The lesson for businesses today is that no matter how well they have done before if businesses are not willing to change to create new values, they will be left behind and out of the race. To survive and succeed, every organization needs to adapt and adjust to become stronger. That’s why change management should be a top priority for businesses. Let’s follow this article to learn more about the change management plan.
The definition of change management
Change management (often abbreviated as CM) is a term that refers to all methods of preparing and assisting individuals, groups, and in creating change within an organization. It includes methods of reorienting or redefining the use of resources, business processes, budgeting, or other operating modes to change a company or organization. Change management looks at the organization as a whole and what needs to change and is used only to show how people and teams are engaged during an organization’s transformation.
The nature of change exists in two forms: translational transformation and total transformation. Translational transformations are small changes that occur naturally and continuously in the day-to-day operations of an organization. Meanwhile, the comprehensive changes are towards a clear change in the strategy, people, organization, technology, and culture of the enterprise. Thus, change management is essentially controlling the change of one of the five factors mentioned above, depending on the current status of each organization. Even governance can require simultaneous impact on all these aspects for many organizations and in some corporate training consulting programs.
In summary, change management is the whole process of proactively reforming the activities of an enterprise in order to create greater competition against other businesses in the market, using methods and techniques. support from individuals, groups, and organizations to transition from the current state to the new state. It involves many different fields, from sociology to behavioral sciences, information technology, and business solutions.
What is a change management plan?
A change management plan is a plan or process that guides individuals to successfully apply the change for the purpose of managing change and achieving success. A change management plan in an enterprise is a collection of management activities to actively detect, promote and control the change process of the enterprise in accordance with the fluctuations of the business environment to ensure the development of the enterprise. in an ever-changing business environment. Each stage and company is unique, but research has shown a number of strategies businesses can implement to influence transformation in the operation of the organization or project.
In the context of project management, the term “change management” can be used interchangeably with change control processes when changes to the scope of the project are introduced and approved.
Types of change management
Most companies equip themselves with different programs to respond to business fluctuations such as: new technology challenges, new competitors, new markets, and the need to operate more efficiently… Each program is tailored to overcome obstacles and increase business performance. Typically these programs fall into one of the following categories:
With restructuring programs, the company is viewed as a group of functional departments under the “one machine” model. During this transformation, with the support of consultants, senior management attempted to reshape these divisions for greater overall performance. Mergers, acquisitions, consolidation, and resale of operating divisions are all examples of structural change.
Operating costs optimizing
These programs mainly focus on cutting unnecessary activities or implementing methods to minimize operating costs. Little-considered activities during profitable years will attract the attention of cost-cutting experts when times are tough.
These programs focus on changing the way work is done. You’ve probably experienced a few changes of this sort, such as rebuilding the loan approval process, the approach to handling customer warranties, or even the way decisions are made. . Process change is often meant to make work faster, more efficient, more reliable, and less expensive.
These programs focus on the “people” aspect such as the company’s usual approach to business or the relationship between management and employees. The shift from command-and-control management to participatory management is an example of a changing cultural environment, an attempt to reorient from a company that focuses solely on content. set and bring the mentality of “product is the center of development” to a customer-centric orientation.
If your company is contemplating a change program, it is essential to clearly determine what form of change the company wants to take first, as well as predict how it will affect the entire organization. Anticipating potential roadblocks will help your company prevent problems during change and ensure success.
Components of a change management plan
When creating a change management plan, every leader or manager of the organization/project should pay attention to four following aspects:
The are several principle goals of creating a change management plan. The first one is to motivate and help individuals/teams that are negatively influenced by the change of the organization. The second one is to raise awareness of employees about the benefits of change in the organization.
An indispensable component when creating a change management plan is communication. Communication about the change management plan in the organization must be clear and strong during the changing process. Besides communicating about the objectives and expectations of the future organization, it is also important to be honest with employees and stakeholders. Always keep in mind that communication should be multidimensional, therefore, let the employees, stakeholders, and even customers know and discuss those changes.
One of the most problems that every manager/leader has to face is the lack of participants of their employees. When individuals are familiar with the culture and working environment of the organization, it will be harder for all of them to adapt to a completely new working style. Therefore, leaders and managers should prepare suitable and effective strategies for these change management plans.
Training and onboarding
These are the two most effective methods to help employees smoothly adapt to the change of the organization. Several meetings on the purpose of discussing and educational sessions will do wonders in helping empower your project team.
The importance of change management plan
The business environment changes in an extraordinary way, changing on a large scale and very quickly. Advances in technology, changes in consumer needs, business globalization trends, and environmental protection have created strong pressures for businesses to change to adapt or otherwise be excluded from the business environment.
Change management helps projects implement change proactively, in the right direction, and at the right time. This is the condition for them to survive and develop effectively in a constantly changing environment. In today’s business environment, more than in any previous era, the only constant is the change. Successful organizations manage change effectively, constantly adapting to any changes in the business environment to adapt to the changes and thrive with forces.
The truth is that if the business maintains the conservative ideology against change, that business is gradually entering the path to collapse. But, change is absolutely a challenge for every business. Therefore, managers need to act flexibly and skillfully to make the process of change happen smoothly, effectively, and without causing negative impacts or disrupting current business activities.
The story of Wal-Mart’s need to transform the business model of each market is a typical example.
Wal-Mart, the leading low-cost retail chain in the world, is one of the most successful privately held companies in the US. Applying the Osterwalder model, Wal-Mart’s value proposition is based on a cheap solution for customers. Wal-Mart not only sells convenience goods with a variety of products but is also a one-stop shopping place. With this value proposition, customers can save time and money.
However, with this model, Wal-Mart failed and had to withdraw from Korea.
