Change management

For software version changes, see Change control. For IT service management, see Change management (ITSM).

Change management (sometimes abbreviated as CM) is a collective term for all approaches to prepare, support, and help individuals, teams, and organizations in making organizational change. Drivers of change may include the ongoing evolution of technology, internal reviews of processes, crisis response, customer demand changes, competitive pressure, acquisitions and mergers, and organizational restructuring. It includes methods that redirect or redefine the use of resources, business process, budget allocations, or other modes of operation that significantly change a company or organization. Organizational change management (OCM) considers the full organization and what needs to change, while change management may be used solely to refer to how people and teams are affected by such organizational transition. It deals with many different disciplines, from behavioral and social sciences to information technology and business solutions.

In a project-management context, the term "change management" may be used as an alternative to change control processes wherein changes to the scope of a project are formally introduced and approved.

History

1960s

Many change management models and processes are based with their roots in grief studies. As consultants saw a correlation between grieving from health-related issues and grieving among employees in an organization due to loss of jobs and departments, many early change models captured the full range of human emotions as employees mourned job-related transitions.

In his work on diffusion of innovations, Everett Rogers posited that change must be understood in the context of time, communication channels, and its impact on all affected participants. Placing people at the core of change thinking was a fundamental contribution to developing the concept of change management. He proposed the descriptive Adopter groups of how people respond to change: Innovators, Early Adopters, Early Majority, Late Majority and Laggards.

1980s

McKinsey & Company consultant Julien Phillips published a change management model in 1982 in the journal Human Resource Management.

Robert Marshak has since credited the big six accounting and consulting firms with adopting the work of early organizational change pioneers, such as Daryl Conner and Don Harrison, thereby contributing to the legitimization of a whole change management industry when they branded their re-engineering services as change management in the 1980s.

1990s

In his 1993 book, Managing at the Speed of Change, Daryl Conner coined the term 'burning platform' based on the 1988 North Sea Piper Alpha oil rig fire. He went on to found Conner Partners in 1994, focusing on the human performance and adoption techniques that would help ensure technology innovations were absorbed and adopted as best as possible. The first State of the Change Management Industry report was published in the Consultants News in February 1995.

2000s

Linda Ackerman Anderson states in Beyond Change Management that in the late 1980s and early 1990s, top leaders, growing dissatisfied with the failures of creating and implementing changes in a top-down fashion, created the role of the change leader to take responsibility for the human side of change.

2010s

In response to lack of understanding in how to manage change in large projects and programs of work, Christina Dean, (author of RIMER Managing Successful Change Professional Edition) established the Australian Government National Competency Standards at Diploma Level, and RIMER as the Australian National Competency Standard Certification. RIMER is a Project Based approach to managing change, which introduced the concept of Enterprise Change Management. Christina also influenced the Human Resource Management Institute and Project Management Institute Industry Associations to include Change Management in their Academic programmes to Masters Level. By 2016, all Australian Universities offered programs that provided a formal vocational pathway, through a HRM or Project Management.

In response to continuing reports of the failure of large-scale top-down plan-driven change programmes, innovative change practitioners have been reporting success with applying Lean and Agile principles to the field of change management.

The Association of Change Management Professionals (ACMP) announced a new certification to enhance the profession: Certified Change Management Professional (CCMP) in 2016.

Approach

Organizational change management employs a structured approach to ensure that changes are documented and implemented smoothly and successfully to achieve lasting benefits.

Reasons for change

Globalization and constant innovation of technology result in a constantly evolving business environment. Phenomena such as social media and mobile adaptability have revolutionized business and the effect of this is an ever-increasing need for change, and therefore change management. The growth in technology also has a secondary effect of increasing the availability and therefore accountability of knowledge. Easily accessible information has resulted in unprecedented scrutiny from stockholders and the media and pressure on management. With the business environment experiencing so much change, organizations must then learn to become comfortable with change as well. Therefore, the ability to manage and adapt to organizational change is an essential ability required in the workplace today. However, major and rapid organizational change is profoundly difficult because the structure, culture, and routines of organizations often reflect a persistent and difficult-to-remove "imprint" of past periods, which are resistant to radical change even as the current environment of the organization changes rapidly.

Due to the growth of technology, modern organizational change is largely motivated by exterior innovations rather than internal factors. When these developments occur, the organizations that adapt quickest create a competitive advantage for themselves, while the companies that refuse to change get left behind. This can result in drastic profit and/or market share losses. Organizational change directly affects all departments and employees. The entire company must learn how to handle changes to the organization. The effectiveness of change management can have a strong positive or negative impact on employee morale.

Change models

There are several models of change management:

John Kotter's 8-Step Process for Leading Change

Dr. John P. Kotter, a pioneer of change management, invented the 8-Step Process for Leading Change

Dr. John P. Kotter, the Konosuke Matsushita Professor of Leadership, Emeritus, at the Harvard Business School, invented the 8-Step Process for Leading Change. It consists of eight stages:

• Create a Sense of Urgency
• Build a Guiding Coalition
• Form a Strategic Vision and Initiatives
• Enlist a Volunteer Army
• Enable Action by Removing Barriers
• Generate Short-Term Wins
• Sustain Acceleration
• Institute Change

Change Management Foundation and Model

The Change Management Foundation is shaped like a pyramid with project management managing technical aspects and people implementing change at the base and leadership setting the direction at the top. The Change Management Model consists of four stages:

• Determine Need for Change
• Prepare & Plan for Change
• Implement the Change
• Sustain the Change

The Prosci ADKAR Model

The Prosci ADKAR Model is an individual change framework created by Jeff Hiatt. ADKAR is an acronym that represents the five building blocks of successful change for an individual:

• Awareness of the need for change
• Desire to participate and support in the change
• Knowledge of what to do during and after the change
• Ability to realize or implement the change as required
• Reinforcement to ensure the results of a change continue

The ADKAR Model is prescriptive and goal-oriented, each milestone must be achieved to define success. It uses a 1 - 5 scale to determine how strongly an individual meets the requirements of each milestone. If a person scores a three or below, that specific step must be addressed before moving forward, Prosci defines this as a barrier point.

