In any company, sooner or later, there comes a period of expected or forced organizational change. Therefore, managers need to understand how to properly create and implement change strategies, as well as how to prepare employees for them.
The way change initiatives are managed will determine whether the business thrives or fails.
In this article, we’ll take a look at the main reasons why change initiatives may fail, as well as discuss principles that help predict risks and keep your employees on the path to effective change.
What Is Change Management and Who Conducts It
Change management is a systematic approach to transforming an organization. Additionally, it’s also a relevant discipline in management science. The discipline contains a set of techniques, guidelines, and principles that help implement modification in an organization.
What is meant by change in this case? It’s the addition, modification, or removal of something that can affect company structures. Thus, growing sales in a department can hardly be considered a change. Growth doesn’t alter processes. Whereas new regulations for sales managers or implementing an advanced CRM system can be considered one.
Here are some examples:
- Updating business processes, implementing new regulations;
- Creation of new positions leading to the revision of established processes;
- 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;
- Launching of employee training systems, etc.
The goal of such management is to increase the likelihood of success + reduce company costs and stress for employees. When managers master change management, they learn:
- Change management models. These are general concepts that describe how modification should be implemented;
- Leadership tips for such managers;
- Tips and techniques for dealing with employees affected by the change. Namely, how to motivate and train employees;
- Recommendations and techniques for changing the corporate culture;
- Techniques for introducing technical changes (e.g., ERP systems). Such techniques concern not so much technical as organizational aspects, including employee training, drafting of internal regulations, and so on.
Change initiatives are most often implemented by managers (namely, top or mid-level managers) who are responsible for the project. To be successful, managers are trained in such management.
Why Change Initiatives Fail: 9 Main Reasons
In today’s volatile and unpredictable business environment, change management is becoming part of business culture and business planning.
You don’t just have to decide how to adapt something in some way to your business model so that it always works in risky situations and allows you to prevent failures.
Companies that have gone through significant transformations have made mistakes along the way, and after reading this article, you will be able to avoid them.
That said, here are 9 typical reasons why change management fails.
Reason #1: The Need for Change Is Not Clearly Visible
One of the most important competencies of a leader is the ability to anticipate and prepare well for change before it occurs. This philosophy, for example, is the basis of the entire “business model” of Navy SEAL unit operations. Change-oriented companies can use this principle, focusing on the fact that modification can come both from within the business itself and from the outside.
The need for change can refer to a business model, product adaptation, or even new opportunities in the industry that can take the company to the next development level. Having a clear vision and understanding of the change are some of the key steps in such management that help shape your action plan. At this stage, it’s important to describe the technical approach, tools, and structures needed to successfully implement your initiative.
For example, Ecoark Holdings, Inc. (EARK), a provider of proprietary technologies and services, found that grocery retailers, restaurants, farmers, and caterers were losing millions of dollars because they had to throw away expired products (or simply after they would lose their fresh look).
A key cause of such a problem was inefficient supply chains. Thus, Ecoark Holdings decided to adapt its business model to help food companies reduce these losses by creating a technology solution based on one of its Zest Labs subsidiaries.
The new technology soon helped food companies see that products with shorter shelf life cycles began to arrive on their shelves faster. This is a good example of anticipating necessary changes from the external environment surrounding a business and developing an adequate model focused on an existing need.
Regardless, any company that wants to grow must transform itself significantly several times during its lifecycle.
Reason #2: No Thought-Out Organizational Strategy
Change in the company must happen at an appropriate pace, not too fast and not too slow. In-depth analysis can lead to paralysis and deprive initiatives for change of their potency. However, there’s no need to “rush towards your death.”
Leadership teams should spend enough time developing an appropriate plan and make sure their team is well-equipped and well-prepared for the upcoming alterations.
Chances are, as your company goes through complex transformation processes over several years, you will detect important gaps in the strategic vision. Executives should spend a fair amount of time developing well-thought-out plans and anticipate all contingencies before having to face them in the marketplace.
Reason #3: Wrong Employees Involved
Involve the right people in the transformation process. These can be employees from informal organizations (if there are any), which have an active influence on the company team; and with the right approach, you can make great allies.
At various stages of change implementation, you can consult with members of informal groups and get their opinion. However, note that this should be done carefully and tactfully so that such behavior is not seen as manipulation. Otherwise, you may lose their trust.
It’s also important to remember that engaged employees are not resistant to alterations.
Reason #4: Lack of Consistency
At the planning stage, senior leaders need to do several things; one of them is to gather information from front-line employees to get the best data available. This allows two things to happen:
- First, it gives senior leaders the best possible understanding of the situation. What should we stop doing? What should we start doing? What should we keep doing?
- Second, the process gives the team a sense of meaning and allows them to consciously engage in a process that leads directly to the goal.
