Change management is a practice that ensures employees adopt the processes, technologies and goals required of a larger organizational change.
What Is Change Management?
Change management refers to the approaches used to manage employees throughout organizational changes. It helps employees get acclimated to new business goals, processes or technologies, so that the company’s larger change initiatives are successful.
According to one McKinsey study, companies that invest in excellent change management programs for their initiatives enjoy much higher ROI than companies with poor or no change management programs in place.
When a significant change takes place within an organization, change management can help keep employees on target and make new adjustments go as smoothly as possible.
What Is Change Management?
Change management describes the systematic approaches used in an organization to help employees embrace and adapt to company-wide changes. The aim of change management is to guide employees through substantial transformations or transitions in an organization’s processes, technologies and goals, and ensure changes are implemented efficiently to contribute to business success.
Before change management became a more formalized discipline in the 2000s, businesses that tried to reinvent themselves often narrowly focused on the new technologies and processes — neglecting to focus on the employees such changes affected the most.
They did so at their own peril. People have a tendency to resist change when it’s foisted upon them without adequate support. So when a company asks them to adopt a new tool or workflow that affects their daily lives, they may not get on board. And that makes it difficult for organizations to transform successfully.
“If your people don’t accept or adopt that change, you consider it a failure,” Kim Phan, a change management leader at Deloitte and director of operations at the Midwest chapter of the Association of Change Management Professionals, told Built In.
Change managers like her are tasked with helping to smooth the process and drive expected organizational outcomes by getting employees to prepare for, and accept, the change.
“We really focus on the people aspect [of change],” Phan said. “That’s truly what drives success for transformation projects.”
How Does Change Management Work?
Central to change management is listening and empathizing with the people whose daily work the change affects. Typically, change managers will first meet with various stakeholders and conduct interviews, hold focus groups and run surveys. Then they summarize the findings and use them to create a document outlining the strategy of where the organization’s people are, where they need to be, and how they’re going to get there.
Managers have to break change up into campaigns, Michelle Davies, who serves as Centric Consulting’s people and change practice lead in the Chicago area, told Built In. When she consults clients on change management, she relies on a four-step process that includes driving (1) awareness, (2) understanding, (3) adoption and (4) sustainment, sometimes called commitment or ownership.
1. Create Awareness of the Change
The awareness stage is all about communicating the need for change, building a burning platform (a grim but popular metaphor used to make the status quo look unacceptable) and explaining the benefits of the proposed change.
2. Ensure All Employees Understand the Change
In the understanding stage, Davies clarifies what the roadmap to change looks like — what the timeline is, what’s expected of everyone. It answers “what happens now?”
3. Train Employees to Adopt and Apply the Change
The adoption stage is where training comes in. “You’re taking [employees] through a journey. It’s not about sitting them in a classroom and expecting them to remember all of it. It’s about giving them what they need at that moment,” Davies said. “That could be a video, a work instruction, some sort of gamification thing that they’re learning over a period of time.”
4. Sustain Implementation of the Change
After about six months or a year, Davies said, you arrive at the fourth and final stage — sustainment. This is where you start to see success stories of the change taking hold and working.
Communication is paramount through every stage of the process, and may take several forms, including email correspondence, intranet announcements, town hall meetings, group meetings and one-on-one meetings between employees and supervisors.
When Do You Need Change Management?
1. New System Implementation
The most common type of change for which change managers are relied upon is a system implementation (think ERP-based projects like SAP, Oracle, Office 365, Salesforce). Organizations may want their people to adopt and use these new, expensive systems, so they look to change management to help get everyone on board.
2. New Workplace Processes and Habits
It could be as simple as preparing and training employees on a new way to log their hours — a repeated process that they’ve developed muscle memory for, where a new system is likely to throw some people off.
3. Shifts in Workforce, Strategy or Company Culture
There are other business transformations — including altering company culture, shifting areas of focus, bringing in new senior management, reducing headcount, acquiring or merging with another company — for which organizations may turn to change management. These transformations all likely involve initiatives that require system and process changes.
In each case, “you need change management to be able to integrate all this new stuff together,” Davies said. “You can come up with the best idea and the best processes and redo your systems, but none of it is going to come to life if the people don’t really get on board.”
Do I Need to Hire an Outside Consultant for Change Management?
Bigger companies — think 1,000 employees and up — will often retain the services of management consulting firms, which have consultants specializing in change management who are familiar with the latest methodologies and frameworks.
Smaller and medium-sized companies often buy pre-packaged templates and workbooks to help them deploy changes on their own. Or they might send one of their employees to get their Prosci certification in change management and return to build out the program in house.
Over the past decade, Davies has noticed a trend in which businesses shift away from bringing in management consulting firms and toward building change management skill sets internally — the idea being that third-party consultants won’t know the company nearly as well as people who have been there for a while.
There’s also the option of a hybrid approach, in which companies will have an in-house change management program but will bring in outside consultants when particular needs arise.
Popular Change Management Models
Kotter’s 8-Step Process for Leading Change
John Kotter, a business thought leader, published his 8-Step Process for Leading Change in a 1995 Harvard Business Review article and in a subsequent book.
- Create a sense of urgency.
- Build a guiding coalition.
- Form a strategic vision and initiatives.
- Enlist a volunteer army.
- Enable action by removing barriers.
- Generate short-term wins.
- Sustain acceleration.
- Institute change.
Prosci’s ADKAR Model
Prosci founder Jeff Hiatt created the ADKAR model. Each step describes an outcome people need to achieve for lasting change to take place.
- Awareness of the need for change.
- Desire to support the change.
- Knowledge of how to change.
- Ability to demonstrate skills and behaviors.
- Reinforcement to make the changes stick.
Every organization has their own preferred methodology for making change management happen. “But if you boil it down,” Phan said, “it centers around many of the same things. It’s creating awareness, building a burning platform, enabling your people to adopt that change and reinforcing it.”
Frequently Asked Questions
What is change management?
Change management refers to the approaches used to manage employees throughout significant organizational changes. It is often applied in the case of a company implementing new processes, technologies or strategic goals.
Why is change management important?
Change management helps employees better understand and adapt to company-wide changes, and aims to guide teams in a way to make transitions between systems as seamless as possible.
