Every changing organization must learn how to deal with a wild card – change management’s impact on business, the workplace, and the workforce.
Organizational change is rarely easy and if changes are not managed properly, they can undershoot their performance targets. Or, in a worst case scenario, these change projects can fail completely.
Below, we’ll explore how business changes and changes in management can impact a business, then learn how organizational change management can mitigate those effects and boost change ROI.
Wild Card – Change in Management’s Impact on Business
Here are a few key areas that can be affected by changes in management and business:
The Employee Experience
Changes to management, business processes, and the work environment can all disrupt long-standing work practices.
For instance, business changes can affect:
- Management styles
- Existing workflows and procedures
- Employee training
- Job roles and responsibilities
- Social and behavioral norms
According to the Center for Management and Organization Effectiveness, business changes actually push employees through a psychological process that includes stages such as:
- Tolerate (with resistance)
Naturally, over the long-term, business initiatives are often designed to benefit the organization.
However, a failure to understand these types of psychological impact can be detrimental, if not devastating, to a business project. If such changes are not handled properly, they can have a very disruptive impact in the short-term and affect other areas of a business, as we will see below.
The Customer Experience
Another area that can be affected by disruptions to the employee experience is the customer experience.
After all, if employees are discontent, confused, or under pressure, those negative effects can easily ripple out to impact the customers.
Here are just a few examples of areas within the customer experience that could be impacted:
- Customer care
- Product development
- Technical support
When business or management changes affect departments such as these, business leaders should pay close attention to how such changes could impact the organization’s bottom line performance.
Ultimately, improperly managed changes can have an impact on organizational effectiveness – that is, how economically and effectively an organization can meet its stated goals.
There are several ways that the effects covered above could impact the organization’s overall performance.
- The ROI of change projects could dramatically undershoot expectations
- If the pushback against a change is too severe, the program could fail entirely, which would result in financial losses, changes to the business strategy, and more
- Mishandled change projects could result in lower employee morale, which could have long-term implications on employee metrics such as performance, productivity, and turnover, among others
In short, the management and execution of a change project will have a direct and profound effect on the outcomes and profitability of those changes.
For that reason, when an organization is investing in business and management changes, they should also learn how to implement those changes properly.
How Change Management Can Boost the ROI of Business Changes
Though different experts may define change management slightly differently, most would agree that change management is dedicated to minimizing the negative effects of change, while maximizing ROI.
One of the key ways that change managers do this is by managing the human side of change. After all, as we saw above, many of the negative effects of a change stem directly from employees and their experience with change.
Here are a few examples of techniques that change managers use to improve business changes:
- Providing upfront communications about business changes. If employees don’t understand what changes are occurring or why they are happening, resistance to change will be more likely. Change managers, therefore, make it a point to build awareness of a change project early on.
- Onboarding employees smoothly to the new standards. Rapid transitions can be disconcerting and psychologically taxing for employees, which can result in many of the negative impacts covered above. Better onboarding, through tactics such as training and communication, can significantly reduce those disruptive effects.
- Ensuring employees have access to the right tools and skills. Key employee metrics, such as time-to-competency and productivity, depend directly on employee skills. For this reason, another hallmark of change management programs is employee training, which directly affects the performance and profits of a change project.
- Continuously monitoring the change program’s health. Rather than “setting and forgetting” a change program, change professionals will establish metrics and KPIs. Then, throughout the project, they will track that performance and make adjustments to the program as needed.
- Reinforcing a change over time to make sure that it sticks. Employers will often reinforce change projects over time to ensure that those changes actually remain permanent. Reinforcement mechanisms, such as rewards and recognition, are yet another technique used to improve the long-term performance and ROI of business change and organizational transformation.
In short, change practitioners manage change programs and do their best to improve the employee experience.