There’s a famous quote by former US president John F. Kennedy that goes “Change is the law of life and those who look only to the past or present are certain to miss the future.”
Nowadays, for a company to become successful, it needs to be able to quickly adapt to change. The business world is constantly evolving at a rapid pace, and if you own a company, the only way you can ensure its success or even just its survival in a cutthroat industry is to prepare and adapt to change, in whatever form it may come.
Organizational changes come almost daily in any business. Take a merger, for instance. While carrying out the technical side of the change is certainly difficult and complicated, it’s getting people on board that can make or break the success of your venture.
This is why change management in business is so critical. It can literally affect the future of your company.
Defining Change Management
Simply put, change management deals with the people side of change. Whether you’re introducing a new technology to streamline work processes or creating a new organization, you can only see the full potential of such changes if you bring your people along.
It is both a competence and a process, and what it does is to set up a structured process and introduce a set of tools that will help the people in your organization adopt and apply a specific change in their daily work.
Types of Organizational Changes
There are three common types of changes that often occur in many businesses:
- Development – This refers to any change that streamlines and improves on previously set processes, systems, and strategies. An example is when a new technology is implemented that you expect to improve your company’s operations.
- Transitional – This type changes the current state of an organization to a new one so as to solve a particular problem. Mergers and acquisitions are some examples of this change.
- Transformational – This is a radical and fundamental change that ultimately seeks to alter a company’s core aspects, such as its values, culture, and operations. Changes in leadership and organizational culture are prime examples of this kind. Times of crises are also another form, with the recent COVID-19 pandemic being a relevant example.
Reasons Why You Need to Employ Change Management
- Change can only happen if you involve the people.
When you’re managing your business, it’s easy enough to think of change from just an organizational perspective. You can get carried away with thinking about technical aspects such as data and systems integration, financial structuring, and the like. However, keep in mind that permanent change can only occur as a result of cumulative individual changes in your employees. This means that the organization-wide transformation you’re hoping for can only happen if Peter, John, and Mary make the necessary adjustments and do their daily tasks differently.
- Poor management, or the lack of it, can be expensive.
So what happens if you don’t do your part and neglect the people side of change? It can bring about some dire consequences. For one thing, your employees’ morale can suffer, which can, in turn, affect their productivity and even lead to valued employees leaving your organization. This low morale can affect even your suppliers and customers. Such negative effects can have costly consequences on your company’s finances. Fortunately, the above-mentioned issues can be resolved through effective change management strategies.
- It can increase a project’s chances of success.
Studies have shown that change management can increase a project’s probability of meeting its objectives. In such research, it was revealed that the majority of companies with excellent change management practices either met or exceeded their objectives, while those with poor strategies or had none at all underperformed. In short, change management had a direct effect as to a project’s staying within budget and on schedule.
In these uncertain times, companies have to learn to adapt to constantly changing ways of working and communicating. Adjusting to such changes can be challenging, but with the help of a professional change management firm, they can ensure the future of their organizations.