Change Management

What is Change Management?

Change management is the methodical approach an organization takes to transitioning or transforming its plans, processes, or technologies. Its purpose is to create a framework for effecting, controlling, and helping people to adapt to organizational shifts in a way that minimizes disruption and maximizes benefits.

We can characterize the modern business environment by rapid transformation — whether that’s technological advancements, buyer or employee preferences, globalization, or unplanned global events like the COVID-19 pandemic.

But ~70% of change initiatives fail. The ones that don’t have one thing in common: they’re well-planned. And that’s where a strategic plan comes in.

Synonyms

  • Organizational change management
  • Strategic change management
  • Technology change management

Understanding Change in Business

“Organizational change” refers to a business’s actions toward changing or adjusting a significant component of its organization. You might implement an organizational change to improve efficiency and productivity, respond to market trends or competition, or adapt to new laws and regulations. Or, you might be scaling your company and need to adjust your organizational structure accordingly.

Some areas of change include:

  • Company culture
  • Corporate hierarchy
  • Technology and infrastructure
  • Internal business processes
  • Employee roles and responsibilities
  • Branding
  • Product innovation

There are various reasons why organizational change might be necessary. Regardless of the cause, the process requires careful planning and management to ensure a smooth transition.

The 2 Types of Organizational Change

Broadly speaking, change in busienss falls into one of two categories: adaptive or transformational.

  • Adaptive changes are small and gradual. Businesses make them in response to specific needs or challenges, and iterate them over time. When you hire a few new sales reps to meet growing product demand, test a new sales methodology, or introduce a hybrid/remote work policy to attract top talent, you’re making an adaptive change.
  • Transformational changes are large-scale overhauls. They’re a departure from the status quo and are often the result of substantial market shifts, external pressures, or long-term goals. When a company rebrands itself, launches an innovative new product, or taps into international markets, they’re making a transformational change.

In either case, change management is the process of guiding these changes to successful implementation. That involves thorough scenario planning, clear communication with team members, and frequent progress tracking and adjustments (especially where changes are transformational, sudden, and unplanned).

The Kübler-Ross Change Curve

The Kübler-Ross Change Curve, originally developed by Elisabeth Kübler-Ross in her work on personal transition in grief and bereavement, is widely applied in corporate change management. It helps leaders understand how their team members react emotionally to significant change. From there, they can tailor communication and support to help the team navigate the transition.

This model highlights five stages of natural emotional responses to change: denial, anger, bargaining, depression, and acceptance.

1. Denial

In this initial stage, individuals often resist the change because they hope it won’t actually happen (or won’t affect them personally). It’s a defense mechanism they use to cope with the initial shock, leading to a temporary drop in productivity as individuals cling to familiar ways and resist the emerging reality.

2. Anger

As the reality of the change begins to set in, they experience frustration, often looking for someone to blame. This emotional response can manifest in various ways, potentially creating conflict within organizations as individuals express their dissatisfaction or fear about the future.

3. Bargaining

Moving past anger, they look for ways to avoid or minimize the impact of the change. Employees in this stage negotiate for a more favorable outcome or attempt to make compromises, reflecting a desire to regain control or mitigate losses.

4. Depression

Acknowledging the inevitability of the change can lead to a sense of loss and sadness, as individuals “mourn” the way things used to be. At this stage, low morale and productivity are commonplace as people may feel overwhelmed by the changes and uncertain about their future.

5. Acceptance

Eventually, team members begin to accept the reality of the change and start looking for ways to adapt constructively. This stage is marked by a renewal of energy and focus as people explore new opportunities and learn to work within the context of the new reality. In other words, they integrate the change into their routines and behaviors.

Of course, your team members probably won’t feel “depressed” or “angry” at an organizational shift. Those words are a bit dramatic. But they will show resistance, dissonance, and a lack of adoption according to the Change Curve, which will hinder successful implementation or prevent it altogether.

The Change Management Process

Any organizational change initiative requires thorough planning and execution. Let’s look at the essential steps involved in managing change:

1. Preparing your team members

The most important first step is to lay the groundwork. That’s the only way you stand a chance at successfully transitioning your team to a new way of working. Cultural preparation is the first step here.

In this phase, your leaders need to focus on helping employees recognize the need for a change initiative and understand why it’s crucial for the company’s success. They communicate the problems the organization faces and try to create dissatisfaction with the status quo.

Essentially, the purpose here is to get initial buy-in from employees to avoid the friction outlined in the Kübler-Ross model.

