The pace of change in the modern organization seems unending—rapidly evolving technological advances, labor market ups and downs, socio-political swings, stakeholder demands, and environmental and geo-political threats make business planning and execution challenging. What has not changed is the need for business and HR leaders to better prepare and respond to these challenges in a way that enables sustainable and consistent commercial performance. Many change management approaches appear to be ineffective, ignored, under-deployed, or improperly executed.

The discipline of organizational or strategic change management, popularized by Kurt Lewin (the "unfreeze, change, refreeze" model) in the 1950s, has been part of the HR lexicon for decades. It is designed as a formal process that supports organizational transformations, large and small, as they hope to achieve adoption and acceptance by employees, managers, and leaders alike.

The issue, however, is that psychologists have found that humans naturally resist change, whether it stems from fear of the unknown, loss of control, or simply discomfort with breaking a predictable and reliable behavior or action-result chain. Research has suggested that this starts with the amygdala in the brain, where change is perceived as a threat that triggers a fight-or-flight response. This naturally occurring resistance makes many business and process transformations challenging, stressing traditional change management approaches.

Change is a dominant organizational theme

Objective data supports the notion that the business world is spinning faster and in less predictable patterns, and experts see it as having evolved into a continuous flow of challenges. For example, Accenture reports that 80% of organizations have identified such significant change in their strategic vision, with 96% of leaders planning on allocating 5% of their revenue to change efforts in the next few years. 95% of companies say they have already undergone two or more significant transformations in the past three years alone, and 100% of their leaders foresee substantially altering their workforces (e.g., downsizing, replacing those with insufficient skill sets). So, employee fears and concerns are well-founded, and appropriate change management approaches should address those.

The problems with change management approaches

A wealth of organizational research has covered the difficulties with traditional change management practices. Unfortunately, estimates of success rates are concerning, with failure rates estimated as relatively high. For example, CEB found in its research that responding companies reported 50% “outright failures”, 16% with mixed results, and 34% as apparent successes. Some signs point to employee skills and reluctance or resistance to change, as evidenced by executives' and workers' surveys.

Executives’ concerns

From the perspective of executives, their faith in achieving success in change initiatives is relatively low (with only 47% sure that their teams can meet their goals). In fact, only 17% feel that their teams are “highly capable” of successfully executing the transformation plans. Another key issue is their reported lack of understanding of whether a transformation initiative was successful, with 50% reporting that they are unsure whether the efforts achieved their goals. This indicates their organizations' lack of clear goals and quality outcome measurement, a weakness in many change management approaches.

Employee issues

Sadly, reports from the affected employees provide similar messages about their experiences with transformations. For example, only 43% of employees believe changes are managed effectively. And their (resulting?) motivation creates another barrier to success, with only 38% stating that they are willing to support organizational change. Further research finds that no more than 26% of employees can “effectively implement” the required changes.

The reasons for these appear to stem from a handful of common reasons, including the 39% of employees reporting a lack of understanding of why the change is occurring, 38% who are uncertain about the implications of the change, 27% who fear changes to their roles and responsibilities, and 23% who report being excluded from decision-making and thus lack a sense of ownership over them. And sadly, 41% of those employees reported “mistrust in the organization” as the reason they resisted change. However, another compelling insight has emerged that the focus of traditional change management approaches should be reevaluated.

Is it the employees or something else? 

A classic question arises from these observations—is it the people or the process that makes organizational transformations fail or succeed? Two critical insights guide better ways to make organizational change “stick,” and they are both related to change management practices and strategies employed.

Failure to use a structured change management methodology has been shown to dramatically influence the effectiveness of the change effort. 74% of reporting organizations that did not use a structured methodology achieved only “poor” or “fair” results. Not surprisingly, taking an undisciplined or non-comprehensive approach to inform workers of the change, helping them understand how it will affect their jobs and benefit them and the organization, effectively developing the new skills needed, and the plan of action hampers adoption and acceptance.

The approach to change management employed has emerged as a significant factor that drains the potential effectiveness of a change effort. The most common change management approach is “top-down,” as 71% of HR heads reported. This approach focuses on executive-level decision-making, communication, and directing employees on how they should prepare and accept the changes. The issue with the top-down approach is that it is typically ”foisted” upon workers, relying upon primarily one-way communication and design. This has been found to lead to inefficient and unsatisfactory employee behaviors characterized by PWC as:

• Waiting: 64% of employees only act once leadership directions specify what they should do during change. 
• Wasting: 71% of employees are at risk of focusing on the wrong actions because the top-down plans are not made relevant to their daily work.  
• Wrecking: 28% of employees actively resist change due to anger and anxiety toward top-down communications viewed as edicts.

