What is Change Management

1. What is change management?

Change management is the process of guiding successful change within an organization. It can include a number of stages from planning and execution to monitoring and embedding change.

The Change Management Institute defines change management as follows:

“Change management represents a domain of principles and practices that enable stakeholders of change to adopt the mindsets, behaviors and capabilities required for that change to deliver full business value. It focuses on people.”

The focus on people is one of the most significant parts of the above definition, because successful change management is very much about people, culture and behavior. It is often combined with project management, and is viewed as the ‘softer’ side of implementing projects.

But despite this perception, change management is absolutely essential for project success, and to ensure targeted benefits are fully realized. Your business could implement a new state-of-the-art ERP system, for example, but it won’t deliver the value your business needs if your people aren’t willing or able to use it.

Standard changes or business projects that might require change management include:

• Upgrading or replacing a critical system
• Rolling out a new product line
• Restructuring the organization
• Merging with another company
• Relocating to a new facility
• Meeting new regulations or guidelines

Read:Five real accounts of change management in action, and learn about the success factors that drive or support effective

2. How does change management work?

Change doesn’t come naturally to people. Or to the organizations for which they work. Effective change management works by engaging people with the proposed change, getting their buy-in, and bringing them along on the journey.

As Celonis Customer Transformation Advisor, Kerry Brown explained during our Pioneering Sustainable Change and Value with Change Management webinar:

“If I were to boil down change management into one sentence, it’s about managing expectations and accountability. If there’s a match on expectations and accountability then there’s success in the outcomes.”

There are multiple frameworks for change management (more on that later) but most change management models encompass common stages like:

• Preparing the organization for the change ahead and encouraging buy-in
• Developing a change management strategy or plan
• Implementing the change and supporting those affected
• Embedding new expectations and behaviors
• Reviewing the change initiative to see if it has been a success

Change management drives employee engagement, and improves communication and collaboration, so change can take place more quickly and efficiently. It also ensures changes are evaluated, approved and implemented with minimal risk to business operations.

Download: The Road to Go-Live Handbook for Running a Data-Driven System Migration

3. What are the benefits of effective change management?

Change management improves communication and collaboration around change projects. So what are the benefits of this approach? Here are six of the top ones:

1. Faster time to value: By empowering individuals to navigate change more quickly, change management helps organizations reduce the time to value and realize a faster return on their transformation projects. It also makes those projects more successful, with better outcomes.
2. Improved employee morale: By giving employees a clear structure for change, listening to their feedback, and making them feel they are an integral part of the process, change management can boost employee morale and create positivity around the change project.
3. Risk management: Change inherently incurs some risk. The project manager will address more obvious risks such as technical issues, but change management allows the business to manage more subtle risks such as communication gaps, cultural clashes and resistance to change that could just as easily disrupt business operations.
4. Promoting innovation: Change brings opportunities and, by supporting and encouraging each employee to get involved, organizations can benefit from their experience and creativity to innovate and explore exciting new possibilities.
5. Sustainable change: Change management doesn’t just support the implementation of change. It also ensures the change management team can fully embed change into the organization and that it is sustainable so it can deliver the value the business expects.
6. Handling frequent change: Change is becoming more frequent as the environments in which organizations operate evolve rapidly. Change management allows businesses to get better at change by standardizing structures and frameworks, which can be particularly useful when emergency changes need to be made.

Read: Change management is as much about the people as it is the processes

4. What are the challenges of effective change management?

Many of the challenges a change leader or change manager will face when implementing a transformation project relate to people. People are unpredictable, because their behaviors are informed by a complex combination of experiences, biases, needs, fears, and expectations, that vary from one individual to another.

It may be that an employee enjoys the comfort of the status quo, or that they feel the suggested change is a criticism of the way they currently work. They may have negatively experienced change projects in the past. They may fear losing power or control, or in some cases losing their jobs. Or it may simply be that they don’t fully understand the need for organizational change or the way it will benefit the business.

To overcome these challenges, change leaders need to understand how people feel about a proposed change and be able to identify where resistance is likely to come from.

