Change Management: The Key to Profitability and Survival

Death, taxes and change are inevitable. Of these three inevitabilities, change is the only one we can manage and profit from.

Change in the business climate and the workplace occur constantly and challenge everyone from the CEO right on down the line. Managing change change is is not only the responsibility of every executive, but of every individual in the company too.

There are many departmental, divisional and organization-wide changes taking place that require effective change management. These include change in company ownership, top management changes, layoffs and budget cuts, new human resource policies, new marketing plans and strategies, higher sales quotas, new sales commission structures and simply getting a new boss.

8 Of The Most Common Obstacles To Change

Fear of The Unknown
Fear of the unknown is the biggest obstacle to managing organizational or market change effectively. People instinctively fear what they don't know and can't control what will happen in the future. Naturally they are afraid change will only impact them negatively. They're concerned that what they don't know will hurt them.

Conditional Fear
This is the fear of what "could" happen, based on past personal experiences, or the experiences of someone else. People worry that because it happened to them before it could happen to them again ... or because it happened to someone else, it can happen to them too.

Fear of Job Loss
Fear of losing your job is probably the most basic fear that is aroused whenever changes take place within a company or when market conditions change for the worse.

When a new parent corporation takes over a company, for example, this change triggers a multi-level series of fear-based chain reactions. The initial fear is losing your job, health insurance benefits and your home. This in turn creates feelings of vulnerability and legitimate concerns over how to support a family, send the children to college, and plan for retirement one day. Change now becomes a catalyst that ignites an entire chain reaction of fear and negativity.

Fear of Technological Change
Technology stimulates change and the resulting changes very often create insecurity with staff members at all levels. Fears may range from simply struggling to learn a new application to having technology make your position obsolete. Even employees in Information Technology sometimes fear technological change.

Fear of Failure
After their first six months with the company, most employees feel fairly secure that have proven themselves to the company and their supervisors. Changing company ownership,or their supervisor can make people they're back at square one and must "prove" themselves all over again. Deep down inside, they fear they could fail and lose their job.

Reluctance To Change
Change hurls most people out of their comfort zones. All of a sudden, they have to do learn new skills and start doing things differently.

Employees and people in general don't like to change established behavioral patterns. People settle into certain routines that become comfortable. They know the policies and procedures ... and how far they can stretch them. Above all, they know the current management structure, what's expected of them and what behavior will and will not be tolerated. Now things are going to change.

In some instances, their resistance may be the result of personal changes involved such as working a different shift or longer hours, relocating to a new facility across town or across the country, taking a salary cut,or losing perks such as an expense or company car.

If It Isn't Broke ... Don't Fix It Syndrome
Change very often takes employees totally by surprise, especially when everything in their area of operations appears to be going well. People's naturally tendency is to maintain the status quo and resist any change they think is unnecessary. Some staff members may even take offense and interpret the change as meaning they don't know how to do their job. As far as they're concerned, nothing's broke, so there's no need to fix it.

Self-Esteem and Self-Actualization Protection
Executive and managerial positions very often fulfill people's needs for self-esteem and self-actualization, the two highest in Maslow's hierarchy of human needs. Changes in ownership, management, responsibilities, titles and job functions can create resentment and resistance to change.

There are many reasons for opposing change. These are only a few of the major obstacles most frequently encountered when change takes place within an organization.

Effective change management requires identifying these and other obstacles immediately and responding with a positive, pro-active and timely approach, along with a comprehensive plan.

12 Steps For Effective Change Management

Perhaps the greatest change management challenge to any manager is developing an open-minded, flexible and positive approach to change and then integrating it into a structured action plan. Here are a dozen basic steps that will lay the groundwork for effective change management.

Recognize That Change Is Inevitable
Change has always taken place, is taking place now and always will until the end of time. No company, department or individual is immune from change. That's why change needs to be viewed as an ongoing process that impacts all the decisions and needs to be planned for and managed.

Thousands of years ago, Chinese scholars theorized that change is a constant force in the universe that impacts everything in life. They compiled all their wisdom concerning life and change into a book called the I Ching, (pronunced yee ching), also known as the Book of Change.

Along with the book, they developed a decision-making process that incorporates the forces of change currently going on in the universe . Today, many people throughout the world consult the I Ching before they make important business or personal decisions.

Organizations and individuals who grow and profit from change are those who realize the inevitability of change and the importance of managing it to their advantage.

Embrace Chance As A Positive Opportunity.
People tend to view change from a negative perspective. From the very start, it's important to communicate and convince staff that the changes being made are positive and will provide exciting opportunities for growth, advancement and financial gain.

View Change As An Opportunity For Innovation
Employees don't like to leave their comfort zones, which is exactly what change forces them to do. Positioning change as an exciting opportunity for them to participate in the innovation process and contribute fresh new ideas will help ease their fears and lessen resistance.

