Although it is sometimes called the soft side of change, managing the people side of a change is often the most challenging and critical component of an organizational transformation.

Consider a merger or acquisition. The technical side of the change is certainly complex. You must work out the financial arrangements of the deal, integrate business systems, make decisions about the new organization's structure, and more. But getting people on board and participating in the merger or acquisition can make the difference between success and failure.

Why? Individuals will need to perform their jobs differently. The degree to which they change their behaviors and adopt new processes has a significant impact on the initiative. This is why the soft side of change can be the harder side of change. Fortunately, a structured approach to managing the people side of change can make a big impact on overall success.

 

What is Change Management?

Change management addresses the people side of change. Creating a new organization, designing new work processes, and implementing new technologies may never see their full potential if you don't bring your people along. That's because financial success depends on how thoroughly individuals in the organization embrace the change.

Change management comprises the processes, tools and techniques used to manage the people side of change and achieve desired business outcomes. Ultimately, change management focuses on how to help employees embrace, adopt and utilize a change in their day-to-day work. Change management is both a process and a competency.

The Change Management Process

From a process perspective, change management is a set of steps a team member follows on a particular project or initiative—the strategy and plans focused on moving people through the change. Prosci’s research-based methodology includes three main phases:

  • Preparing for change (where readiness assessments help guide the formulation of a strategy)
  • Managing change (where five change management plans integrate into the project plan)
  • Reinforcing change (where compliance audits and mechanisms deploy to solidify the change)

Change Management Competency

Change competency is a leader or manager’s ability to effectively lead people through change. The notion of a leadership competency is universal, but what that competency entails depends on a person’s relationship to change.

For senior leaders, change management competency means being an effective sponsor of change and demonstrating commitment to the change, both individually and organizationally. For front-line supervisors, competency relates to coaching direct reports through their own change journey. Although competency varies according your relationship to change, organizations are more effective and successful when they build change management competencies throughout their ranks.

Change management is not just communication and training. It's not just managing resistance. Effective change management follows a structured process and employs a holistic set of tools to drive successful individual and organizational change.

Why Change Management Matters

There are numerous reasons to employ effective change management on both large- and small-scale efforts. Here are three main reasons to employ change management:

  1. Organizational change happens one person at a time
  2. Poorly managing change is costly
  3. Effective change management increases the likelihood of success

Organizational Change Happens One Person at a Time

It is easy to fall into the trap of thinking about change exclusively from an organizational perspective. When you consider a merger or acquisition, you can focus on financial structuring, data and system integration, and physical location changes. However, organizational change of any kind occurs one person at a time. Success of an organization-wide effort only occurs when Andre, Becky, Carlos and Dharma do their jobs differently.

Organizations don’t change. People within organizations change. It is the cumulative impact of successful individual change that results in successful organizational change being successful. If individuals don’t make changes to their day-to-day work, an organizational transformation effort will not deliver results.

The Cost of Poorly Managing Change

Ignoring the people side of change has consequences:

  • Productivity declines on a larger scale for a longer duration than necessary
  • Managers are unwilling to devote time or resources needed to support the change
  • Key stakeholders do not show up to meetings
  • Suppliers begin to feel the impact and see the disruption caused by change
  • Customers feel negative impacts of a change that should have been invisible to them
  • Employee morale suffers and divisions between “us” and “them” begin to emerge 
  • Stress, confusion and fatigue increase
  • Valued employees leave the organization

Projects also suffer from missed deadlines, budget overruns, rework and even abandonment. These consequences have tangible impacts on project health and the organization. Fortunately, you can mitigate these issues when you include a structured approach to the people side of change on projects.

Effective Change Management Increases Success

A growing body of data shows the impact effective change management has on the probability of a project meeting objectives. Prosci’s Best Practices in Change Management benchmarking studies revealed that 93% of participants with excellent change management met or exceeded objectives, while only 15% of those with poor change management met or exceeded objectives.

Figure-5.1-Correlation-with-meeting-objectives (1)

Source: Prosci Best Practices in Change Management – 10th Edition

 

In other words, projects with excellent change management were six times more likely to meet objectives than those with poor change management. What may be most enlightening about the research is that poor change management correlates with better success than none at all.

Prosci research even shows a direct correlation between effective change management and staying on schedule and on budget.

Figure-5.3-Correlation-with-staying-on-or-under-budget (1)

Source: Prosci Best Practices in Change Management – 10th Edition

How to Implement Effective Change Management

Effectively managing change requires two perspectives: an individual perspective and an organizational perspective.

Individual Change Management

The individual perspective is an understanding of how people experience change. Prosci’s ADKAR Model describes successful change when an individual has:

  • Awareness of the need for change
  • Desire to participate in and support the change
  • Knowledge about how to change
  • Ability to implement required skills and behaviors
  • Reinforcement to sustain the change

If an individual gets stuck on a building block and cannot progress sequentially through the model, the change will not be as successful. The goal in leading the people side of change is ensuring that individuals have Awareness, Desire, Knowledge, Ability and Reinforcement.

Organizational Change Management

The organizational perspective of change management is the process and activities that project teams utilize to support successful individual change. If the ADKAR Model describes what an individual needs to make a change successfully, organizational change management is the set of actions to help build Awareness, Desire, Knowledge, Ability and Reinforcement across the organization. Based on two decades of research, Prosci’s organizational methodology utilizes readiness assessments and strategy to support five targeted plans, or what we refer to as the five levers of change management:

  • Communication plan
  • Sponsor roadmap
  • Coaching plan
  • Training plan
  • Resistance management plan

The Importance of Change Management Roles

As the change management practitioner works to develop the strategy and plans, senior leaders, managers and supervisors work to execute their unique roles in change. For example, depending on the message about change, employees prefer to receive organizational messages about change from leaders at the top of their organization. They prefer to receive messages about the change's impact on their day-to-day work from their immediate supervisor.

The role of the change practitioner is to enable these employee-facing roles. And in times of change, it is the effectiveness of senior leaders as sponsors of change and managers and supervisors as coaches of change that will determine whether a project succeeds or fails.

How You Can Effect Successful Change

So what can you do to become a more effective change leader? Begin applying change management on your projects and build change management competencies in your organization. These are the first steps to ensuring projects deliver their intended results.

The people side of change is not the soft side of change, it's the harder side of change. Investing the time and energy to manage the people side of your organizational efforts pays off in the end in terms of your effort's success and avoiding the numerous costs that plague poorly managed change.

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