Many organizations point to their workforce to blame for change failure, and yet data suggests otherwise. It is seen that 64% of employees have most of the necessary skills to effectively make the changes, and just shy of 75% report a willingness to change their approaches to support the organizational change.

The reasons to change the change management process

A more comprehensive and better-planned transformation—whether it involves adopting new technologies, changing work processes, reorganizing a function or business unit, acquiring and integrating another company, rebuilding after a layoff, or conducting a business turnaround—has yielded substantial results. With clear goals such as implementing a new system or process, garnering widespread employee acceptance and adoption, and generating operating efficiencies and savings, an organization can enhance the likelihood of success and speed the adoption rate with robust change management approaches.

Better change project outcomes. Using a structured methodology has been shown to improve the likelihood of meeting the initiative’s objectives seven-fold (7X), over four and a half times (4.6X) more likely to stay on or ahead of project schedule, and almost one and a half times (1.4X) more likely to stay on or below budget.  

Improved business outcomes associated with the transformation are also seen with 5% higher revenue growth, 70% more likely to achieve lasting financial benefits, and 40% more likely to achieve cost savings. Organizations that excel at change achieve twice (2X) the profitability and shareholder returns and between 1 and 3 times (1.5-3.0X) revenue growth over those without such capabilities.  

Improved employee experiences can be achieved with twice (2X) as likely to feel “net better off” as a result of the changes and one and a half times (1.5X) improvements in productivity gains.

Making change management more impactful with a structured model

Adopting structured change management approaches to organizational transformations produces significantly better results. It can enhance the credibility of leaders and their decision-making, the HR team that designs and enacts the process, and the perceptions and adoption rates of the employees impacted by the changes. Many options are available, with some impressively comprehensive and practical approaches developed by leading consulting firms. Many quality boutique firms can offer various services at price points that meet the varying requirements and scale appropriate for mid-sized companies.  

The reality for many smaller organizations with fewer resources (smaller budgets and staff) is that they may not be able to afford a consultant yet want to optimize the outcomes of their transformation efforts. In any of these cases, an awareness of different change management approaches and models can be a starting point for selecting a change management vendor or developing an in-house process. No matter how the organization approaches the transformation, a structured approach will help guide it toward more effective and less painful success.  

The models tend to focus on different elements of the change process and include:

Understanding and acting on employees’ emotional response to change

These models help managers understand the process or stages, reactions, and resistance employees experience when encountering change. They are well-established in helping predict employee resistance and individual priorities and planning how to manage and overcome them at different points in their change processing. The most popular include the Kübler-Ross Change Curve, the Bridges Transition Model, and the Neuropsychology SCARF Model. These tend to be more effective in small-group or team transitions, as they focus on the individuals and where they are in the process of understanding, acceptance, and adoption.

Managing change as a business process

These treat employee understanding, acceptance, and adoption as a process and, as such, are better suited for more extensive organizational transformation efforts. They categorize the steps needed to effect change through a more traditional business strategy lens, emphasizing understanding the problem to be solved, envisioning the future state, planning, communicating, executing, and tracking progress. Popular examples include Kotter’s 8-Step Theory, Lewin’s Change Model, and Deming’s PDCA Cycle, which have been widely used for decades. They tend to generate better responses from executives, especially in long-standing and highly structured industries such as aerospace, government, and manufacturing. However, their effectiveness can be limited as they take more of a top-down approach.

Effecting change through personalization and engagement 

These represent more contemporary models that view change from systems and humanistic perspectives, considering how change can be best affected by more deeply understanding and engaging employees. Certain ones also consider elements of the organization, its processes, and operations and may include advanced analytic and human-centered design concepts. Those considered “open source” or “bottom-up” approaches directly engage employees in defining the change and how to best manage it in their daily work lives. Examples of the comprehensive systems approach include the McKinsey 7-S Model, and the open-source approach is evident in the ADKAR Model, Nudge Theory, and Accenture’s Change Capability Quotient.

Building a better change management approach

Deciding on the most effective approach for an organization is a crucial decision, and understanding the most effective elements of the wide range of change management models offers an opportunity to enhance the outcomes of any transformation. The practices that drive the best results include:

1. Leverage an open-source or bottom-up approach

Taking the lessons learned from various realms, directly engaging employees in the design and execution of change rises to the top. Drawing from experiences and lessons learned in and from employee involvement, self-managed work teams, work purpose and meaningfulness, job autonomy, human-centered design, and employee experience, we know that the more employees are engaged in establishing how they work, the more profound the outcomes.

