What is Change Management?
There are actually conceptual definitions of the idea of change management. It can refer to the actual task of managing change, a specialized area of professional practice or a standard body of knowledge. It most likely refers to the tools and techniques employed my business leaders and managers to help their employees and organizations adapt to major adjustments.
Strategies for Managing Change – Incentives and Norms
There are many strategies for managing change. The easiest is to simply apply the fact that people are rational beings who will follow self-interests. Successful change is accomplished through the communication of information and associated offering of incentives. This classic carrot-and-stick management technique relies on helping people get what they want while they help the organization accomplish goals. For instance, a corporation that seeks to open up new senior management positions can incentivize veteran employees to retire through increasing their benefits and bonuses.
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Business executives also rely on the fact that people are social beings who adhere to cultural norms and respect social values. Successful change can occur through redefining existing subculture norms and developing commitments to new ones. This concept takes advantage of the fact that most people want to go with the flow and contribute to the success of the group. Following the example of the corporation and the need for early retirements, an alternative would be to allow veteran employees to transition their jobs into training and mentoring new employees.
Strategies for Managing Change – Power and Survival
When there is increased resistance to change or a limited time frame, power and coercive techniques and sometimes required. In these scenarios, successful change is based on authority and the imposition of policy. This can range from strict rules, such as zero tolerance for reckless driving of company vehicles, to sanctions, such as management requiring investment advisors to sign ethical commitments with severe penalties. Business leaders tend to employ power only in certain scenarios, such as when two companies merge and new norms and rules are imposed.
Sometimes, employees will understand that the survival of the company and their job security depends on change. This is common in companies in highly competitive markets, such as logistics, real estate, finance brokerage and manufacturing. The ROI in these intensely competitive markets may only be a few percent, so employees are usually prepared to sacrifice for the greater good. For example, production companies who ship to overseas customers will often run day and night work shifts every day of the year.
How to Choose the Right Change Strategy
There are proven strategies to better manage change. Generally speaking, business leaders will need to adopt a hybrid strategy that utilizes different methods and tactics. When choosing the strategy, business leaders must take into consideration the degree of change because radical transformations and high degrees of resistance will require well-thought out strategies. Organizations with large populations may need to use a variety of strategies to match their diverse workforce.
When the stakes are high, such as business mergers, nothing can be left to chance, so a power strategy is best. When it comes to limited time frames, a power strategy will work fine, but longer time frames can use logical and reason to persuade others. Businesses may sometimes lack expertise, so they will have to import an authoritative figure to impose change and represent power.
Change management is the science of successfully handling internal transformations and external environmental fluctuations. The Harvard Business Review offers advice on change management here.
