Posted by Mary Milorrie Campos
Jul 03, 2023
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Is your company going through changes? Effective organizational change management can help you handle them successfully. Here’s what you should know about change management and why it matters.
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This article covers:
What is organizational change management?
Organizational change management (OCM) is the systematic approach to any transformations or transitions within an entity. This top-down process aims to guide the entire organization — from executives to employees — toward the successful implementation of change. When executed well, OCM minimizes resistance to change and boosts value creation.
Why is organizational change management important?
Innovation is an unstoppable force. Whether you like it or not, you’ll always meet innovative competitors out there.
But wouldn’t it be better if you’ll be that innovative disruptor instead of the company that got left behind?
To remain competitive, you must be open to exploring new opportunities, trends and possibilities. And managing the change that comes with these disruptions is vital for your success.
To be specific, here are the reasons why organizational change management is important:
- Encourages employee participation: It encourages your employees to participate and share their input, which increases the chance of your initiative’s successful implementation.
- Empowers leaders: It empowers the leaders in your organization, pushing them to be more accountable of their decisions and actions.
- Commitment to change: It helps your employees to understand and commit to change.
- Resolves potential concerns: It provides a strategic way to address any concerns from affected departments and employees.
- Creates people-centric strategies: It is essential in developing people-centric strategies for change adoption.
- Optimizes resources: It shows an optimal way to maximize your time and resources.
- Improves company performance: If implemented properly, it improves company performance and boosts employee morale.
- Increases chances of success: It increases the likelihood of success.
- Builds a long-term culture: Change management is also essential to reducing the chances of reverting to pre-change practices and building a long-term culture.
- Develops resilience: Lastly, it makes your business more competitive and resilient against future disruptions.
What triggers organizational change?
Several factors can trigger change within an organization, such as:
- Changing industry regulations
- Technological advancements
- Shifting consumer demands
- Economic and political volatility
- Company merger, acquisitions, and divestitures
- New management
- Adoption of new business models
- Development of new product
- New work arrangement
...and more.
The impacts of these changes can vary based on their magnitude, which we’ll cover in the section below.
Types of organizational change
The Harvard Business School Online (HBS Online), an online platform dedicated to business education, classified organizational change into two main types: adaptive and transformational.
Adaptive changes are small and incremental changes that involve refining existing processes, products and software. It requires minor yet constant adjustments over time to address recurring business challenges.
Unlike transformational changes, adaptive changes don’t affect the entire organization. Instead, it applies more to departmental levels.
To deal with adaptive changes, managers should be methodical and analytical.
Transformational changes, meanwhile, are large-scale changes with a wider scope, often affecting the entire organization. It requires major transformations in business models, processes, organizational structure and other company-wide initiatives.
Whereas adaptive changes happen over time, transformational changes are more dramatic and sudden in nature.
Because of this, managers must influence their teams to understand why a change is necessary. They should also motivate each member to embrace it, especially those who show signs of resistance to change.
Related: How Can Accounting Firms Deal with Resistance to Change?
Who is responsible for change management?
Business leaders are expected to be at the forefront of change management. As mentioned earlier, it’s a top-down approach.
For adaptive changes, department heads or team leaders can oversee the entire process.
Meanwhile, transformational changes may require the involvement of company executives like the CEO, CFO and other key decision-makers. Managers and team leaders remain responsible for their department’s adherence to any applicable adjustments.
Skills to help you manage change
Here are some of the key change management skills that can help you thread through your ongoing transformation initiatives.
- Conflict management
- Effective
business communication skills
, especially active listening - Strong organizational skills
- Attention to details
- Emotional intelligence
- Problem-solving and decision-making skills
- Analytical skills
Knowing how to delegate tasks without micromanaging your team is also important. Not only does it streamline the entire process but also make your staff feel included.
Other factors to consider when implementing change
Organizational change management addresses these three core areas, according to the Office of Change Management and Organizational Excellence of The Pennsylvania State University:
- Communication: OCM should get the communication “simplified, clear and right the first time” among all levels — from executives to sponsors, to frontline employees.
- Training: To guarantee a project’s success, it’s also necessary to assess the skills and knowledge of affected stakeholders. From there, change management leaders should make sure that the employees receive proper training and support. This way, the latter will have the skills needed to work through potential changes.
- Change readiness: OCM aims to understand the level of readiness of people impacted by any transition and the best way to deal with it.
For more information about these three core areas, check out this resource.
4 tips for managing organizational change
Change happens everywhere. It's as constant as the tricking of time. However, embracing change is easier said than done, especially on an organizational level.
To help you get started, we distilled these four organizational change management tips:
1. Focus on your people
In an entity, change is only possible if you can garner the support of your employees. To do this, consider these best practices:
a. Define what the organizational change is all about — what it is, the changes you’ll have to go through and why it matters.
b. Create a roadmap of how the organization, especially its stakeholders, will be affected.
c. Educate your employees about the change.
d. Identify potential change leaders who can communicate your vision among your employees.
e. Maintain open communication between management and employees.
f. Train and mentor employees in using modern technology or using productivity methods.
Always remember that you can't force your employees to embrace change. It may work for a while, but your employees might only revert to their old practices over time.
Any initiative you plan to implement must be intentionally integrated into your business practices until it becomes a normal part of your daily operations.
2. Align your plans with your goals
To get the most out of this initiative, you should identify the goals you want to achieve. By doing so, you can develop a plan that will guide your organization toward achieving that goal.
3. Celebrate small wins
Embracing change, especially the transformational ones, moves you out of your comfort zone and hurls you out into the unknown.
That’s why whether you’re still implementing changes or close to the finish line, you deserve to celebrate your small wins, especially the strides made by your employees.
4. Track your performance
Change management is an ongoing process, even after you’ve successfully executed an organizational transition. Always take your time to track your performance, conduct regular training and skills development sessions and readjust your goals as necessary to increase your chances of success.
Expand your organization’s capacity amid changes
Navigating your way through complex organizational changes can put a strain on your human resources. If you’re looking for options on how to maintain your staff’s productivity amid ongoing changes, consider offloading some tasks to an outsourced service provider.
Learn how D&V Philippines can expand the capability of your finance and accounting department. Download our content offer, Premier CFO Solutions to find out how we can support your CFO and your organization. You can also talk to our experts for more information.
This article was first published on 10 October 2019 and updated on 03 July 2023 for relevance and comprehensiveness. Edited and updated by: Mary Milorrie Campos
