Change is inevitable for both companies and individuals alike. It can be an uncomfortable shift for employees when organisational change occurs. So how can SMEs implement change management processes to ensure these changes run smoothly?
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Managing a company can bring a number of challenges and, especially in times of crisis, managers must take measures to facilitate efficient operation and ensure the continued success of their company. There are various management concepts available, with change management being one of the most important. Change management helps companies react to change processes and simplify the steps towards essential digitalisation.
In this article, you can find out the principles of change management, the different change management models, the most important success factors and why companies should consider implementing change management software.
What is change management?
Change management is the concept of planning for, carrying out, and monitoring major changes within a company. Activities and projects are implemented in order to adapt new corporate strategies. Change management can manifest itself in different ways and can involve improved processes, changed behaviours, new strategies and fresh organisational systems. In order to implement the concept successfully, managers must actively participate in adjustment processes, which requires sensible planning to ensure that the company's objectives are aligned with the needs of the employees affected.
Why is change management important?
Even in the past, companies had to be able to react properly to change, but in our fast-moving world, this aspect is more important than ever. Some factors that can contribute to companies having to adapt in order to remain competitive in the market include:
- Advancement of digital transformation
- Political measures such as new laws
- Changing demands from employees
- Scarcity of resources
- International integration of national economies (globalisation)
- Demographic change and other social changes
Admittedly, managers and employees are not always in favour of such change, as they often feel more comfortable conforming to the status quo. However, change is inevitable and in recent years this has become increasingly apparent.
Change management principles
As with other management concepts, there are various change management models that companies can use as a guide. Some of the most well-known are: the 3-stage model by social psychologist Kurt Lewin, the 8-phase model by American leadership management professor John Paul Kotter, the 5-phase model by economist Wilfried Krüger and the ADKAR model by Prosci founder Jeff Hiatt. Each of these concepts has its advantages and features which specifically characterise them.
Lewin's 3-stage model
Lewin's 3-stage model serves as a simple illustration of social change in communities and groups. The social psychologist took the view that change in an organisation takes place in three phases: unfreezing, moving, and freezing.
By following these three phases, companies can transform an old structure into a new one. Incidentally, Lewin's three-phase model was originally used to illustrate change processes in social groups, but it has since developed into a common theory in change management processes.
Kotter's 8-Step Model of Change
Kurt Lewin's theory has been taken up and expanded several times over the years. One of these extensions is Kotter's 8-step model of change.
In contrast to Lewin's 3-phase model, the individual steps in Kotter's 8-step model are described more in-depth and the model indirectly reveals some of the biggest mistakes in change management. For these two reasons, this concept is often used by many managers as a starting point.
Kruger's change management iceberg
Krüger's change management model is based on previously developed concepts such as Kotter's 8-stage model and expands on these. The 5-phase model describes all the steps required to implement a successful change process in a company. Let’s briefly examine what you need to know about the different phases.
- Initialisation (phase 1): The first phase is about identifying the company's need for change. Declining productivity, a lack of consumer interest or increasing competition all indicate the need for change. Phase 1 is also about mobilising all managers and employees responsible for the change to enable joint analysis of the existing internal and external processes. This way, it is possible to determine where there is an acute need for action and change.
- Conception (phase 2): In order for change management measures to be successful and for change to be implemented without major complications, a well-founded concept is required. Managers should think about which changes make sense and what the company hopes to gain from them.
- Mobilisation (phase 3): Once the concept has been finalised, the planned changes must be communicated to the employees. This is not just a matter of issuing instructions but also explaining the benefits of the various measures. Ideally, employees will show enthusiasm for change management and promote the change process through active input. However, reservations about change are quite normal, making it all the more important to dispel uncertainties as early as the mobilisation phase.
- Implementation (phase 4): Following mobilisation, the next step is to implement the changes set out in the concept. To ensure that the whole process runs as smoothly as possible, priorities must be set so that all employees know what needs to be implemented and when. If the implemented measures lead to the planned results, it makes sense to retain them. However, if complications arise, an adjustment or even a new strategy will be required.
- Stabilisation (phase 5): Implementation alone is not enough; successful changes should be maintained and consolidated in the final phase. The main aim here is to firmly integrate the measures implemented into the company's processes, which often requires continuous fine-tuning. After stabilisation, managers should continue to actively look for new strategies so that the company can continue to adapt and develop.
The ADKAR model is a goal-oriented change management model for managing individual and organisational change. ADKAR is an acronym for five factors that must be present for lasting change to be possible: Awareness, Desire, Knowledge, Ability and Reinforcement.
The ADKAR change management model aims to move everyone involved from the current state to the target state. This is specifically about the acceptance and participation of employees, because the human side should always be taken into account in times of change. If employees are not actively involved in the change process, this can lead to more resignations, an increase in absenteeism and lower morale, for example.
Change management success factors
We have already shown you what change management models there are; however, this alone is no guarantee that the measures implemented will be successful. So let's take a look at some of the most crucial success factors:
Only if all these success factors are in place can companies assume that the planned change management process will be successful. However, even with a good concept, it is important to continuously monitor all processes and make adjustments where necessary.