In our fast-moving 2024 business environment, Space2BE sees many businesses embracing change projects, small and large. However, few are taking a helicopter strategic perspective before jumping in. Whilst we all know that change is constant, unless you’re brilliant at it, there is an urgent need to incorporate change into cycles of business and strategy planning. In short, if there’s a lot to do, we would advocate making ‘change’ a strategic imperative.
Why is this? Look at our context. We have the rapid rise of Artificial Intelligence, now influencing almost every aspect of life. Supply change disruptions are not going away. Customer needs are rapidly evolving. Competition is fiercer than ever. Cybercrime is a constant threat. In addition, eco-friendly business approaches – and full ESG strategies – are winning hearts and minds, as this McKinsey article shows.
The workplace demographic now regularly consists of employees whose birth dates span seven different decades. Structural changes have been imposed by the rise in hybrid working or working from home. Diversity, inclusion and equity strategies are increasingly in the spotlight. Mental health in the workplace is a constant talking point.
Mergers and acquisitions are enjoying a phenomenal run rate.
Political change is on the cards arguably globally and certainly right now in the USA and UK. We know that the impact on businesses during political instability is huge.
Quite simply, it is impossible to stand still. So let’s do change well.
Benefits of organisational change
Factors like these create a fluid and capricious framework in which companies simply must be on the front foot with change strategies, to stay ahead of the next curved ball. Forward-thinking organisations embrace change as a matter of course, recognising the benefits of constantly evolving as a business and being ready to face whatever new challenges emerge.
Change within the workplace comes with many benefits. It helps a business stay aligned with its customer base. It encourages creativity, ideas and innovation. It fosters a culture in which employee morale can be higher, which in turn can boost productivity, reduce absenteeism and assist with staff retention. It also creates an environment that encourages skills enhancement and staff development.
As Chad Wachter, President and CEO of Investcore, Inc. says, “It is important to note that growth and progress often come from stepping outside of your comfort zone.”[i] Had Jeff Bezos simply been content to keep Amazon as primarily an online bookstore, it would not be the $1 trillion business that it is today.
When we here at Space2BE are running change workshops, we often remind the exhausted change managers in the room that it is not the fault of ‘this business’ that forces us to change as much as we do. We highlight that, in today’s world, it is a marketplace necessity.
What is organisational change management?
Organisational change refers to the ways through which a company or business alters a major component of its organisation. This could be by adapting its culture or changing underlying technologies, operational infrastructure or internal processes. Organisational change management is the process that lays behind this, that of taking the change right through to a successful conclusion. It usually has three stages – preparation, implementation and post-change action and evaluation. Even when you embrace an emergent change approach, these phases are still required.
Change can be categorised in two ways. Adaptive change is small scale, composed of incremental steps that slowly institute change. Transformational change is much wider in scope and scale, involving shifts in mission, culture, structure, strategies and processes. How transformational change is handled is typically critical for all key stakeholders – investors, suppliers and employees.
On our podcast, we’ve interviewed two change experts during the past year, both of whom are rich in content and experience. Listen to these podcasts;
The Inevitability of Change with Dr. Sally Denham-Vaughan.
Change with Professor Julie Hodges
Do you have the right amount of change power?
Many organisations get change management wrong or hit the buffers mid-programme. Interestingly, as reported in the Harvard Business Review (HBR), back in 2019, David Michels and Kevin Murphy, started to attribute this to how much ‘change power’ they possessed. They began to measure what seemed like a true intangible and identified nine common traits that all contributed to change power.
Three of these relate to factors required to lead change (purpose, direction and connection). Another three are those needed to accelerate change (capacity, choreography and scaling). The final three are elements that have to be in place so as to organise change (development, action and flexibility).
According to Michels and Murphy, organisations should assess their strengths and weaknesses in each of these areas, to fully predict how successful any transformational change might be and help create a blueprint for its roll out over time. Focusing on weaknesses is key.
The two researchers analysed companies according to the nine factors, to assess where they ranked in terms of change power. They then discovered that a company’s change power is a strong indicator of its performance. Companies in the top quartile of the change power table were more profitable, with margins two times those of companies in the bottom quartile. Those ranked in the top half, grew revenue by up to three times as fast as those in the bottom half. Shareholder returns increased every 10 places up the ranking.
