The 5 Ingredients You Need to Make Organizational Change

There are three guarantees in life: death, taxes, and resistance to change.

Let’s face it, people are creatures of habit and get comfortable in their routines, systems, and structures. Requiring them to break away from the familiar takes a seismic effort. But change is essential in business today in order to stay competitive, improve processes, and maximize results.

At its core, change management deals with the people side of change Click To Tweet

Sure, change is difficult, particularly on an organizational level. That’s why there’s no shortage of consultants, guides, and gurus offering advice on organizational change management. HR leaders are usually at the center of transitional efforts, as they’re responsible for helping implement change across departments.

So what are the keys to implementing change and orchestrating a smooth transition? We’ll examine the five main ingredients to change management.

Understanding Organizational Change

According to SHRM, organizational change is the systematic approach and application of knowledge, tools, and resources to deal with change. It involves adopting new corporate strategies, structures, procedures, and technologies to handle changes in the business environment.

At its core, change management deals with the people side of change. That’s why HR leaders should be involved in all stages of change initiatives, and in many cases, spearhead them. Studies show that the more HR is involved in organizational change, the better the results, including:

  • Better employee satisfaction
  • Trust between management and employees
  • Improved employee understanding of change
  • Potential risks identified and mitigated
  • Improved cohesiveness among leadership

Still, just because you, as an HR leader, are directing the change process doesn’t mean it will be smooth sailing. About 70 percent of change initiatives fail, regardless if HR is significantly involved or not.

One way to increase your chances of success is getting key stakeholders involved in the process. When people of influence in the organization buy in to change, it makes the transition easier. It’s a good idea to enlist advocates from areas such as IT and finance to assist you.

The Recipe for Change (and Why You Can’t Leave Anything Out)

Once you have key stakeholders onboard, there are five essential ingredients you need for successful organizational change. If one of them is missing change can still happen, but it will have negative consequences.

The five ingredients are vision, skills, incentives, resources, and an action plan. Tim Knoster, professor at the McDowell Institute, created a model that illustrates why each key is indispensable.

A big change many organizations are undertaking is introducing a new performance management process. Nearly 60 percent of companies report that their annual performance evaluations are ineffective, and companies such as Accenture, Goldman Sachs, and Adobe have transitioned to ongoing feedback and coaching.

Let’s look at the five essential organizational change ingredients and how they relate to implementing a new performance management process.

Vision

Having a clear vision is the foundation of organizational change. It should convey two things: where you’re going and why you’re going there. It should provide a picture of the end result of the change, and should also be desirable, feasible, focused, and flexible.

When vision is missing from the process, there’s confusion. Neither management nor employees have direction for the change, nor do they understand the reasons for it.

When implementing a new performance management process, clarify that ongoing feedback drives learning and talent development, is more relevant and actionable, and empowers employees to improve as soon as they receive feedback and coaching.

Skills

Any type of organizational change brings a shift in organizational culture and often requires a change in behavior from leaders and employees. Prepare people for the shift by providing proper training so they can develop the necessary skills for the new initiatives.

Without training, people lack the skills to be successful in the new direction the organization takes and will be more resistant to change, resulting in increased work anxiety.

Without training, people lack the skills to be successful in the new direction the organization takes and will be more resistant to change.

When it comes to performance management, leaders must develop coaching skills to move from formal reviews to regular feedback. Organizations must provide training to help facilitate the transition. Likewise, studies show employees desire more career development, so when leaders become coaches it helps with retention.

Incentives

It’s inevitable when it comes to change people will ask: What’s in it for me? If people don’t believe the change will benefit them, they’ll resist it more.

It’s important to provide rewards for adopting change, and clearly communicate the benefits of the change. Organizational change is more successful when it positively impacts the work environment itself, by say, making jobs easier or more efficient.

Ongoing feedback provides both intrinsic and extrinsic rewards, and it’s important to communicate those benefits to management and employees. Some benefits include more useful and accurate reviews, more employee trust in the process, increased employee productivity, and improved employee engagement and retention.

Resources

You may have the vision, skills, and incentives in place, but if you lack resources to implement change you’ll have nothing but frustration throughout the process. That’s why it’s vital to ask, What do we need?

If people don’t believe the change will benefit them, they’ll resist it more Click To Tweet

Resources include everything — from people to finances to information to technology—you need to implement change. It’s important to be flexible, as unforeseen obstacles may arise. Creativity helps too, as you may need to implement change within a certain budget.

While a new performance management system will require training, there are creative ways to support the new process as well. You can use microlearning — providing new content in small and specific bursts instead of massive training sessions—and question boards to answer specific inquiries.

Action Plan

Now it’s time to put change in motion. An action plan translates the vision into specific goals and objectives. It assigns milestones, responsibilities, and desired outcomes for the change process.

Without a plan, people are essentially walking in place, performing tasks but not progressing. Sure, you may start the initiative, but it’s bound to lose traction without proper implementation phases, timelines, and leadership.

Without a plan, people are essentially walking in place, performing tasks but not progressing.

When transitioning to an ongoing feedback model, have a proper plan for your organization. You can introduce real-time feedback in a pilot group, evaluate the results, tweak it, and then roll it out company-wide. Maybe you’ll keep performance reviews, but supplement them with real-time feedback data. Or, maybe start with quarterly check-ins at first, then add more frequent feedback. Whichever route you take, adding new software to change the process will make the transition smoother.

Change isn’t easy, and implementing a new initiative in your organization is often a multiyear process that takes time, testing, and flexibility to perfect. But if you’re careful to include the five ingredients of organizational change, you’ll increase your chances of success.

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