The four main reasons people resist change are:

• I didn't know
• I wasn’t able
• I wasn’t informed
• I’m not willing

Communication, involvement, training, coaching, and ongoing support will help guide the employee towards changing their behavior and embedding change.

Read: Level up your change management with 15 dos and don’ts from experts

5. What are popular models for managing change?

A variety of change management models have emerged over the years to support and guide businesses, and to overcome the challenges outlined above.

Choosing the right change management strategy will depend on your business, and what you are trying to achieve. It may be that you take elements from multiple models to form your own approach. Here are four popular change management models:

The McKinsey 7-S Framework

Developed in the 1970s, this model maps seven interrelated factors that influence an organization's ability to change. The first three are strategy, structure and system, which are identified as hard elements that are easier to control. The other four are shared values, staff, style, and skills, which are classified as soft elements and are harder to control and change. This model is useful in an organizational restructure to see what the impact will be across the company.

The Satir Change Model

Developed by Virginia Satir, this model identifies four stages and two key events within the change process. Stage one, the old status quo, is disrupted by the introduction of a new element which will initiate the second stage, chaos. The chaos phase is brought to an end by a transforming idea that shows the way forward. This is followed by the integration stage and the final stage which is the new status quo. This model is useful to understand the emotional state of employees involved in significant change.

Kotter’s 8 Steps for Leading Change

Developed by Harvard professor Dr. John Kotter, this eight-step framework focuses on the psychology behind embracing organizational change. These eight steps are creating a sense of urgency, building a guiding coalition, forming your strategic vision, enlisting a volunteer army, enabling action by removing barriers, generating short-term wins, sustaining acceleration, and instituting change. This approach to change takes place over a long period of time and involves many stages of preparation, meaning it is most suited to larger, long-term organizational change initiatives.

Lewin’s Change Management Model

Developed in the 1950s by Kurt Lewin, this model breaks the change management process into three stages. The first stage is ‘unfreeze’, where businesses prepare for the change by communicating with employees, gaining support and explaining why change is necessary. The second stage is ‘change’, the implementation phase, which should include as many people as possible to ensure the organizational change is fully embraced. The third stage is ‘refreeze’ where the change is monitored to see how new processes work and ensure change is adopted in the long-term. This relatively simple model can be effective for smaller change projects.

6. The three pillars of effective change management

The three pillars of effective change management are:

• People
• Processes
• Technology

Today, when we think about change management, digital transformation is often at the heart of the change initiative. In fact, when a Prosci research study asked participants about the biggest changes their organizations expected on the horizon, the most popular answer was ‘technology and digital transformation’.

This trend means there’s usually a technology element to any planned change. Even when digital transformation isn’t the goal, there’s likely to be some form of systems integration or adoption involved in any major organizational change.

And we already know that every transformation is about people. Technology might be the catalyst, but it’s people that will make it work. So the first two pillars of change management are people and technology. The third pillar of change management is one that often gets overlooked, and that’s processes.

Processes are the lifeblood of an organization, so successful change requires process to be understood and adapted. Technology is used to improve processes, and changes in process impact the people doing the work. Addressing any of the pillars within this change management foundation individually, without considering the other two, is problematic.

7. How Process Intelligence supports change management

Process Intelligence supports change agents throughout all phases of change projects. Through the Celonis Process Intelligence Graph it can support:

Planning: By providing an end-to-end view of how business processes actually run and interact – a process digital twin – Process Intelligence allows change leaders to understand the status quo, identify areas in need of transformation, and make the case for change based on the value it will drive.

Execution: During the execution phase, Process Intelligence can pinpoint areas where support is needed to help people need to do their jobs differently and make the necessary change. By visualizing processes across functions, and how small process changes will impact the business, individuals can better understand their role in the change process, as well as the rationale for new ways of working.

Monitoring: Once changes are implemented, Process Intelligence allows change agents to track success metrics to see if new behaviors are being sustained, and to ensure value is being realized. It can help to communicate the positive impact of organizational change, and also identify areas for further improvement.

Read: 5 change management pillars: Why process mining is a game changer

Find out how Autodesk accelerated and enhanced their system migration into a system transformation, saving four to six weeks of project time.

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