According to a recent study, 96% of organizations are currently undergoing some form of business transformation. However, only 47% of those business leaders believe that the change will generate sustainable value.
Given the oft-quoted statistic that most change initiatives fall short of their goals, this mindset is understandable. Still, it doesn’t have to be the status quo.
With the right approach in place, your organization’s change efforts can be successful. The key is knowing which steps to take, who to work with and how to proceed.
Today, we’re sharing the key components of an organizational change management strategy. With this blueprint, you’ll be ready to tackle any enterprise-wide adjustments, setting the stage for continued growth.
What is Change Management?
A competitive business rarely stays stagnant. Rather, your company should always be looking for new ways to improve performance, seize opportunities and improve upon best practices.
When these areas for advancement are identified, changes will occur. Long-standing processes might be replaced, job roles might shift, and organizational structures might be rearranged. At the same time, there is often new ERP software to learn how to use as legacy systems become obsolete.
During these shifts, it’s not uncommon for employees to express a range of emotions, which can range from hesitation to obstinacy.
That said, what is change management? This refers to the actions that addresses the human side of any organizational change. It involves preparing your workforce to embrace and adopt the new ERP solutions and new business processes.
ERP Training Success Story
We helped this manufacturer implement a training strategy to increase user adoption of its new ERP system.
Recent Growth in the Change Management Industry
For years, change management was a nice-to-have feature, rather than the core competency that it is today. Now, organizations are realizing the importance of change management as an actual discipline.
This understanding has led to increased executive buy-in and increased support from senior leadership. Recognizing the powerful role they play as agents of change, many C-suite leaders are delivering the resources required to help project managers spearhead these change efforts and see them through to completion.
The Significant Cost of Change Management Failure
Companies that fail to prioritize change management can experience many setbacks at both the project level and organizational level. Project-wise, jumping into large-scale change without strategizing its implementation can mean:
- Going over budget
- Missing important milestones
- Experiencing project delays
- The need for extensive design reworks
- Losing current and future customers
- ERP failure
While these issues can be detrimental to any company, they are only the tip of the iceberg. Across your workforce, a change management failure can lead to the following organizational costs:
- Loss of productivity
- Poor work quality
- Loss of skilled, valuable employees
Finally, consider the cost of failure associated with the change itself if your team mishandles the rollout. Not only could you lose the investment that you made in the project, but you could also hinder your business from being able to pursue innovation in the future.
Key Change Management Tools
Now that we’ve covered the importance of effective change management, you might be wondering what tools can help you manage change? A few of the most common ones include:
- Communication plans
- Coaching plans
- Employee training plans
- Resistance management plans
- Sponsorship roadmaps
- Data collection and feedback analysis tools
- Focus groups
Not all of these will be applicable to every change initiative. However, they’re important resources to have in your arsenal when you’re ready to introduce a new concept to your workforce.
We recommend reviewing the statement of work from your ERP vendor to see what change management activities and tools are included. Chances are that your team will be responsible for developing and deploying many of the above-mentioned tools.
8 Key Components of a Change Management Strategy
The above tools are helpful, but unless you know how to format your change management strategy, you won’t tap into their full power. To that end, let’s take a look at the key components that make up a successful change management approach:
1. Readiness Assessments
Readiness assessments are tools that analyze the anticipated level of change resistance within your company. There are several aspects of your organization that should be considered at this juncture:
- The organization as a whole
- The culture and history of the organization
- Your employees
- Your sponsors
As you assess each one of these aspects, consider the scope of the change and the impact it will have on each individual group.
2. Communication Planning
Effective change requires effective communication planning. This is one of the pillars of a change management strategy and it requires ongoing attention.
Simply communicating the change once to your team isn’t enough. Repetition is key.
Often, it’s best to focus initial dialogues around the business case driving the change. What is catalyzing the transition and what are the risks associated with not changing? As discussions progress, you can share more details as required.
Every time you communicate, remember to take the following variables into account:
- The audience
- The message
- The timing
We recommend developing a cohesive change management communication plan, or ERP communication plan, that specifies how you will address change with different members of your organization, including employees, managers and executives.
3. Sponsorship Roadmaps
The Project Management Institute explains that sponsorship is the number-one success factor in determining project and change initiative success. Sponsorship is also one of the ERP implementation best practices that we recommend to clients.
Though the two are related, sponsorship is not the same as support. Your executive teams can support your ideas from afar, but unless they have visible, hands-on participation, the change can still fail.
An organizational change management consultant can help you develop a sponsorship roadmap that outlines both how you will communicate the importance of sponsorship to executives, and how these executives can help build a network of support that extends to other key stakeholders and decisionmakers in the organization.
The first type of training you will need is change management training. Managers should be equipped with the knowledge they need to drive change within their departments.
The other type of training you will need is end-user training. In other words, employees should be trained on how to follow new business processes and/or use new ERP systems. This training should be customized based on how each group will be impacted by the change.
If business process reengineering is a key aspect of your project, then process reengineering workshops can be a great time to document the impacts of change for each group of employees.
5. Resistance Management
It’s unrealistic to expect that every employee will be 100% on board with every change. There will likely be some form of disgruntlement, disagreement or even outright resistance.
This is why a resistance management plan is key. When resistance is proactively addressed, it is less likely to usurp your project.
Within the plan, your change management team should identify the steps required to identify, understand and manage resistance across the workforce. Your team should also help leaders implement these steps within their departments.
6. Ongoing Employee Feedback
Once change is implemented, you need to know how it’s progressing. Employee feedback can help you discern what’s working, what’s confusing and where the pain points lie. Once you have this knowledge, you can take the steps necessary to address any issues.
Allowing feedback reassures employees that you care about their experience and are dedicated to ensuring they have the tools they need to navigate change.
7. Change Reinforcement
Reinforcing change in your organization hinges on celebrating every milestone post-adoption, both big and small. It’s important to recognize and reward individuals as they make strides with new technology, processes and procedures.
This is one way to communicate to employees that the change is here to stay, and that continued adoption is essential.
8. Results Management
Once the project is completed, it’s important to have steps in place for measuring results.
At this point in the process, you can take a bird’s eye look at where the program was successful, as well as any weak areas. You can also identify process changes that you can implement on the next round of changes.
If ERP software is part of your project, then measuring results will mean measuring the benefits of ERP – what benefits are being realized and how close are you to achieving your key performance indicators (KPIs)?
A dedication to continuous improvement is key in this regard. By looking for new ways to help your employees embrace change, you’re turning change management into the core competency it was meant to be.
An Expert Approach to Change Management
Are you contemplating an ERP implementation or business transformation? If so, these key components of a change management strategy can help you transition employees to new ways of working.
However, taking the time to create these plans and oversee these activities can be laborious and overwhelming. That’s where we come in. Our ERP consulting firm has the tools and resources required to help you ensure employee buy-in and manage change resistance. Request a free consultation below to learn more.