Change management

Today company is struggling with the process of aligning the organization with the  changing business environment. Change is a constant, complex and dynamic and  has become a fact in both our professional and private lives. It include moving from something familiar to something new. Often, change is not product of decisions within organization. It is an inevitable result, inter alia, of faster technological progress, more and more information to process, and customer demanding for cheaper, better and faster product/service. Change is a human effort as much as it is a strategic one.

Organizational change take place when a company makes a transition from its current state to some desired future state. Creating change starts with creating a vision for change and then empowering individuals to act as change agents to attain that vision. The rate of change is escalating in virtually all organizations.

Change is occurring at an accelerating pace; today is not like yesterday, and tomorrow will be different from today.

Change

Change is the implementation of new processes, procedures, technologies, systems, structure, job redistribution ..  intended to realign an organization with the changing demands of its business environment, or to capitalize on business opportunities. Three dimensions of change can be distinguished:

• Context (the internal and external environment) – WHERE.
• Content (strategy, structure, technology, product/service, goals) – WHAT.
• Process (change process implementation) – HOW (Pettigrew and Whipp).

Two other dimensions can be added:

• People (behavior, skills, culture, mindset,suggestion, devotion) – WHO.
• Purpose ( reasons for taking changes) – WHY.

All five dimensions should be integrated in one unified change strategy that moves organization to where it chooses to be in future.

Although unusually important factor, change management does not only apply to people, processes that work for people and strategy. Change usually involves seven overlapping aspects: people, processes, strategy, culture, technology, task and design. To properly implement a change all aspects should be in balance.

Changes in organizations are undertaken to improve performance by adoption of a new idea or conduct and the need for more integrated ways of working. Change will only reach its full effect if it is made enduring.

Organisational change can affect at least four variables:

Although change can be enforced to any part of an organization, often can be identified four types of changes (with the possible overlapping among them): operational, strategic, cultural and  political changes.

In more details, significant changes usually involve making alterations in following areas:

Changes in one area will usually have an impact on another area. As well, organizations evolve through a life cycle, with each evolving stage raising change challenges.

Both internal and external pressures can cause a change. External pressures could be changes in global markets, global competition, changing in customer demand, technological advances, new government legislations or any other social, political or economic pressure. Internal pressures could be performance, costs, accommodation or human resource issues, the need to review policies and procedures, low morale, changing customer needs etc. Change whether caused by internal or external sources, large or small, involves adopting new/different perspective, processes, policies, routine and attitudes.

Commitment, competence, and structure are three key components necessary for any successful change.

As change in its broadest sense, is a planned or unplanned response to pressures and forces,  there are a number of ways in which change can be categorized.

Individual (team) change is about people, their own behavior, values, attitudes, and preferences and most of them can be reluctant or resistant to changing them.

Organizational change is about reviewing and modifying organizational/management structure and business processes. It relates to the collective character of a company, or its organizational culture. Organizations become an entity of their own, and over time, the people within it begin to act with their own set of norms. More useful changes in organization take places  at individual and team levels then at the organizational level.

Change management requires understanding how an individual (team) and an organization can transform. Obviously, change is much less complicated when the goals of both are in alignment.

Change occurs when something ends and something new or different starts. The period between these two points is transition (the period of adapting the change). This is where people should learn to abandon the old and adopt the new.

Change must be realistic, achievable and measurable. Change without alteration in behavior is temporary, but with  alteration in behavior is transformation.

Change management

Employees role in change management process

As people we learn habits. To cope with the variety over time we form habits.  Managing change essentially is an people issue. Change management mostly takes care of the people side of change. The more you understand people’s needs, their strengths and weaknesses, the better you will be able to manage change. As organizations are composed of individuals with different talents, personalities, and life and business goals, it has a easily distinguished culture. Some aspects of this culture change when the employees do; other aspects seem to be fixed and lasting. People will support the change if they notice a link between their own personal goals, expectation, wishes and the goals of the change. People change when they believe it is in their best interest to do so.

The most common error in managing change is underestimating the affect it has on people. People desire stability.  Most of us are not very change ready or change capable. People need time to adjust.

Change is about demanding people to shift perspectives from where they are to where they should be. Although people are assumed to be rational being, generally speaking, significant change brings out the emotional side in most of them.  It is reasonable to expect employees to react since the process of change involves going from the known to the unknown. When you are dealing with people you are managing emotions, uncertainties and inconsistencies.

