Digital transformation (DX) was well underway before the pandemic. IDC forecasted in 2019 that “By 2020, at least 55% of organizations will be digitally determined, transforming markets and reimagining the future through new business models and digitally-enabled products and services.”
Despite this, many global companies still struggled to navigate the macroeconomic uncertainty caused by COVID-19, sorely highlighting an innate lack of organizational readiness to tackle unplanned change.
According to a McKinsey survey, only 50% of organizations are well-prepared to anticipate and respond to external shocks. Additionally, 2/3 of organizations consider themselves as being overly complex and inefficient.
Resistance to change sits at the heart of stagnant businesses, with those failing to adapt and evolve often sitting on the fringes of innovation and opportunity. Companies that assume a future-ready mindset and the mutability and agility to affect change are in a prime position for indefinite growth.
According to McKinsey’s study on successful digital transformations, those that achieved effective change management across c-suite, mid-level management, and frontline employees reaped a remarkable 143% ROI.
In this article, we will explore the topic of change management, discussing the common reasons why organizations undergo change and exploring the main benefits and challenges of successfully implementing change.
We will then dive into four real-world examples of companies that have navigated change successfully. From adopting AI and cloud transformation to strategic mergers, these companies demonstrate the importance of having a solid change management strategy.
Finally, we’ll discuss the inevitability of change and provide key advice to better help organizational leaders cultivate change capabilities in a meaningful way.
Reasons Organizations Undergo Change
Organizations undergo change for a variety of reasons, both internal and external. One of the most common reasons is to adapt to changing market conditions, new technologies, or consumer demands.
In order to remain competitive, organizations must be willing to evolve and pivot their strategies as needed. This might involve restructuring departments or streamlining processes to increase efficiency and productivity.
Another reason organizations change is to address internal issues such as stagnant growth, declining profits, or poor employee engagement and retention rates. These can be symptoms of a larger problem, such as outdated business models or ineffective management practices.
In these cases, change may involve bringing in new leadership or overhauling systems to create a more positive and productive work environment.
Some organizations may also undergo change due to external pressures, such as legal or regulatory requirements. For example, new laws or regulations may require companies to adopt new environmental practices or implement more stringent security measures.
Overall, the reasons for organizational change are varied and can be complex. However, successful organizations recognize the importance of staying agile and responsive to evolving circumstances to remain relevant and successful over the long term.
The Main Benefits of Change Management
Change is integral to growth and progress, whether in our personal lives or professional environment. Change management is a crucial process for organizations, allowing them to navigate through transitions and implement new strategies or technologies. Here are the main benefits of change management:
Smooth Transition: Change management ensures a smoother transition from the old ways to the new. It reduces disruption and ambiguity, ensuring employees are informed and trained in the new systems, reducing downtime and errors.
Improved Efficiency: Change management helps identify the inefficiencies and gaps in the existing processes, enabling the implementation of new, more efficient ways of working.
Better Employee Engagement: Change management encourages employee participation and collaboration, ensuring that all stakeholders have a stake in the transition process. This leads to better engagement and increased motivation.
Competitive Advantage: Through effective change management, organizations can adapt to changing market trends, regulatory requirements, and customer demands, giving them a competitive advantage over their peers.
Overall Growth: Finally, change management enables organizations to innovate and grow, improving their businesses and meeting the challenges of a rapidly changing world. By embracing change, companies can become more agile, resilient, and successful.
Forbes cites composability, digital immunity, and sustainability as the top three key motivators why businesses are invoking change in the year ahead. As such, It’s wise to keep a finger on the pulse of the latest industry trends and leading examples of firms implementing change, whether as a response to evolving externalities or to simply outmaneuver competitors.
The Main Challenges Of Change Management Change
While change management can bring immense benefits, it presents many challenges. Here are the main challenges organizations face during a change management process:
Resistance to Change: One of the biggest challenges of change management is employee resistance. Many employees are set in their ways and may feel threatened by the proposed changes. This can lead to pushback and a lack of cooperation, making the transition more difficult.
Lack of Communication: Another challenge is a lack of communication. The goals and objectives of the change need to be clearly communicated to all stakeholders, from employees to customers. Lack of communication can lead to confusion, misunderstandings and create more resistance.
