Overcoming resistance to changes is often one of the biggest challenges for continuous improvement practitioners. In the first of a four-part series on managing change in the enterprise, Dr. Robert Swaim looks at the reasons organizations change and breaks change down in the six main areas of impact.
Why organizations change
Organizations change for a number of different reasons, so they can either react to these reasons or be ahead of them. These reasons include:
Crisis
September 11, 2001 is the most dramatic example of a crisis which caused countless organizations and even industries such as airlines and travel to change.
The 2008 financial crisis obviously created many changes in the financial services industry as organizations attempted to survive.
PEX Network report: How to achieve agility in financial services
Performance gaps
This occurs when an organization's goals and objectives are not being met or other organizational needs are not being satisfied. Changes are required to close these gaps.
New technology
The identification of new technology can lead to more efficient and economical methods to perform work.
Identification of opportunities
Opportunities are identified in the market place that the organization needs to pursue in order to increase its competitiveness.
Reaction to internal and external pressure
Management and employees, particularly those in organized unions often exert pressure for change. External pressures come from many areas, including customers, competition, changing government regulations, shareholders and financial markets in the organization's external environment.
PEX Network report: Managing change during uncertainty
Mergers and acquisitions
Mergers and acquisitions create change in a number of areas often negatively impacting employees when two organizations are merged and employees in duel functions are made redundant.
Read how Siemens Gamesa approached change management and process harmonization following a merger
Change for the sake of change
Often an organization will appoint a new CEO. In order to prove to the board they are doing something, they will make changes just for their own sake.
Something sounds good
Another reason organizations may institute certain changes is that other organizations are doing so, such as the old quality circles and reengineering fads. It sounds good, so the organization tries it.
Planned abandonment
Changes as a result of abandoning declining products, markets, or subsidiaries and allocating resources to innovation and new opportunities.
What organizations can change
What organizations can change fall into six broad areas.
Mission, vision and strategy
Organizations should continually ask themselves: "What is our business and what should it be?"
Answers to these questions can lead to changes in the organization's mission (the purpose of its business), its vision for the future (what the organization should look like) and its competitive strategy.
Related article: Driving transformation with effective change management
Technology
Organizations can change their technology, for example the way they produce whatever they sell, in order to increase efficiency and lower costs.
Human-behavioral changes
Training can be provided to managers and employees to provide new knowledge and skills, or people can be replaced or downsized. As a result of the 2008 financial crisis, many organizations downsized, creating massive unemployment that continues to this day.
Task-job design
The way work is performed in the organization can be changed with new procedures and methods for performing work.
Organizational structure
Organizations can change the way they are structured in order to be more responsive to their external environment. Again to be more responsive to the marketplace, this also includes where decisions should be made in the organization, whether centralized or decentralized.
PEX Network report: Mastering change in hybrid-work models
Organizational culture
Entities can attempt to change their culture, including management and leadership styles, values and beliefs. Of all the things organizations can change, this is by far the most difficult to undertake.
These are the major elements that organizations can change. It is important to note that changes in one of these elements will usually have an impact on another element. As an example, changing technology may require changes in the human-behavioral area where new knowledge and skills on how to use the technology will be needed.
Read part two: Why people are not as afraid of change as you might think
Read part three: Eight reasons change efforts fail
Read part four: Four steps to manage the Change Equation
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