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“The only constant in life is change” (Heraclitus, circa 535-475 BC). Humans tend to resist change or anything that disrupts the status quo. But change is entirely necessary for businesses to evolve and improve. Without change, processes would remain stagnant, technology and innovation wouldn’t exist, and results would lack any real benefit.
On the other hand, change implemented without a plan or purpose can cause disruptions that lead to detrimental consequences and unachieved goals. COVID-19 provided a global picture of what change thrust upon us without a solid strategy or contingencies in place can look like and how drastic the implications can be. While studies indicate that “most organizational change initiatives (60-70%) fail,” the pandemic has shown us that an organization’s ability to respond to a crisis quickly and adequately may determine its overall success. In other words, a quality response can lead to a business’s overall resilience.
Change will happen, whether by choice or chance—you cannot avoid it. As a result, nine out of 10 executives said organizational agility is critical to business success, according to research reported by Prosci. Additionally, 76% of CEOs said their ability to adapt to change presents a key competitive advantage, according to a PwC survey of 1,150 CEOs.
Knowing that employees may be resistant to change, however, companies must provide guidance to encourage progression and help their staff adapt when “newness” is introduced into the workplace. Changes that might be uncomfortable or disruptive to your employees include:
- New hires
- Changes in leadership
- New systems or processes adopted to reduce costs or improve operations
- Digital upgrades or transformations
- New tools or software integrations
- Expansions or a move to a new office location
- A rebrand or reorganization/business reconfiguration
- A pandemic or another unexpected crisis or natural disaster
- Any other changes impacting the business or its culture
That’s why organizational change management (OCM) is essential for companies navigating transitions and hoping to implement changes seamlessly and efficiently within their business. Adopting an effective OCM model can help ensure that employees are prepared, disruptions are minimal, and direction is clear and consistent, thereby paving the way for realized objectives that work for every business and every person.
What is organizational change management (OCM), and why is it so important?
Organizational changes are necessary to promote innovation, support continued productivity, maximize your return on investment (ROI); and transform your business as trends evolve to remain authoritative, relevant, and resourceful within your industry or discipline. OCM helps leadership introduce needed changes while maintaining a productive and positive workplace that empowers employees to embrace change rather than reject it. It’s a framework for managing the effect of changes within any given organization and a catalyst for performance improvement and transformation.
Uncertainty can diminish employee productivity. OCM offers a strategic and optimal approach to unavoidable innovation that eliminates doubt or ambiguity. Additionally, it helps leadership answer vital questions about the weight of changes being made so that they can better present employees with the relevance and opportunities accompanying the implementation of organizational adjustments. Essentially, OCM stresses the importance of effective management, delegation, and resource-preservation when introducing modifications or renovations in the workplace.
Finally, for employees to thrive in an evolving work environment, leadership must establish an atmosphere of trust and support. The degree of trust instilled can determine employees’ reactions, thoughts, and feelings toward the changes. Therefore, effective change management should take into consideration the “who” behind any adjustment, modification, or renovation, rather than just the “how” or “why.”
One strategy is to involve your employees in the process. This reassures them that change is not something being done to them but instead something that they are a part of. It can also bring different perspectives to the table, opening the door to new ideas and conversations about organizational changes that benefit everyone.
According to an article about leading strategic change published in the Graziadio Business Review, “involvement breeds commitment.” The author states: “In the U.S., where individualism reigns supreme, managers who do not involve their workers in decisions that affect them run the risk of stalled change efforts.”
A common excuse is that it takes too long. However, the time and costs saved in the long term are worth the time and resources spent now. The article cites a manager at Microsoft who determined that companies often overestimate what needs to be done in the short term and how quickly change needs to happen while underestimating what can be done in the long term.
Benefits of Organizational Change Management for Your Business: Choosing the Right OCM Model
A suitable and well-defined OCM model will help prepare and equip individuals to thrive despite the impending changes to their jobs, their roles within the business, or the company overall. Effective OCM models are primarily concerned with the people in the organization. Still, the benefits extend to standalone projects and the enterprise when people can readily and more comfortably adapt, and innovation can take place naturally or with minimal growing pains.