Mainly, it all comes down to motivation and affecting conduct, about breaking old habits and attitudes and embracing the new. Adaptivity (concerning both distinct components: flexibility and versatility)  becoming a preferable personal traits. For employer is important employees willing to change and are they  actually capable of change. A well defined change management process can help in mitigating risks related with the people side.

It is important, during change process, to overcome fear of change at work and to remove fear of failure. In that case employee participation and involvement increases, as does overall feeling of employee competency and commitment to work. As consequence, overall performance is higher, as is the level of creativity, innovation, employee morale and work satisfaction.

People are not machines that can be programmed in a new way and run. It is important to note that organizations are not the ones that change, it is the people within organizations that change. It does little good to create a new organization, design new work processes or implement new technologies if you leave the people behind. Financial success of these changes will be more dependent on how individuals in the organization embrace the change than how well you draw organization charts or process diagrams. Developing the workforce is a strategic leadership responsibility. Any strategy without a capable workforce is a fantasy.

Effective education and training, which promotes employee engagement, is essential for employees to understand and adapt to a change. This is a critical change manager responsibility for enabling change. Engaged employees collaborate more, complain less, and are proactive in their roles. They view their jobs as an opportunity rather than an obligation. In a well designed change strategy, employees are the bridge between effective change strategy development and change strategy deployment.

The need to be adaptive, innovative, proactive and creative has never been greater. A highly skilled and knowledgeable workforce that is able to learn quickly is critical for organisations wanting to compete in a global marketplace. A successful transformation is due more to the people initiatives than to any other elements of the change process.

In the past business environment, stability and security were the goals organizations strove for and could often offer to their employees. In the new business reality, employees should set their own expectations, and they must work to enable their organizations to change, to constantly meet  their customers evolving needs. Today employees should develop their personal and professional capabilities. Capability is a feature, an ability, or competence that can be developed in a person.

Change leader role in change management process

Change doesn’t happen on its own. The employee does not have a responsibility to manage change. Responsibility for managing change is with leaders and management of the organization. Organizations depend upon capable change  leadership to guide them through unprecedented changes. Effective change leaders create a compelling vision, lead the process and  people, communicate (building trust among employees, communicated what, why, how, who) collaborate ( bringing people together to plan and execute change, empowering others, managing fears, reduce conflict) and  commit (make sure their own beliefs and behaviors supported change). They are in the unique role of not only designing change initiatives but enacting and communicating them to subordinates. Change without leadership can cause chaos and distrust from employees or investors. Change needs to be understood and managed in a way that people can cope effectively with it. The change leader should create a sense that the change is important, effective and beneficial and actively, apparently and systematically  demonstrate the behaviors that are consequent with the future state. He chooses appropriate models of change  and techniques to implement change. The secret to successful change leadership is organization ability to embrace on an ongoing basis the vision of a desired future state. Managing change requires strong leadership and an understanding of how organizational change occurs.

Mismanaged change leaves organizations worse than before and results in even more change.The cost of failed change is very high.

A change leader’s ability to influence change across the organization depends on their ability to affect change within themselves. Leaders should start a transformational journey accepting that the organization will have to transform them as much as they will have to transform it. The fact is that an organization will not change until its leaders do. Employees in organization listen to leader but also watch carefully what they do. When a leaders doing the opposite of what they say they will believe leaders action before their words and will therefore imitate them. How leaders behave, models how their followers will tend to behave. Only when the employees trust in their leader the change will be successfully achieved and implemented, because people will only follow a person that they trust. Employees and leaders in the organization need to trust each other in order to shape a positive organizational culture. Skilled change leader and managers make the most of their company’s existing culture. Employees expect  that change leader and managers make the same sort of commitment to them as they have been asked to make for the company. In present business environment, significant transformation cannot happen without the simultaneous transformation of a critical mass of change leaders and employees mindset, conduct and the oganization culture.

As key drivers of change, change leaders need to develop change leadership capabilities in themselves and in others. High degree of change leadership capability should be  possessed as an essential skill. New skills are needed. Skills to build change leadership capability are very different to those needed to manage a business in normal operational mode.

The basic competencies of effective change leadership are:

• Building trust and demonstrating personal accountability.
• Action orientation.
• Flexibility and agility.
• Problem solving creatively.
• Social judgment.
• Vision and goal setting.
• Building strategic alliances.
• Promoting empowerment.
• Knowledge.

Key practice areas for enabling change are learning to lead change, facilitating change, leveraging culture, promoting change participation, building change capacity, systems redesign, apply new tools, processes, techniques and monitoring change.

