What most likely happens when a firm optimizes its organizational structure to its current situation?

Change management has become one of the most critical success factors for any business in today’s ever-changing world. 

The business world is changing at a fast pace: technology keeps evolving, customer trends are changing, new market regulations are being launched on a regular basis, and businesses have to cope with unprecedented global crises.

💡Check out Top Leadership Skills and become the leader your employees need.

Companies that can’t adapt and grab growth opportunities are likely to be outcompeted by agile competitors and even disappear. That’s why preparing for change should be one of your top priorities.

Definition of Change Management

Change management is a systematic approach that includes dealing with the transition or transformation of organizational goals, core values, processes or technologies.

The purpose of every organizational change management initiative is to successfully implement strategies and methods for effecting change and helping people to accept and adapt to change.

As organizational changes in the agile workplaces happen daily, change management and change communication teams have become crucial performance drivers for many companies.

People are Resistant to Change

Research shows that only 38% of people like to leave their comfort zone. When these people are presented with a change, they think, “Hey, this is so exciting.” Those positive interpretations of change result in positive emotional reactions, such as happiness and satisfaction, which result in greater employee productivity.

The other 62%, however, look at that same exact statement and immediately feel fear and discomfort. They may think, “Oh great, this change will have an effect on my career growth.” or “I will not do what I like doing anymore.” or “Will they keep me in?”.

3 Types of Organizational Change

The 3 most common types of organizational change include:

1. Developmental change – Any organizational change that improves and optimizes on previously established processes, strategies and procedures.
2. Transitional change – Change that moves an organization away from its current state to a new state in order to solve a problem, such as mergers and acquisitions and automation.
3. Transformational change – Change that radically and fundamentally alters the culture, core values and operations.

Common Examples When Change Management Is Needed

With all the changes happening in the business world, change management has become one of the most important business functions.

Some of the most common examples when change management is necessary to successfully implement changes within organizations include:

• Implementation of a new technology
• Mergers & acquisitions
• Change in leadership
• Change in organizational culture
• Times of a crisis

Managing Organizational Change During Crisis

Under normal circumstances, driving change in the workplace is already quite challenging. Today, workplace transformation needs to be more agile.

In a survey with nearly 3,000 executives about the success of their enterprise transformation efforts, McKinsey found the failure rate to be higher than 60%. But COVID-19 makes organizational change even more complex and challenging.

As the pandemic continues to spread, businesses have no choice but to review their short-term as well as long-term strategies.

Some companies have temporarily closed their plants and shops while others have made remote work mandatory. More and more businesses are laying off a part of their staff because of business deterioration. As a result, unemployment rates are exploding.

Businesses are now operating under pressure.

They have to adapt on the fly and they have no visibility on what’s going to happen in the upcoming weeks. Check out the graph below where WTO presents how the world merchandise trade volume has been changing since COVID-19. 👇

World merchandise trade volume, 2015Q1‑2022Q4

Source: WTO

In these uncertain times, businesses have to review their plans in no time. They are changing the way their employees are working as remote work has become the new norm and they also are rethinking the way their teams are functioning and collaborating. Most companies have already changed their organizational structure and their work arrangements.

Read on: Remote Work: 20 Ways to Engage and Connect with Your Remote Employees

Companies have to act fast and as a consequence, change is implemented with no smooth transition, which is highly challenging for both businesses and employees.

Think about it: employees — including team leaders — have to instantly adapt to new ways of working and communicating, while change management programs usually take years to be implemented — whether it’s the launch of new technology or the implementation of a new internal organization.

Indeed, driving change doesn’t mean equipping employees with new software or new ways of communicating. Implementing change requires a preparation phase, a proper internal communication plan, training programs, and evaluating the program’s success.

“Digital transformation does not happen quickly. Some companies seem to expect it to happen over the course of a year. In my experience, particularly for larger organizations, closer to five years is more realistic. Even then, the task is never over”,

says Ashley Friedlein, founder of Econsultancy.

Experts have already announced that the future of work is happening now. There’s no doubt that the way companies are managing organizational change now will directly impact their ability to ensure business continuity.

Most Common Change Management Challenges

Change is not always perceived as positive, and many employees may be resistant to changes within their organizations. Therefore, successful business transformation is all about getting employees’ buy-in and embedding new behaviors in the workplace.

Here are some of the most common challenges that change management professionals face 👇

1. Defining goals in a timely manner

Most changes get implemented with a goal to improve current processes, products, services or organizational cultures. However, it is critical to identify clear goals and milestones.

Some of the common change management goals and objectives include:

• Build a culture of innovation
• Change or update the company’s best practices
• Implement new technology
• Establish milestones and incentives programs
• Implement knowledge sharing initiatives
• Shift in targeted customer base

2. Poor leadership and lack of alignment

Leadership has a big impact on employee engagement. If your leaders are not convinced about the benefits of change, it will be hard to implement it.

