The wheel of change is ushering in an unprecedented economic, political, and social transformation. We are at a historical turning point. Violent transformational change is altering the world, as we know it. This is dramatically transforming the business environment. It is shifting long held business assumptions. Leaders must transform their organizations or fall by the wayside.
Organizational change has only a 30% chance of achieving success. Most lack the change management tools to bring about effective organizational change. Moreover, they embark on change management without a clear understanding of the issues of organizational change. The causes of failure are a general resistance to change, lack of process and methodology, and failure to acknowledge the impact change has on the people. The key considerations to overcome the barriers to successful change management are strategic compatibility, degree of change, scale and scope, pace, style, and creating a guiding coalition.
The goals of change management must align with the organization’s strategic plan. For the project to succeed, the goals must be precise and easily understood. Whereas, a vaguely defined project with uncertain goals and does not comply with a company’s strategy will fail.
Degree of Change
Some organizational changes are easy, some more difficult. Changing an organization’s structure, systems, and strategies are difficult to accomplish. By contrast, change such as upgrading skillsets and minor changes to the reporting structure are more easily accomplished. In this time of radical transformation of the business environment organizations, if they are to survive, must undertake bold, ambitious, arduous, transformational change. Organizations that focus solely on minor organizational changes will fail.
Scale and Scope
Scale is the amount of resources the change requires including human resources, capital, and time investment relative to organizational size. Large-scale change involves more risk. Managing large-scale projects requires senior leadership commitment, stakeholder buy-in, exceptional project management, and a communications plan. Change management that neglects any one of these elements will undoubtedly fail.
The project scope can be limited to a department or companywide. In today’s environment, companies require large-scope change management to keep pace with the transformational change that is occurring in the business environment.
Pace is the speed at which an organization can absorb change. As the pace of change increases, so does the risk. The world is experiencing unprecedented pace of social, political, and economic change. Given the scope, scale, and pace of change, organizations need to mitigate the risk of undertaking large-scale transformational change management. Companies that do not react to market conditions in a timely manner become a tail ender and subject to financial failure. Kodak was late in adapting its organization to a digital world and is now in Chapter 11. By contrast, IBM undertook fast successful large-scale transformational organizational change and flourishing.
Style is the leadership approach to change management. It can be top down or bottom up. Radical top-down, large-scale, fast-paced, transformational, planned change, that seeks to obtain staff buy in, best overcomes employee resistance to change. Leadership must ensure that followers receive appropriate skills training necessary for change. To overcome staff resistance, leaders must engage in intensive communications accentuating the necessity for transformational change and a sense of urgency. Staff buy in can migrate from a top down approach to become a bottom up initiative.
A Guiding Coalition
No one individual can accomplish successful change management on his or her own. It requires a guiding coalition of senior leaders with a sense of urgency, who is committed to radical, large-scale, fast-paced, transformational change. These senior leaders must empower a broad base of committed followers to implement change removing the barriers to the carefully planned transformational change. Employees can quickly determine if there is a lack of management commitment and resist change. Accordingly, senior leadership must convincingly demonstrate their commitment to radical transformational change.
Slashing expense, thereby making corporate financials attractive to Wall Street, does not accomplish radical organizational transformational change. This is merely financial transformation. Transformational organizational change must take a long-term view and adapt to the unprecedented economic, political, and social transformation occurring in the business environment.
What to do?
Organizations must undertake strategic planning, questioning the validity of current business vision, mission, strategy, values, and business model. They must ask, “How are the changing economic, social, and political drivers affecting our business?” “Do we have the right business strategy and organizational structure for today and tomorrow?” “Who are our customers today and who will they be tomorrow?” “Is our business going to be another Kodak or do we have to change like IBM?” Nothing short of a radical transformation of today’s organizations will satisfy the upheaval that is bringing about unprecedented change.
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