There are five major effective leadership components: character,  personal capability, focus on results, interpersonal skills and leading organizational change.

Effective change leaders share the following traits:

• Intelligence. The ability to integrate and interpret information.
• Creativity. Innovative and original in their thinking.
• Integrity. Integrity is a conscious choice. Their actions match their words and are identical with their values. This inspires confidence in their followers.
• Emotional Stability. Emotional stability helps leaders stay cool under pressure so they can calm down their subordinates and keep everyone on track when things get tough.
• Positive Attitude. They are eternal optimists and always see the future as a reality.
• Curiosity. Along with listening, great leaders ask lots of questions.
• Teach-ability. The willingness and ability to learn from every situation(s).
• Empathy. The willingness and ability to fully appreciate another person’s experience of change and to not attach a value judgment to it.
• Decisiveness. Leaders make decisions.
• Openness. It refers to how open an individual is to explore new ideas and experiences and how imaginative and insightful an individual can be.
• Action Orientation. Adapting to and leading change requires action.
• Self-confidence. Trust in themselves and confidence in their abilities to succeed.
• Drive. A high level of energy, initiative, and tenaciousness.
• Credibility. Honest, trustworthy, predictable, and dependable.
• Motivation. Enjoy influencing others to achieve shared goals.
• Flexibility. Adapt to fit the needs of followers and demands of situations.

Strategic capability

Every business in order to survive and thrive in a competitive business environment needs to possess a certain level of strategic capability. Strategic capability refers to the ability to develop soundly based strategies, to apply strategic thinking and manage an organisation strategically. Strategic capabilities are the adequacy and suitability of the resources (physical, financial, human resources and intellectual capital) and competences (both threshold and core competences) of an organisation for it to survive and prosper. They are vital for organization to be competitive. If they are managed well, it can be a strong competitive advantage. Unique resources and competences create strategic capabilities if they are deployed and employed in an effective manner.

Change management strategy

Elements to a change leader’s role is creating the strategy for the change initiative  and ensuring the transition from the old to the new situation. While business strategy determines what in organization needs to change, change strategy clarifies how  those changes will happen. A change management strategy is a plan for how to make something different. It describes specific ways in which an organization will address such things as changes. It ensures that any negative effects of change will be minimized. Effective change management strategy will accelerate organizations  change and reduce its cost.

Continuously learning is one of the ways to improve the overall performance of the organization and facilitate a change implementation. An implicit expectation of any kind of change management enrichment program is that of learning, which generally involves some relatively permanent type of change- behavioral, attitudinal, or cognitive. Therefore, the different kinds of learning should be applied. An effective change leader encouraging employees in the organization to learn and he actively participates as a learner in helping the organization improve. Organizations do not think, make decision or allocate resources. People do.

Organization capacity

To permanently succeed, change leaders need to be skilled not just in assessing people but also in assessing the abilities and disabilities of their organization as a whole.

Too often, the tempo and scope of changes overcomes the organization’s ability to absorb it, so organizations are running at over-capacity. Change leader should  assess the real capacity in the organization, for both normal operations and for carrying out planned key organizational change initiatives. He should initiate capacity planning to establish a change infrastructure. Capacity planning is the process used to determine how much capacity is needed (and when) in order to carry out planned change. Capacities’ can exist at different levels: that of an individual, a team, a unit within an organisation, and an organisation as a whole. Capacity is mental or intellectual receiving power, ability to take in impressions, ideas, knowledge. It is what enables people to get their work done. Building (effective) capacity refers to an individual or organization’s ability to absorb change effectively. It is the process by which individual and organizations obtain, improve, and retain the skills and knowledge needed to do their jobs competently by providing employees with more time, resources, energy and understandings. Having employees adequate workload capacity to do both, their normal day-to-day work and their change work, when required is essential to their success and the success of change. Capacity is a finite but renewable company resource.

Organization capability

The competitive advantage is the outcome of effective and efficient strategy. We can define two essential elements of competitive advantage, a perceived customer value and uniqueness. Among  four sources of uniqueness: organization, financial, strategic and technological capability, organization capability is much more complex and difficult to copy and change. Changing organizational capability requires much more time and effort than to change other capabilities.

Organization capability building refers to the skills and knowledge required for a particular assignment. An organization may have the capacity to change, but shortage certain key capabilities. Capability is the demonstration of what can be achieved, it is the active application and use of improvement approaches and practices, it is what individual or organization’s  are capable of. The assessment of the workforce capability and capacity is  an valuable input into the development of the change strategy. It is essential that an organisation when defining its required business capabilities understands its capacity to deliver. Having the capacity to deliver goods and services is even more important than just having the capability. Capacity and capability are not in opposition. In order to successfully implement change, organization need both, appropriate capacity and capability.