2. Planning for organizational change

After you have buy-in from most of your team members, you can move on to the actual planning. Here, you’ll form your change management team, create a vision, and start mapping out the details of your transition.

Some common activities at this stage include:

  • Conducting a thorough impact analysis
  • Pinpointing strategic goals
  • Identifying key stakeholders and influencers
  • Defining their roles in the change process
  • Defining the benefits and expected outcomes of the change
  • Creating an actionable project plan with a clear timeline and deadlines

While it’s important to define the discrete actions your organization will take to achieve the end goal, you’ll also want to account for unexpected issues and setbacks. Things like risk assessments and contingency planning should occur in this phase.

3. Implementation

Once you’ve planned everything out, all there is left is to put that plan into action. Whether that’s a structural, strategic, or technological change depends on the specific type of transformation you’re pursuing. Either way, communication and cross-functional alignment are absolutely critical.

A few things change managers can do to ensure a smooth transition during this stage include:

  • Celebrate progress and small wins to keep morale high
  • Actively listen and address team members’ questions, concerns, and challenges
  • Adjust plans based on feedback from team members
  • Provide the tools and resources necessary for team members to adapt to the change

4. Integrating changes with organizational culture

Once the change has been implemented, it’s essential to make sure it becomes a part of your organization’s culture. You’ll have to embed new processes, procedures, and ways of thinking into day-to-day operations. This is especially crucial for internal business process changes, like sales innovation or switching CRMs.

The goal here is to prevent team members from sliding back into old procedures and solidify long-term adoption of the changes. Of course, that isn’t something that happens right away or even weeks after execution. It requires change managers to consistently examine employee behavior, performance, and progress and guide them toward fully embracing the change.

5. Project review and analysis

Although this is something you’ll look at continuously, take a step back after a few months and assess the overall impact of your change management process.

  • Did you achieve your organizational goals?
  • Have your employees adopted the new practices?
  • Are they happy with the way things are going?
  • How has productivity changed within the company?

Also look into issues that still need addressing. There were probably unexpected challenges or roadblocks that came up during the process. Take the time to identify and resolve those before they become long-term problems.

Technology Change Management

In 2023, Flexera studied over 500 IT execs and found that 73% of businesses saw digital transformation as a top priority. Managing technology changes within organizations presents unique challenges, however, specifically when it comes to user adoption, training needs, and resistance to new systems.

To ensure effective technology change management, here are a few essential practices to keep in mind:

  • Involve users from the start. Get user feedback and input during all stages of purchasing, planning, and testing. This will help increase buy-in and decrease resistance down the line.
  • Take an agile approach. Agile processes like Test-Driven Development, pair programming, and regular retrospectives can promote a more flexible and iterative approach​​.
  • For large projects, use phased implementation. Implement parts of the software in phases or test it on smaller groups within your organization. This builds on agile principles and allows for adjustments after each phase based on feedback and results.
  • Provide training and support to promote user adoption. Tailor training programs to meet the specific needs of different user groups and offer ongoing support to address any issues or concerns that arise​​.
  • Identify your “change champion.” Place leaders and department heads in a position to guide others through the change and be an advocate for it.

Change Management Frameworks

There are several different change management strategies. The one you use depends a lot on your organization’s culture and the type of change you’re implementing.

Here are four popular approaches:

Kotter’s 8-Step Change Model

Developed by John Kotter, the 8-Step Change Model focuses on facilitating change through a mix of top-down and bottom-up approaches. It emphasizes the importance of leadership, communication, and employee involvement in the change process through the following steps:

  1. Creating a sense of urgency
  2. Building a “guiding coalition” (change management leaders)
  3. Forming strategic visions and initiatives
  4. Enlisting a “volunteer army” (champions for the cause)
  5. Removing barriers to implementation
  6. Creating short-term wins
  7. Maintaining that momentum
  8. Articulating the relationship between new behaviors and broader success

This framework is ideal for large-scale organizations undergoing significant transformations that require a new vision or a substantial shift in direction.

ADKAR Model

Created by Prosci founder Jeff Hiatt, the ADKAR Model prioritizes an individual-oriented approach to change management, focusing on…

  • Awareness (at every level of the organization)
  • Desire (to support it)
  • Knowledge (of how to make it actually happen)
  • Ability (to make it happen)
  • Reinforcement (that the change is worthwhile)

…to ensure the change is successful at both an individual and organizational level​​​​.

