How to Successfully Manage Organizational Change
Since taking on the role of CEO of Logical Maintenance Solutions, it seems as if Stacey Powell has faced almost all types of organizational change.
The service provider headquartered in Irvine, California, was acquired in June 2021 by a strategic investor, Flex Equity, and now handles IT contracts for Fortune 500 companies. Since then, the company has doubled its revenue and taken on two new major clients, requiring a total communication system upgrade and a shift into a 24/7 operating model.
“It was a huge, huge change that we had to take them through,” Powell said. “We feel it’s very important to over communicate. We were explaining the value of bringing us up into this century.”
LMS started out primarily working with print-centric companies and doing more mechanical troubleshooting for clients. Now the company has branched out into working with many different technologies and handling more component-based issues.
Examples of Organizational Change:
- Personnel changes
- Mission or business model revamp
- New technology
- Mergers and acquisitions
- Roles and responsibilities reclassification
Navigating an acquisition, bringing on new clients and managing a business model shift is plenty of organizational change, but doing so amidst a pandemic brings additional challenges like shifting call center employees to remote work while dealing with tripled call volume. To meet this increased traffic, LMS needed to upgrade its phone and email systems and train all employees on how to use them.
“A lot of it was just the infrastructure and making sure the infrastructure could sustain such a substantial, Herculean effort of bringing in such a large client,” she said. “We divided and conquered. We did a number of different really intense training sessions and work groups, and then we set people up with mentors to mentor them in a home environment.”
Labor shortages are an ongoing challenge, which is limiting the clients LMS can take on right now. Despite offering signing bonuses, tuition support and other incentives, it has not been easy to fill all open roles.
“Right now, I have business that I would love to bring on… but we can’t even bring people on fast enough to be able to integrate new business and implement,” Powell said. “With this change and with bringing on new clients, which is organizational change and growth, we just can’t find the resources to keep up with it.”
Still, LMS is maintaining ambitious financial goals, aspiring to close an additional $40 to $50 million in business by the end of the year.
“A lot of times we don’t have the luxury of time these days. It used to be that you could… plan a very methodical approach, and now with the speed of change, you don’t have the time to do that,” she said. “I think actually really planning out if things go wrong, making sure you have a contingency plan to fall back on, is really really important.”
If she could change anything about how the company managed all of the recent organizational change, Powell said she would have focused on implementing the infrastructural changes first before bringing on new clients to reduce the stress of doing both simultaneously.
Still wondering how your team can best handle organizational change? Built In spoke with experts for tips on navigating transitions, communicating with employees and reorganizing personnel structures.
Put People First
As a management consultant, Rupert Morrison became frustrated constantly working in tedious spreadsheets for organizational design projects. This inspired him to create OrgVue, a platform that allows companies to conduct data-driven analysis, planning and monitoring of their workforces.
“With org change, people often forget people,” said Morrison, founder and CEO of OrgVue. “You have this theoretical world in your head where you say every person becomes a node, and you move them around. When you do this in Excel, people get lost, so all of a sudden there’s a big change, and people are lost. Then how do you know that you’ve got the right person in the right place, and how do you know if there’s redundancy, who should be at risk for redundancy? Are there other roles that they could be applicable for?”
Morrison, who is also the author of the book, Data Driven Organization Design, emphasizes that changes like reorganizations need to be human-centered processes because of the significant impact these decisions have on people’s lives.
As companies navigate workplace changes brought on by the pandemic, it is important to keep individuals in mind when creating policies for the future. Krishna Kutty, managing partner and co-founder of Kuroshio Consulting, a management consultancy focused on strategy, leadership and transformations, cites how employees feel less restricted by geography with the promise of remote work, so they are leaving companies in search of employers whose missions better reflect their values.
“We’re seeing a lot of folks essentially switching companies and really moving towards companies that are actually in line with their passion and their purpose, as opposed to just finding an organization that they can work for because they’re limited by their geographic bounds,” Kutty said.
Keeping in mind how organizational change will directly affect employees influences how smoothly transitions can go.