Insufficient Resources: Implementing change can be costly, and the organization may not have the necessary resources to carry out the transition effectively. This could lead to delays in the process or rushing the change, which may lead to errors and an unsuccessful transition.
Inadequate Planning: Effective planning is essential to ensure the change process is smooth and efficient. The process can be chaotic without proper planning, leading to more confusion and resistance.
Lack of Leadership Support: The success of change management depends heavily on the leadership team’s support. If the leaders are not fully committed to and invested in the change, it can lead to a lack of enthusiasm and motivation among employees.
Overcoming these challenges requires a well-thought-out strategy and a commitment from all stakeholders to work together toward a successful transition.
4 Successful Change Management Examples In 2023
- JPMorgan Chase & Co.
Financial powerhouse JPMorgan Chase & Co. earned its title as a prominent player within the global economy by consistently embracing change. This is particularly true post-pandemic, with the financial firms’ profit jumping to $11.7 billion in Q3 of 2021, up from $9.4 billion earned in the same quarter the year before.
JPMorgan, with a workforce of around 271,025 employees, is experienced in driving change across diverse sectors with a large employee base. One example of the latest changes at JPMorgan is their rapid adoption of AI and the cloud.
In their 2022 Annual Report, Chairman and CEO Jamie Dimon shared, “AI and the raw material that feeds it, data, will be critical to our company’s future success — the importance of implementing new technologies simply cannot be overstated.”
The firm currently has “over 300 AI use cases in production today” that span different areas such as risk, marketing, customer experience, fraud prevention, and prospecting. JPMorgan has also implemented AI in its payments processing and global money movement systems.
JPMorgan’s in-house AI teams have delivered state-of-the-art enhancements and solutions for transforming an increasing number of business cases daily.
With over 1,000 employees devoted to data management, JPMorgan boasts a sizable pool of skilled workers, including more than 900 data scientists specializing in creating new AI and machine learning models and 600 ML engineers developing the code to implement these models.
The company remains committed to exploring novel ways to harness AI and empower its employees. It actively leverages human-centered collaborative tools and workflows such as ChatGPT and large language models.
JP Morgan is not only renowned as a leading financial institution on a global scale but is also considered a compass to gauge the performance of the global economy and markets. Therefore, their strategies and practices for effective change management, such as adopting AI, are ones to watch and learn from in the industry.
Blackwoods is a subsidiary of a global 2000 company that boasts the title of the largest provider of industrial and safety products in Australia, and New Zealand, with an expansive network of 55+ branches.
Their impressive product range of over 300,000 items ensures that customers can access a comprehensive selection of high-quality products from the world’s leading brands.
As part of larger company-wide tech efforts, Blackwood’s planned to deploy Microsoft Dynamics and had to implement effective change management for migrating their workforce to a new tool.
However, the unforeseen chaos caused by COVID-19 facilitated the rise of social distancing and work-from-home initiatives, meaning on-site training capabilities negatively affected their ability to deliver exceptional customer service.
Blackwoods remedied the pain point of legacy training methods by leveraging cloud and digital adoption solutions, most notably by implementing WalkMe’s Digital Adoption Platform (DAP).
The team collaborated with WalkMe to develop a customized change management solution comprising training materials and automation. This solution guided the staff through each process within the company, including the migration to Microsoft Dynamics.
Partnering with WalkMe yielded significant benefits for Blackwoods, including a 50% increase in time-to-proficiency for new team members, a 15% reduction in the quote generation process, and saving hundreds of staff hours monthly through automation.
According to Darryl Crumblin, Blackwoods Sales Training and Enablement Manager, “Unfortunately, the requirement for ongoing process excellence and new digital adoption coincided with the beginning of the pandemic lockdowns.”
Leveraging innovative cloud solutions such as DAP emphasized legacy training methods proving inadequate for navigating disruption and staying afloat. As such, Blackrock is a successful example of change management.
- Innovative Employee Solutions (IES)
IES is a global provider of solutions for the contingent workforce, specializing in the employer of record payrolling, independent contractor compliance, HR administration, and back office services in over 150 countries.
Recently included on the 2022 Inc. 5000 list, IES is a rapidly growing California-based company that exemplifies embracing and pioneering change. Forbes noted, “The one constant in life and business is change. IES has spent 50 years learning this lesson.“
Amidst the COVID-19 pandemic, IES achieved an incredible 85 percent growth rate over a period of three years, underscoring the importance of constant innovation and evolution to surpass competitors and effectively tackle unprecedented challenges.