Organisational  capability can be defined in many ways including as:

• Company ability to perform better than competitors using a distinctive and difficult to replicate set of business attributes.
• The organisational ability to intentionally and systematically use improvement approaches, methods and practices, to change processes and products/services to generate improved performance.
• A feature, ability, faculty or process that can be developed or improved.
• A business ability to establish internal structures and processes that influence its members to create organization specific competencies and thus enable the business to adopt to changing customer and strategic needs.
• A ability to manage people to acquire competitive advantage.
• A particular, unique, collective ability or capacity that a business may possess or exchange to achieve a specific purpose or outcome.
• Understanding what a company should be able to do to carry out its strategy, what makes the organisation successful now and in the future and how to build and preserve those characteristic of the organisation that enable prosperity.
• The identity of a company as perceived by its employees and customers.
• Capacity for a set of resources to integratively perform a designated task.

Organization capability consist of following critical element:

• Shared mindset.
• Management and human resource practices.
• Capacity to change.
• Leadership.
• Organization’s knowledge and skills.
• Business process and organizational structure.
• Supporting systems and technology.

Organization capability, depends on teamwork and grow through use. How fast it grows is critical to organizational success. Organizations are constantly changing. It therefore makes sense that if you wish to improve your organization’s capability you should build this on future needs. Since capabilities represent more what an organization can do and not what it actually does they can be viewed as possibility.

Capable organisation and employees are those that can operate effectively in unfamiliar context and with latest problems. Capable people are more able to respond to the demands of a rapidly changing  and uncertain environment where is constant requirement and pressure  to do more with less. Capability should be developed in the (each) workplace, cause change implementation engage people at all levels of the organization. Finally, successful change management happens at the bottom.

Organisational capabilities are a major source for the generation and development of sustainable competitive advantage.

Organisational change capability

In the context of transformation, establishing building organizational change capability as a major change project is crucial. It is key strategic goal. Aware change leader realize this and recognize the importance of building organization change capabilities. In order to ensure that change will be accepted and embraced, leaders must address following questions: What are the organizational change capabilities? Although training  remains a crucial activity to build sustainable change capabilities in an organization you need to do more than simply train people. Learning is more than just training. If you want to improve your business results, build your change capability.

Change capability is the ability of an organization to plan, design, and implement all types of change effectively and efficiently with committed stakeholders, so that desired results from change are consistently achieved and successfully integrated into business operations. It is the ability to achieve current business goals, meet future challenges and build capacity for change.Change management must be an internal and permanent capability present within the organisation on all occasions. Organisations now have to be “change capable” all the time.

Change capability help people understand business purpose and therefore enable high organizational performance.

Needed change leader capabilities and skills are:

• Personal skills(perception, flexibility, tolerance of ambiguity, enthusiasm).
• People skills (networking, Communication, Persuasion).
• Organizational skills (sensitivity, political ability, team-building).

The value of an organization will be measured by its capability to change. Soon, the capital will not determines the value of a company, but the spirit that reigns in it.

The key factors for successful change management:

Common reasons why organization change fails:

If you’re not ready to lead change then you’re not ready to lead. Today, difference between success and failure can lie in a company’s ability to adapt changes. (Change management) teams are a powerful vehicle to produce results and build morale. When managed effectively, they can outperform any group of individuals and do more to unleash creativity and build skills than individuals working alone. 

Estimation is that about 70% of all change initiatives fail to be launched, to be complete or finishes as initially planned and expected. Failure rate may even be increasing. The need to lead change is growing, but  ability to do it is shrinking.

Need for change is usually very clear, what is to be changed is not so clear. How to create an effective process of change, is a really difficult question to answer.

Resistance is a key element in why change fails.

Benefits of change management are:

Organizational change management should start with a systematic diagnosis of the existing situation in order to determine the organization’s need for and ability to change. The goals, content, and process of change should be specified as part of the change management plan.

Most aspects of change management are simply an extension of good management practice. The difference is that they are being used in unusual and often demanding circumstances. They require extremely good leadership from the top of the organisation.

After all we should change how we change, how we make choices, how we make things happen, even how we perceive change. The most successful organizations are proactive about change. They look for ways to turn obstacles into opportunities. The ability of an organization to develop and grow is dependent on its ability to respond to changes in the environment.