Change management is a systematic approach to enabling people in an organization to transition from their current state to a desired future state. Without adequate change management, there is a high risk of failure for the implementation of a new business strategy or operating model, or a program to reduce costs and improve operational efficiencies. When delivering change management support to our clients, we balance formal and informal interventions to ensure that leaders drive and role model the change, people throughout the organization adopt new ways of working, and the business benefits of the change are sustained.
Most business leaders have come to understand the importance of the people component in implementing and embedding change. According to a survey PwC's Strategy& conducted of 350 global executives charged with leading major transformation programs, senior leaders now recognize that people initiatives spell the difference between success and failure. Change management tools and techniques have become far more prevalent and sophisticated, and the cadre of seasoned professionals skilled in wielding them has also grown. Still, as one respondent put it, “The people dynamic is always recognized but severely underestimated and under-resourced in every change project in which I’ve been involved.”
A number of attributes distinguish a successful change management program. First, it is people-focused. You cannot achieve business change objectives without altering the way people work and behave. Second, it is systemic. Each business is a system; you need to understand the enablers and barriers of that unique system to effect change. Third, it uses both formal and informal levers. Opportunities for people to shape the change through informal and peer-to-peer networks add significant value to a balanced and integrated change effort. At the same time, it is necessary to drive change through formal organizational enablers like recruitment, reward, and performance management processes.
At Strategy&, we have an approach to change management — the people side of business transformation — that addresses change comprehensively. The key to our approach is balancing the formal and informal levers in a change program, addressing both the “boxes and lines” of the organizational structure and the “unwritten rules” of how decisions are made and how pride in the organization is instilled.
Change management, as we define it, is the capability and set of interventions that deliver the “people” side of a change effort. Successful change management not only targets leaders but also engages people across the organization, while adjusting key enabling processes such as performance management. Change management is not a communications plan – communications is a vital component of an effective change management program, but it is no substitute. Nor is it an HR initiative, though HR plays a critical role in implementing change
This “change” can be large-scale, such as the introduction of a new operating model or a significant culture change effort, or more contained, such as merging two departments. Whatever the magnitude, all change involves people adopting new mindsets, policies, practices, and behaviors. Change management helps people not only make the transition but also sustain its benefits.