To further demonstrate its dedication to transformation, IES has brought Maria Goyer on board as its new Chief Innovation Officer, who will play a key role in keeping the IES team ahead of the current market trends.
IES has shown its deep commitment to embracing change and prioritizing innovation by hiring a Chief Innovation Officer. With this move, the company is taking concrete steps to stay ahead of the market and keep its services relevant.
Scott Omelianuk, Editor-in-Chief of Inc., states, “The accomplishment of building one of the fastest-growing companies in the U.S., in light of recent economic roadblocks, cannot be overstated.” He adds, “Inc. is thrilled to honor the companies that have established themselves through innovation, hard work, and rising to the challenges of today.“
- IKEA (Ingka Group)
Ikea is a world-class brand that has made a name for itself as a leader in the affordable furniture and home decor industry. The company’s ability to remain relevant and innovative in the face of an evolving marketplace is a testament to its proactive approach to change management.
Ikea hired its first Chief Digital Officer in almost 80 years, Barbara Martin Coppola, to help transition the retail giant from a historically analog business model to a more digitally mature enterprise. With global experience from companies like Google and Samsung, Barbara is a seasoned digital executive who has spearheaded the company’s digital transformation since joining four years ago.
via IMD Coppola shares “with digital technology providing the opportunity to operate companies more efficiently and find new sources of growth with digital business models, IKEA had to embrace this digital wave quite urgently.”
To put her change plan into action, Barbara liaised with IKEA’s CEO, in which a deep change to company operations emerged as the inevitable next step. Instead of blindly applying a one-size-fits-all methodology for enacting change, Barbara made sure any potential changes closely aligned with one striking principle – every digital change was to be true to the values and the mission of IKEA.
While at the helm of IKEA’s digital change, Barbara has been instrumental in driving Ikea’s digital transformation through proactive approaches to change management.
- As part of this transformation, Barbara recognized the need to build cross-functional teams comprising individuals with diverse skill sets to tackle digital solutions end-to-end.
- Along with executive team members, Barbara empowered these cross-functional teams and provided them with the freedom to execute quickly.
- To ensure seamless execution, she emphasized the importance of fostering human interactions and facilitating clear communication within these teams.
- Additionally, throughout the process, Barbara placed equal emphasis on stakeholder management, ensuring that all relevant parties were kept informed and engaged.
- She also gave decision-making power to the teams to drive change and produce results.
- Barbara and her team have digitally equipped consumers with apps that provide information and enable them to return Ikea products with greater ease.
- Additionally, Ikea launched a program last year that allows customers to sell products back to the company for recycling purposes, resulting in over 100,000 items sold back to Ikea on Black Friday in 2021.
Change is Inevitable, Embrace It
Change is a fundamental aspect of life and the only constant in the world of business. Possessing the ability to navigate change effectively can spell the difference between success and failure.
Instead of resisting the inevitability of change, embracing it allows organizations to thrive and adapt to a dynamic business trends. By adopting a growth mindset and proactively seeking out opportunities for transformation, businesses can remain competitive and continue to innovate, solidifying their position as leaders in their respective industries.
As such, it’s inspiring to look at companies that have managed to successfully navigate significant changes in their operations, strategies, and structures.
Through innovative tactics like cross-functional teams, digital adoption, and increased focus on sustainability, these companies have demonstrated the importance of staying nimble and forward-thinking in the face of change.
At the heart of these successful transformations lies a commitment to effective change management. Our research shows that 47% of organizations that integrate change management are more likely to meet their objectives than the other 30% that did not incorporate it.
By embracing new technologies, empowering employees to be key drivers of change, and maintaining an unwavering focus on fostering human interactions, these companies have been able to proactively identify opportunities for change, and adapt to them in a way that has enabled them to remain market leaders.
Whether you are a business leader looking for inspiration, or a change agent seeking new ideas to help your organization navigate transformational change, there are valuable lessons to be learned from the four companies highlighted in this article.
WalkMe spearheaded the Digital Adoption Platform (DAP) for associations to use the maximum capacity of their advanced resources. Utilizing man-made consciousness, AI, and context-oriented direction, WalkMe adds a powerful UI layer to raise the computerized proficiency, everything being equal.