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The Principles of Organizational Change Management

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by Randy Geoghagan October 4, 2016
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Companies often underestimate the degree of change that comes with implementing a new IT system or transitioning services to a new provider. Change can be hard on an organization, and too often, the focus is solely on getting the new technology right or contracting with the best provider. However, studies show that the success of a change project actually has more to do with a company’s people than its new IT or service provider-driven capabilities.

Say you have a dedicated employee who has been with the company for 20 years. He knows where everything is in the company warehouse and exactly how to get it to where it needs to go. He also understands the steps that other people play in his workflow, both before and after his part. When company leaders decide to deploy new inventory technology or outsource part of the supply chain, this employee’s job will inevitably change. The company can either help the employee understand the changes, explain the reasons and offer support or let the employee become fearful and disengaged.

The fact is, all organizations experience a productivity dip as they adapt to new circumstances. Sometimes called “the valley of despair,” the productivity dip coincides with the time it takes employees to adjust to changes in processes and roles. In the past, the prevailing wisdom was to simply weather the storm and hope for the best.

But Organizational Change Management (OCM) has proven that adequate communication, education and training can help companies minimize the duration and depth of the productivity dip associated with change. This way a company can realize the projected benefits of a change project faster, keep employee morale from plummeting and avoid the potential of costly turnover. Investing a certain amount of money upfront to help prepare employees for large-scale impacts to their jobs can save a lot more money down the road.

When considering your next change project, keep in mind the Top 5 principles of OCM:

1. Align leaders on the project. Business leaders tend to focus almost all of their attention on “what” needs to be accomplished with a project without focusing on the “why” or the “how.” But, when it comes to change, it’s the leaders’ job not only to lead the way, but also to prepare others so they can thrive in a changed—and continually changing—environment. And, while many leaders believe organizational change management is purely theoretical or is something that happens organically, OCM is the application of concrete methodologies that have been proven to work. When executives understand the principles of OCM and become advocates for it, that spirit can send positive ripples throughout the organization.

2. Use OCM methodologies to support employees. Recent studies show 62 percent of the issues faced during an IT implementation are people-related. Change projects that lack OCM can result in transaction errors, operational siloes and process and system workarounds that hinder progress. OCM is an investment in the company’s employees. By providing them with support, training, clear communication and time to focus on the project, they will understand they are the company’s top priority.

3. Let employees get their hands dirty. Just like the company’s leaders, other employees understand the purpose of OCM best when they engage and see it in action. When key employees familiar with the existing systems and processes receive hands-on training and education about the new processes and systems, they can act as trainers for their colleagues, so everyone winds up with a greater understanding of the changes and their expected day-to-day impacts. When employees can think practically about the change process, they are more likely to adapt.

4. Create a process for transferring knowledge. Knowledge transfer is a two-part process aimed at making sure the company can carry out business transformation projects in the future. The first step is for the company’s change personnel to learn how to effectively manage change. The second step is to document what’s needed for future change projects, including charting a clear path to achieving goals and creating a checklist of required activities.

5. Build an OCM team. Yesterday’s OCM practitioners were either subject matter experts with big ideas or diplomats who could facilitate a project and manage relationships. But as technology rapidly evolves, companies often have to go through multiple waves of change, and a chief learning officer and a small training staff aren’t always able to keep up. A dedicated OCM team can help support employees who find that change is becoming more of a constant.

ISG helps companies—their leaders and their employees—better manage change and achieve their transformation goals. Contact me to discuss further.

About the author

Randy Geoghagan founded TracePoint Consulting in 2009 after spending much of his career as a program manager running large-scale IT-system implementations for big companies. He saw a clear need in the marketplace for people who understood the process of change and knew how to facilitate it well in large companies, with a strong focus on the employee experience. From 2014 to 2015, TracePoint doubled top-line revenue, worked with several household-name clients, and grew its staff by 40 percent. TracePoint was named a “preferred SAP service provider” and appeared on the Inc. 500 list of America’s fastest-growing companies before ISG acquired the firm earlier this year.

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