“Staying in business” is a misleading phrase. The “staying” part implies that your business should be still.
Rather, it should be “Keeping up with business” or at least “Staying in the race of business” to incorporate the reality that a business needs to change to be successful.
Why? Because fundamental parts of the company, such as the people, technology, and market will change regardless of the intent of business leadership. Becoming more efficient, reducing costs, and increasing revenues all require some sort of change in the way you do business.
But change is not easy; there are many barriers that can prevent an organization from adopting change and moving forward. Below is an overview of the top four barriers that an organization will face when implementing change.
1. Fear of the Unknown or Unfamiliar
If you are standing still, you are going backward. So said the American educator Reed B. Markham. This is most definitely the case for those who do not, or cannot, embrace change management and its positive effects on any organization.
While many fear change, others welcome it. Those who don’t implement the right change at the right time are at risk of failure.
However, those who overcome their personal barriers to change management and are able to successfully implement new business practices can, according to a report by McKinsey & Co, expect significant or even exponential growth in revenues and profits. Of the 40 organizations in their study, the 58% who did not implement a successful change management program failed to reach their set targets. The remaining 42% that did do so either hit their targets or exceeded them. In some cases experiencing returns of 200-300% higher than expected.
In 2008, when Santander, the Spanish banking giant entered the British market through the acquisition of Abbey National, Bradford and Bingley, and Alliance and Leicester, it was considered an almighty challenge for them to implement the necessary new working practices that would modernise the centuries old institutions that were seen as dinosaurs of the industry. But through clear and direct change management that all parties embraced their new way of banking. Santander quickly became one of the UK’s largest retail banks.
So the question is not whether one should use change management, but whether one can afford not to. This may be a hackneyed line but it still holds true and what, therefore, remains to be dealt with is the matter of understanding and overcoming the main barriers to change management.
Takeaway: Change is Good, Don’t Fear It
2. Ineffective Leadership
The lifeblood of any organization is the people who work in it: the employees.
If the employees do not embrace the new changes then the implementation will be an uphill battle. It is hardly surprising that, when asked, most CEOs attempting to bring in new working practices say that this is their biggest worry, and what actually keeps them up at night.
Yet, if executed properly the workforce can also be one of the most dynamic and important supporters in the change management process. In fact, the employees must be advocates of the change for the process to go smoothly.
Very few people respond positively to simply being told what to do, when and how.
Far more effective is to demonstrate how their roles and workplaces will be vastly improved by the new methods to be implemented.
Many employees, especially those who have worked at an organization for a number of years, fear that the change being incorporated will cause them to become obsolete and likely to lose their jobs. A failure to understand the fears and sensitivities of the workforce is a sure way of creating a barrier to change management and even friction between parties.
Instead of imposing from above, a far more effective a method is to encourage employees to embrace the change. You can do this by:
- Providing them with information to understand the benefits
- Providing training to show that you are investing in them
- Giving them ownership of the change
Takeaway: Bring Your Team On Board
3. Broken Communication
When introducing change management to an organization, it is crucial to communicate the changes being implemented to every level of the organization.
Everyone involved must be seen as a key stakeholder to ensure a successful outcome. Clear and decisive messaging is paramount at this stage.
Returning to the same Mckinsey report, their study demonstrated the example of two hospitals that both chose to incorporate new group purchasing systems to reduce costs.
The hospital where the CEO was seen as leading the change and involving all relevant people at every stage exceeded their expected cost saving target. In the second hospital, the CEO was more conspicuous by his absence, leading to confusion and less enthusiasm for the change. The second hospital barely reached half of its expected savings.
Takeaway: Engage with Stakeholders (Hint: Every employee is a stakeholder)
4. Undue Complexity
Change, especially in the biggest organizations, can be a complicated and lengthy process. In fact, the sheer scale and complexity of the change can, itself, become a significant barrier in change management.
This can result either in the failure to implement or even to shelve plans entirely as the challenge is simply too daunting to take on.
For any large organizational change to be successful, there needs to be a perspective that ensures the correct change is managed properly and effectively.
Keeping it simple, or as simple as possible, is the key to achieving the desired change. Sometimes small steps are better than great strides. There is no substitute for the hard work and planning that must take place prior to any policy change—and that must continue throughout the entire process.
Takeaway: Change is Inherently Complex, So Keep Things Simple
Focus on Results
The barriers to organizational change are far from insurmountable and can, in fact, be turned into the stepping-stones to success. Embrace the change and reap the rewards.
Understanding the four areas where an organization is likely to face resistance is the first step in creating a strategy to overcome the barriers to organizational change. Strategies should then be developed to tackle each area.