Part 2 of a 3-part blog series focusing on creating an effective enterprise change management strategy and implementation plan, inspiring user adoption, and improving ROI.
What is Change Management?
Change management helps guide how companies can prepare and support individuals to change to drive organizational success and outcomes. There are multiple approaches to prepare and support individuals, teams and organizations. Change is inevitable and organizations have to find a way to manage change effectively to beat their competition. Effective change management can be timely and costly, but if executed properly, can be very effective in setting themselves apart from the competition.
For many organizations, effective change management remains an elusive goal for one reason: even when stakeholders agree it’s necessary, the adoption process may still suffer from poor planning, bad execution, and a lack of user training, just to name a few challenges.
The key takeaway is that companies shouldn’t underestimate the value of change management by shortchanging the process needed to achieve it. Whether your cloud transition requires employees to learn new ways of working with company data, communication tools, collaboration tools, or all of these, too much is at stake to take the change lightly.
However, employing a user-centric approach to change management will facilitate its success and even drive growth.
The Cost of Bad Change Management
The financial pitfall of failed change management is incalculable, in that it is extremely difficult to attach a dollar amount to a complex process with so many different people, moving parts, total-man hours, and other variables; not to mention companies have different goals and strategies for achieving them.
Regardless of each company’s specific change management challenges, the data paints a grim picture. A landmark report from the Graziadio School of Business found that organizations stand to lose 65% of their investment when big projects have little or no change management support.
The biggest factors in failed change management initiatives include:
- Lack of commitment and follow through by senior executives
- Defective project management skills among middle managers
- Poor training and confusion among end users
- Lack of initial strategy set up and follow through
- Company culture is not well defined
- Technology needed is not available
- Team is not engaged or interested in the transition
The common denominator in these situations is that a few drops of bad planning lead to a tsunami of wasted financial resources. A Harvard Business Review study found that among change management initiatives, 27% suffered from cost overruns and 1 in 6 ran 200% over. By focusing on a user-centric approach, meaning how will each employee engage with this change, adoption and success will receive a boost. By focusing on the employees and how they fit in, companies will be a lot more successful due to increased voluntary engagement from employees. If they feel as though the change is about them and they are a part of the change, they will be a lot more likely to get excited about the project and participate in it.
The Autopsy of Migration Failures
For years, the standard method of managing projects has focused more on rational factors like process and procedure but less on employees’ psychological engagement. This has led to a dictatorial “our way or the highway” push that is more likely to be rejected, abandoned, or worked-around by employees in the long run. One estimate found that the cost of this failure-prone approach to project management can reach up to $150 billion annually.
The challenges are just as harrowing in the public sector: taxpayers were hit with a $100 million-plus bill when the FBI failed to correctly implement a Virtual Case File system that would have upgraded and streamlined their operations. The post-op analysis of the FBI snafu mirrors and even reveals many of the biggest technical challenges of change management:
- Poorly defined and slowly evolving design requirements
- Overly ambitious schedules
- Lack of a plan to guide network deployments and software development
Without a rock-solid adoption plan in place, total C-suite buy-in (and perhaps with IT execs leading the charge), and an ability to adapt with the times, a failed migration becomes more than just a potential outcome of large-scale projects. Without a people-first approach, it becomes an inevitability.
Change Management Solutions
With all the potential roadblocks to change management – financial and operational, among others – finding solutions is a difficult task, but there are best practices that help ensure it doesn’t have to be too big of a risk.
Many of these solutions can and should be adapted to company-specific goals and challenges, but generally, the steps to change management are:
- Establish a vision – Define how the organization will look and operate after change occurs
- Involve senior leadership – They should agree on, communicate, and implement the vision
- Develop a change management plan – This should also include a SWOT analysis
- Engage stakeholders – This reduces barriers to adoption and gives managers and other key leaders an ownership stake
- Communicate at all levels – Market the change so every employee at every organizational level knows the reasoning for the change, how it will drive goals, and ensure they know where to look for for support
- Create infrastructure to support adoption – Build a culture around change that focuses on training, access to resources, and continued commitment to how the process will drive results
- Measure progress – Gauge company-wide participation and ensure that no employee falls back into the old ways
By beginning with the end in mind – the end user, that is – companies will have an easier time coordinating a change management campaign.
There are many different models of change management, but all of the models have similar steps to accomplishing change. Effective change management includes a couple of essential steps including: setting expectations, constant communication between executive and team members, monitoring and managing success and resistance and review. If any one of these steps is missing in your change management plan, you won’t be as successful in implementing change, and may loose a lot of money in the process.
Change management takes time and requires commitment, but it’s a necessary endeavor for business survival. Like any other company decision, it should be taken seriously, initiated early, and assessed thoroughly against financial and organizational risks. Failing to create a solid plan for change can cost millions and lead to disengaged employees. For stronger results, organizations should follow the best practices of successful change management solutions, many of which target how to best engage users early and often to increase adoption.
Learn more best practices for executing a winning change management initiative by watching our on-demand webinar session – “Your Guide to Designing a Successful Change Management Strategy for the Cloud”.
As Practice Lead for Change Management and Organizational Effectiveness
at SADA System, Jason enables enterprise organizations to effectively manage
change as they implement cloud solutions and tools.