Over 70 percent of change management efforts fail, according to global management consulting firm McKinsey & Company. This is due to several reasons, none of which will probably be a surprise: low employee engagement, lack of management support, poor collaboration, and no accountability. The real surprise is why—after knowing all the reasons change efforts fail—we haven’t found a way to remedy the situation.
Because the benefits are significant. A different McKinsey study points out that companies with excellent change management efforts gained an average of 143 percent of the returns they expected. So, when organizations manage change well, they see a positive change to the bottom line.
When do organizations need to think about change management?
It would be tempting to say, “all the time,” but that’s not really a fair answer. However, there are moments when organizations should consciously ask the question, “Would it be helpful to include a change management activity in our plans?” Here are five regularly occurring situations where it could make some sense:
1. When there’s something new happening
Many organizations think about change management for large-scale implementations like bringing a new technology solution in house or adding a new product line. But what about the small changes like a new policy or procedure? Those are often the changes that frustrate employees the most. Not because the change is bad or wrong, but because employees weren’t adequately prepared.
Organizations would benefit by thinking about change activity in small changes as well as large ones. It’s an opportunity to set expectations and make sure everyone is on the same page.
2. When something needs to be fixed
Companies regularly find out that a process they thought was working fine isn’t working anymore. Or they discover that a piece of equipment is broken and instead of repairing it, they’re going to have to replace it with a newer (and different) model. Stuff happens, and organizations have to react to it. Makes total business sense. But that doesn’t mean the process of fixing what’s broken is easy.
Creating process maps can help organizations communicate with employees about the process of change. Managers can share the steps to move from the current state to the desired one.
3. When business is falling behind
We’re not just talking about the sales numbers here. Companies might find that a lack of infrastructure is holding them back. For example, lots of companies today rely on technology to reduce redundancies and help their business grow. Older hardware and software could create outages that limit the company’s ability to service customers.
Technology is a part of the company’s brand, both for customers and employees. When people can deposit a check, buy shoes, schedule a doctor’s appointment, and much more on the internet… they expect the latest and greatest. Organizations cannot afford to fall behind customer and employee expectations.
4. When the company wants to lead the competition
Every organization has to make the strategic decision whether they will lead or lag the market. The decision could be based on the likelihood of your industry for disruption. For organizations that choose to lead, that means change will happen proactively, faster, and more frequently. And for organizations that choose to lag, be prepared to react.
Whether you lead or lag, change management to some extent becomes a part of culture. But dealing with change proactively is significantly different than reacting to it.
5. When an employee leaves—or arrives for that matter
The four situations we’ve discussed so far have dealt with changes in processes and strategy. Change management is also necessary when the organization makes people changes. Again, it’s not because the new hire or the departing employee are evil. Each of us is different and we all have to get used to new working, communication, and leadership styles.
In a recent article, author Abby Falik suggests that individuals should create “user manuals” to share how we like to work and our quirks. This could be a powerful orientation or onboarding activity.
Formal change management efforts pay off
Some might look at this list and say, “This sure looks like companies should consider change management ‘all the time.'” But when you look closer, that’s not the case. There is some truth to the statement “If it ain’t broke, don’t fix it.”
But when change is necessary, organizations need to embrace change management and not make assumptions like “it’s a small change” or “no one will notice” or “we did change management training a couple of years ago.” Investing in change management is not only about mitigating setbacks. It’s about realizing gains.
P.S. I hope you’ll join me and the Udemy for Business team on Wednesday, September 19, 2018 at 9:30am Pacific/11:30am Central/12:30pm Eastern for a discussion about “5 Ways to Use Change Management for Positive Impact.” Think of the webinar as part two in a series about change management. We’ll be offering real-life examples of how to implement change management in these situations. Registration details can be found here. Oh, and if you can’t join us, sign up anyway and we’ll make sure you get the recording. I look forward to seeing you then!
About Udemy for Business:
Udemy for Business is a learning platform that helps companies stay competitive in today’s rapidly changing workplace by offering fresh, relevant on-demand learning content, curated from the Udemy marketplace. Our mission is to help employees do whatever comes next—whether that’s the next project to do, skill to learn, or role to master. We’d love to partner with you on your employee development needs. Get in touch with us at firstname.lastname@example.org