What is change management and what are its main principles?

Change management is when an organization pursues change from its current goals, processes, or technologies to a desirable future goal through a systematic approach. It identifies and lays out a start point, as well as the ‘goal’ – the functional endpoint. The change management charts this journey from start point to end point through a coordinated and structured approach to efficiently implement and control change, as well as to help people adapt to the change.

To successfully use change management theory, you’ll need to implement the four main change management principles:

• To understand the change required.
• To plan the change.
• To implement the change.
• To successfully communicate the change.

What is change management?

Companies must constantly evolve and adapt to remain relevant, and cutting edge. Be these changes updates to tech, changes to law and regulations, underlying social or economic trends, or new competitors, businesses need to meet these challenges head-on. If businesses don’t change, they stagnate  – or in even worse circumstances, they can fail.

But change isn’t always easy – it’s much easier for both employers and employees to stay stuck in the comfortable rut they know. Even when organizations do affect change, considering how to change is the key. This Gartner study suggests that a shocking 50% of change initiatives fail, and only 34% are a clear success.

Changes can include updates to internal processes, ‘softer’ changes to company culture or benefits, overhauling underlying infrastructures, updating tech, overthrowing company hierarchies, or a whole host of other changes to significant components of an organization.

It’s clear that knowing how to run the change process efficiently, empathically and with structure is key knowledge for an HR team, management, and business owners themselves.

It’s crucial to change management effectiveness that a business follows an appropriate chronology of change through this process. This is so that employees feel that the forthcoming change has been transparently laid out, and any new responsibilities or role changes are clear. The future role, or goal, of both the business and the employee, must not be nebulous but set, and achievable.

First off in the change management timeline? Prepare the organization for change. This is to lay the groundwork for the WWWH – who, what, why, how – of the change, its goals, and its impact.

Second, create a vision for this change. The goals you seek must be laid down, concrete and attainable, as must be the plan to achieve such change. This way everybody onboard can be enthusiastic and goal-driven, rather than reaching for a more intangible goal. Then it’s crunch time – time to implement the changes you’ve planned for. Hopefully, the preparatory steps and planning that has gone before will have streamlined this process, and any organizational updates, from new tech and software to new employees, can be efficiently put in place.

Next is to make sure these changes stick, by embedding them within the business’ culture and practices. This may seem easy, with a simple rewrite of the company handbook, but actually, it can be one of the toughest phases of change. That’s because the ‘soft stuff’ within company culture – attitudes, behaviors, and practices – can take longer to evolve, as they’re based on the willing evolution of the employees themselves. It’s crucial to embed these changes, to stop any employees or processes from sliding back into the easy and familiar ‘old ways’.

Finally? Review your progress and analyze the results of your change. Considering change management effectiveness is key in appraising your change process, and providing data for any future efforts. Has the change allowed you to hit your goals? Are you where you wanted to be? Honesty at this stage is key so that any final tweaks or reruns can immediately be undertaken before the organizational change is ‘set’. Yes, it can be tiring to take a step back and implement further change – but it’s important to do so before inefficient or incomplete change takes hold within the firm, and mindsets have to be rewritten once again.

How to implement change management

It’s crucial to start from the beginning and plan all steps in the change management process. Organizational change management begins with setting out your aims, but then it’s plan plan plan.

First, set strategic goals. Identify what the business goals are, and how the change you plan will help the organization to achieve these goals. Next, consider KPIs (key performance indicators). This is crucial, because judging change as ‘good’ or ‘bad’, ‘successful’ or ‘unsuccessful’ is completely subjective. How will you measure the success of this change? Consider what metrics could be useful, and what figures the metrics need to reach. What’s the current state, and what do you want to attain?

A crucial consideration in the planning stage is to lay out how the change will be implemented, and who by. Who will be responsible for implementing each element of the change, and who needs to sign off at each stage in the process? For this, it’s important to break down the change into discrete and identifiable steps – and also acknowledge elements that may occur that fall outside of the change’s remit.

Then – undertake the change! It’s important to carefully place team members to oversee the change process at each step, who also actively look out for stumbling blocks in the change process and help to mitigate these scenarios. All staff members should feel confident, enthusiastic, and empowered within the change process; they know what they need to do, why, and for what end.

Change management models

There are plenty of different change management models which could assist you in managing change – and the appropriateness of one versus another may well rely on you or your business. It’s worth exploring a whole host of change management models, but three effective models to look out for are:

• Nudge Theory
• Lewin’s Change Management Model
• McKinsey 7-S Model

Nudge Theory can be particularly useful for implementing behavioral changes or adapting company culture. It relies on subtle, indirect suggestions, backed up by unequivocal evidence. This way, the employees are ‘nudged’ in the direction of change you desire, without having anything strictly implemented. “Nudging” is considered more effective than strict enforcement, as it allows a feeling of personal choice for the employee. The basic principles of the Nudge Theory are to define the change, consider the employees’ point of view, provide evidence that supports the best options, present the change you suggest as a choice, limit their options, and listen to employee feedback.

