Business change management: what is it and what is the process?
Learn how to implement changes in your business without disruption to your operations. Discover what change management is and how to apply an effective process.
Your business won’t stand still. It should evolve over time, and part of your job is to make that process as smooth and beneficial as possible.
For instance, you will need to adapt to a changing business environment, economic factors such as inflation or taxation, and social elements like the increasing preference for online shopping.
On another level, you may need to change the team structure or hierarchy of your business as it grows.
As necessary as change may be, it can be disruptive and even a source of worry for your employees.
The process of change may harm productivity in the short term, and if handled badly can have long-term impacts too. Proper planning and management is therefore essential.
Change management has also become more critical in recent years for many reasons, such as rapid technological advancements, shifts in consumer behaviour, and economic volatility.
Learn what business change management is and how to carry out the process effectively below.
What is change management?
Change management is the process of getting your organisation from here to there as smoothly as possible.
You know where your business is now, and you have an idea of where you want it to be.
What you now need to create is a series of steps, or a similar structure, that makes that transition happen without unwanted side-effects.
Change management aims to avoid ad hoc and reactive decision-making in your management process. If you only implement change in response to a problem, you could find yourself backed into a corner with limited options.
So, you need to find ways to maximise your options and to be as proactive as possible.
Why is change management important?
There are a lot of reasons why business change may be needed.
Perhaps your market is developing fast, or there is a dangerous new competitor.
You might need to cut costs or increase productivity, or you might just want to introduce flexible working. Considering the company's culture and values is vital when implementing change.
External factors, such as regulatory changes (e.g., GDPR, changes in pension regulations), might necessitate change management processes.
Usually, business change will relate to increasing competitiveness, creating a better working environment or responding to external pressures.
Some common changes that businesses make include:
Implementing new computer systems or technology throughout the company
Tweaking or adapting an established working practice
Changing your workflow or hierarchy of responsibility
Introducing flexible working
Trying to introduce a new product range or service
Entering a new market
Moving parts of your business online
Reducing waste
What are potential obstacles to business change?
If your workforce, shareholders or customers don’t buy into the change you want to implement, the process could be a rocky one.
Some of the biggest obstacles that companies encounter when trying to change are:
Lack of support from influential people throughout the company
Not dedicating enough resources or manpower to the project
Having a working culture that is resistant to change
Lack of support for the solution you have chosen to solve your issues
Sometimes problems can arise because you’re not clear enough about what you want to achieve, or how you will do it.
Always ensure at every step that your employees know why the business is doing things differently, and encourage them to ask if they don’t understand.
How do I prepare for organisational change management?
An important first step is to lay the groundwork properly.
Make sure the right resources are in place, and give plenty of thought to those who may be on the front line of the business changes: your employees and your customers.
1. Employees
Ensure that everyone in your company understands what changes you are making and why you want to make them.
Notify your people well in advance and get them enthused, so that by the time you implement the process people are looking forward to it and fully onside.
2. Customers
If you are making changes that will affect the end product or service you provide to customers, tell them about what you are planning.
Give them a clear picture with relevant details, as any indication that you are withholding information could harm your brand.
Emphasise the positives in every case, to reassure people that any temporary disruption will be justified by the improvements you’re making.
What is the change management process?
There are three key steps to any process of change management. These are simply:
Assess: Identify what needs changing within the business and analyse the current situation to determine areas for improvement.
Prepare: Get the business ready for change by developing a clear plan, communicating with stakeholders, and securing the necessary resources.
Execute: Implement the changes according to the plan, monitor progress, and make adjustments as needed to ensure success.
Change management should also involve a "post-implementation review" to assess the success of the changes and identify lessons learned for future change initiatives.
You can remember these steps with the acronym ‘APEx’ – which will also remind you that you’re trying to raise your business to its peak performance.
Each step of the APEx process can be broken down into further steps, as explained below.
1. Assess what needs changing
There are two main reasons for change: chasing opportunities, or mitigating risks.
So it’s not just a question of asking ‘What is wrong?’ but also asking, ‘What could be better?’
You probably already know what needs changing, but dig deeper and ask if the issues might have a deeper cause. See if you can solve several problems or open up multiple opportunities with one change.
The steps of this stage are therefore:
Identify root issues and/or broad opportunities
Work out a practical plan for addressing them
Break this plan down into key steps
Set SMART goals for each step
To remind you, a SMART goal is Specific, Measurable, Achievable, Realistic, and Timely.
2. Prepare the business for change
Who will deliver the change in your business? Your employees. Therefore you'll need to prepare everyone thoroughly so that they understand your plans and fully support them.
Communicate your vision clearly and explain how the changes will improve the business.
Invite feedback from the start and engage with any criticism. Maintaining a feedback loop can help ensure ongoing support and adaptability.
People on the front line of the business may have valid objections – don’t ignore these. Work together to anticipate any obstacles to the changes and problems they may cause. Then, work together on solutions.
All this will take time, so factor this into your timetable and start the process early.
By the time you start to implement the changes, the whole business should be fully aware of their shared goal and keen to get started.
The steps of this stage are:
Communicate your plans
Invite feedback
Address concerns
Anticipate obstacles
Work as a team to overcome issues in advance
3. Execute the changes
Change should be carried out in stages: a series of relatively small steps conducted one after the other.
This helps to ensure a smooth transition and minimises the risk of major upheaval or things not working as expected.
You should ensure that each step is fully complete (or as complete as practicable) and problem-free before moving onto the next.
This way, you will not be overwhelmed by teething troubles from multiple areas of your business.
If possible, also have back-up plans ready in case something doesn’t work.
For example, if you are changing your supply chain, you may want to ensure your new distribution system is fully bedded in before switching your upstream suppliers.
In this scenario, it would also be a good idea to build up emergency stock so you could continue to meet orders even if your supply chain were to hit a problem.
To identify such problems, you’ll need solid reporting systems in place so you can objectively compare performance before and after the changeover.
Also ensure that you have the right people taking responsibility for the success of each stage, holding them accountable while giving them all the support they need.
The steps of this stage are:
Break the changes down into individual tasks
Work out the best order in which to tackle these tasks
Assign responsibility for each task
Anticipate problems and put safety measures in place
Tackle and complete the tasks one at a time
Confirm each change is working well before moving on to the next task
Throughout the process, monitor the situation with regular management meetings and share any lessons learned at each stage.
At the end, hold a final debriefing session to compare the end results with your initial plans, to see where you might have fallen short of (or exceeded) expectations.
How do I prepare for the unexpected?
Another key part of change management is recognising that things won’t always go to plan.
Keep a close eye on what is happening so you can manage unexpected developments, communicate them swiftly and adapt.
Sticking to your script too rigidly will be counterproductive if it doesn’t match what’s happening in the real world.
Being more responsive will mean you can deal with problems effectively and also grasp unexpected opportunities if they arise.
Get expert financial advice
Effective change management is essential for navigating the evolving business landscape while keeping operations running smoothly.
By understanding the principles of change management, preparing thoroughly, and executing changes carefully, you can ensure a positive outcome for your business and its people.
Remember, change is not just about fixing what's broken; it's about driving your business toward a more successful and sustainable future.
With the right approach, you can turn every challenge into an opportunity for growth.
Unbiased can match you with a financial adviser for expert financial advice to help you with your financial journey and achieve your business goals efficiently.