Editor's Note: Take a look at our featured best practice, Change Management Strategy (24-slide PowerPoint presentation). Seventy percent of change programs fail, according to the April 2001 Harvard Business Review article, "Cracking the Code of Change". According to Bain & Company, businesses that implement fast, focused, and simultaneous change programs can create enormous and long-lasting shareholder [read more]
Change Management in Times of Uncertainty
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Organizations during good times enjoy lenient and thriving economic conditions. The confidence interval for tolerance of errors is relatively high. There isn’t a pressing requirement for overhauling operations or Business Models, compelled by external factors. There is a rare feeling of sense of urgency and people tend to take time to ponder over and carefully evaluate relevant data and scenarios before making decisions.
Good times are typically characterized by:
- A proactive yet rationally calm atmosphere.
- Executives across the board considering the broader picture. Both short and long-term aspects are cautiously deliberated upon when making decisions.
- New initiatives are proposed internally versus consultants driven and the pace and degree of Transformation is controllable.
- Centralized as well as devolved powers make critical judgments.
- Office politics which is within limits and not detrimental for the team.
- Requirements of all organizational stakeholders being well taken care of.
- Executives’ performance is gauged on the basis of financial, functional, and behavioral realms.
On the other hand, organizations during times of uncertainty and crisis lack flourishing and tolerant economic conditions. The finance unit is pressed for cash, investment outlook is gloomy, and cost cutting becomes a norm. The confidence interval for tolerance of errors is low or nonexistent in most organizations.
Uncertain and crisis times are further characterized by:
- An incredibly high pace and extent of external-driven Business Transformation.
- An extraordinary need for streamlining operations or Business Models.
- A reactive and crisis atmosphere, which is marred by failures and catastrophes.
- A constant feeling of sense of urgency, where people tend to take haphazard actions under pressure situations. Such reckless actions bear untoward consequences.
- Lack of time and will to carefully evaluate data and scenarios before making decisions.
- Executives across the board prioritizing short-term reckless initiatives, without looking at the broader picture.
- Implementation of a borrowed Change Management Strategy, which lacks across the board support from the organizational stakeholders.
- A generally unwelcoming mindset towards open exchange of opposing viewpoints.
- A negligible focus on operational and social attitude aspects of Performance.
- A highly centralized approach towards making critical judgments.
- Cutthroat office politics and intolerant attitude towards mistakes that can end a person’s job.
- An attitude of fulfilling needs of certain stakeholders only to look competent.
- Executives’ performance during uncertainties is judged on the basis of actions focused only on making a financial impact.
Managing Change during difficult economic times and crisis isn’t a small feat. These hard times cause haphazard planning, miscalculated actions, costly mistakes, failures, and even bankruptcies and closures.
These difficult economic times necessitate the following 19 Change Management Tactics to come out of crises stronger than before:
- Pay attention to avert unintended consequences.
- Steer clear of inattention and a false sense of preparedness.
- Act with caution and conviction.
- Plan for both the short term and long term.
- Employ a befitting Change Management approach.
- Seek advice.
- Model the structure of your organization and envisage required changes.
- Comprehend all the dimensions of Performance.
- Utilize a combination of Change Management Strategies.
- Keep people informed and listen to their ideas.
- Research what works and connect with others.
- Gather support from your people.
- Don’t start off with attrition.
- Revisit priorities and assign resources accordingly.
- Manage Behavioral Change.
- Connect with your people.
- Improve your political and people management skills.
- Focus on all stakeholders.
- Promote differing views.
Let’s dive deeper into the first tactic.
Tactic 1. Pay Attention to Avert Unintended Consequences
Executives take actions according to the scenarios that they develop in Scenario Planning sessions. However, they are often flabbergasted by the inadvertent consequences that they never planned for. These unintended results gets detrimental during difficult economic conditions and should be averted at all costs.
Interested in learning more about the other tactics of managing change? You can download an editable PowerPoint presentation on Change Management Tactics in Uncertain Times here on the Flevy documents marketplace.
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"The only constant in life is change." – Heraclitus
Such is true for life, as it is for business. The entire ecosystem our organization operates in—our customers, competitors, suppliers, partners, the company itself, etc.—is constantly changing and evolving. Change can be driven by emerging technology, regulation, leadership change, crisis, changing consumer behavior, new business entrants, M&A activity, organizational restructuring, and so forth.
Thus, the understanding of, dealing with, and mastery of the Change Management process is one of the most critical capabilities for our organization to develop. Excellence in Change Management should be viewed as a source of Competitive Advantage.
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About Mark BridgesMark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.
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