Lewin’s Change Management Model meanwhile identifies a three-phase change model, breaking change down into the manageable steps of “unfreeze” – “change” – “refreeze”. Lewin argues that restraining forces influence both group and individual behaviors, and these ultimately control the fate of any change. Driving forces steer employees toward a new state, whilst these restraining forces provide potential resistance to change. Lewin states that these forces must be balanced through effective change communication and employee involvement. You first “unfreeze” current work processes to analyze what can be improved, and make sure everybody understands the need for change. Then the change is undertaken, taking employees with you on the journey. Taking into account any tweaks due to employee feedback, the change is set with a “refreeze”. Lewin’s method works for longer-term change which can be undertaken at a slower pace.

McKinsey 7-S Model is possibly a more complex but also more defined change management model. It is useful when you’re implementing organization-wide changes as it nails down the specifics. The model involves satisfying McKinsey’s seven Ss – strategy, structure, systems, shared values, style, staff, and skills. It isn’t necessary to tackle them in this order, but it’s crucial to consider how they affect each other in a web-like system so that weaknesses can be identified and overcome. The first three are considered the “hard”, non-negotiable elements – strategy, structure, and systems. These are easily influenced by management and are easier to identify. Examples of these three elements might be:

• Strategy – the company wants to up its competitiveness.
• Structure – employing organizational charts.
• Systems – processes for how work should be completed.

The other four are “soft” elements; they’re more difficult to pinpoint and describe and are swayed and shaped by company culture. Keep all seven elements in harmony by considering how they all interact.

The benefits of change management

There are plenty of benefits to change management. Instead of a scattergun approach to change, it provides structured, actionable, and results-driven steps to get change done efficiently and effectively.

The benefits of change management are manifold. As a system, its chronology insists that you check off the main principles as you travel through your change management process. This means it allows you to identify the need for change, muster the resources needed to implement the change, and manage the spending on the change. Because it insists on an organized approach, it reduces the time investment your staff spends implementing change and also helps get staff onboard by supporting them through a transparent change process, run with effective communications.

Cooperation and collaboration are both thus boosted, as everybody is empowered to work toward the same goals (and knows how and why those are the goals).

When time is spent explaining the change process to employees, kickback and resistance are also minimized (particularly useful for more “soft” changes in company culture and the like.

In terms of ‘business as usual’, change management minimizes interruptions to your regular routine through the change, as everybody knows their tasks and what’s expected of them. Productivity and morale are often boosted by appropriate change management, as it’s seen as an honest and collaborative approach that encourages staff to feel ‘part of the team’, responsible, and respected. Overall, change management minimizes the possibility of failure in your undertaken change – a significant benefit!

Six types of organizational change

There are three primary types of change within an organization – evolution, revolution, and directed change. Directed has three subcategories – developmental, transformational, and transitional. Evolutionary change is by far the most common form of organizational change, as small tweaks and adjustments carry a business through the everyday. They seem small, but when looked back upon can create real change!

Revolution is usually a type of change thrust upon a business by external circumstances – losing a big client may mean cutting a section of the workforce for example, or losing a department. Directed change, however, is purposeful, planned change that can be controlled and encourages a business to improve and grow.

Three types of Directed Organizational Change Management (OCM)

Different kinds of directed change require different strategies so they can be implemented most efficiently.

• Developmental

This is a simple method of directed change and just involves a business improving something that it’s currently doing, whether that’s existing processes, skillsets, standards, or conditions.

• Transformational

Transformational change is difficult because it’s a type of change where the future cannot be planned or outright known in detail, as the final iteration is created by the evolution. This change is based on trial and error as a business responds to new information, new boundaries, and new interactions. This cannot perform on a linear trajectory – although a vision and strategy are fundamental, the sequence of change and the change undertaken will be based on the rate at which current values and belief systems change.

• Transitional

Transitional directed change involves replacing an already existing ‘cog’ with something ‘new’. Everyone involved needs to abandon the old way of operating for the new, so an organization has to dismantle the old whilst putting the new in place, which can be challenging. However, in transitional change the future goal can be completely recognized before the change is undertaken, making it perfect for change management tools.

Why change management implementations fail

A refusal to read KPIs and analyze outcomes can lead companies to ‘stick’ with their first, unsuccessful change. Brutal honesty and a willingness to try again are crucial to achieving successful and meaningful change. Another reason that change management models sometimes fail is that the investment wasn’t thoroughly thought through; programs often take much longer, and are much more involved, than initially planned for.

Change management tools

The types of change management tools that might be useful in your change depend on the types of change being undertaken. However, some potentially useful change management tools include:

• Culture Mapping

This constitutes looking at a range of research processes and tools and using them to “map” people’s cultural assets – both tangible and intangible.

• Gantt Charts

Popularized by Henry Gantt, the Gantt Chart is a bar chart illustrating a project schedule. Today, Gantt Charts also illustrate dependencies between the current schedule status and activities.

• Flow charts

Representing a process or workflow, this is a diagram or diagrammatic representation of an algorithm, showing an incremental approach to completing a task. Different tasks are in various boxes, linked with arrows to show the chronology of progress in the process.

• ADKAR analysis

An acronym for awareness, design, knowledge, ability, and reinforcement, the ADKAR model of change helps businesses to better understand and analyze their change. The five elements are foundational for creating change, from a human point of view.

Convinced about the value of following a change management process? Read more in our HR-focused article Change Management with Naveen Bhateja, or expand your understanding of behavioral science’s impact on HR in our recent podcast featuring Ogilvy’s Rory Sutherland.