve successful change management, communication is vital. Poor communication can be a very costly occurrence, and every business that has successfully executed change management attests to the fact that good communication regarding changes is absolutely crucial.

9. Aligning Teams With Changes

Organizations often find it challenging to get the entire workforce informed and on board with upcoming change implementation.

Large organizations typically face this challenge to a more severe extent, as informing and aligning branches worldwide about change implementation is no easy feat.

Communication between different departments and teams is therefore essential to the success of change management implementation.

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10. Keeping The Workforce Updated on New Policies, Materials, and Procedures

Any organizational change must be thoroughly documented, and the entire business must have access to such documents. An effective change management strategy includes keeping all organizational changes well-documented and accessible to every employee.

8 Practices for Successful Change Management Implementation

A great deal of complexity is associated with change management in the workplace, and stress and anxiety levels tend to run high during times of change.

Fortunately, there are some proven ways and practices to ease the process of change management.

1. Set Clear Goals

Each change management initiative must be defined clearly and openly. Upper management must ensure that any organizational change has a clear and concise objective conveyed to employees and leaders.

If everyone in the company knows why the change is necessary and how it can lead to improved productivity, they are more likely to accept and align with it.

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2. Practice Honesty and Transparency

Most employees have reported their employers and managers being dishonest or veiled at least once during the course of their time with an organization.

In order to implement people-centric change, employers must always be transparent about the reasons for and implications of an organizational change.

Even if some employees may not be as comfortable with change as others, honesty and transparency on the matter will promote trust and unification during the process.

3. Reassure and Train Teams

Employees need to feel supported when changes occur in the organization. Adequate training sessions and ongoing support will go a long way in aligning your team with change management implementation.

Reassurance and empathy are necessary practices to ease the change process, and change managers must ensure employees get all the support they require to go along with the change.

4. Encourage Regular Communication

Employee engagement plays an essential role in the success of change management. Therefore, leaders and change managers must converse with their employees regularly and discuss the current change in the organization to find out how they feel about the initiatives being implemented.

Communication goes both ways, so leaders must ensure their employees trust them enough to speak freely and openly about their stance on organizational changes.

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5. Get All Leaders On Board

Efficient change management is paramount to the success of change initiatives. For the entire organization to buy into change initiatives, the leaders must fully comprehend the benefits they entail.

Businesses must invest time and effort into conveying the realistic benefits of change initiatives to leaders in order to get them to communicate accurately and efficiently with team members.

6. Empower Employees

Both change managers and employees need to be empowered by being an essential part of change management implementation. The entire workforce needs to be engaged in the process and have the freedom to share new ideas and participate in the decision-making process.

Employees that feel powerless against organizational change are more likely to retaliate and resist change implementation.

An important part of empowering your employees involves sharing all the relevant information regarding changes openly and giving them the tools they need to learn more about the technicalities of the change.

7. Make Documentation and Information Easily Accessible

Documenting every change in an organization doesn’t benefit anyone if employees don’t have access to the necessary information. Therefore, every business must have a central database containing all the relevant information and documentation regarding organizational change management.

An astonishing amount of time goes into tracking down information on a daily basis in most organizations. To execute change management efficiently, employees need to have easy access to everything they may need to integrate with the change.

8. Recognize and Reward Employee Efforts

Employees undoubtedly feel more inclined to work productively if their efforts are recognized, and it’s no different when it comes to organizational change. Motivating employees to accept and embrace change with appropriate rewards for achieved milestones is a great way to get the entire organization on board.

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Successful Change Management Examples

To gain deeper insight into what successful businesses do to manage organizational change, let’s explore some real-world examples of change management in leaders of industries.

Domino’s Pizza

For the first time ever, Domino’s Pizza overtook Pizza Hut in sales due to a number of organizational changes. This business decided to shift gears and focus its efforts on innovative technology and creative marketing campaigns, which resulted in overall growth and success.

Domino’s Pizza faced significant challenging when the stock took a dive back in 2008. The business attempted to maintain a positive image, but the struggle to stay afloat was severe.

However, the organization took a turn in 2012 when it implemented successful change management. The business’s digital transformation’s success was based on transforming entities’ ability to convince top management to embrace the necessary changes.

With time, these changes were able to mitigate unprofitable routes, and enthusiasm spread through the entire business.

The company started incorporating new digital technology to keep up with changing trends and introduced transportation vehicles equipped with a heating oven, which also served as advertisements on the road.

Moreover, the business embraced digital transformation to meet consumer demand by incorporating various means of communication, including Google Home, Facebook, Alexa, Twitter, and Smart TVs, through which customers could place an order.

Domino’s Pizza also leveraged the immense amount of consumer data it had at its disposal, effectively lowering transaction costs and offering insights into its customer base. The business also started offering special deals and loyalty programs to increase sales.

The latest innovation by this thriving company was drone and robot delivery services, where customers could get their pizzas through these excellent technologies.

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Lego’s latest reinvention has been coined the most remarkable turnaround corporate history has ever seen. In the early 2000s, Lego started experiencing losses for the first time in history. The brand sunk deeper into debt as the industry expanded, but Lego has been offering the same product range for decades.

The new CEO of Lego recognized the fact that the company was slowly starting to go bankrupt and wouldn’t survive if drastic changes weren’t made. After implementing such changes, Lego replaced Ferrari as the most powerful brand in the world in 2015.

The company realized that its range of products wouldn’t generate unlimited interest for a long time. After some expansion, this toy company started sinking deeper and deeper into bankruptcy before finally reconstructing the entire business.

For starters, Lego performed a complete digital transformation. The company did this rather unusually by bridging the gap between physical toys and virtual augmented reality.

By exploring and embracing new revenue sources, this famous company managed to revolutionize its brand and stay ahead of the changing trends of its audience.

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British Airways

After British Airways appointed John King as its new chairperson in 1981, it soon became apparent that the business was wasting valuable resources and operating exceptionally inefficiently.

The chairperson vowed to make the company more profitable by restructuring the entire organization. He achieved this with a good change management plan.

The business first reduced its workforce dramatically before its leaders decided it was necessary to prepare British Airways for upcoming change by restructuring the entire organization.

The change management plan included letting go of approximately 22 000 employees, developing contemporary jets, and getting rid of unprofitable routes. King’s successor praised him for the transformation he brought about to ensure a prosperous future for British Airways.

 By means of good communication and leadership, British Airways was able to survive incredibly challenging times and turn into the highly profitable business we know today.

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Nokia used to be the pillar of the cellular industry before smartphones entered the market. During the first few years after the company’s inception, Nokia’s market value was sky-high, and the business held 40% of the worldwide market share.

However, things started going south rather quickly as technology advanced and far surpassed the offerings of this well-known organization. By 2012, Nokia was facing detrimental losses and nearing disastrous ends.

Nokia was a bit late to join the smartphone revolution, but after hiring a new CEO, the company started a new journey of reinventing its brand.

Nokia introduced a new program that guided the company to match the evolving aspirations of cellular users and the new technologies of competitor companies. Nokia streamlined its operations and went from nine to only three business units.

The organization also bought Alcatel-Lucent and Siemens, resulting in a substantial increase in market value and a full-service infrastructure.

The organization went from bankruptcy to a highly successful leader in the industry by transforming its operations and structures entirely.

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