Change management (CM) refers to any approach to transitioning individuals, teams, and organizations using methods intended to re-direct the use of resources, business process, budget allocations, or other modes of operation that significantly reshape a company or organization. Organizational change management (OCM) considers the full organization and what needs to change. Organizational change management principles and practices include CM as a tool for change focused solely on the individual.
- Reasons for change
- Change models
- Choosing which changes to implement
- Managing the change process
- Factors of successful change management
- Integration and navigation
- As an academic discipline
CM focuses on how people and teams are affected by an organizational transition. It deals with many different disciplines, from behavioral and social sciences to information technology and business solutions. In a project management context, CM may refer to the change control process wherein changes to the scope of a project are formally introduced and approved.
Many change management models and processes are based with their roots in grief studies. As consultants saw a correlation between grieving from health-related issues and grieving among employees in an organization due to loss of jobs and departments, many early change models captured the full range of human emotions as employees mourned job-related transitions.
In his work on diffusion of innovations, Everett Rogers posited that change must be understood in the context of time, communication channels, and its impact on all affected participants. Placing people at the core of change thinking was a fundamental contribution to developing the concept of change management. He proposed the descriptive Adopter groups of how people respond to change: Innovators, Early Adopters, Early Majority, Late Majority and Laggards.
McKinsey & Company consultant Julien Phillips published a change management model in 1982 in the journal Human Resource Management, though it took a decade for his change management peers to catch up with him.
Robert Marshak has since credited the big 6 accounting and consulting firms with adopting the work of early organizational change pioneers, such as Daryl Conner and Don Harrison, thereby contributing to the legitimization of a whole change management industry when they branded their reengineering services as change management in the 1980s.
In his 1993 book, Managing at the Speed of Change, Daryl Conner coined the term 'burning platform' based on the 1988 North Sea Piper Alpha oil rig fire. He went on to found Conner Partners in 1994, focusing on the human performance and adoption techniques that would help ensure technology innovations were absorbed and adopted as best as possible.
Linda Ackerman Anderson states in Beyond Change Management that in the late 1980s and early 1990s, top leaders, growing dissatisfied with the failures of creating and implementing changes in a top-down fashion, created the role of the change leader to take responsibility for the human side of the change. The first State of the Change Management Industry report was published in the Consultants News in February 1995.
In Australia, change management is now recognised as a formal vocation through the work of Christina Dean with the Australian government in establishing national competency standards and academic programmes from diploma to masters level.
In response to continuing reports of the failure of large-scale top-down plan-driven change programmes, innovative change practitioners have been reporting success with applying Lean and Agile principles to the field of change management.
The Association of Change Management Professionals (ACMP) announced a new certification to enhance the profession: Certified Change Management Professional, planned for 2016.
Organizational change management employs a structured approach to ensure that changes are implemented smoothly and successfully to achieve lasting benefits.
Reasons for change
Globalization and constant innovation of technology result in a constantly evolving business environment. Phenomena such as social media and mobile adaptability have revolutionized business and the effect of this is an ever increasing need for change, and therefore change management. The growth in technology also has a secondary effect of increasing the availability and therefore accountability of knowledge. Easily accessible information has resulted in unprecedented scrutiny from stockholders and the media and pressure on management.
With the business environment experiencing so much change, organizations must then learn to become comfortable with change as well. Therefore, the ability to manage and adapt to organizational change is an essential ability required in the workplace today. Yet, major and rapid organizational change is profoundly difficult because the structure, culture, and routines of organizations often reflect a persistent and difficult-to-remove "imprint" of past periods, which are resistant to radical change even as the current environment of the organization changes rapidly.
Due to the growth of technology, modern organizational change is largely motivated by exterior innovations rather than internal factors. When these developments occur, the organizations that adapt quickest create a competitive advantage for themselves, while the companies that refuse to change get left behind. This can result in drastic profit and/or market share losses.
Organizational change directly affects all departments and employees. The entire company must learn how to handle changes to the organization. The effectiveness of change management can have a strong positive or negative impact on employee morale.
Among the many methods of change management exist several key models:
John Kotter's 8-Step Process for Leading Change
Dr. John P. Kotter, the Konosuke Matsushita Professor of Leadership, Emeritus, at the Harvard Business School, invented the 8-Step Process for Leading Change. It consists of eight stages:
The Change Management Foundation is shaped like a pyramid with project management managing technical aspects and people implementing change at the base and leadership setting the direction at the top. The Change Management Model consists of four stages:
Deming Cycle of Plan-Do-Check-Act
The Plan-Do-Check-Act Cycle, created by W. Edwards Deming, is a management method to improve business method for control and continuous improvement of processes and products. It consists of four stages:
Choosing which changes to implement
When determining which of the latest techniques or innovations to adopt, there are four major factors to be considered:
Managing the change process
Although there are many types of organizational changes, the critical aspect is a company's ability to win the buy-in of their organization's employees on the change. Effectively managing organizational change is a four-step process:
As a multi-disciplinary practice that has evolved as a result of scholarly research, organizational change management should begin with a systematic diagnosis of the current situation in order to determine both the need for change and the capability to change. The objectives, content, and process of change should all be specified as part of a change management plan.
Change management processes should include creative marketing to enable communication between changing audiences, as well as deep social understanding about leadership styles and group dynamics. As a visible track on transformation projects, organizational change management aligns groups' expectations, integrates teams, and manages employee-training. It makes use of performance metrics, such as financial results, operational efficiency, leadership commitment, communication effectiveness, and the perceived need for change in order to design appropriate strategies, resolve troubled change projects, and avoid change failures.
Factors of successful change management
Successful change management is more likely to occur if the following are included:
Change management is faced with the fundamental difficulties of integration and navigation, and human factors.
One of the major factors which hinders the change management process is people's natural tendency for inertia. Just as in Newton's first law of motion. People are resistant to change in organisations because it can be uncomfortable. The notion of doing things this way, because 'this is the way we have always done them', can be particularly hard to overcome. Furthermore, in cases where a company has seen declining fortunes, for a manager or executive to view themselves as a key part of the problem can be very humbling. This issue can be exacerbated in countries where "saving face" plays a large role in inter-personal relations.
Integration and navigation
Traditionally, organizational development (OD) departments overlooked the role of infrastructure and the possibility of carrying out change through technology. Now, managers almost exclusively focus on the structural and technical components of change. Alignment and integration between strategic, social, and technical components requires collaboration between people with different skill-sets.
Managing change over time, referred to as navigation, requires continuous adaptation. It requires managing projects over time against a changing context, from inter-organizational factors to marketplace volatility. It also requires a balance in bureaucratic organizations between top-down and bottom-up management, ensuring employee empowerment and flexibility.
As an academic discipline
As change management becomes more necessary in the business cycle of organizations, it is beginning to be taught as its own academic disciple at universities. There is a growing number of universities with research units dedicated to the study of organizational change.