Those companies in the top half of the table had leaders and cultures ranking higher in employees’ eyes than those in the bottom half. Interestingly, this was consistent with Glassdoor rankings for the same companies. Change power, it would seem, matters greatly and has numerous benefits.
How to create change power
When the Space2BE team look at the factors that fuel change power, it is clear there is a huge role for skills training. The first three factors – required to lead change – are those on which we focus through our leading and managing change training programme and strategic consultancy support. The second three are those that require skills which we develop through courses such as leaders as coaches and high-performing teams. The final three are very much in line with our agile leadership training and courses such as inspiring performance.
The change power researchers found it was crucial to ’add in’ the elements lacking within an organisation, to prevent change stumbling blocks from having negative impacts.
37% of businesses were found to be ‘in search of focus’. They could not connect core activities to their purpose and strategy. They lacked the ability to create a common purpose through all-important change storytelling. As McKinsey has noted, this is hugely important. As it says, “Building consensus on priorities is critical to the success of a transformation”. It adds that, if you don’t select initiatives aligned with the aspiration, a change programme can quickly run aground.
20% of organisations got stuck in the midst of change and then became sceptical. In these organisations, it is crucial to reignite the team. It needs team members to come together and share a vision that is then disseminated organisation-wide.
We are often invited to run group change coaching sessions – a confidential opportunity to support teams and groups, responsible for change, allow them to ‘offload’ and, through process support, receive new ideas, solutions and a renewal of motivation and confidence.
24% of the businesses analysed in the change power study were ‘aligned but constrained’. People were not in place to fill vital roles. Connection, capacity and development were lacking. Here, it was vital to close capability gaps, recruit new talent and develop talent from within.
With this in mind, how many of you have updated your approach to talent management and succession planning, to account for the latest change requirements?
The final 19% of businesses were ‘struggling to keep up’. They needed strategic direction and to introduce a new focus on customers, innovation, testing and learning.
Reading these statistics reminds us that we have huge empathy for any change agents and implementers out there. It is often exhausting. Why not reach out for practical support that doesn’t require a new budget!
What else does successful organisational change require?
As well as having the nine ingredients of ‘change power’, successful change needs to be powerfully articulated and consistently tracked and monitored. Any programme has to be flexible and reactive. It must always result in actions that contribute to the overall strategy and business goals.
Many different people within the organisation need to be involved. The CEO and the C-suite office should set the vision and be the high-level orchestrators, but it is then for the leadership team to articulate the need for change and motivate their teams. Managers should accurately allocate resources and shape processes that can effectively deliver the change. To be successful, they need emotional intelligence, strong organisational skills, attention to detail, an ability to take decisions and solve problems along the way and a capacity to delegate non-core tasks to others. They may need to be trained in new skills and have to remove the micro-managing hat.
They also need a supportive Board that has been brought into the process.
McKinsey suggests that, ideally, 25% of an organisation’s workforce would be involved in delivering change. However, this can go to as low as 7% of employees ‘owning’ the change strategy. That is the lowest percentage of an organisation that needs to be on board, in its view. If that is the case, the organisation is twice as likely than others to deliver better shareholder returns. In a large organisation, 7% could still be hundreds of people.
Let’s take it beyond the statistics, however, and remember that, whilst useful, the best change is when it remains ‘human’. People are delivering it. People are affected by it. So ask yourself whether you have reviewed your change strategies through their eyes.
Boosting your change power
Many organisations would struggle to focus on all aspects of change power themselves or to orchestrate the involvement of 7% of the workforce in a change strategy. This is why organisations look to bring in external help, like that available by the team of expert trainers and consultants at Space2BE. Once we have received a brief, we can audit current situations through impartial eyes, assess where organisational strengths and weaknesses lie and plug all the gaps that could lead to the failure of a change programme. We can be your critical friend in support of a better outcome.
The added value we can bring can not only boost change power but also make the difference between successful implementation of change strategies and their fizzling out or ultimate demise.
If you recognise that instituting change is a vital part of business growth and survival but need assistance with either implementing a vision, changing a culture or rolling out a change programme, please get in touch with us on 0208 720 6991 or email connect@space2be.co
[i] https://www.forbes.com/sites/forbesbusinesscouncil/2023/04/13/the-importance-of-embracing-change-in-business/?sh=367e16f58268