What is Change Management? 2022 news at ITIL.press

What is Change Management?


60% of innovations in companies fail. What is change management and how it can help. A detailed guide for managers. Who should implement changes in the company, how to assess the chances of success at the start and what techniques to use.

The Green Technology Training Center organizes lectures for environmental specialists. Every day dozens of people call and write to the company, who want to sign up for webinars and face-to-face classes. Their requests are handled by managers — they enter the data into Excel documents. It's inconvenient and time-consuming, and customer data gets lost.

Management has a solution — a CRM system. Managers are connected to the system and given regulations to work with. But the employees resist. They find it even more difficult to work, and they need even more time. It turns out that it is not as easy to enter data into the CRM as it is in Excel spreadsheets, and many functions are incomprehensible.

To be effective, you have to learn. Employees complain about the new system, and management puts off the innovation until later.

This is a simple example of a failed attempt to change company processes. Only one-third of all changes in organizations successfully take root. The other two-thirds fail, wasting resources and hurting employee motivation. These results were cited by John Kotter, a change methodologist, in the late 1990s, and similar figures were cited by McKinsey in 2008.

In order to successfully change a company you need to master change management. This is a broad branch of knowledge. In this introductory article we will touch on only the most important aspects.

  • What is change management and who does it in a company
  • How do you know if change will be successful?
  • Change management models
  • Three steps to change: Kurt Lewin's model

What is change management and who does it?

Change management is a systematic approach to transforming an organization. It is also a relevant discipline in management science. The discipline contains a set of techniques, recommendations and principles that help to implement changes in the organization.

What is meant by change in this case? It is the addition, modification or removal of something that can affect company structures. Growing sales in a department is not a change. Growth doesn't change processes. New regulations for sales managers or implementing a CRM system is a change.

Here are some examples of changes in a company:

  • Updating business processes, implementing new regulations;
  • creation of new positions, which leads to the revision of established processes;
  • the introduction of new IT products for management: CRM systems, ERP systems, and the like;
  • creation of new subdivisions;
  • replacement of equipment;
  • updating of production technologies;
  • launch of employee training system.

The goal of change management is to increase the likelihood of success, reduce costs and reduce employee stress. When managers master change management, they often learn:

  • change management models. These are general concepts that describe how change should be implemented;
  • Leadership tips for change managers;
  • tips and techniques for dealing with employees affected by change — how to motivate them, how to train them;
  • recommendations and techniques for changing the corporate culture;
  • techniques for introducing technical changes — for example, ERP systems. Such techniques concern not so much technical as organizational aspects. These are employee training, preparation of regulations, and so on.

Managers most often implement changes. This role can be assumed by one of the top managers or by a mid-level manager, who is entrusted with the project. To be successful, managers are trained in change management.

Sometimes a separate position is created for change implementation — a change management manager. Often such a manager has two types of competencies. The first is managerial competencies, the manager has also been trained in change management. The second is competencies in the professional sphere to which the innovation relates. In large companies, a department may be responsible for implementing changes.

How do you know whether the changes will be successful?

In order to understand whether the changes will take root, the "force field" methodology is used. The methodology involves dividing the sheet into two parts. On the left side, the factors that work for change are written out. On the right are factors that work against innovation.

These factors may include, for example, the opinions of employees and customers, financial resources, or the actions of competitors. When the factors are collected on the sheet, you need to assess which side is stronger.

Each force for and against can be rated on a ten-point scale. The scores should then be added up for each side. If it is on the negative side, it means that the change is unlikely to take root. If it's on the positive side, the change is likely to work.

How do you translate the "force field" into a positive?

  • Write out all the forces that contribute to the change. For example: "top management support" or "competitors are successfully trading on the new sales model, we should learn from their experience".
  • Assess whether you can launch the change so that resistance does not increase.
  • Make sure you don't put too much pressure on the opponents of change. It is quite possible that if you release the pressure, resistance will also decrease.
  • You can also use the Hynings model to see if the change will be successful. It involves assessing two factors. The first is the need for change. The second is the agreement of the main participants that change is needed.

This produces a table of four squares. If the need for change is high and the main participants agree, the chances of success are the highest. Otherwise, there is little chance that the innovation will take root. If there is no agreement among the participants and the need for innovation is low, the change is doomed.

Three models of change management: ADKAR, Kotter, 7S.

We've already said that change management is a vast branch of knowledge with its own methods, recommendations and techniques. In this part of the article, we will break down three popular change management models.

These models represent basic concepts. Based on them, you can plan and implement innovations. Sometimes to successfully introduce an innovation, it is enough to choose one of the models and act on it.

If you want to introduce an innovation on a small scale, such as new scripts, one of these models may be enough. You won't need any other change management techniques.

ADKAR

The model was developed by Prosci Change CEO Jeff Hiatt. At the center of this concept are the employees who are affected by change. ADKAR is a set of five steps that each employee must go through in sequence. These are:

  • A — Awareness. Awareness of the need for change. In this stage, employees are told why change is important.
  • D — Desire. Desire to support and participate in the change. Now we need employees to want to change their jobs. For example, employees need to be explained the benefits of the new regulations or the new IT system.
  • K — Knowledge. Knowledge of what to do during and after the change. Employees need to be trained: they need to know how to work now.
  • A — Ability. The ability to put the change into action. The difference between stage three and four is the difference between theory and practice. Employees must now not only know what to do, but also be able to work in new ways.
  • R — Reinforcement. Reinforcement of the results of change. This is the stage where changes need to be sustained and monitored. If any of the employees are affected by the innovations, either you need to find a solution that will satisfy them, or they will have to be parted with.

