Why Organizations Need To Make Change Management a Core Competency
Written by Tim Creasey
Building an organizational competency to manage change is not like installing a new technology or training employees on a new process. When you build organizational change management competency, also known as enterprise change management (ECM), you target the foundation of how the organization operates, as well as how individuals in the organization relate to change. Building the competency to manage change gives these individuals the perspective, authority and skills they need to support the many different changes that come their way over time.
5 Reasons to Build ECM Competency
In today's always-changing business world, there are countless reasons to manage the people side of change. Here are five reasons to move from project-by-project change management to building an enterprise-wide competency:
1. Competitive advantage
Creating an organizational competency to effectively implement and manage change is one of the key ways you can set yourself apart from your competitors. In today's marketplace, many organizations have seen the sources of their historic competitive advantage erode. Rapid access to information, technologies, best practices, suppliers and markets has led to parity for many organizations. The global economy is forcing organizations to change the way they work locally and abroad.
If you can no longer rely on historic sources of competitive advantage, how will you set your organization apart? Imagine that your organization can react to change more quickly and effectively, and with less impact on productivity. Your people are equipped for change and expect that it's going to happen. You target their questions. You mitigate or prevent their resistance to the change. Each new project has a plan and approach for managing the human side of change. This is what "enterprise change management" means.
Over the last few years, we have seen organizations begin to dedicate the time, resources and mindshare to building change management as a core competency. How well you manage change in the coming years—and how effectively you build internal change management competencies—will be a key source of competitive advantage that will differentiate you from others in the future.
2. Failed changes
Each of us could list a number of poorly implemented changes in our organizations. Some changes end up behind schedule. Others run over budget. Some face tremendous resistance from employees. Some are implemented, but the expected results never materialize. In some cases changes fail completely and are abandoned. Many of the reasons your projects have not fully realized the expected benefits in the past are tied to mismanaging the people side of change.
Now consider the cost of these failed changes. How much time and money was spent on initiatives that were not fully implemented? What was the impact to the organization from these changes not being implemented? Your organization cannot risk the additional cost and missed benefits of poorly managing the human side of change.
Building the organization-wide competency to manage change effectively can be a cost avoidance measure which minimizes the impacts from failed changes.
3. Upcoming changes
In addition to minimizing the risk of failed change, the number and types of changes on the horizon further support the rationale for building the organizational competency to manage change. The years ahead promise bigger, more critical, more complex changes at an accelerating pace.
Organizations are constantly working to implement new technologies, upgrade systems, improve productivity, cut costs, and manage human capital in the organization. At any one time, your organization may have 50 to 100 projects impacting how individuals do their jobs—with 50 to 100 more on the schedule. Improving how your organization manages change will directly impact the success of each of initiative underway and those planned for the future. And the high-priority, more strategic initiatives typically have a direct impact on how employees do their jobs, increasing the need for change management. With so much change on deck, effective change management will be critical to project outcomes and the organization's ability to meet objectives.
4. Consistent application
While there certainly is value to applying change management to a single project, the value is magnified when organizations begin consistently applying change management on each and every change. This is a key component of organizational change management competency. Adopting and deploying a common approach results in more consistent application both by individual practitioners and across numerous projects. This step of adopting a common approach includes common processes, tools, practices and language throughout all levels and all projects.
There are numerous benefits to applying change management more consistently. First, a common set of resources and subject matter experts can support a variety of change management practitioners. When you apply a common approach consistently, learning curves shorten. A common approach also provides a platform for continuous learning and improvement. Each time change management is applied, practitioners can generate lessons learned that will improve subsequent change management efforts. Without this consistent application, continuous improvement of the change management process and approach cannot occur.
Not adopting a common approach to change also carries risk. Think about a single manager being asked to fulfill three completely different roles by three change management practitioners who are supporting three different changes. While each of the practitioners works to optimize adoption of their particular change, the manager can become confused and disengage from all change management activities. The same backfire effect can occur with senior business leaders, project teams and other project support functions (such as communication specialists or training specialists).
One of the first steps in building enterprise change management competency is selecting and deploying a common approach, which improves change management efforts throughout the organization.
5. Personal competency
Finally, it's important to consider the individual perspective related to building organizational change management competency. Aside from the organizational reasons above, managing change is an emerging and important individual skill set that leaders, managers and supervisors throughout the organization need to add to their portfolio.
Several key best practices show why managing change is a necessary personal competency at many levels in the organization. Prosci's biennial Best Practices in Change Management research studies consistently identify the role of the primary sponsor as the number one contributor to successful changes. The sponsor's role includes actively and visibly participating with the project team, building a coalition of sponsorship with peers and other managers, and communicating directly with employees about the need for change. However, fulfilling these roles does not come naturally for many senior leaders. Even the best leaders in an organization may need support, training and coaching on how to be an effective sponsor. The same holds true for managers and supervisors when it comes time to fulfill the role of coach, communicator and resistance manager when changes are introduced.
Project team members can also build personal competencies related to managing change. Even the Project Management Institute has started to add managing the human component of change to the body of project management skills.
A final element of organizational change competency is the collective individual competencies built throughout the organization, from the person sitting at the very top all the way down to front-line supervisors and employees. Change management competency shows up across the entire organization, and must be managed both from the organizational and the personal perspective.
Enterprise Change Management Is the Future
In organizations across the globe, there is in an increased need to truly build the competency to manage change. Building the competency sets your organization apart and improves the execution of each new project implemented. It allows you to minimize the substantial negative consequences of mismanaging change and better position yourself for success on future initiatives. Building the competency to change is not easy—it requires design, project management, change management and commitment from the organization. But it will be critical for success in coming years.