A BearingPoint research paper entitled Seven Guideposts to Mitigate Risk provides readers with some practical tips and guidelines as to how organisations can avoid numerous large scale change challenges when undertaking an organisational change journey, effort or process, whether that be large or small scale. The following verbatim excerpts from this paper are provided as follows.
Global competition, ever-changing technologies and increased focus on customers' needs are just a few drivers that compel companies to undertake significant transformational initiatives. These efforts are designed to increase customer loyalty and retention, enhance organisational agility, decrease costs while gaining efficiency, and spur innovation. Viewed from an enterprise-wide perspective, change management needs to align with the organisation's strategic direction. Whether the goal is customer intimacy or product and service innovation, change management incorporates tools that can help drive the workforce and culture in the desired direction.
Change programs emerge from several sources: transformation efforts, enterprise-wide systems implementations, and mergers and acquisitions, to name just a few. Regardless of the source, change efforts bring several risks of failure that revolve around people and the organization undergoing change.
Whether the change initiative is restricted to a single business line or an entire enterprise, BearingPoint has identified seven crucial areas of risk that an organisation should address to increase its chances of success:
- Leaders assume the organisation is ready for change.
- Not enough people know the business reasons for the change.
- Top and middle management do not support the change.
- The change is developed without input from those whom it affects. This problem is compounded by inadequate information sharing before, during and after the change.
- Managers' and employees' job roles, accountabilities and performance metrics define and reward the "old" way of conducting business.
- Employees lack or do not receive the knowledge and skills to make the change.
- Leaders do not budget resources to help avoid the first six risks.
As companies prepare to take on major change, they must consider important questions, such as: How do we manage the knowledge transfer from senior to junior employees while preserving institutional capabilities? How do we create and maintain a culture of empowerment and accountability? Why is there a breakdown between leadership and mid-level management that inhibits our goal of common execution and vision? What future capabilities do we need to execute strategy and how do we calibrate our workforce accordingly?
Interestingly, Upwards of 70% of change management projects fail to achieve stated business objectives due to internal politics and people associated with the change.
When business units and functional leads align to the organisational structure, it becomes easier to develop goals and performance metrics associated with the change efforts. Including human resource professionals and business leaders to execute tested approaches to organisational alignment can help sustain the benefits of change. Providing frontline managers with tools and skills to help them become effective change agents will inspire their staff to climb on board and support the effort.
Successful change management requires organisations to set employees up to succeed. Employees must be equipped with the tools, training and knowledge to work in new and different ways. Without these fundamentals, they will resist change and undermine the effort.
In addition to aggressive risk mitigation, successful change strategies engage leadership at all levels. Chief executives and their direct reports must deliver a clear picture of their vision while openly addressing cultural concerns that could dampen efforts. They must share the business strategy and rationale for the change, which will inspire the organisation to embrace change.
For more information about how your organisation can practically mitigate the risks associated with your change and transformation journey, please contact Adam Kreuzer at BearingPoint on the details provided below.
About the author
Adam Kreuzer is manager, people and change at BearingPoint Australia. For more information email: firstname.lastname@example.org or phone: (03) 8665 9792