Change Management: what it is, how it works, and why it is vital for businesses

In today’s corporate world, the ability to adapt to change is a major requirement for maintaining a degree of competitiveness that allows businesses to strengthen their market presence, effectively face critical moments, and meet the new challenges of Digital Transformation.

In this regard, it’s worth recalling how, in recent years, the pandemic emergency caused by COVID-19 has given a significant boost to the redefining of business models, with millions of companies around the world forced to embark on an emergency path of digitization of services and remote working methods.

Managing changes in a rational way means facing a Change Management process which consists in taking advantage of structured and defined activities with which to reorganize the internal dynamics of a company.

The Change Management process: definition

As already mentioned, Change Management is a process, but it is also a method and an approach aimed at re-discussing and transforming the goals, procedures, technologies and values of an organization.

The planning and implementation stage of change requires a strategy defined precisely through Change Management, while the expected result cannot be limited only to a reorganization of the assets. It is in fact necessary that all those involved understand the advantages deriving from the planned measures, and receive the necessary support to adapt to them.

Change Management can be, and often is, an ongoing process susceptible to continuous integrations. Previously, reference was made to the recent pandemic as an engine of change, leading for example to a greater adoption of smart working, e-commerce and tools for the online development of collaborative projects, but already now new challenges arise, such as entering the Metaverse, openness to transactions through cryptocurrencies, or the use of smart contracts based on the Blockchain.

Why Change Management is important for companies

Change Management helps you to increase productivity, cut the price of implementing new business processes, gain competitive advantages, and overcome resistance to change among a company’s management and collaborators.

So, let’s try to figure out how these changes take place.

The benefits for companies

One of the main advantages deriving from Change Management concerns the fact that this process helps to make the transition to new goals and ways of working less traumatic. For example, if a company needs to face a path of technological innovation, this can be anticipated by carrying out tests based on the digitization of some procedures and evaluating the effect on the productivity and employees’ well-being.

Likewise, a company that wants to adapt to the new market needs could opt for Reskilling or Upskilling strategies, with the aim of retraining its employees, in order to facilitate the transition to new tasks or update their skills. This would also have a positive impact on personnel management costs because, instead of hiring new employees, the human resources already existing would be enhanced.

Factors such as digitization, business process automation and robotization can encourage resistance to change, this is because they are often accompanied by the fear that one’s role in the company may be marginalized, to the point of losing a job. However, effective Change Management is also able to act from a psychological point of view, by supporting, for example, the transition to a corporate culture where technology makes it easy to delegate repetitive tasks to machines and allows workers to pursue more creative tasks.

Change Management is therefore the ideal solution to balance those aspects related to feasibility, sustainability, profitability and satisfaction of a change project.

Who is in charge of Change Management?

Change Management is a quite complex process that must be guided by a specifically trained professional, the Change Manager. The latter carries out planning, organization and intervention coordination activities with which to determine the necessary changes for business renewal and overseeing their implementation.

From a Digital Transformation perspective, Change Managers are also Innovation Managers but they must also have soft skills focused on communication and leadership, with which to overcome any internal resistance to change. The human aspects related to established habits are often the most delicate to handle if you want to fight the status-quo.

To face this commitment in a conscious, competent and professional way, Talent Garden offers its Business Innovation Master, a training course reserved for IT Managers, Junior and Middle Managers, Project Managers, Consultants, Advisors and Digital Strategists with at least 3 years of work experience in IT or Business Management.

The master course, organized in blended mode, is divided into on-demand content, live online learning sessions and face-to-face lessons at the Calabiana Campus of Talent Garden located in Milan. The overall duration is 6 weekends, 4 of which are live online, plus 2 in presence.

Examples of Change Management

There are several situations in which Change Management is necessary and some of them can occur simultaneously, just think of events like:

  • mergers between companies;
  • the sale of one or more divisions or company branches to third parties;
  • sector crises, such as a sudden increase in the prices of commodities;
  • the appointment of new top management;
  • the emergence of a new corporate culture;
  • more or less sudden technological changes;
  • the emergence of new competitors.

With the necessary adaptations to the different characteristics of a company, the Change Manager starts from an analysis of the current situation to define a strategy aimed at change. It is therefore necessary to evaluate the impact of this strategy and then identify the factors that could facilitate the involvement of the interested parties.

Once the necessary tools to achieve the expected goals have been identified, their use will be aimed at maximizing ROI (Return on investment), also with a view to worker and manager satisfaction.

From this point of view, it is useful to refer to concrete cases, such as that of Netflix, a company that has managed to successfully deal with market changes several times. Founded as a video sales and rental company, it managed the transition from physical to digital media becoming one of the largest companies in the world in the paid on-demand streaming sector.

With the proliferation of competing platforms, Netflix then responded by multiplying the original productions, also in view of fewer possibilities of access to third-party content. At the same time, its business has been extended to video games and in its future projects there would also be new subscription formulas supported by advertising.

The audio/video streaming sector is by far one of the most dynamic and it can be used as a reference to evaluate the effectiveness of Change Management processes.

Conclusions

A corporate strategy based on Change Management allows you to rationally, promptly and effectively respond to market changes, technologies and internal dynamics of an organization.

As demonstrated by the intense phase of Digital Transformation faced by companies over the last few years, this approach becomes particularly useful also for dealing with the most dramatic moments of change. A constantly changing context therefore requires the contribution of a Change Manager able to assist companies and workers on a process of renewal.

Photo by John Schnobrich on Unsplash

30 June 2022

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