Make your staff a part of the change proces. Create "innovation teams" and ask for volunteers to join these teams. Make sure every staff member is on at least one team. Try making your most vocal opponents of change "team leaders". You'll be amazed how resistance and opposition will steadily begin to vanish.

Outline What and Where Major Changes Are Happening
Identify what the major changes will be, what departments or areas of operations will be impacted the most and over what time period these changes will be taking place. Create a list of secondary "less important" changes that you envision might occur.

Evaluate What Impact Change Will Have On Your Staff
Identify what impact these changes will have on each member of your staff. Pinpoint any serious problems and those individuals you can expect will voice the most resistance. Make a chart with this information and use it as a guide when holding staff meetings and discussions on the changes taking place.

Identify What Resources You Need To Facilitate The Change
You may need additional staff, a larger operating budget, more marketing support and a variety of other resources to facilitate the change process. Make a list of these and be prepared to ask management for the additional resources you'll need.

Discuss Change Honestly and Openly
Try to get all the facts and meet with your staff as soon as possible, before rumors run wild. If there has already been a general staff meeting on the changes taking place, be prepared to hold a departmental meeting with your staff to further explain and clarify the situation.

Some staff members may be reluctant to speak publicly about their concerns, so let everyone know you are available to discuss any concerns privately, if they feel the need to do so.

Encourage your employees to ask questions and voice their opinions and concerns. Most importantly, be sensitive, honest, open and show your support during the transition process.

Develop A Change Management Plan
Change is all about transition and the challenges it creates. Change Management in its simplest form means planning and directing the process of transitioning people, procedures and behavioral patterns.

The Change Management Plan is basically a transitional action plan outlining what specific objectives, strategies, tactics and structures will most easily and effectively shift the organization, its operations and people from one direction to another. It should contain the following sections:

A Situation Overview - a brief synopsis and analysis of the business, economic, market or organizational factors that create the need for change

A Rationale For Changes - an honest and open statement as to why the change is needed and the time frame in which it must occur

Change Objectives - clear, specific and concise goals that change will bring about

Change Strategies - an outline of the steps that will be taken to create and embrace change

Change Catalysts - what factors can be introduced to accelerate change and facilitate everyone in the company embracing it.

Impact Analysis on Staff - A review of the effect the changes will have on either individual staff members and/or staff members in different departments.

Impact Analysis on Operations - An outline of how the change will alter, enhance, improve, complicate or simpify the day to day operations of the organization as a whole and the individual departments.

Competitive Impact Analysis (if needed). If the change will effect your competitive situation as well, it is important to assess what impact this will have in terms of market share, share of voice, sales revenue, marketing and advertising, expenses and profits.

Customer Impact Analysis - A determination of what impact the change will have on customers, if any at all.

New Procedures and Policies Needed To Facilitate Change - A review and analysis of the new or different procedures and policies that will be required to effect and facilitate the change. These might include changes needed in invoicing, distribution, hiring, training, customer service and other areas.

Budget and Resources Needed - A listing of additional human, technical and physical resources, along with the funds that will be required to effectively introduce and facilitate the desired change.

Internal and External Communications Plan - a plan outlining any employee communications and external customer and trade advertising, promotion or public relations that must accompany the change.

Plan for Securing Employee Feedback - a plan to collect, monitor and analyze staff reaction to the change so that the company can better manage and facilitate the transition process.

Timeline for Implementing Changes - a time frame during which the changes are introduced and their impact analyzed.

Benchmarks and Change Measurement - the yardsticks used to measure change, it's effectiveness and impact on internal and external stake holders.

These are just general guidelines. Each unique situation may require more or less sections, depending on the magnitude of the change and size of your organization.

Keep Flexible To Make Adjustments
Change puts everyone throughout the organization in new and at times unfamiliar territory. Mistakes will be made, plans will be scrapped, directions will be changed ... and of course, staff turnover will inevitably occur too. That's why it's important to keep your thinking and planning flexible enough to change at a moment's notice.

Train and Coach To Facilitate Change
Your staff will need change management training and coaching, and possibly training in specific product or technical areas. It might even pay to turn over training to an outside resource to let you focus more critical issues Training and coaching for effective change are important, but often overlooked in the heat of battle.

Measure The Results
Devise a process for measuring the results and assessing the effectiveness of the changes and your change management program. This will help you manage the current change and transition process and better prepare yourself for the next one.

Get Ready To Change All Over Again
No changes last forever. Just as soon as things have settled, people are comfortable and a new status quo has been established, it's time to go through the process all over again. When this happens, just review your previous change management plans and your results analysis. Learn from your past mistakes and institute improvements this time around. You've survived the last round of changes and hopefully profited from the experience. Now get ready to grow and profit even more.