Poor leadership and lack of alignment among the leaders are some of the main reasons for organizational change fails. On the other hand, great leaders know how to inspire their workforce and embrace change.

Read on: Top 5 Communication Skills and How to Improve Them

3. Identifying the resources needed to make change a success

Before starting the change process, identifying the resources and individuals that will facilitate the process and lead the change is crucial for success. However, it can be hard to identify those resources and budgets before the process even starts.

4. A Lack of agility and slow approval process

Organizations that are not agile struggle to implement changes. Slow approval processes can cause delays in change implementation.

Therefore, it is important to have everyone on the same page in order for the process to get implemented smoothly and on time.

5. Planning the next steps

Every change management process should have a well-set plan. The plan should consist of timelines, and change milestones should be identified. Without planning, it may be hard to understand the overall success of the change process.

6. Fear and conflicts

Changes within organizations can develop emotions of uncertainty and fear. This may cause employees to take their frustrations out on each other. Here, it is leaders’ responsibility to overcome difficulties and resolve conflicts.

An active leader should always be ready to dive deeper into the problem while working in accordance with their organizational change management.

7. Resistance to change and lack of commitment

Some employees resist change and do not want to collaborate or commit to new practices. Leaders should be able to address resistance on a psychological level and proactively remove behavioral barriers that restrict change.

8. Poor communication in the workplace

Communication is crucial for successful change management, and the cost of poor communication can be significant. Every employer that has a successful change management team expresses the need for constant communication during the change experience.

9. Aligning all the teams with the new strategy

Having everyone on board and informed before and during the implementation process may be challenging. This is especially true for large organizations with various offices and departments across the world. Therefore, global and interdepartmental communication has to become a priority.

10. Updating everyone on the new materials, policies and procedures in a timely manner

Changes should be documented and those documents should be easily accessible and shared with the employees.

Every highly-effective change management strategy keeps all changes well-documented and transparent.

Read on: The Ultimate Crisis Management Checklist for Employers

12 Change Management Best Practices

Change management processes can be very complex. Additionally, change in the workplace can cause high levels of stress among employees.

However, there are some rules and best practices every organization should follow.

Here they are.

1. Define clear goals

Every change management initiative should be clearly defined. Even though SMART goals are not easy to define for change management, companies should strive towards setting up as clear goals as possible.

This way, employees and leaders will have something to reference to when evaluating their change management efforts.

2. Be honest and transparent

Over 30% of employees say that their employer is not always honest and truthful.

In order to implement transitions successfully, employers should be honest and transparent. As most employees don’t feel comfortable with changes, being transparent at every step of the change management process helps build trust and connection with employees.

3. Train and reassure your teams

Support your employees with reassurance, offer new training sessions and give employees time they need to adapt to new practices. Empathy and reassurance help fasten the process and eases future organizational changes.

Yet, many line managers don’t even understand why the change is happening.

4. Encourage conversations and communicate regularly

Employee relations have a big impact on encouraging conversations before, during and after the changes are implemented.

Start a conversation among your employees in order to find out how they feel about the new initiatives.

Understand that true communication is a two-way conversation.

Read on: Interpersonal Communication: Definition, Importance and Must-Have Skills

5. Listen to your employees

When driving engagement and communication, you should not be the only one talking. Listen to what your employees have to say. Allow them to lead the conversation where employees can ask questions, comment and suggest their ideas for improvement.

6. Bring your leaders on board

The evidence is clear- excellent change management increases business outcomes of change initiatives. So why is it so difficult to communicate these benefits to business leaders?

Companies should work on proving the real ROI of change management and communicate that to the business leaders to bring them on board and support the change.

7. Choose the right communication tool

Millennials in the workplace expect an easier way of communication than through emails. In fact, many emails are never read which causes important information to get lost.

Choose the right employee communication and engagement solution that your employees will actually want to use.

Make sure that your solution is mobile friendly. Younger generations are used to being able to do everything on their mobile phones. Company tools should, for that reason, be mobile-friendly.

8. Empower your employees

Empower your change management leaders as well as employees to engage in the change process by giving them freedom to make their own decisions and implement new ideas.

If your employees don’t feel empowered, the engagement level will drop and result in resistance to change.

9. Encourage knowledge sharing

Some employees will learn and adapt to change faster than the others. However, knowledge sharing among employees can fasten this learning process significantly.

Employee collaboration tools such as Haiilo enable organizational knowledge sharing in a way that is easy and fun for employees.

10. Document and make information easily accessible

Documenting everything does not help if this information is not easily accessible to employees. Having a central place where all the important documents and information are kept, makes change management much more efficient.

Did you know that employees, on average, spend 2.5 hours every day searching for information? In the process of change management, this can be very frustrating and discouraging to employees. Drive the #NoSearching Revolution in your company!

