What is change management? A guide to organizational transformation

What is the main purpose of change management?

In modern IT, change management has many different guises. Project managers view change management as the process used to obtain approval for changes to the scope, timeline, or budget of a project. Infrastructure professionals consider change management to be the process for approving, testing, and installing a new piece of equipment, a cloud instance, or a new release of an application. ITIL, ISO20000, PMP, Prince2, as well as other methodologies and standards, prescribe the process to gain approval and make changes to a project or operating environment.

The Association of Change Management Professionals (ACMP), PROSCI, the Innovation and Organizational Change Management Institute (IOCMI), and others view change management from an organizational perspective. While each group has its own approaches, frameworks, and language, these groups all address the human side of change in organizational contexts.

The following article focuses on organizational change management (OCM), to distinguish it from the process-based changes of ITIL, Prince2, and so on. Here, ‘change’ refers to any event or program the enterprise undertakes that causes major disruption to daily operations—for example, a new ERP installation or digital transformation.

What are the benefits of change management?

Change management reduces the risk that a new system or other change will be rejected by the enterprise. By itself OCM doesn’t reduce costs or increase sales. Instead, it ensures teams work together in the way required for the enterprise to accept the change and operate more efficiently.

Where is organizational change management needed?

OCM is needed wherever the enterprise undertakes a program or event that interrupts day-to-day operations. Such an undertaking will impact:

The work content of individual jobs. Many jobs require individuals or groups to perform tasks repeatedly. An accounting department has daily, weekly, monthly, and annual activities. Over time, most people become comfortable with the tools provided and the rhythm of the work calendar. Even simple changes may disrupt the workflow and be disconcerting for the staff.

The roles of individual employees. Many people view their value to the organization as being a good technical architect, programmer, or security specialist. When asked to take on a different role, they may become very uncomfortable. People with excellent technical skills often struggle when asked to become managers. Rather than performing all the tasks, they have to learn to work through other people and delegate. Once they are no longer rewarded for the skills that made them successful, employees may question their purpose.

The organization itself. Executive teams debate major changes for months before making final decisions, enabling each member to gain a deeper understanding of the effects the change will have on the enterprise. Even if they don’t agree with the final decision, they have time to determine whether to accept the new direction or to depart gracefully. Individuals lower in the hierarchy rarely have time to process major changes. Executives don’t want employees to worry about events that may never happen until it’s clear the change will take place. In addition, tighter insider trading enforcement prohibits executives from sharing information about upcoming mergers, acquisitions, or divestitures. As such, individuals not part of the executive team have much less time to prepare for the planned change and may decide to leave while the change is undertaken, making change management more difficult.

What are the requirements for an effective change management process?

OCM programs require several elements to be successful:

The right executive sponsor. Sponsorship is critical. The OCM sponsor is responsible for developing the case for change and obtaining the necessary OCM resources. For this, the sponsor needs the support of the CEO to make it clear that the effort is important.

The sponsor must understand the case for change clearly enough to have a detailed discussion about the challenges that created the need for a different way of operating. They should be confident enough to confront skeptics and close enough to the details to justify the approach selected and the reasons the alternatives were rejected.

The sponsor needs to understand the impact on the staff. Good sponsors are concerned about the people who will be affected by the change. These sponsors communicate honestly while treating everyone fairly and respectfully. Rather than merely relating the facts, they take the time to listen to people and to empathize with the individuals who dislike the new way of operating. If people are to be terminated or reassigned, sponsors should know when it will happen and how everyone will be treated. They explain why the change was necessary, and do what they can to smooth the transition for individuals whose jobs are transformed. The best sponsors help everyone losing a job find their next opportunity.

Cultural willingness to adapt and change. All organizations resist change to some degree, but ones that follow the dictum “if it ain’t broke, don’t fix it” often need a major wake-up call to behave differently. Skilled change management teams embrace the organization’s emotional energy. They use company stories, language, and behavior to emphasize those parts of the current culture that are aligned with the planned change. These teams celebrate behaviors they wish to encourage by publicly recognizing individuals exhibiting these behaviors. Change management teams use every opportunity to reinforce the way the change helps the enterprise.

Individual willingness to change. Individuals must be willing to examine new information and adopt new behaviors and approaches. Since most people prefer the status quo, this can be difficult. Typically, most people only accept changes that make sense and improve their job content or their work environment.

