To successfully drive organizational change, it is necessary to have a mature change management capability.
A robust and mature change management function can significantly improve the outcomes, efficiency, and costs of organizational change initiatives
Ineffective change management, on the other hand, can significantly impair a company’s ability to change, increase resistance to change, and negatively impact organizational performance.
Below, we’ll learn more about the components of an enterprise change management function and how to go about creating this capacity.
Change Management Capability: A Usable Definition
To better understand why a company would want to create the capability for change, let’s define some of the most important concepts related to organizational change and change management:
- Organizational change. An organizational change is a formal, intentional change made to some area of a business or institution. These can include changes to strategies, processes, workflows, the organizational structure, and more. Changes such as these are designed to achieve an organizational objective, such as performance improvements.
- Change management. Change management is the management discipline dedicated to designing, organizing, and managing organizational change initiatives. Management has a significant impact on the outcomes and the performance of change projects, which is why it is so important to develop a formal change management capability.
- Individual change. One of the central focal points of change management is the human side of change. Employees, after all, are the ones who drive a change project forward. Without their support, organizational change programs will suffer significantly – and their resistance can even cause projects to fail completely.
- Enterprise change management. Enterprise change management refers to an organization’s change management capability. Companies that have enterprise change management functions have established processes that guide the organization through change.
- Change management maturity. An organization’s change management maturity level refers to how advanced a company’s change capability is. More mature change functions, for instance, have a sophisticated, well-structured enterprise change management function that is tightly integrated into the organization’s normal processes.
Naturally, building a mature change management function takes time and effort, but for a growth-oriented organization, the investment will pay for itself.
The Benefits of Institutionalized Change Management
There are several reasons why organizations should invest in a formal change management function:
- Managed change programs outperform those that are not managed. Since businesses are profit-oriented businesses, the overriding concern is, unsurprisingly, ROI and bottom-line profits. The more frequently an organization engages in change, the greater the impact that change management will have on bottom-line metrics such as these.
- Effectively managed change programs gain more support from employees and stakeholders. Organizational change can be difficult and taxing for anyone involved, including managers, employees, and customers. Good change management is helps to streamline and improve the experiences associated with change. Those improved experiences, in turn, can enhance employee productivity, customer sentiment, executive support, and more.
- To keep up in today’s economy, organizations must be ready for change. Digital disruption, COVID-19, competitive pressure, and many other forces are compelling organizations to adapt and stay agile. Change, in other words, has become a normal part of the business world, and one of the major implications of this is obvious: companies that can adapt and change will outperform those that cannot.
The bottom line – which is what most business leaders are concerned with – is that change management helps boost key business metrics such as organizational agility, resilience, and performance.
How to Create a Change Management Function
Here are a few areas to focus on when developing a change management capability for one’s organization:
Adopt a Structured Approach to Change Management
The most essential ingredient for any enterprise change management function is a formal and structured approach to change management.
- Understanding change management frameworks and methodologies
- Hiring experienced change managers, providing training to staff, or both
- Develop expertise in both individual change management and organizational change management
- Taking a goal-oriented, data-driven approach to organizational change
Having the expertise is only valuable, however, if it is actually applied – to build a mature change capability, therefore, it is important to implement change management during the organization’s day-to-day operations.
Integrate Change Management into Organizational Operations
To obtain the benefits associated with change management, it is necessary to actually apply change management consistently within the business.
A mature enterprise change management function not only applies change management within discrete projects, but change management is integrated throughout the organization.
To ensure that change management is actually applied:
- Advocates for enterprise change management must obtain executive buy-in early on
- Change management practices should become the norm, rather than the exception
- Openness to change should be incorporated into the culture
- Managers and employees alike should be ready, willing, and able to lead change at the local level
In short, change management should be coded into the very fabric of the organization.
An organization’s capability for change management, after all, depends directly on how deeply embedded these practices are within the organization.