The right OCM approach is essential and can have far-reaching project-specific impacts. Key benefits of effective OCM for your business include:
- Your business is 2x more likely to stay on or under budget
- Your business is 5x more likely to stay on or ahead of schedule
- You’re 6x more likely to achieve project goals
Simply ignoring the need to manage changes throughout your organization can have devastating consequences and negatively impact the outlook and longevity of the business. There are many different OCM models to choose from, but it’s important to select one that best fits your needs and focuses on the people within the organization. In addition, adopting an effective OCM model is a justifiable short-term expense that can help avoid future costs and mitigate risks, such as:
- Dips in productivity
- Lowered employee morale
- Loss of valuable employees
- Delays in projects
- Missed objectives
- Misaligned goals
- Abandoned projects
- Unavailable resources
- Budget concerns
Significant outcomes of your investment could include:
- Companies that invest highly in their employees—including training and development—decrease staff turnover by 65%
- Increasing project spending on training and adoption from 4.5% to 6% of the project budget improves the chances that deployment will meet its performance targets by 30%
- Companies with micro-learning in place experience greater year-over-year improvement in revenue (63%) per full-time employee (FTE)
- An investment as low as $1,500 per employee in knowledge support increases profit margins by an average of 24%
Challenges to Effective OCM: What are the most significant barriers to change?
“Slowness to change usually means fear of the new” (Phillip Crosby).
As previously mentioned, humans are typically resistant to change. How your employees feel about the changes will impact on their willingness to adopt and utilize those changes moving forward. How the changes are implemented will also contribute to your employees’ attitudes toward actively participating in the process.
In other words, if leadership instills confidence and trust in their employees, they will be more likely to engage in the company’s progression. But if they feel their role within the company is threatened, or there are uncertainties about the business’s future and an individual’s future within the organization, their hesitation to go along with the changes will be apparent and can affect continued loyalty, productivity, and operations.
Even the most effective OCM model can prove ineffective if not executed properly and adopted accordingly. If leadership fails to acknowledge potential challenges to organizational change—and how it’s managed—and address those possible roadblocks head-on, they’re missing a vital element of the process.
OCM obstacles or barriers to be aware of include:
- No clear direction or adoption strategy
- Employees unwilling to adopt the changes
- Employees lacking the competencies to adopt the new technology or business processes
- Lack of employee input to the new process design
Oxford’s Organizational Change Management Model: How does one effectively approach OCM?
Oxford believes the proper approach to change management can benefit an organization and its employees. According to data collected by Prosci’s research team, 93% of projects with excellent change management met or exceeded project objectives, compared to 15% with poor change management. However, even with good change management, the success rate dropped to 77%, while fair change management saw a decline in success to 43%. These numbers further demonstrate the importance of adopting a superior OCM model.
Oxford’s approach to OCM supports holistic and successful change, with a dedicated focus on mobilizing adoption and usage, thereby providing exceptional, consistent, and long-term results. People are key, with 98% of change-related critical success factors dependent on the individuals comprising the workforce.
“True and lasting change comes from the bottom up” (Kezar, 2013). Working alongside your employees to include them in the transitions rather than forcing the changes on them from the top-down can encourage transformation that’s permanent and helpful rather than fleeting and damaging. Oxford establishes a solid OCM strategy that moves upward and crosswise rather than downward, introducing a broader scope and encompassing all stakeholder levels—presenting an effective OCM method for every business and person.
Critical success factors for an effective OCM model include:
- Structure
- Active and visible leadership
- Frequent and open communication
- Employee engagement and participation
- Engagement with middle managers
- Integration and engagement with project managers
- To achieve this level of success, an organization must follow three key steps, including:
- Creating a climate for change
- Engaging and enabling the entire organization
- Implementing and sustaining the changes
Lastly, each individual involved in the organization must go through their own journey of adoption to achieve acceptance and ownership of the change, exclusive of any mandates from leadership. This journey consists of:
- Awareness of the change and why it’s happening
- Understanding or a desire for the change based on its benefits to the person
- Acceptance or knowledge of the impacts and a willingness to learn the new process
- Ability or the adoption of the change—showing a genuine commitment to the change
- Reinforcement or taking ownership—advocating for or supporting—the change
Making the Most of OCM for Your Business: Partnering for Success
Successful leaders know it takes a skilled and reliable team to reach a common goal. Implementing changes within your business can be challenging without knowledgeable and valuable help. When change management is handled poorly, its impacts can be catastrophic to your company and its ongoing operations. Most significantly, your employees—and therefore your customers or clientele—are adversely affected.
Therefore, partnering with OCM experts when fulfilling needed changes within your company is a sound short-term investment that can generate long-term payoffs for your organization. Working with a partner who can help you achieve your goals with as little disruption to the workplace as possible is important Most critically, it’s imperative to partner with someone who understands the magnitude of employee satisfaction and how it can positively or negatively influence your overall objectives and profitability.
Together, you can achieve innovative and new ideas with adaptive processes that work for every business and person, facilitating your company’s viability through days, weeks, months, years, and generations of change.