What Really Drives Change Management? – A Practical Insight

Change Management – we all have heard this fancy term before. It means everything and nothing. But what is it really about and how do you get your people to change?

What is Change Management?

By definition, change management includes all measures and initiatives to adapt an organization to a changing environment. This comprises the adaption of enterprise strategies and organization structures. Some typical examples of change management are the re-organization of a service center, market expansion to a new geographical region or the introduction of a new software system. Whatever the challenge is, the process to implement this change is very similar.

Define the strategy, get the right people on board and execute the strategy. So far, so good. But now you track your results and realize that the change is not adopted as you intended. So, what to do?

What is the biggest challenge in Change Management?

It’s not a secret that the biggest challenge in change management is the people that have to change. We humans are creatures of habit. Every change is threatening us. Our brain prevents us to change because our brain likes routines. However, in today’s economy, not adapting to changes can ruin your company. Knowing that people are the key to successful change management, which is the best method to make change happen?

How to achieve change?

There are many publications and guides out on the market and you can obviously argue what the best way might be to get people to change. Of course, you should be transparent about the upcoming changes as this reduces the fear of unknown. If people don’t know where they shall go to, it makes them not move at all. This is a natural behavior which survived from ancient times, when making changes put our survival at risk. After knowing where to go, you need a clear strategy with defined action steps, KPIs to measure the progress, and regular reviews on the progress. You should lead by example and demonstrate the desired behavior. But what do you do if nothing helps? If there is no progress?

The Solution

I have executed software implementations all over the world, for different companies, on different levels and with different cultures. No matter the company, culture, or position in the company, there has always been resistance. In some companies less than in others, but people always try to get around new things.

What I have seen in various companies of different sizes, is the following: The only real, significant influence on the progress of Change Adaption, is the connection of compensation to the desired result. Yes, this might sound shocking to some of you, but it’s the reality. You can try talking to your people – I have seen organizations with such a great company culture that this is sufficient and delivers the desired results. However, this wouldn’t work for the majority of companies. For organizations that need to change fast and that have neither the time nor the knowledge to get their organization to adapt by itself, the only effective way is to tie the compensation to the results. People can suddenly be very open to adopt to and implement changes when their salary is at stake. It takes significantly longer to achieve the desired results, when there are no personal consequences for the ones involved. You can make it a part and priority for their bonus and objective review for example. Once the change has been implemented for a certain time, this point shouldn’t be a part of compensation requirements any longer.

Why is this effective?

Usually, the beginning is the most difficult part. It takes time to learn a new way of working. You need numerous repetitions until something new becomes natural. Especially in the beginning, people tend to go back to their old way of working, because it is faster and it’s been their habit for a while. Under time pressure, people tend to fall back into old behavioral patterns. When you introduce new technologies, people are skeptical. The only way to overcome this, is to convince them to apply it and increase their confidence in their own skills, until the promised results show. Employees have a high interest in their salary, so if parts of their compensation is tied to the new way of working, there is a real incentive for them to dig into it and try it. If, on top there’s a chance to even earn more if they adjust to the change, you will be surprised how fast the adaption will work.

Once again, trying to foster change and adaption through the monetary component alone, won’t be the most effective way. You need to talk to your employees to create an open atmosphere and lead by example. The monetary incentive has proved to be the most effective influence when it comes to motivating people to start the adaption of any change, but don’t forget that every change is still a team effort.