11. Recognize and reward

77% of employees say that they would work harder if they were recognized for their work. Therefore, this approach can be a great motivation to comply with and implement the changes faster.

Recognize and reward employees for accomplishments and for adopting new behaviors during the transformation process. Celebrate the wins and milestones.

12. Make it social

If you are implementing a new technology solution you are proud of, share it publicly! Modern employee communication tools allow you and your employees to easily share information both within and outside your organization.

Having employee advocates can also be a huge help for your recruitment and talent acquisition efforts.

Change Management Models You Can’t Ignore

There are many change management models out there. However, we have chosen the top 3 models used by successful companies across the world.

1. Kotter’s change management theory

This change management theory is one of the most popular and adopted ones in the world. It is divided into eight stages where each one of them focuses on a key principle that is associated with the response of people to change.

• Increase urgency – Create a sense of urgency among the people so as to motivate them to move forward towards objectives.
• Build the team – Get the right people on the team by selecting a mix of skills, knowledge and commitment.
• Get the vision correct – Take into account not just the strategy but also creativity, emotional connect and objectives.
• Communicate – Openly and frequently communicate with people regarding the change.
• Get things moving – Get support, remove the roadblocks and implement feedback in a constructive way.
• Focus on short term goals – Set small goals and achievable parts is a good way to achieve success without too much pressure.
• Don’t give up – Be persistent while the process of change management is going on, no matter how tough things may seem.
• Incorporate change – Reinforce and make it a part of the workplace culture.

2. ADKAR Model

ADKAR model or theory of change is a goal-oriented. This makes it possible for change management teams to focus on activities that are directly related to the goals the company is trying to achieve.

The model can be used by change managers to find out the various challenges in the process of change management so that effective training can be offered to the employees.

ADKAR Model stands for:

• Awareness – of the need and requirement for change
• Desire – to bring about change and be a participant in it
• Knowledge – of how to bring about this change
• Ability – to incorporate the change on a regular basis
• Reinforcement – to keep it implemented and reinforced later on as well.

3. Lewin’s Change Management Model

Lewin’s Change Management Model is one of the most popular, most accepted and most effective models that make it possible for companies to understand organizational and structured change. This model consists of three main stages which are: unfreeze, change and refreeze.

• Unfreeze: The first stage of the change process is the preparation for change. Here, employers must get prepared for the change and explain to people why the change is necessary. As most people are resistant to change, this step helps to break this status quo.
• Change: In this stage, the change process takes place. Good leadership and effective employee communications are crucial for this step.

• Refreeze: In this stage, the change has been accepted. This is the time when the employees start going back to their normal pace and routine. This last step requires leaders to make sure that the changes are adopted and used even after the change management objectives have been achieved.

The Role of Internal Communications in Change Management

According to Michael O’Malley, “it isn’t the technology itself that IT projects trip over”.

In a research by PMI, of 256 companies that were surveyed, only 14 percent of all failures can be chalked up to a company’s inability to cope with technology.

The other 86 percent owe to some common management challenges:

• improperly defined objectives (17 percent),
• unfamiliar scope (17 percent),
• lack of effective communication (20 percent) and,
• poor project management skills (32 percent)

As a lack of, or ineffective, communication often cause change management projects to fail, companies now have to reconsider their internal communications efforts.

How to Communicate Organizational Change During Crisis?

When it comes to change management, internal communication plays an even more critical role today. Indeed, businesses have to find effective ways to communicate the abrupt changes they’re implementing right now so that employees can understand where the new strategies and adjust their work accordingly.

Read on: Crisis Communication — How to Communicate Effectively with Your Employees

Broadly speaking, when driving change during the pandemic, you need to:

• Explain to your employees the changes you’re implementing as well as the different  steps your organizational change plan includes.
• Tell them the reasons why you’re implementing these specific changes and the impacts they may have on their work
• There’s no organizational change plan without objectives and goals. Clearly explain to your employees the objectives you’ve set and help them identify the impacts their work will have on the team’s ability to reach these goals.
• Encourage your employees to ask any questions they may have in mind and most importantly, make sure you are able to answer all their questions. That point is extremely important when it comes to driving change during the pandemic. That’s one of the best way to reconnect and build trust with your remote teams. If needed, appoint a spokesperson that will be able to keep the dialogue with your employees open, the same way as you would appoint a spokesperson as a part of a crisis communication plan.

We’ve also asked our clients to share their best practices for communicating change with the workforce during the pandemic outbreak. Here are some takeways:

Why does a firm use an organic organization combined with a functional structure when implementing a differentiation strategy quizlet?

Why does a functional structure rely on a flat organizational structure?

Why is it difficult to imitate the organizational culture?

Which of the following statements correctly describes groupthink?