It’s particularly effective in environments where change success depends heavily on individual employee adoption and usage. When you’re implementing new technologies or processes that employees will interact with daily, you need each step of the ADKAR Model to ensure your change lasts long-term.

Lewin’s Change Management Model

This classic change management model, developed by Kurt Lewin, involves three steps:

  1. Unfreezing the current processes
  2. Making the change
  3. Refreezing to solidify the new processes in place​​​​

Lewin’s model is most effective for straightforward, linear changes you can clearly delineate into stages. It is especially useful for smaller organizations or individual departments within larger entities where changes can be contained, monitored, and stabilized effectively.

McKinsey 7-S Model

The McKinsey 7-S Model analyzes organizational effectiveness by looking at seven interdependent elements:

  1. Strategy
  2. Structure
  3. Systems
  4. Shared Values
  5. Skills
  6. Style
  7. Staff

It’s ideal for complex organizational changes where multiple elements of an organization are affected simultaneously. It verifies you’ve considered and aligned all relevant elements, making it effective for enterprise strategic changes or integrative efforts post-merger or acquisition​​​​.

The Prosci Methodology

This methodology includes tools and processes based on research to facilitate successful change management. It integrates three main components:

  • ADKAR Model (mentioned above)
  • Prosci Change Triangle (PCT)
  • Prosci 3-Phase Process

This comprehensive, multifaceted framework works well for organizations committed to a research-based, structured approach to change management. It’s applicable across a wide range of industries and company sizes, but it is particularly beneficial in organizations where change needs to be scaled across multiple teams or departments​​.

Examples of Successful Change Management

To help you grasp what change management looks like in practice, let’s take a look at two successful examples:

JPMorgan Chase & Co.

With a team of 270,000+ employees around the world, companywide changes at JPMorgan Chase & Co. are near impossible without a proper change management strategy. Post-COVID-19 pandemic, profits surged to $11.7 billion in Q3 2021 from $9.4 billion that same time the year prior.

The company attributes its recent success to its ability to effectively harness artificial intelligence (AI) and cloud technologies — “more than 300 AI use cases in production,” to be exact.

To drive successful AI implementation across such disparate teams, the firm brought on 1,500+ employees dedicated to new AI developments, data management, and cloud technology. At the employee level, they continuously test the newest ways to use AI applications to improve productivity and make their lives easier.

Blackwoods

Blackwoods is a top industrial and safety products provider in Australia and New Zealand with over 55 branches across Australia and New Zealand. When the pandemic struck, they had a huge problem with legacy training methods (which weren’t adapted to remote work in a field where on-site training is practically required).

They utilized WalkMe’s Digital Adoption Platform to migrate to Microsoft Dynamics, distribute training materials, automate processes, and guide staff through the transition to working and training remotely.

The implementation, guided by the change management platform, led to notable operational improvements — 50% faster time-to-proficiency, 15% faster quoting processes, and significant time savings.

Change Management Best Practices

Successful change management varies from company to company. Even within the same organization, each individual initiative requires a completely tailored approach.

However, there are best practices to keep in mind when planning for, implementing, and solidifying organizational changes.

  • Incorporate team member feedback and participation at every step of the change management process (only 42% of employees say their company included them when creating a change strategy).
  • Communicate clearly, consistently and often to ensure all stakeholders are informed and on-board with each element of the change.
  • Equip managers with the necessary skills to effectively lead teams through the shift.
  • Prepare a strong support system for employees to prevent burnout, reduce stress, and facilitate employee resilience during times of change.
  • Gauge employees’ levels of resistance according to the Kübler-Ross Change Curve beforehand and as you execute your strategy to find points of vulnerability and address them proactively.
  • Monitor and track progress throughout for effective decision-making, course corrections, and assurance that the change is sticking.

People Also Ask

What are the 5 C’s of change management?

The 5 C’s of change management are Clarity, Communication, Commitment, Culture, and Capability.

How do you get employee buy-in for organizational change?

The #1 way to get buy-in from employees is to involve them at every step of the change management process. Before implementation, gather input from them to understand their needs and concerns. During the change, give positive reinforcement and recognition for small wins, and attribute broader success to your change initiatives.

What are the responsibilities of leadership in organizational change management?

In change management, leadership is responsible for defining and communicating the vision, inspiring and mobilizing commitment, providing resources and support, modeling the desired changes, and monitoring progress while adjusting strategies as necessary to ensure successful implementation and sustainability of the change.