The leading practice is to cascade the change process down to the individual workers and teams, where they are presented with the future vision, rationale, and business need for the changes, projected benefits for all stakeholders, specific targets and goals to be achieved, and minimum standards and parameters for adapting their work to the vision. Individual groups are then challenged to identify 1) how they can best adapt their tasks, workflows, and output requirements to the changes and 2) how they can best be supported (through training, communications, and piloting) to effect and adapt to those changes.

Research has demonstrated the effectiveness of this two-way interactive approach, with a 24% increase in the likelihood of transformation success, implementation time reduced by as much as 33%, employee engagement levels increasing by 38%, 2.7X more employees who understand the changes, and 29% more employees feeling ownership of the change.

2. Communicate clear objectives, processes, and progress 

While communication is a traditional element of a change management approach, how it is accomplished is often under-executed. The goals for a change initiative must be more than just clear—they should include how the change will be implemented. They must be quantified so leaders and employees know how they are progressing and how much improvement is expected. Employees and their leaders should receive project plans and regular updates to inform them about what is underway and coming. 50% of successful initiatives included implementation timeline communications, versus only 16% of those who did not.

An interesting element also called out by McKinsey is face-to-face communications, which were identified in 65% of successful transformations, particularly those delivered by line managers and business leaders. Team briefings, leadership town hall sessions, and regular messages and updates from project leads (and well-known and credible peers) are essential. These can also include line managers communicating how the changes will impact individual and team roles and goals.

3. Measure progress and the impact of changes

The power of analytics in driving and achieving adoption and change cannot be understated. As discussed earlier, 50% of leaders report a lack of understanding of the level of success that a change initiative achieved. Using quantified means to understand how much change is occurring (versus goals and expectations) and how well the change process is progressing calms executives' nerves (especially the CFO), who are concerned with generating the promised ROI on expensive, time-consuming and distracting changes to their operations.

The difference can be substantial, with organizations that measure and track change achieving their objectives four times (4X) more than those that do not.

4. Use human-centered design and business process techniques

Integrating employee experience and process improvement practices with change management techniques adds tremendous confidence to those affected by the change and their leaders. By acknowledging that acceptance and adoption rates can be significantly impacted by engaging those who will be end-users (a system, work process, or reorganized function), the likelihood of a more solid and responsive change that lasts increases.

Using design thinking, Lean, Agile, Six Sigma, and related product and process methodologies brings tremendous benefits to transformation efforts. For example, companies who use elements such as prototyping and piloting are three times (3X) more likely to achieve their objectives when introducing new technologies.

5. Engage leaders and peer influencers as active proponents and champions

Another traditional element of many change programs is active leadership by executives and senior leaders, which is considered a must. Employees need to understand and hear directly from those above them how critical the change is and how much they support it. Leaders can be engaged as part of an initiative governance council that sets the tone and direction and oversees the initiative's design, progress, and implementation from Day One. All senior leadership should be made responsible and held accountable for regular communications, inputs, and oversight of employee acceptance and adoption rates within their organizations.

Additionally, too often neglected is the identification and engagement of influential and admired peers, whether lower-level managers or subject matter experts. These individuals can be the difference locally, primarily when engaged as part of the transformation design and execution team, where they can bring the voices and concerns of peers and teammates into the improvement initiatives. They can represent a voice of experience when making choices and decisions.

Identifying the best talent for change management project teams is also key to success. Having employees acknowledged as innovative, systems thinkers, excellent collaborators, and strategists with high technical proficiency is key to successful transformation planning and design. Furthermore, identifying influencers through organizational network analysis (ONA) can locate hidden gems trusted and relied upon by many for expertise and insights, regardless of their role or job level.

Relevant Practices & Tools

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Creating a Top-tier Organizational Culture that Embraces and Reinforces a New Digital Future. >

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Driving Adoption of the Digital Future to Optimize the Return on Digital Investments. >

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Managing the Organization’s Change Portfolio with a Structured and Formally Governed Model. >

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The Initiative Timeline Plan Template: Depict Critical Activities to Implement to Fulfill the Digital Transformation Strategy. >

The Initiative Timeline Plan is a pictorial representation of the major initiatives for the digital transformation... more »

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