Rewards and consequences. Major changes need to be reinforced by rewards and consequences. Individual performance plans with specific, measurable results need to reinforce the desired future state. Individuals who meet their objectives need to be rewarded appropriately, and those who don’t need to face consequences.

Why is change management difficult?

It takes a great deal of time to change attitudes and behaviors. Application implementations, even large ones, are easier to plan and manage; project managers know when a module is tested or a server installed. Change managers have a much harder time measuring progress. Gauging support can be tricky: just when it appears a key individual supports the change, the person raises another objection and returns to old behaviors.

Executives often assume that everyone impacted will find the business case so compelling they’ll automatically accept the new way of operating. But most people resist change or are unpredictable. This creates several difficulties for the OCM team:

Change management is not deterministic. Unlike computer programs, people can be unpredictable and illogical. OCM activities effective with one group may be ineffective with another. Messages may resonate with some people but not with others. Change management is a contact sport. The OCM team needs to interact one on one with individuals who will need to change. Emails, videos, and other mass communication can reinforce a message, but these don’t make people feel the enterprise cares about their difficulties. Change is personal; sometimes people whose jobs have been transformed need someone else to listen to their frustrations before they accept the new reality.

Midlevel and frontline staff must be engaged. Midlevel and frontline staff can make or break a major program. Since they understand the operational details of the current processes, they can anticipate potential problems and likely customer reactions. Individuals not sensitive to the disruption that major change can create often believe it’s more efficient to involve fewer people early in the process. While involving more people in the change process creates additional work for the OCM team, it also builds commitment. Midlevel and frontline staff who see their suggestions accepted are more likely to support the final result.

Cultural differences can make OCM difficult. Cultural norms are different around the globe. The OCM effort needs to be aware of local customs even with a global system intended to standardize enterprise operations. Care needs to be taken to be sensitive to these and other cultural norms since violating them can cause great resentment. The best OCM teams are very sensitive to local cultural norms even when the people at headquarters demand a standard project rollout and standard OCM program globally.

Change management may be an afterthought. With major IT efforts, the project team is often consumed by business process changes, interfaces to other systems, data cleanup, and so on. If the OCM effort isn’t started concurrently with the rest of the program, it may only be started when the program team experiences resistance from end users. Even enterprises that assert that OCM is critical sometimes reduce or eliminate the OCM budget if the overall program gets too expensive.

Change management can be started too early. The OCM effort needs to be tightly coupled to the rest of the change program. This is particularly difficult with major IT programs when the OCM efforts begin before new system details have been finalized. In the absence of tangible information about the new system, the OCM team either sounds vague or describes what they hope the new system will do. When the new system fails to materialize quickly or has less functionality than anticipated, supporters often become disillusioned.

OCM and the change program may be disconnected. The rational and emotional cases for change need to be integrated tightly. Frequently, executives communicate a rational, logical case for change that lacks emotional appeal. People respond to calls to action that make them feel they’re part of something that’s more important than any single person, and are energized by visions that capture their hearts as well as their minds.

How should a change management team be structured?

The OCM team should be integrated with the team responsible for implementing the change. The OCM sponsor should be a senior executive, often the CEO. The sponsor is the cheerleader who describes why the change is important and how it’ll help the enterprise. This person acquires necessary resources, establishes OCM goals along with consequences for failure to support the change.

The OCM sponsor is supported by an OCM project manager who directs the day-to-day activities of the OCM team. The OCM project manager works closely with the overall program manager responsible for implementing the change. Together the OCM project manager and the overall program manager coordinate training, communications, and supporter recognition.

OCM staff, known as OCM champions, are supporters of the change who ‘sell’ the benefits to specific departments, business units, and individuals. They start working with their target group shortly after the program team begins planning. As part of change training, these champions explain how the change will help the individuals affected.

After implementation, champions continue to make sure the change is supported and used by the individuals whose jobs have changed. They continue to espouse the benefits of the change and pay particular attention to anyone having difficulty with the change. Sometimes they merely listen and in other cases, they obtain additional training or offer help for the struggling individual.

The best champions are well respected even though they may not be very high in the organization chart. They wield informal power as opinion leaders, performing their duties competently and with grace. Many have been with the enterprise for a long time. Frequently, they serve as informal coaches to new employees who may be more senior in the hierarchy. They motivate others, inspiring them to do a good job. Other employees seek them out to determine if the people leading a major initiative will be persistent enough to make the change stick.

