One of the world’s leading food chains, McDonald’s, had made a billion-dollar mistake.
In 1998, the business launched a ‘Made for You’ program that emphasized innovation, installing expensive equipment and more customized orders. However, it failed to implement that change, and McDonald’s lost two of its most important assets: employees and customers.
While McDonald’s did create better quality products, the customers didn’t care. There was also a huge cultural shift and the employees couldn’t effectively switch to the new processes. The result was a 60% turnover rate.
When it comes to change management, most organizations ignore the ‘management’ part of it.
Change management has always been about people: first, during and last. According to a study by Mckinsey, companies that disregarded shifting mindsets during a change rated their change programs ‘extremely successful.’ But companies that went through the trouble of addressing the mindsets were four times more successful.
Keeping the focus on people isn’t easy. Moreover, managing people can be tougher than initiating change and performing technical tasks. Read on to find out how an HR can lead people through change.
What is Change Management?
Change management is a process where an organization implements strategies to deal with its internal and external transformation. It prepares the employees and supports them throughout the process of implementation, monitoring and post-changes.
For example, when companies had to implement remote work, they changed their organizational structure and work arrangements. Companies supported their employees and team leaders to adapt to new ways of working and communicating.
Why micro-change management is the new macro
Change management is generally associated with implementing large-scale initiatives. However, when the covid-19 pandemic hit, companies had to change their approach towards adapting to change. Businesses began taking small, fast and focused steps to manage business transformation.
Take Infosys. The company was able to drive change during their multi-year transformation and the pandemic as well. It redefined its onboarding process, employee experience and other business processes which transformed the company into a digitally native company for more than three years – all through small implementations.
During the pandemic, almost 99% of its employees moved to remote work smoothly. Employee satisfaction improved dramatically along with client value scores.
How was Infosys able to implement micro changes on a larger scale? According to an article by Harvard Business Review, following are the micro change techniques it used:
- Deconstructing big changes into small steps: Begin by understanding why a change is required, its value and the desired behavior. This helps in modifying existing processes and deconstructing big initiatives into well-defined, smaller and focused outcomes. Assemble small teams with cross-functional skills to achieve larger objectives.
- Incorporating required behavior through small modifications to habits and routines: Infosys implemented large-scale reskilling initiatives by driving the desired behavior and making small modifications in employee routines and behavior. One routine or behavior was encouraged at a time which changed employee behavior. It deconstructed training into smaller modules which was easier for employees to steadily progress and develop new routines.
- Measuring, learning and evolving: Once micro change initiatives are implemented, they need to be continuously monitored to make sure the desired outcomes are achieved. Organizations must make use of existing tools to produce patterns and provide feedback. This will enable companies to measure change, encourage required behaviors and take corrective action.
For every organization to fulfill its vision, micro change management can deconstruct complex changes into smaller, achievable changes.
Types of change management
Developing a structured approach is critical as many disruptions arise when implementing changes. The changes could involve the implementation of new technologies, modifying existing processes, changing organizational hierarchies, etc. There are 8 types of change management:
- Organization-wide change
- Strategic change
- People-centric change
- Personnel change
- Structural change
- Technological change
- Unplanned change
- Remedial change
1. Organization-wide change
An organization-wide change is a large-scale transformation that affects every employee in the company. These changes are well-planned and carefully structured as they bring about changes in the culture, structure, policies, technology and laws of the organization. These changes are mostly communicated by the HR team to the employees to prepare and support them.
2. Strategic change
Strategic change can also be referred to as transformational change. Strategic change includes making changes in policies and structures. The changes are mostly connected to the product, services or public engagement. The HR makes sure that the talent and technology are aligned with the business strategy to boost competitiveness and take advantage of market trends.
3. People-centric change
People-centric changes include introducing new employee policies in the organization. Employees will naturally resist this kind of change so the leadership and HR teams must ensure an effective approach to managing the emotional reactions of the employees.
4. Personnel change
Personnel change is a small-scale change that occurs in the form of new hires, promotions, demotions, and layoffs. Sometimes, it can also happen on a large-scale when a company acquires another company and retains its staff. The HR department ensures support during the process or help design career paths.
5. Structural change
Structural change refers to making deep and impactful changes in the way a business functions and operates. There will be changes in the hierarchy, departmental structure, job structure and procedures related to administration. The HR team must make sure that the structural change does not cause major disruptions in the culture and employees’ behavior.
6. Technological change
Technological change is the process of introducing new systems or software in the business to improve business processes. The main goal is to increase the competitive edge of the business. HRs must ensure that the need for change is properly communicated to employees because this type of change often leads to resistance and frustration.
7. Unplanned change
Unplanned change arises due to unexpected events like shifting to remote work, high employee turnover or natural disasters. Not all unplanned changes are negative. Whatever the unexpected event may be, it is the HR’s responsibility to ensure effective communication, employee engagement and development.
