What is Organizational Change Management?

The business landscape is in a constant state of flux. New technologies emerge, customer expectations evolve, and market forces shift like sand dunes. As we race towards a future shaped by innovation, one thing remains constant: the need for organizations to adapt and embrace change. Because of this, every organization experiences change (or transition) during its existence, such as strategic direction, acquisitions, departmental restructuring, technology advances or implementation of new software, market fluctuations, etc. These changes can significantly impact the business, processes, people, and stakeholders. In some cases, the impact of change can result in a negative outcome, affecting the company’s reputation or effectiveness. In other cases, when appropriately managed, changes may result in greater efficiency and additional business opportunities.

A formal organizational change management process is necessary to effectively manage change while minimizing its potential negative impact. 

Organizational Change Management (OCM) refers to the policies and methods that prepare individuals for transformational changes. As businesses adopt new and modern technologies to advance their industry’s future, leaders must set the tone for any organizational shift. Simply acknowledging the inevitability of change isn’t enough. Leaders must fully embrace the transformation. This means understanding the “why” behind the change, its potential impact, and, most importantly, its benefits for the organization and its people. Furthermore, the success of any technological change hinges on your workforce. Employees need training and guidance to succeed in the pre-and post-change environment.

Attended OATUG’s Ascend 2024? Check out this live conference session, where our VP of ERP solutions, Bruce Meghan, discusses “Mastering Change Management: Strategies for Transformational Success.” Watch on-demand.

Why Do People Resist Change?

• Fear of the Unknown: People are only open to moving toward the future state once they believe in the cause or that the future state will enhance their work experience and reduce their stress and work.
• Habits: People who do not understand the need for change will resist. This is especially true of people who believe the status quo is the only way.
• Fear of Losing Value: If past change initiatives failed or were poorly executed or adopted, there may be a lack of trust that the change can be effectively applied and adopted. There will be resistance if the benefits are not seen as added value compared with the effort required to make the change.
• Change Fatigue: Employees who have experienced much change within the organization may suffer from change fatigue.

It is vital to manage and address resistance to change and adverse consequences in a timely manner. But how?

The Secret Sauce to Successful Business Transformation

Successful OCM hinges on establishing a pragmatic scope and clear expectations from the leadership team within your organization. It requires planning and implementing change in a way that minimizes employee resistance & cost while maximizing effectiveness. 

A crucial first step is defining a realistic “business-as-usual” (BAU) during the project. This acknowledges that typical operations will be impacted and plans mitigation strategies. Next, ensure clear direction and accountability are established throughout the project. Everyone involved should understand their roles and responsibilities. Additionally, don’t lose sight of the project’s business value. Regularly assess if the project remains aligned with organizational goals and adjust the scope if needed. Finally, proactive change control management is essential. Having a plan to identify, assess, and implement changes effectively before, during, and after the project minimizes disruptions and ensures a smooth transition.

Essential Items to Consider:

• Underestimating the complexity of the change effort can lead to missed steps and unforeseen challenges.
• Ineffective communication: ensure practical and clear communications between vendors, contractors, and internal team members involved in the project.
• Overlooking the impact of change within your organization’s culture, workflows, and adoption rates.
• Inadequately allocating resources: project team members must be fully dedicated; juggling existing duties alongside a project can hinder progress. Ensure their daily workloads are redistributed or reduced to allow them to focus 100% on the project.
• Lack of a solid vision before starting a project and clarity throughout the department heads.
• Ignoring internal resistance to change.
• Lack of involvement: ensure essential personnel, from leaders to those directly affected by the change, are actively involved.

Key Phases of Organizational Change Management

Prepare

The Change Management Strategy establishes the approach needed to deliver desired project outcomes.

1. Success—What are we trying to achieve? The Change Team needs to establish precisely what it is trying to achieve, with activities such as developing a detailed change profile and defining the success of the project.
2. Impact—Who will do their jobs differently and how? This focuses on how the change impacts individuals, using activities that include identifying impacted groups and defining adoption and usage.
3. Approach—What will it take to achieve success? The Change Manager should consider what steps they need to take to achieve project success, engaging in activities such as assessing risk, identifying potential resistance, and establishing required roles.

Manage

The Master Change Plan consolidates individual plans and serves as the guiding document for the change management team.

1. Plan and Act—What will we do to prepare, equip, and support people? The Change Manager will establish how to best prepare, equip, and support people who will be impacted by the change, with activities like developing an ADKAR Blueprint and producing change management plans such as a Sponsor Plan and a Communications Plan.
2. Track Performance—How are we doing? This focuses on tracking and sustaining progress in change management efforts, using activities such as establishing a tracking calendar and identifying performance strengths and opportunities.
3. Adapt Actions—What Adjustments do we need to make? Based on what the Change Team has learned, particularly in the previous stage, they spend important time adjusting their change management strategy, such as preparing adaptive actions and continuing to track performance.

Sustain

Change Management Closeout documents the change in performance status of the organization to own and sustain outcomes.

1. Review Performance—Now, where are we; are we done yet? Following the project go-live, the Change Team must review performance to confirm desired results by reviewing ADKAR outcomes and documenting lessons learned.
2. Transfer Ownership—Who will assume ownership and sustain outcomes? In the final stage, the Change Management Team should establish how to move sustainment efforts forward, with important activities that include transferring knowledge and assets and celebrating change management successes.

How and When To Incorporate OCM

NOW!

For more information, be sure to check out our OATUG Ascend 2024 session: Register and watch on-demand.