5 Key Components of Organizational Change

Driving change is, without a doubt, one of the most challenging parts of being a leader, and implementing organizational change is the most challenging change of all.

Why is that?

People generally don’t like change, and as organizational change directly impacts them, this is the least popular type of change. On average, 70 percent of all change initiatives fail, which is not great, but that’s nothing when comparing it with organizational changes, such as Customer Service initiatives, which have a staggering 93% failure rate.

Much of my career has been spent either driving organizational change or coming in to turn around a failing change program, and yes, it can be difficult, but I also believe it’s made more complicated than it needs to be.

5 Main Approaches to Managing Organizational Change

Some key aspects of organizational change need to be addressed, and these will help your changes run much smoother and have a higher chance of success. Invariably, when I’m brought in to fix things, it is usually one of these five components that are causing most of the problems encountered.

1. Clear objectives

You would be surprised at the number of change programs that are run where the people involved are not exactly sure what the objective is or what success looks like.

When this happens, it makes it difficult for teams to engage. When people don’t understand the objective, it’s hard to know what to do or whether you are making any progress or not.

I remember at one company that I had just joined, in my first month, they started a major organizational change, and as I didn’t really know the organizational structure that well, what it's issues were, it was difficult for me to understand the change that was being presented to us.

Fortunately, I was sitting next to a senior VP, so I quietly asked him if he could explain the change to get involved. He said to me, “Look, this is quite a complicated change, and it’s not that easy to explain or understand, so why don’t you skip this one and get involved in the next one. We usually do one of these every year, so forget this one and engage in the next one.

As you can imagine, that change failed, and in double-quick time. When even senior management cannot explain it to you, what chance does the rest of the organization have to know what is expected? It would be best if you had a clear, simple, and easy-to-understand explanation of the change you are employing. The easier it is for people to understand, the easier it will be for them to participate and become involved.

The best way to describe a change is in terms of the outcomes you are looking for, as this means that your teams can contribute to the solution and help make sure it is a success, rather than blindly implementing a change they don’t understand.

2. Clear purpose

Teams want to know why you are implementing the change. What is the purpose behind it?

Too often, I see changes being made for just the sake of making a change. A new leader wants to put their stamp on things. In many of these cases, the change doesn’t make things better, it just makes them different.

Your team needs to understand why you are doing the change, and if the reason is not good enough, they will not commit to it. They will become passengers rather than drivers of the change.

Change for change's sake is one of the key contributors to change failure.

Sometimes I have seen changes that have powerful purposes, and the challenge here was that it just wasn’t communicated clearly to the teams.

So, make sure your purpose is strong and that it is communicated clearly to everyone. The stronger the purpose, the higher the chance of the change succeeding. One personal example of this I have comes from a project I worked on for DHL, the project was just, or so we thought, about increasing on-time delivery rates. At the project kick-off, the Business PM asked if anyone knows why we are doing this project. He got the usual answers: increase revenue, reduce costs, and drive customer satisfaction, to which he said no, it’s not that.

He then said to us, in a quiet voice.

“We are doing this because there is no Santa Claus, and it’s our job to make sure that kids get the Christmas presents in time for Christmas, not the day or week after. We’re doing this to ensure that when their grandparents, aunts, and uncles send birthday presents, they arrive on their birthday, not the following week or the week after. We also deliver a lot of medication, and it’s our job to make sure it arrives when they need it, for when they are in pain”.

When he finished, you could have heard a pin drop in the room, and you could have cut the atmosphere with a knife. People were so engrossed in what he said. The hairs on the back of my neck stood up, and I felt a shiver go down my spine.

That was the only project I have ever worked on where people volunteered to work evenings and weekends to ensure that we delivered ahead of schedule. There were no complaints or gripes, just a highly motivated team who were all pulling together to deliver against this great purpose.

Now, I appreciate that not every project will be so clear-cut. Still, we have to explain why we are doing the change and put it into terms where they can see the wider benefits, strengthening the purpose and increasing motivation.

3. Clear benefits

A strong purpose usually involves providing the organization with some clear benefits. Otherwise, why are you doing the change?

But in the section when I talk about benefits, I’m referring to the people involved in delivering the change. What are the benefits for them? What will they get out of it? If the change is just about making shareholders richer while that’s nice for them, why should your teams become engaged and committed to the change? The more you can explain the purpose in ways that will benefit your teams, the stronger their desires and commitments will be.

At one company I worked at, we were implementing a massive outsourcing program that had a considerable impact on the organization. It was met with quite a lot of resistance. At a town hall meeting, we ran a Q and A session on why we were doing the change. It became clear that most of the organization felt that the change was being implemented to reduce costs and increase profits for the company. They also felt that this was the first stage of losing their jobs, which really didn’t encourage them to participate.

This allowed me to explain the real reason why we were doing the change. While it’s partly true that it was cost-related, it was also because we had a large volume of project work coming up. With 50 percent of our resources tied up in maintenance work, it would impact our ability to deliver the projects in the timeframe the business needed. Also, by freeing up some of the maintenance work cost by having it done with cheaper resources, we could afford bigger project budgets, and there would be even more project work from now on.

When the teams could see that one of the benefits of the change was that they could do more project work, the change suddenly became more attractive. They saw the change as an opportunity to grow and develop more skills rather than threaten their jobs. When teams see how they will benefit, it helps increase their engagement and commitment.

4. Clear approach

One of the phrases I use most often is, “People are not afraid of hard work; they are afraid of failure.” And this is definitely true where changes are concerned because they are hard work, but if you can show your teams how they can be successful, this will increase their confidence and motivation.

Just recently, I led a massive data center migration to Azure, the Microsoft Cloud-based solution. I was the fifth program manager to take the reins, and I was the one who brought it to a successful conclusion. The secret here was to break the program down into a series of steps, each of which the team could understand, and also showed them the path for us to complete the program. Once we had these bite-size pieces and the team started to complete them successfully, their confidence grew exponentially. Not only were they more confident they became excited about the success we could achieve.

When you can show people how they will be successful, you empower and create excited and inspired teams.

5. Clear roles and responsibilities

If you want people to participate and drive the change, you have to let them know what is expected of them and contribute. The more clarity you can provide, the more they can help you achieve the goals. It’s not enough to state the objective people need to know what it means for them, and you need to detail their role and responsibilities and ensure that they have the necessary tools to do the job.

If you can make sure that you address these five key areas, you will be setting your company, teams, and yourself up for success. These may seem simple, even trivial things, but I have lost count of the number of failing changes that I have seen because they forgot to take care of one of these areas. I know this might seem like common sense, but rarely is common sense common practice, and too many things fail just because the basics have not been taken care of.

Driving change is not easy, but if you can tell your teams clearly what the goals and objectives are, what the benefits are, and why they are doing it, show them how they can be achieved and what’s expected of them, then you will have put your teams on the path to success.

If you can take care of these simple things, it will help you create and engage, empowered, and excited teams and teams like you to achieve anything.