8. Remedial change
Remedial change is a small-scale change that is implemented to deal with a problem or issue. Changes like these are not always due to low performance or lack of effort. They may also result from inefficient technology or deficiencies. HRs can offer support and identify toxic work elements to clear them out.
Does your organization need change?
With the world constantly changing, it is crucial that organizations keep up with the speed at which these changes are occurring and determine if there’s a necessity for change in their business. The lives of the consumers also change and so do their expectations from businesses. Hence, it is vital that businesses seize opportunities before there’s a drop in performance and results. Here are some key points that help determine if an organization needs change:
- Constant underperformance: Not all underperformances can be due to incompetence or laziness. Most employees need to be constantly reassured of growth opportunities in the company. They might find their work to be mundane or lacking variety. If a company is experiencing underperformance for long periods of time, it must advance its performance to a competitive level.
- Inability to align with market trends: If an organization is regularly taken aback by unexpected obstacles in the market, it should rectify the gap between how it views the market and the actual situation of the market. It indicates that the business hasn’t aligned itself strategically with the market.
- Unreliable market position: While it’s normal for small companies to have larger competitors outperforming them, it’s a bad sign if the company’s market position has stayed the same for extended periods of time. It’s only a matter of time before the company starts losing its current market position as well.
- Employee turnover due to outdated technology: When an organization doesn’t capitalize on opportunities and adopt newer technologies that could increase competitiveness and efficiency, it’s bound to lose employees who may find the company slow at keeping up with technological changes.
- Too many declining products and markets: When a business doesn’t properly allocate resources to innovation and new products, it will result in abandonment of declining products, markets and subsidiaries. This calls for a change.
- External factors. Businesses that rely heavily on current market demand and consumer purchasing power will be heavily influenced by these factors. These include country’s policies that increase competition, changes in law that turn out to be unfavorable, and other socio-cultural factors that affect a consumer’s and employee’s behavior.
An HR’s threefold role in change management
Any change that’s going to be implemented will impact people in the business. This is the reason an HR plays a major role. Most change management initiatives are unsuccessful because most of them don’t address behavioral changes enough.
It’s normal for people to feel left out, unguided, unsupported and dissatisfied during any part of change. When employees experience such breakdowns, they will look for satisfying work elsewhere. This is where the HR comes in. They avoid such outcomes and manage the ‘human’ side: before, during and after the change. How an organization deploys its HR team in its change management can mean the difference between success and failure.
Most companies that guide employees during change sometimes fail to adequately support them and address behavioral changes. This is where the problem surfaces – they do it only during the change. The actual change process begins before the change has even been undertaken. The best way to spin the situation in your favor is to recognize the bigger role of HRs. They start implementing small but extremely impactful changes – before the actual change management process has even begun. HRs can do it by:
Establishing a clear need for change: Leaders must not focus excessively on their future vision and must adequately communicate why and how the change is going to take place. The HR department plays a very crucial role in ensuring there are no communication breakdowns. When it comes to change, the first communication should focus on why the change is necessary.
A change may not mean the same to every employee in the organization. HRs should take time to understand the change initiative completely and accurately to help others understand what the change will mean to them personally and how it will impact them.
Communicating the change: After establishing a clear need for change, HRs make sure to communicate changes that are going to take place before the changes occur. This includes addressing any questions or concerns employees may have about the change or themselves. The communication should be mostly about:
- What parts will be changing
- The losses and gains impacting people
- The emotional journey throughout the process
- Changes in the career paths of employees
- Changes in workplace culture
- The permanent changes the everyone should brace themselves for
Examining the readiness of the organization: While the leadership will handle the business side, it’s the HR department that will assess the readiness of the employees. This involves answering questions like:
- Are employees struggling with their current work arrangements?
- Will they struggle with the new work arrangements?
- Will any of the changes cause damage to recruitment and retention?
- Can the present skill levels of the employees handle changes? Is training necessary?
These are the questions an HR must answer to ensure the organization is ready for change.
Planning how to handle the emotional response to change: Different employees will exhibit different emotions to change and it’s the HR who acknowledges the emotional responses and engages them to avoid a drop in productivity. This is a critical step as an HR will have to handle negative emotions that can create long-term problems if not managed properly. The best way to recognize and manage emotions would be to develop advocates for change in different groups or departments. Any conflicts must be addressed beforehand so that during and after change, there are no divisions.
Providing training on change: Providing training depends on the change that is to be implemented. Depending on the change, the time taken for training the employees for the change will vary. It’s the HR who is responsible for equipping the employees to adapt to the changes, either internally or externally.
Evaluating the impact of change: There will be many unforeseen impacts of a change. The HR department must assess the impacts of change that will affect the performance and happiness of the employees and must address them accordingly to avoid any fallout or breakdowns. This requires them to have a complete understanding of the organizational change.