A scale of one to five is used to assess results. If an employee scores three points or less at any stage, he must improve his score. Only then can he move on to the next step.

Kotter's model

Developed by Harvard Business School professor John Kotter. Kotter's model is a sequence of eight steps. A change manager or manager introducing innovations needs the algorim.

  1. Create a sense of urgency for change. In this step, you need to make a list of innovations and discuss them with your colleagues. You need to understand what the current situation is threatening and what resources will be needed for change.
  2. Create a leadership coalition. This is the team that will bring change to life. Cotter argues that you need to lead these people, not order them around. Managers must be motivated to change.
  3. Form a strategic vision. You need to develop a strategy for implementing change. After that, you need to show the rest of us a picture of the future that awaits them after the renewal. The image should be attractive — it will motivate employees.
  4. Gather supporters among the rank-and-file employees. Change on a large scale can only happen if there are a lot of supporters, Cotter says.
  5. Overcome barriers that hinder change. These could be company hierarchy, inefficient processes or technology.
  6. Achieve short-term wins and celebrate early successes. Employees should see that the company gets results immediately after the change.
  7. Gradually build up the pace of change implementation. After the initial successes, team support for change will grow. You need to implement what you've planned faster — until the vision becomes a reality.
  8. Sustain the result. New practices need to be maintained until they are sustainable enough to completely displace previous habits.

McKinsey's 7S model

At the center of the 7S model are seven elements within a company that interact with each other.

Before introducing innovations, management needs to understand which of these elements are not aligned with each other and with the planned changes. This analysis will provide an action plan.

The first three elements are called hard elements. They do not depend on the personal qualities of employees, so they are easy to transform.

  • Business strategy. This is a blueprint for the company's development. What will it do for the foreseeable future?
  • The structure of the company. It is the order of interaction between departments.
  • System. These are all the processes without which the company will not be able to create and sell its products.

The other four are flexible. They depend on the people who work in the company. These elements are harder to evaluate and change:

  • Shared Values. Corporate culture, relationships within the company.
  • Staff composition. Number of employees, their competencies, personnel policy.
  • Style of relations. What kind of atmosphere in the company — formal or informal? Leadership style — authoritarian or democratic?
  • Skills and abilities of the employees.

You can find at least ten more models that are used in change management. For example, there is the nudge theory, the Bridges transition, the Kübler-Ross curve. In the next section we will analyze in detail a popular model that can be used as a ready-made algorithm for implementing innovations — the model of Kurt Lewin.

Three steps to change: Kurt Lewin's model

A model of Kurt Lewin — one of the most popular concepts for change management. The German psychologist formulated it in the first half of the XX century. According to Lewin, the success of change depends on the personality of the manager. It is important whether the top manager has sufficient motivation and whether he can formulate a goal. Lewin's model consists of three big steps: unfreezing, moving and freezing.

Unfreezing. In this stage, the company realizes that the business needs change. The initiator is the top manager, it can be the head of the whole company or a specific division.

What he does at the unfreezing stage:

Creates a vision of the future — an image of what the company will look like after the changes are implemented.

He assesses the situation — he understands what exactly needs to be changed: to increase sales, dismiss inefficient employees, enter new markets.

Forms a team of reformers — a group of colleagues who become change leaders in their departments. The team of reformers is created from the top down, following the chain from top managers to line managers and their subordinates.

It declares new working principles and motivates the employees. Recalls the small successes that occurred in the company during the perestroika, and speaks honestly about the failures. Levin advises against lying that the company is doing well when in fact it has faced difficulties. That can undermine employee confidence.

Works with resistance — reassuring and sometimes firing those who don't agree with future changes.

Movement. This is the stage of putting innovation into practice. If during the unfreezing it was enough to understand what and how the company is changing, now you need a detailed plan.

The change process can be divided into two key stages:

  • Training employees in new skills. For example, employees should be trained in new sales scripts or computer software, depending on what you're changing.
  • Creating an environment to reinforce the changes. For example, during the adaptation period you can slightly reduce sales plans, introduce regular meetings with the heads of sales departments and conduct tests on the knowledge of the new CRM system.

Changes are recommended to implement quickly. The less time it takes, the faster employees will see the positive result of changes.

Freeze. At this stage changes are already implemented. All that remains is not to roll back and make sure that employees continue to use the new rules and technologies. At this stage it is important to reinforce new practices with regulations and procedures. Their implementation should be supported by motivation.

In addition, during a "freeze", the results of changes are monitored. If necessary, adjust the work.

Five main points

Change management is a systematic approach to the transformation of an organization, as well as a chapter in management theory devoted to the implementation of innovations in the company.

Often change management is taken over by managers. To do this effectively, they need proper training. Sometimes companies create the position of change management manager. Such people know the industry and have managerial competencies at the same time.

To see if you can renew the organization, use the Hynings model, or the "force field" technique.

There are many models of change management. Such models are the most general templates that describe what needs to be done. Here are a few popular ones: the Kotter model, ADKAR, 7S.

If you want a simple model for innovation, look at Kurt Lewin's system. It includes three steps: unfreeze, move, freeze.