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Nicole Tiefensee

12 Reasons Why Change Management Is Important

If you want to bring meaningful change to complex organizations, you need to understand why change management is so important (spoiler: it's your biggest ally).

The value of change management in organizational settings cannot be overstated.

Businesses can't afford to stand still and get stuck in their ways. But when you're trying to coordinate a large-scale shift in behavior across tens, hundreds, or even thousands of people, each with their own opinions and attitudes towards the changes being implemented, you need to have a plan in place to counter resistance, create buy-in, and ultimately convince people that the hassle of the transition is going to be worth it.

This is where change management has a part to play. So, let's get stuck into why change management is so important - including hearing from some organizational change experts who can vouch for its value first-hand.

What is change management?

In short, change management is a process that supports continuous improvement by directing, guiding, and monitoring change initiatives to ensure their success.

Think of it like this: would you like it if you turned up to work one morning only to be told that all the IT systems you were accustomed to using had been totally switched out for something else? Or would you rather receive plenty of warning ahead of the change, along with support and training, so that when the switch over happens, you're confident that you know what to do? 

The latter is an example of a managed changed. The former example...well, we might generously call this "unmanaged" change. But most people would probably just call it chaos.

To be effective, change management needs to be a part of each step of a planned change project, as well as an ongoing process throughout all stages - including the planning and follow-up phases.

Further reading ➡️ guide people through the stages of change with the change curve model.

Why change management is important

The simple answer for why change management is so important is that it helps ensure that organizational changes are successful. Its purpose is to get from point A to point B with minimum losses and maximum gains, delivering a smooth transition and ultimately a change that "sticks" (rather than people slowly drifting back to the old ways of doing things).

Additionally, if change isn't managed, it can lead to a whole host of problems - from demoralized employees growing resentful of the disorganized situation they are being forced to navigate, to procedural errors in implementation leading to the loss of important records and data.

With change management, these negative outcomes can be deftly avoided.

12 reasons change management is critical to business success

To dig deeper into why change management is such a vital consideration in business, we talked to Rahul Sirimanna, Director of Delivery Excellence at the Royal Bank of Canada (RBC), and Kent H. Frazier, Co-Founder and CEO of ParadoxEdge. They gave us a unique look into their experiences with leading organizational change in our recent webinar “Leading Change in Resource Management”.

These are the twelve reasons why they believe change management is so critical:

1) Change is inevitable

Businesses cannot avoid change. Even if internal changes such as leadership changes are kept to a minimum, external factors can force your hand.

Rather than thinking of change as an event that happens at a certain point in time (say, a planned implementation date), try considering change as a natural part of your organization's life cycle — as something that will inevitably happen to your business in some form or another over time. Being able to anticipate change and deal with it before it becomes disruptive helps keep your company on track, and allows you to adapt more quickly when changes do occur.

2) It strengthens your adaptability mechanisms

You can't sustain success if you're not able to adjust to changing market conditions. A change management strategy helps you modify your plans and processes in response to new opportunities and risks.

In order to successfully manage change, you first have to understand what constitutes change within your organization and how it affects your business. This might include changes in the law or regulations (e.g., GDPR), changes in customer preferences (e.g., more people shopping online), or changes in technology.

Once you know where your organization sits on the spectrum of change readiness, you can set up a plan of action for improving your adaptability mechanisms — which could include things like having a cross-functional team dedicated to implementing new business strategies or conducting regular training for executives on new technologies.

3) It helps mitigate resource-related risks

You may have an idea for a transformation initiative that needs to be put into action, but what if you don't have the people to execute it? Perhaps it's an issue of capacity, with people being too busy with their day-to-day workload in order to be able to commit time to your project? Or perhaps there's a skills gap in your organization that you need to fill before you start implementing the changes you want to see?

Change management allows you to get out ahead of these concerns. By putting plans in place, you can identify the right people, systems, and processes needed to execute your initiatives effectively, and seek out additional resources as needed before your change project gets underway.

4) It helps you understand and predict changing customer needs

Understanding the needs of your customers is an ongoing challenge.

Change management can help you remain attuned to new ways of satisfying their desires by helping anticipate changes in their needs and behaviors, while also helping your team develop methods for understanding these changing needs more quickly than your competitors do.

We are constantly changing, adapting, and adjusting to the world around us. The same goes for our customers, who are also in a constant state of growth, change and evolution. Without change management, your company could easily get left behind as new waves of technology, regulation, and culture come into play.

5) It is critical to success in the Age of Digital Transformation

Digital technology has become an integral part of our lives and businesses. The Digital Age has created an environment where organizations must constantly adapt and evolve to meet the needs of their customers, employees, and partners.

Companies that have understood why organizational change management is important and embraced this new reality are achieving competitive success as well as improved employee satisfaction and communications. They're also enjoying greater agility in responding to market changes, faster time-to-market for new products and services, lower costs and increased productivity.

These organizations have embraced change management processes that enable them to manage this constant state of flux while remaining focused on the goal of strategic differentiation.

6) It helps you improve and optimize business processes

Organizations that don't adapt and change with their environment can quickly become obsolete, losing their competitive edge and possibly going out of business altogether.