As all the necessary information is collected and you have your plan developed, leaders must ask themselves one simple question. Are we all equally “aligned” with the plan and can each of us articulate exactly what the outcome is intended to be?
Nothing is ever perfect, and people may have different opinions on how to get from point A to point B. The main thing is that you are all equally convinced that change is necessary and that this is your top priority.
Remember that information needs to come to employees at the optimal time and from the right level of the organization. When employees first hear about the changes, they will have many questions: “What is the purpose?”, “How will it affect me and my job?”, etc.
Employees will then begin to wonder about the organizational aspects of implementing the change and ask, “What steps do I need to take to innovate?”, “How can I help?”, etc.
It’s essential that the information first reaches top managers/heads of departments because they know how to motivate and engage their subordinates. That said, according to Gallup, 70% of employee engagement depends on managers.
Reason #5: Top Leaders Are Not Involved
So the information has been gathered, the leadership team has developed a plan, and everyone amicably agrees that you all need it.
Now you just have to bring in a consultant or simply submit your plan to your CEO and just watch the magic happen, right? Wrong. Both options stand a good chance of failing. There has to be a leadership team that will constantly shadow the entire change process from start to finish.
All senior leaders in the organization need to be involved in the process. If the change team feels that one or more leaders at any level are losing interest, lowering the priority of the change team’s initiatives, or simply not being included in the process, this can be considered a mission failure.
In the process of implementing major change initiatives within an organization, there will constantly be a temptation to shift priorities, brush off new opportunities, stay in the same customer niche, or attract fresh talent. Be careful not to let it all “derail the train off the track.”
Reason #6: Not All Levels of the Organization Are Involved
The only way to win change for business transformation is to get quality feedback, develop a sound plan, gain alignment, and involve all levels of the organization in implementing the plan.
The most successful management strategies are implemented by every employee in the company; everyone has a role to play.
Control should be decentralized, and members of the change team empowered. Usually, when companies “decide” they need to make serious changes, front-line employees and those “sitting in the trenches” are idle for long periods of time. No one hears them. Whereas, when everyone is involved, each employee feels a sense of belonging to the cause. Rewards and recognition will be a consequence of that.
Organizational change in companies is a difficult process, but in spite of this, every small victory should be highlighted. This will create a positive atmosphere in the team, and your employees will be aware that the process is progressing and everything is on track.
It’s important that managers don’t announce successes prematurely; otherwise, it could lead to a new wave of resistance or a loss of trust. Let employees know the next steps after each win and evaluate your progress.
Reason #7: Implementing Multiple Changes Simultaneously
Introducing a large number of changes all the time can lead to change fatigue. The result is lower employee engagement and productivity.
To avoid such consequences, introduce no more than one innovation at a time. It’s important to gradually train employees, trying to change their thinking through various forms of training.
Your employees can’t just be ordered and confronted with the fact of change; it will be ineffective and may cause resistance. Only open and honest communication between management and subordinates, with a proper explanation of the purpose of the change, will help the team to accept the innovation.
All organizations face transformation in this or that way, but few achieve the results they seek. Proper planning for change, gradual implementation, training of employees, and evaluation of results are fundamental to success.
Reason #8: Loose Changes
Very often, changes do not bring the desired results because they are not “anchored” in the structure of the company by certain actions. This can be rewarding the best employees, moving up the career ladder, etc.
For example, you want to add a more innovative approach to the company. HR managers need to tell the employees about it and encourage the most initiative specialists, those who support the idea of innovation.
In order to successfully anchor the change in the company, it’s important to evaluate it. It can take place throughout the process, immediately after the implementation of the change, or sometime after that. This way, you will give your employees time to get used to it and develop the desired behavior.
Reason #9: The Culture Is Left in Ruins
The foundation of change must be the (corporate) culture which plays two powerful roles during organizational transformation.
Either the leading change team identifies key parts of the corporate culture and links them to change process initiatives. Or that team decides that the culture itself must be changed before the business model changes. And neither of these paths seems easy.
If the culture is broken or simply not properly understood, plans can remain in place. Major changes almost always require complete restructuring and rebranding efforts from within the company. If culture is not prioritized or treated as a “soft” variable, as something that will automatically adapt to the plans, you are sure to get yourself into big trouble in the future.
Conclusions
Change is never easy but always inevitable. Just like Navy SEALs do, always expect change to appear and prepare your team and your plans accordingly.
Any company that doesn’t implement change risks being left behind by the competition since its strategies, structure, information systems, and organizational culture will become obsolete. Change is necessary, but at the same time, must be properly prepared and implemented.
At the same time, remember that the most important element of any organizational change is its direct participants, i.e., people. Most failures with the introduction of changes are connected with the fact that employees are not ready for changes, are not interested in them, and explicitly (or implicitly) resist them. However, this is not a serious reason to give up on organizational change. Focus on the future and the people, and your change will be successful.