Change targets are the groups and individuals who need to change their behaviors and their attitudes. They are the recipients of training necessary to implement the change. As they become supporters of the change, they’re usually recognized for their support.

5 main principles of change management

Organization change management programs typically have fewer tasks and greater complexity than the program they support. The OCM program has to adapt and change on the fly to accommodate the vagaries of human nature as supporters backslide and skeptics become supporters.

While there are different approaches to OCM, most can be summarized by five main principles:

Plan. The OCM team identifies all departments, business units and groups that will need to change along with key stakeholders in each. In parallel, the OCM team analyzes how the various parts of the change will impact the way people perform their jobs. This analysis enables the OCM team to answer the most common question posed during a major change: “What’s in it for me?”

As it becomes more obvious which stakeholders support the change, which are undecided, and which don’t support the change, the OCM team creates a change plan with specific actions for each individual and group. Individual OCM members are assigned to work with individual stakeholders based in part on the strength of the relationship between the OCM team member and the specific stakeholder.

During this phase, the OCM team begins to assess the degree to which stakeholders accept the change. At this point, acceptance measures are informal and based on impressions from meeting behavior, one-on-one discussions and other interactions.

Engage stakeholders. As part of engagement, the OCM team discusses the coming change with potential supporters to determine their willingness to support the change and to create a sense of urgency to implement the change. The OCM team also identifies likely skeptics and attempts to determine their concerns. In many cases, the team will commission a formal change readiness assessment to gain a more precise understanding of the enterprise’s willingness to change.

Rollout and communication. During implementation, the OCM team communicates with individuals at all levels in the enterprise to gain their support for the change. Communications typically begin with a formal announcement from the CEO, supported by videos, emails, workstation log-on announcements, and town hall meetings,. The OCM team hopes to empower supporters and help individuals or groups become successful quickly. The OCM group identifies and celebrates successes publicly and rewards individuals responsible for each success.

As the rollout continues, attitudinal surveys are frequently employed to better gauge employee acceptance and commitment to the change. Special interventions are created and used for individuals and groups that appear reluctant to accept the change.

Training and reinforcement. Because people rarely behave as others would like them to behave, the OCM team regularly revisits and updates change goals, rewards, communications and consequences. Experience is the best teacher. Repeated interactions with individual stakeholders usually reveal their degree of acceptance, enabling the OCM team to adjust its approach as necessary. Additional support and training can be offered to employees to ensure everyone is on the same page and prepared to adopt the new changes.

Measuring success. Tasks, projects and behaviors that support the change should be part of individual performance plans. Items in the performance plan need to be clear, measurable and achievable. In addition, these items need to be weighted appropriately against the other goals in the performance plan. It’s important to establish clear metrics to track the success of the overall changes, and to identify any adjustments that need to be made.

Change management is rarely straightforward. The OCM plan may be depicted as a Gantt chart using the same tools as the IT project plan. However, in practice, OCM activities rarely have clear tasks, precedents and durations. Most OCM teams cycle through the five steps above multiple times during any OCM effort. Lessons learned at any point are incorporated into the OCM vision and communications. OCM work is not complete until the change is fully implemented and adopted by the people affected.

Who offers organizational change management certification?

A wide variety of universities and associations offer change management certificates and certifications. These include:

• The University of Virginia’s Darden School offers a “Managing Individual and Organizational Change” certificate designed to create resilient leaders and adaptable teams that can guide enterprise change.
• Prosci’s Change Management Certification Program is built around a change management methodology with supporting tools that participants apply to a current project.
• Cornell University’s SC Johnson College of Business offers a change management certification program.
• MIT Sloan School offers “Leading Strategic Change” as part of a Management and Leadership certification.
• Michigan State University’s Eli Broad College of Business offers a professional Certificate in Change Management focusing on helping organizations alter existing processes, grow, introduce new products, reorganize, or undertake other actions to be more competitive.
• Stanford University’s Organizational Renewal program focuses on design thinking and innovation to implement change within an enterprise.
• Northwestern University’s Kellogg School of Management offers a Strategic Change Management online program.

For more information on additional change management cert opportunities, see “11 change management certifications to boost your IT career.”