To a great extent, change management is the practice of facilitating the cultural changes necessary for an organization to improve its business processes and meet the needs of a dynamic marketplace.

By focusing on the impact of change, you can foresee problems and eliminate or reduce them before they arise. The process of change management often involves identifying the problem that needs to be solved, determining the resources that are needed, implementing an approach to solve the problem, and evaluating whether the solution is adequate.

This process can be applied to an organization's mission and vision and its goals in order to make sure they are being met.

7) It helps predict and decrease project overhead

If you don't establish a change management process, you don't have a plan to deal with unexpected changes. That means that instead of dealing with problems as they arise, you're trying to change things on the fly.

The more last minute changes you make, the more stress everyone will feel about getting the project done on time, which leads to miscommunication and missed deadlines: a perfect storm that easily leads to going over budget on projects.

On the other hand, if you do have a change management process, everyone knows what to expect when something changes. So when a last-minute change comes up, it's not such a shock to the system, because you have processes in place to minimize the impact of the change.

8) It increases employee engagement and satisfaction

One of the key reasons why change management is important to organizational success is that it increases employee engagement and satisfaction.

Change management helps people navigate an organization's transitions, so they can feel engaged with the changes being made and be better able to adjust to them.

When an organization implements changes that their employees don't agree with or aren't ready for, the employees will be less likely to buy in to the organization's vision. They'll also be less happy, which can lead to decreased productivity.

Resistance is a totally normal human reaction to change - something all managers need to account for before selling their big idea to their leadership or across the whole organization. With this mindset, it’s easier to take the right measures to help people see the individual value they gain from that change.

Once you work through that resistance and help people see their gains from the change, they are a lot more likely to be content and invested in the work they do. 

During our webinar, Kent Frazier explained that it’s crucial for people to be sold on the idea of change first:

People have to be able to answer the question, 'What's in it for me?' From all those different stakeholder perspectives, from leadership, from the end user, to the people that are implementing it… and so in our press release, or in our FAQs, we have to have thought through the question that everyone's going to be asking: 'Before I can commit myself and get on board, I have to understand what's in it for me.' If an individual can't answer that question, they're going to be a little bit more resistant or denying - 'I don't want to do this, I'm not on board.'”

Further reading ➡️ change management models to tackle change resistance.

9) It helps people feel more committed to the cause

Like it or not, major changes are usually top-down. They get initiated by the high-level managers and then the majority of the crowd needs to learn how to work with it.

And if that change is about reducing costs, changing the staff landscape, or disrupting company-wide processes, people can feel left out from the decision making process. And this is where change management makes a difference.

When a change management process exists, people have more chances to voice their concerns and turn them into commitments. It helps create an environment of psychological safety, where everyone is free to challenge the decision or the change initiative, should they have solid arguments for that. 

When it comes to psychological safety in change management, Kent explains that it’s all about empowerment:

It's our role as leaders to steward the language that we use. So if we hear people complaining about what's happening, as a leader, I can say: 'Great, I hear you complaining about X. So you must be committed to Y?' What is it that you're committed to, and change that language from a complaint to a commitment."

10) It improves staff retention

One of the key benefits of change management is that it gives people a voice and they feel heard when a change occurs. They feel supported and understood when a company shifts, changes, and evolves for its people — not in spite of them. 

Change management also makes those business transitions smoother for the people on the ground, it calculates how they will be impacted by the change and what can be improved about it.

On that, Rahul said:

People are much happier in an organisation that supports them in that way...they're likely to stick around, which will help the overall organization of course.”

11) It makes you agile and open to innovation

Organizational success comes from being able to change with market or technology changes, or sometimes even just being able to change for change's sake (if the status quo is no longer working).

Agile organizations are able to respond quickly and creatively to changes in the marketplace. When a new product comes out, for example, agile companies are able to use that information to create something even better and more competitive than the original product.

The agility of an organization is also essential for embracing new ideas that could revolutionize the industry. The openness of an organization will help it identify these new ideas, which can then be quickly implemented in order to bring the company into the 21st century and beyond.

12) It improves your company culture

In this context, managing change means you're able to identify problems before they become big enough issues to disrupt workflows. It's also important because it makes sure that change is well-explained to your employees, so they know what's going on and how it affects them personally.

When people feel that they're being heard, their morale tends to increase. And, in general, it'll be easier to find and retain the best talent when your company has a reputation for listening to and respecting its employees.

Being open and receptive to change is something of a mindset the whole company needs to adopt, top-down and bottom-up. Change management basically gives you the manual needed for the whole company to admit that change, big or small, is made for the greater good of everyone affected by it.

Here’s how Rahul sees it: 

It's okay to be uncomfortable with the change. So it's almost about getting to the point where the users will feel uncomfortable - but the leaders are accepting of the users being uncomfortable. And change is not easy. So it's about having that trust and honesty from the leaders that you're going to go through some changes because you have certain pain points in the current state.”

Final word

In the business world, change is the only constant.

Change is often seen as a harbinger of bad things to come, especially when the change is big or when it happens rapidly. Sometimes that's justified, but often it isn't.

Change can be for the better, and if you're a project manager, it's your job to make sure that what your team aligns with the company's change plans, which will benefit everyone in the end.

Read other guides on change today:

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