09.12.2020

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The challenges of change management

To remain competitive year after year and keep up with social and economic evolution, companies must transform. But change can only be effective if it’s carefully planned and explained: this is what we call “change management”. In this article, we explore the various issues to consider to successfully carry out a strategy of change.

 

 

Companies and change

 

Why change?

 

Before considering the challenges of change management, it is important to understand why organizations change in the first place.

 

Indeed, change is necessary for any company, in particular to:

 

  • Grow the business and sales
  • Remain competitive
  • Roll out a more promising strategy given the current business environment
  • Comply with new standards
  • Respond to developments in digital technology

 

Focus on digital developments

In recent years, technological progress has accelerated companies’ digitalization and disrupted some aspects of their organization. Digital tools are taking the workplace by storm, transforming professions and requiring new skills. Whatever their line of business, no company can afford to ignore the trend. Besides adapting to change in the business environment to remain competitive, they need to support their employees as they try to keep up with evolving requirements.

 

The nature of changes

 

Change is inevitable to maintain a company’s performance and long-term prospects. It can take many forms, including:

 

  • A new management team
  • A move to new premises
  • A new organization
  • The deployment of a new tool
  • A new distribution of resources
  • New products

 

Whether it’s the rollout of new digital tools, the opening of an e-shop, the winding down of an activity or a move to a new location, changes always have an impact. Such decisions – beneficial as they may be for the company – can disrupt the normal course of events for the affected employees. This is why these transformations must be carefully planned and overseen: the process we call change management.

 

Related: Resistance to change: what are its causes and which are the most effective solutions?

 

 

What is change management?

 

Change management encompasses all the practices that enable the successful implementation of internal changes. These go beyond communication and require true, hands-on support.

 

The importance of change management

 

Change management makes the connection between the company’s strategy, its new plans and all its employees. It’s in the interest of both the company and its employees that the transition be as simple as possible – and clearly explained.

 

To this end, the management needs to help affected employees understand the changes, accept them and take ownership of the plan. Management therefore needs to analyse and consider the impact of the changes on employees’ work.

« According to an IPSOS-ESSEC Chair of Change-Logica survey of 2012, 76% of employees do not always understand the value of changes for their company. »

The stakeholders of change management

 

Inside an organization, change management is everyone’s business. Naturally, the leadership must embody the transformation. But they cannot be the only ones involved: the success of a new strategy depends on the engagement of managers and employees.

 

HR plays an essential role in the success of change management, as their work addresses several key ingredients of transformation:

 

  • Involving all stakeholders from the very beginning of the change process
  • Defining a timeline and communication plans
  • Explaining the case for change
  • Discussing employees’ concerns
  • Providing support during the change process to avoid possible tension, uncertainties and loss of engagement
  • Organizing training

 

The involvement of all stakeholders is a key to success.

 

 

Typology of challenges in change management

 

There are three main types of change management issues companies must address: sociological, psychological and financial.

 

→  Sociological issues

 

For companies, the sociological dimension of change management is essential. Indeed, underestimating the sociological aspects of change is the most common cause of failure for internal transformation plans (leading to conflicts, industrial action, etc.).

 

To mitigate this risk, you must ensure the change makes sense to everyone, demonstrate that it’s consistent with the broader strategy and – above all – that it brings real added value to the organization and to employees’ work. Indeed, employees usually first perceive the challenges on the individual level and only later on a collective basis.

 

In addition, identifying employees’ concerns and pain points relating to change is a basic principle of change management and a key to success. For example, if some employees are worried about changes in working methods, they will need to be reassured through a constructive dialogue that addresses their concerns and clarifies the improvements that the changes will bring to their day-to-day work.

 

To help overcome these psychological obstacles, it is important to include employees as much as possible in the change and decision-making process.

 

Psychological issues

 

You don’t decree change overnight; it takes time to get everyone on board. It is highly advisable to respect and plan for this period of appropriation, to avoid any risk of misunderstanding on the part of employees, demotivation or even significant staff turnover.

 

Inadequate change management can lead to psychological risks for workers that must be taken into account: stress, fatigue, concentration issues, etc. These negative impacts will affect employee wellbeing and performance, should they become confused or demotivated.

 

Financial issues

 

The financial stakes of corporate change management are twofold.

 

On the one hand, employee buy-in can have a direct impact on the company’s long-term results. Indeed, well-implemented change gets employees on board, making them more involved and motivated. Less time is wasted and productivity increases.

 

On the other hand, change has a cost. Take the example of a change in the HRIS that is part of a broader transformation. Budgeting for the project includes both the HRIS itself and the change management. You therefore need to consider the return on investment (ROI) of both these items of expenditure to measure the transformation’s results.

 

Due consideration for all these challenges is essential to successfully manage change in a company. Communication and conversations with employees are important levers for achieving the objectives set. This is particularly true during Covid-19-related disruptions, including the new working conditions with the rise of remote work. Major changes within the company should therefore be very carefully planned, to fit in as well as possible with employees’ everyday practices.

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Illustration credits: https://www.istockphoto.com/fr/portfolio/microvone