Identify the Why
Team supervisors at all levels of an organization should have a clear understanding of why change is happening in order to be able to clearly explain it to team members.
“You have to be able to communicate change and why succinctly, so everyone can understand it and everyone can repeat it. Each manager needs to be able to do that. They need to explain to their teams why the change is happening and how they’re going to be impacted,” Morrison said.
Rick Simmons, founder and CEO of organizational development firm, the telos institute, works with companies across three dimensions: strategy, leadership and change. When working with clients as they prepare to navigate change, he starts by asking: Where do you want to play? How are you going to win?
“When you’re clear about the destination or direction, it really then needs accountability. It needs energy. It needs reinforcement. It needs mojo,” said Simmons. “Being able to be principled and practiced and prepared for when change comes into the equation is really the difference between getting there or not.”
It is important to evaluate whether or not major change is necessary. Strategy changes should not be happening every year, Morrison said.
“The case for change has to be overwhelming, and the case for change has to be not just financially sound, but it has to be emotionally sound. It has to be succinct and clear,” he said.
Consider implementing smaller changes first before undertaking a large organizational change project, Morrison said.
“Often, you don’t need to do open heart surgery. I call it macro design, operating globally. Often you don’t need to do that at all, and you should be very mindful about doing it,” he said. “There are lots of micro-detail design changes... that you can do that often will give you the outcome that you’re seeking.”
A clear communication plan can help all employees smoothly manage a transition — even if it negatively affects some team members.
“Let’s say you’re impacted negatively as the employee. If you can understand why, and someone explained it to you ... you’re going to accept that. Even if you’ve been made redundant, at least you know it’s a fair, strong process, and you’ve been treated fairly,” Morrison said. “It’s when you’re treated unfairly, and it doesn’t make any sense that people get really, really angry, and it just breaks trust. Once you break trust, it’s kind of game over, really. It’s really hard to regain it.”
When undertaking LMS’s acquisition, Powell said she and the other organizational leaders made a practice of being open to employees’ feedback and questions during the process.
“We had a lot of individual sessions with each manager, and then we also had an open door if it was a major change, and they wanted to go through their manager’s manager, or even me,” Powell said.
Communicating why change is happening and how it will affect employees down to the individual level will help everyone feel more comfortable during the transition period.
Support Employee Well-Being
Organizational change can be stressful on everyone from the C-suite to individual contributors. Team supervisors carry the burden of both experiencing change and supporting their team members.
“I think self care is a big part of the equation, but we often forget that managers themselves are also employees,” Kutty said. “Encourage all of the supervisors to make sure that you’re balancing that: your own self care with making sure you’re being empathetic and managing self care on behalf of the team as well and encouraging that.”
Kutty also recommends that employees use times of change as an opportunity for learning and skill development. For example, this can include taking advantage of professional development opportunities or taking time to learn more about different areas of your company like its investment strategy, she said.
“There’s no situation in which the role that you’re playing currently is going to be the role you’re playing 20 years from now. There’s going to be some sort of change involved, so encourage your team… in terms of looking at opportunities for growth,” she said.
Recognize That Change Is Challenging
About four years ago, Simmons worked with Dick’s Sporting Goods to manage the transition of its CEO. Throughout the process, he worked with the company to conduct exercises to reconnect with its values.
This contributed to the store’s decision to stop selling guns in many of its stores in response to the 2018 mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida. The company announced in March 2020 that it was removing guns in another 440 stores across the country. Despite the start of the pandemic and low stock prices at the time, the company persisted with opening more stores and following through on removing guns from its shelves, and now stock prices have increased sevenfold.
“That is how you leverage the power of these periods of discontinuity,” Simmon said. “This is why I think it’s hard to navigate really optimally because we need to be both grounded and open. We need to be grounded in the enduring components of who we are, where we’re going, what we believe.”
Successful organizational change comes down to three steps, according to Kutty.
“You have to prepare for the change. You have to manage the change, and you want to make sure that you’re sustaining the outcomes of that change. It’s as simple as that.”