Introduction to Change Management

The reasons for change

The environment in which organisations operate is never static. There are fluctuations in the economy, new legislation and other pressures such as competition.

As a result, most organisations could benefit by making sensible changes from time to time. Organisations that do not respond to a change in their environment will not fulfil their potential. At worst, they can fail altogether and become extinct.

This means that you should take a conscious look at what you are doing and make sure that your organisation is in good shape to meet the current challenges that it faces now and in the future.

The penalty for not making changes is very serious, but the benefits of change are substantial.

Here are some of the many good reasons to make practical changes to your organisation:

1. To make the organisation more secure
2. To reduce risks
3. To make more money
4. To improve the lifestyle of people in the organisation
5. To improve the quality of the goods and services

The ways to change an organisation

There are three main ways to change an organisation:

1. Change the way that the organisation is structured.
2. Change the range of goods and services which your organisation produces.
3. Change your organisation’s working methods

More often than not, a change programme will include all three components. However, it is worth bearing in mind that just because you change your products or working methods, it might not be essential to change the structure.

The most important rule when considering a change programme is do not make changes for the sake of it.

"We trained hard, but it seemed that every time we were beginning to form up into teams we would be reorganized. I was to learn later in life that we tend as a nation to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization." (Charlton Ogburn, "Merrill's Marauders", Harpers Magazine, January 1957)

Changing the way an organisation is structured is a big decision, which should not be taken lightly. The main questions to ask are:

1. In what way does our current structure have an adverse affect on the way that we perform?
2. Will a restructuring produce better results?
3. How extensive should a restructure be?

Changing the range of goods or services is a common part of any organisational change and has a profound effect on the performance of an organisation. Often, external forces play their part in creating a need for change. Products or services can become obsolete or new products come into the market. The main questions to ask are:

1. Is our mix of products or services optimal?
2. Should you diversify?
3. Should you focus on core products or services?

Changing the organisation's working methods is worth reviewing from time to time. New supporting technologies emerge and there is always scope to increase efficiency. This is where profit can be made.

The main types of change

There are two main types of change:

• Proactive
• Reactive

Proactive change is when an organisation has a healthy, self-critical approach and resolves to make either gradual and continuous adjustments to its way of working, or pauses from time to time to take a close look at what it is doing and make step-changes.

The advantage of proactive change is that it can be planned, gradual and implemented at the pace that you require, meaning that there is less pressure and less disruption.

Reactive change can be split into two categories.

The first type is unavoidable; for example a new law or an economic downturn. It is something which is forced upon the organisation and the key factors are:

1. How does the organisation react?
2. What changes does it make?
3. How quickly does it start?
4. How long does it take to implement effective changes?

The second type of reactive change might be regarded as avoidable. If an organisation has allowed things to “drift” for a period of time, there will come a time when it no longer functions correctly. When this happens the changes need to be made quickly and under pressure. This is never a good environment in which to introduce changes but is the price that has to be paid for management inaction in the previous years.

"Change should be a friend. It should happen by plan, not by accident." (Philip Crosby, Reflections on Quality)

It is best to be honest about the need for change and to avoid recriminations about how you arrived at this point. The blame game is not a good friend of effective change.

Successful organisations tend to look ahead and plan their proactive change. They will often identify what year and what time period they will undertake a major review and major change programme.

Successful organisations are also very quick to notice when external pressures mean that they should introduce some reactive changes.

The benefits of change

An organisation cannot be changed overnight. It requires a series of incremental changes, which fit together and transform an organisation. The purpose of introducing changes to an organisation is to derive one or more of the following primary benefits:

1. An improvement in the quality of the goods or services provided by the organisation – all organisations have scope to improve their quality.
2. An increase in efficiency and productivity - it is always possible to find better ways of achieving the same result.
3. An increase in the range of goods or services provided – there is always a decision to be made about whether there is a case for diversification or concentrating on core services.

"It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." (Charles Darwin)

If these primary benefits are derived, it is possible to create a virtuous circle, which results in further, equally important, secondary benefits:

1. An enhanced reputation
2. Improved financial performance
3. Greater Long term security

"The most successful businessman is the man who holds onto the old just as long as it is good, and grabs the new just as soon as it is better." (Lee Lococca)

Finally, the combined effect of the primary and secondary benefits is to make the organisation a better place to work. Success breeds success.

It is better to work in a place which is going well and has few complaints. Confidence and morale increases and this inevitably leads to a further enhancement of reputation and a new cycle of improvements.

Members of a strong team respond to an environment where their view on how things should be done is sought and respected. People “at the coal face” are usually better at identifying new ways to do things, providing they are given the scope to come up with suggestions in a way that does not put their own reputation at risk.

Any organisation which introduces small changes successfully invariably continues to make incremental changes until their fortunes are improved dramatically.

The myths of change

There are few fields of endeavour that are surrounded by as much “smoke and mirrors” as change management. To some degree, folklore has built up about the difficulties of change management. (If you type the words “why change fails” into a search engine, the results outnumber “why change succeeds” by approximately 50 to 1.)

Of course, any management action requires effort and skill and will have its share of obstacles.

"Any change, even a change for the better, is always accompanied by drawbacks and discomforts." (Arnold Bennett)

However, problems can be overcome by managing change in a simple and straightforward manner. Change needs common sense and leadership.

Myth 1 – Change is difficult.

If this were the case, organisations today would be the same as they were 30 years ago. The fact is that most organisations have introduced change on an unprecedented scale. The reality that organisations survive and prosper is testament to the fact that change is going on around us, quite successfully, all of the time.

Myth 2 – Change takes a long time.

It is true that major change programmes require adequate time, but not everything has to be done on a grand scale. Replacing a bad process with a better one can be executed in a very short time.

Myth 3 – Change is costly.

Again this depends on the scale of the change. However, it is wrong to base a change programme on cost. It would certainly be bad economics if an organisation went out of business because it couldn’t afford to make changes.

Myth 4 – People are resistant to change.

This goes against all the indicators to the contrary. In every aspect of life, people prove that they crave change; in fashion, politics and music. In our experience, virtually nobody believes that their current working lives are exactly as they want them to be. However, what they do not like is poorly planned change, forced upon them, giving them more work to do and more pressure on top of their existing roles and responsibilities.

"All change is not growth, as all movement is not forward." (Ellen Glasgow)

Change is not without effort, but the alternative is to allow the organisation to slowly disintegrate. Change should be considered as an investment, not a chore or a cost.

How can you change?

There are three main stages in making an organisation change successfully.

1. Assessing the need for change

   It is essential to have a very clear idea about the reasons for change and whether the organisation needs small adjustments or a major overhaul.

2. Planning the change programme

   As soon as there is a clear view of the need for change, it is essential that a plan is prepared to determine precisely what changes could be made to respond to the new environment that the organisation faces.

3. Implementing the change programme

   How you implement a change programme is as important as what you do. It requires precision, leadership and flexibility if the organisation is to be successful during and after the change programme.

Next Steps

For further information on Change Management, see:

01 - Assessing the Need for Organisational Change - Simply Put!

02 - Planning an Organisational Change Programme - Simply Put!

03 - Implementing an Organisational Change Programme - Simply Put!