Organizations are subject to constant development. There are many interrelated reasons for this: Market requirements, customer wishes, personnel changes, divestment of company divisions or acquisitions, regulatory standards, competitive pressure and price trends can all trigger both major and minor transformation processes. To adapt their strategies and structures to constantly changing business conditions, companies need functioning change management.
Goals and challenges of change management
Companies must, as a result, deal with change and pursue prudent, targeted change management – particularly in times of digitalization and globalization. The challenges of these two phenomena are more complex than ever. The pace of innovation cycles and the speed of all business processes are both accelerating. The approach that a company takes to these changes will ultimately determine its success.
Strategy and employee motivation are managers’ responsibilities
Managers play a special role in change management: They must view change in an organization as an ongoing task. The challenges and difficulties that arise in the process are substantial. The highest hurdle is motivation: Managers, department heads and team leaders must win employees’ support, convince them of the value of the upcoming changes and encourage them to truly participate in the new processes.
For this reason, well-planned change communication is one of the most important change management tools. Workshops and training courses are good ways to qualify managers and employees for the change process and the new tasks associated with it.
Change management: an overview in three terms
- Red Queen hypothesis: The “Red Queen” hypothesis explains why a company needs good change management: “Now, here, you see, it takes all the running you can do, to keep in the same place,” the Red Queen tells Alice, the protagonist of Lewis Carroll’s classic “Through the Looking-Glass.” In other words, companies must constantly change to defend their market positions.
- Commitment: To win over employees and to successfully support the change process, managers and management must believe in the goal and the path that leads to it. If managers stand firmly behind the company’s new direction and repeatedly communicate their support of it, the workforce will follow them. The Big Five in the technology industry show how this is done: Google’s innovation head, Frederik Pferdt, describes the process as “enthusiasm” for a “great idea and a mission” that employees and their managers pursue together. At Amazon, the search for ideas and change starts over every day. Jeff Bezos lives by the motto: “Every day is day one.” Day two, a day without change, brings the threat of “Stasis and death”.
- Storytelling: With the help of a clearly structured company story, managers can explain the reasons why changes are necessary. One motivational tool is the story of a hero’s journey: Like the hero, the company is venturing into uncharted territory and faces a number of challenges. What’s waiting at the end of the journey? Respect and the “magic potion” of new knowledge that prepares the company for the future – so that it can, for instance, enter a new market or take advantage of new opportunities to grow. tesa SE based its relocation on the hero-story principle and won the PR Report Award in the category “Internal Communications and Change Management” for its efforts.
Change management models according to Lewin and Kotter
Numerous change concepts have been developed to meet these challenges. Change management, as it is currently taught in MBA programs at business schools, is based on the theories of Kurt Lewin and John Kotter.
The model developed by Lewin consists of three change-management phases: “unfreezing,” “moving” and “refreezing.” These phases can be used to successfully structure change processes. Kotter developed his eight-step model at Harvard Business School. Under this model, far-reaching changes can be introduced to a company’s culture only if managers actively assume the role of change agents, because they are the ones who initiate the change management process, embody it and lead it to success.
Conflict management and culture change
A change process or culture change involves more than just defining short-term goals to safeguard success. It is also important for establishing an appropriate form of conflict management to address resistance that arises. In view of the acceleration caused by the digital transformation and the related company changes, which are taking place at an ever faster pace, change processes are an increasingly important part of personnel management. For this reason, personnel development is one of the most important success factors for effective leadership in companies that intend to transform themselves.
Change management at transformationbeats.com
Companies take very different approaches when changes need to be made. What those approaches are, who implements them and how, and where they ultimately lead – that’s the focus of the interviews, special sections and feature stories on Transformation Beats, the online magazine of goetzpartners.