The main cause of the company’s painful failure was the wrong localization strategy. Wal-Mart has rushed to apply almost 80% of the supermarket model in Western countries. Wal-Mart’s supermarkets in the West are often located far from the city center to reduce the cost of renting land to lower the cost of products. However, a Korean person goes to the supermarket 2-3 times a week because they always want to buy fresh food every day. Wal-Mart’s supermarkets are located in the suburbs and the supermarket’s products are often packed in large packages, making it difficult for consumers to choose to buy products.
Although, the strength that makes Wal Mart different is the low price due to the maximum reduction of related costs such as staff and infrastructure. But for Korean customers with a per capita income of $24,000 a year, need more than cheap products.
Therefore, applying and changing business models is necessary even for leading businesses as Wal-Mart if they want to succeed.
Principles of a change management plan
One enterprise’s way of managing change may not work for another, so no method or formula is perfect. Leaders should flexibly adjust their approach to have a strategy suitable for each organization.
There are four core principles that leaders need to understand before starting to plan change management for any activity in their organization as follows:
Principle 1: Understand change
Leaders need to understand the nature of change in order to effectively leverage the benefits of change. Leaders need to think about the following questions:
- Why does the organization need to change? What is the main goal of the change?
- What benefits will the change bring to the organization?
- How do employees embrace change positively?
- How will the change affect the way employees work?
- What must each person do to achieve effective change?
Thinking about the consequences of not changing will also help leaders understand the importance of change. The leader himself must also be confident that the new approach will be better and develop a clear roadmap to achieve that positive change.
Principle 2: Prepare for the change
The change will not happen spontaneously, and any plan for change needs to be tailored to the characteristics of each organization. The way in which a change project is implemented will also vary from organization to organization. Some businesses follow a methodical and rigid implementation direction, while others will be more open and flexible in their approach to change.
Overall, the leader will need to consider the following factors:
- Consensus: Change is effective only when the leader has the agreement and support of all employees in the organization.
- Participation: Since every change is different, responsibilities will vary depending on how the changing activities and projects are organized.
- The impact: Think about the future when the desired change has been achieved. How does the leader anticipate and measure the impact of this change? What is the goal that needs to be achieved then?
Principle 3: Implement Change
There are many strategies and strategies that leaders can use to implement change. J. Kotter’s organizational change model is a prime example. This model explains how leaders can create a sense of urgency, help employees realize the importance of change, thereby creating motivation for them to change. According to this model, the following steps can help managers implement change in the organization in a positive and effective way:
- Step 1: Make sure everyone involved in the change process understands the reason for the change – and what it means for them.
- Step 2: Agree on the criteria for change and ensure that they are measured and reported on a regular basis.
- Step 3: List all personnel and key stakeholders in the change process and determine their level of involvement.
- Step 4: Identify the training needs needed to make the change.
- Step 5: Assign responsibilities to key personnel, appoint people who will help bring new methods into the organization’s operating processes.
- Step 6: Find ways to change the behavior and habits of employees, so that the new change becomes the norm.
- Step 7: Ensure that support for personnel throughout the change process.
Principle 4: Communicating change
Any preparation or planning for change will fail if it fails to convey the message of change to everyone. A serious communication mistake some leaders make is thinking that others will figure things out on their own, feel the need to change, and see the new direction as clearly as they do. Reality is not so.
Barriers to organizational change
Managing change has never been a simple task. One of the biggest causes behind this is poor leadership and lack of alignment between management at all levels in the business. If managers themselves are not convinced of the benefits of change, they will not be able to lead employees to follow. On the other hand, great leaders know how to inspire their workforce and embrace change more positively.
Any change in the workplace can cause more or less inhibition for workers because they are used to working according to the previous procedures and ways. This can lead to resistance to change. This is also one of the major barriers to change management of leaders. It is not possible to simply issue orders with a series of announcements, nor can employees change their behavior without a plan. It should be considered that change is always difficult, even very difficult, to lead people to give up the old inefficient behavior to a new behavior that brings more benefits to the business.
Besides, leaders also face cultural barriers. If the previous organizational culture does not accept or even resist, change, then the leader should have incentives to reward creative flexibility, thereby creating an exemplary premise for change. change, and repeat this message repeatedly until the organization-wide view of the change improves.
Another factor hindering the change management process is people’s natural inclination towards inertia. As in Newton’s first law of motion, people are resistant to change in organizations because it can be uncomfortable. Furthermore, in cases where a company has seen its prosperity dwindle, for a manager or executive to see themselves as an important part of the problem. This problem can be exacerbated in countries where “honor” plays a large role in interpersonal relations.
No matter how detailed a change management plan is, there is a possibility of failure, so always be prepared to face problems that arise. For pessimistic or negative views from the outside, leaders need to acknowledge, understand and find ways to remove resistance to change.
Creating a change management plan
The process of change in each organization will take place at different rates and expressions. If we look at Kurt Lewin’s change model, change is divided into three main stages:
Step 1: Break the ice
The leader, who is also the one who leads the change, must create an imbalance between motivation and resistance, in order to transform the state of the organization from the present condition to the desired condition for implementation. project changes.
Step 2: Convert
Implement the contents that need to be changed according to the set plan. However, leaders need to understand the difference between planning for change on the one hand and the need to implement the plans on the other, so that appropriate and necessary adjustments can be made for the plan.
Step 3: Reshape
This process occurs when the change has entered the desired operational state. At this point, the manager needs to strengthen and maintain the existing conditions to ensure the change is operating stably until completely replacing the old one to prevent the organization from falling into a state of operation in the traditional way.
The above article has provided you with beneficial information about change management as well as how to create a change management plan. Hope this information will definitely help you have a better start to your project manager career.
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