Leaders must embody the new vision they are trying to implement so that employees feel confident about their role in the new situation. During the change, the HR acts as the main facilitator and communicator of change by:
Facilitating smooth communication: While addressing concerns related to changes, the HR also manages employees who want the change to be implemented in a different way. This makes sure that the organization focuses on a bottom-up approach as well. The HR acts as the point of contact throughout the change process.
Continuously tracking employee performance and well-being: After the change has been implemented, HRs continuously monitors the well-being of the employee through feedback and surveys. Sometimes, HRs implement programs where they make sure that the changes are not impacting professional development negatively.
Aligning the change with the culture: When large-scale changes are being implemented, it is likely that there will be a cultural shift in the company. If the cultural shift is planned, the HR aligns change policies and strategies with the culture.
Checking and managing resistance: In the pre-implementation stage, the HR already deals with different emotional responses and makes sure that employees exhibit the desired behavioral traits. Any resistance that arises after change can also be managed by communicating regularly, rewarding desired behaviors and initiating employee engagement activities.
Keeping the focus on people: The HR can sometimes get caught up in technical tasks and project management, but they must not forget to manage the human side. For the HR, the primary goal of change management is to facilitate communication and track changes so that the change is implemented successfully.
While it takes time for employees to completely adapt themselves to the change, it’s easier for them to revert to old processes very quickly. When this happens, the whole change management process can be deemed pointless. The HR plays a critical role in ensuring the sustainability of change by:
Monitoring the adoption of changes: An HR’s role doesn’t end after the implementation of changes. They work with the leaders and employees to track whether the changes are adopted as desired. This drives a long-lasting change and increases sustainability.
Encouraging behaviors that align with the change: Once the changes have been adopted successfully, the HR ensures that the employees do not revert to their previous behaviors and work processes. The HR department plans new reward systems and structures so that the change is properly embedded in the organization.
Measuring the success of the change: Not all change initiatives turn out to be successful. The HR team conducts analysis and feedback sessions that can help understand if the change initiative was a success. These insights can be used to modify initiatives and change efforts.
Reviewing and taking feedback: After the change initiative is completed, the HR continues to work with the employees and leaders to deal with potential roadblocks by addressing persisting issues that can hamper new work processes and behaviors.
Managing resistance: How HRs can turn into change enablers
How employees are treated during change determines the success or failure of the change initiative. Humans will naturally resist change and are reluctant to leave behind their old way of doing things. Managers must be trained adequately to support and deal with employees as communication plays a major role for HRs in the change process. To successfully manage resistance:
- Begin by identifying employees as part of the change process. Involve them in the process, talk with them, get them to be enthusiastic about the process and acknowledge their emotional responses.
- After a change has been announced, employees will exhibit different emotions. Empathize with them by recognizing their insecurities, fears, doubts and excitement. The HR team will have to address these emotions one by one and help them cope with the changes.
- Clearly communicate the need for the change, the impact it will have on the employees and the objectives that will be met. In the end, connect the change with the greater good for both employees and organization.
- Conduct one-on-ones to inform employees about the expectations. Maintain transparency about the change and follow-up accordingly. Also, provide information in detail to the right people.
- Collect feedback through surveys to gather employees’ ideas, opinions and suggestions. This makes sure employees are part of the change process.
- Make sure the mental health of employees doesn’t go unchecked. Implement initiatives to reduce stress and anxiety. Initiate employee wellness programs to increase engagement and productivity.
- During the process, employees may feel unappreciated. Conduct peer-to-peer recognition programs or give out incentives to boost motivation. Don’t forget to identify employees who exhibit desired behaviors and are cooperative. Reward them.
Steps to create change management strategy for HRs
Change management involves continuous change in plans and strategies. However, the end goal remains the same: to reduce disruptions to work processes and lead people through change. Here are some steps that can be followed to reach that goal:
- Define what’s going to change in the organization.
- Establish the need for change, challenges, opportunities and impact.
- Identify who will be affected by the change and plan accordingly.
- Evaluate the emotional, the physical and the technical impact of change.
- Plan how the HR will communicate regularly with employees regarding change.
- Design a training plan for the employees to make sure they don’t lack skills and knowledge after changes have been adopted.
- Monitor the changes and continuously adjust them to strategy and culture.
- Recognize employees who have contributed to the implementation of change and reward them.
- Collect information on what went wrong and what went right for future change management activities.
Are your change champions equipped?
There is a common misconception that change management is the sole responsibility of the upper-level management. However, most organizations fail to recognize that it is the HR that plays a bigger role in the change process. The HR needs to be in a position where they can focus on employees, upskill them and meet the expectations of the overall strategy.
Let your HR team focus on people while Keka handles all the mundane administrative work. Sign up for a free trial.