The Plan-Do-Check-Act Cycle, and choosing which changes to implement

The Plan-Do-Check-Act (PDCA) Cycle created by W. Edwards Deming

The Plan-Do-Check-Act Cycle, created by W. Edwards Deming, is a management method to improve business method for control and continuous improvement of choosing which changes to implement. When determining which of the latest techniques or innovations to adopt, there are four major factors to be considered:

• Levels, goals, and strategies
• Measurement system
• Sequence of steps
• Implementation and organizational changes

Managing the change process

Change management involves collaboration between all employees, from entry-level to top-management

Although there are many types of organizational changes, the critical aspect is a company's ability to win the buy-in of their organization's employees on the change. Effectively managing organizational change is a four-step process:

• Recognizing the changes in the broader business environment
• Developing the necessary adjustments for their company's needs
• Training their employees on the appropriate changes
• Winning the support of the employees with the persuasiveness of the appropriate adjustments

As a multi-disciplinary practice that has evolved as a result of scholarly research, organizational change management should begin with a systematic diagnosis of the current situation in order to determine both the need for change and the capability to change. The objectives, content, and process of change should all be specified as part of a change management plan. Change management processes should include creative marketing to enable communication between changing audiences, as well as deep social understanding about leadership styles and group dynamics. As a visible track on transformation projects, organizational change management aligns groups' expectations, integrates teams, and manages employee training. It makes use of performance metrics, such as financial results, operational efficiency, leadership commitment, communication effectiveness, and the perceived need for change in order to design appropriate strategies, resolve troubled change projects, and avoid change failures.

Factors of successful change management

Successful change management is more likely to occur if the following are included:

• Define measurable stakeholder aims and create a business case for their achievement (which should be continuously updated)
• Monitor assumptions, risks, dependencies, costs, return on investment, dis-benefits and cultural issues
• Effective communication that informs various stakeholders of the reasons for the change (why?), the benefits of successful implementation (what is in it for us, and you) as well as the details of the change (when? where? who is involved? how much will it cost? etc.)
• Devise an effective education, training and/or skills upgrading scheme for the organization
• Counter resistance from the employees of companies and align them to overall strategic direction of the organization
• Provide personal counselling (if required) to alleviate any change-related fears
• Monitoring implementation and fine-tuning as and when required

Reasons for failure

Research across many different lists of reasons has resulted in the following - organizations:

• Don’t get the sponsor right
• Start on a solution before the underlying problem [that requires the change] is fully understood
• Don’t spend time on systematically analysing the people and styles that are involved
• Jump to a solution to the problem(s)
• Don’t validate the proposed solutions
• Don’t plan for certainty
• Don’t communicate what is happening and why
• Don’t define measurable outcomes and way-points
• Don’t put strong governance in place, particularly around dependencies
• Don’t deal properly with Risk and Contingency

Challenges

Change management is faced with the fundamental difficulties of integration and navigation, and human factors. Change management must also take into account the human aspect where emotions and how they are handled play a significant role in implementing change successfully.

Integration

Traditionally, organizational development (OD) departments overlooked the role of infrastructure and the possibility of carrying out change through technology. Now, managers almost exclusively focus on the structural and technical components of change. Alignment and integration between strategic, social, and technical components requires collaboration between people with different skill-sets.

Navigation

Managing change over time, referred to as navigation, requires continuous adaptation. It requires managing projects over time against a changing context, from interorganizational factors to marketplace volatility. It also requires a balance in bureaucratic organizations between top-down and bottom-up management, ensuring employee empowerment and flexibility.

Human factors

One of the major factors which hinders the change management process is people's natural tendency for inertia. Just as in Newton's first law of motion, people are resistant to change in organizations because it can be uncomfortable. The notion of doing things this way, because 'this is the way we have always done them', can be particularly hard to overcome. Furthermore, in cases where a company has seen declining fortunes, for a manager or executive to view themselves as a key part of the problem can be very humbling. This issue can be exacerbated in countries where "saving face" plays a large role in inter-personal relations.

To assist with this, a number of models have been developed which help identify their readiness for change and then to recommend the steps through which they could move. A common example is ADKAR, an acronym which stands for Awareness, Desire, Knowledge, Ability and Reinforcement. This model was developed by researcher and entrepreneur Jeff Hiatt in 1996 and first published in a white paper entitled The Perfect Change in 1999. Hiatt explained that the process of becoming ready for change is sequential, starting from the current level of each individual, and none of the five steps could be avoided: "they cannot be skipped or reordered".

As an academic discipline

The University of New South Wales offers a Graduate Certificate in Change Management (GCCM)

As change management becomes more necessary in the business cycle of organizations, it is beginning to be taught as its own academic discipline at universities. There are a growing number of universities with research units dedicated to the study of organizational change.

See also

• Accountability § Individuals within organizations
• Business process reengineering
• Business transformation
• Change management (ITSM)
• Employee engagement
• Human resource management
• Leadership development
• Organization studies
• Organizational culture
• Organizational structure
• Workers' self-management
• Performance management
• Stakeholder management
• Strategic management § Strategy as adapting to change
• Talent management
• Training and development
• Transparency (behavior) § Management
• Transtheoretical model
• Turnaround management