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Change Management.

Successful businesses need to function and grow in a manner that is both stable and dynamic.

This means having a well-defined strategy and operational processes that drive consistency across the entire organization — but also remain agile and flexible enough to change and adapt to the ever-evolving business landscape.

We’ve previously discussed organizational change and why it might be necessary. A quick refresher: organizational change refers to the strategies and actions that a company undertakes to enable transformation in some part of its business. This could mean altering or updating internal processes, infrastructures, goals, technologies, or other components. 

An important prerequisite to effective organizational change is having a strategy to support this. In order to make organizational change happen — that is, supporting the whole company in embracing innovation to achieve desirable outcomes — business leaders need to prioritize change management. 

Why We Need to Manage Change.

An organization, both as a whole and at the level of individual employees, cannot change by itself. Although separate parts of the company can evolve on their own, adapting new practices over time, they might not be synchronized with all its other elements. 

An effective strategy for organizational change should target the entire organization – from C-level executives and management to operations teams and frontline staff. Those responsible for guiding change management need to focus on understanding how their company can work more efficiently and succeed by embracing change as a whole unit. 

So, a good change management approach ensures that new methods and processes are implemented correctly and that all members of the organization can adjust seamlessly.

If change management is lacking and not being communicated well, team members may feel surprised and threatened. With no planning/preparation, projects are more likely to fail or incur additional costs, as the change may take longer to implement and suffer low rates of adoption. 

On the other hand, a deliberate and well-thought-out change management strategy will clearly outline why the change is happening. It will also offer support and tools for quicker adaptation to updated processes or technology. Team members will be more likely to meet objectives as they feel better prepared and equipped for transformation.

So, What is Change Management? 

Change management can be defined as:

The consolidation of all the strategies and approaches to prepare, support, and equip individuals, teams, and organizations in implementing organizational change. 

For change to be successful, leaders need to prioritize early and transparent communication with employees, guiding them through the transition so that they can successfully adapt to any shifts. It’s valuable to view the issue from the perspective of an individual employee: what will motivate and inspire each individual to embrace change? What are the tools they may need to better manage the change? 

The 7 R’s of Change Management.

Alongside early and transparent communication, it’s important that leaders aim to streamline the process of planning and managing change by adopting frameworks that help analyze existing business processes. 

Frameworks are an excellent method of evaluating an organization. For leaders and managers, they are a valuable tool to better understand their business and how it operates, and they can also be used to find pain points and areas of improvement.

For implementing change, one helpful guide is the 7 R’s checklist for Change Management — a questionnaire that aids business leaders and stakeholders in assessing the impact of change. It helps lay the foundation for any transition by identifying its purpose, risks, and future impact, among other factors.

Let’s go through the seven questions that businesses should consider when evaluating change:

1. Who RAISED the change?

The first thing to pinpoint at the very beginning of the change management process is which member or department of the organization raised the need for change. This person or team will have the reasoning and evidence to support their initiative. This will ensure that stakeholders can get insight into any concerns or inefficiencies in current company operations, and also that everyone has a shared understanding of why the change is necessary.  

2. What is the REASON behind the change?

Before initiating any shifts, it’s important for a business (typically, its management team) to understand why the change was necessary. Is it aligned with the organization’s strategy and overarching goals? Or perhaps, there are underlying issues that require change? It’s crucial to identify these, as it will also indicate how the company can address the concerns and ensure that the changes made are actually needed. 

3. What RETURN is required from the change?

The point of implementing any change is to achieve a certain outcome. For businesses, this means identifying the return generated by the change: this could be the financial ROI or the impact of changing a certain process to make it less time-consuming, for instance. It might be useful to define the pros and cons of the change to see whether it’s impactful enough to implement in the first place. This helps shape a vision for the change and determine its priority. 

4. What are the RISKS involved in the change?

More often than not, organizational change will involve risk-taking. The question is whether the company is able to either mitigate or accept the risks. This is why it’s crucial to identify potential roadblocks or risk scenarios and think of possible solutions and preventive strategies. It will help the organization and its people be better prepared to deal with obstacles that accompany the change. 

5. Which RESOURCES are required to deliver the change?

When adopting new methods or processes, an organization will likely need some additional assets — this could be financial or material supplies, something like new software, and even time or human resources. Gathering these resources might also require approval from stakeholders and effort from those involved. So, before implementing the change, it’s necessary to define and mobilize the tools, budget, and personnel required for successful execution. 

6. Who is RESPONSIBLE for creating, testing, and implementing the change?

Effective change management requires someone to be responsible for preparing for the shift and executing it — of course, by working with other people. Whether the change is physical or not, there needs to be a person or team in charge of its planning, testing, and implementation. It’s especially helpful to have a project manager on board who can allocate tasks to relevant team members and ensure the change process runs smoothly. 

7. What is the RELATIONSHIP between the suggested change and other changes?

Organizational change can affect anywhere from a single team or department to the entire company, and multiple changes can also occur at the same time. With that, it’s imperative to think about the relationships between the current proposed change and all the other shifts that might be happening. Because many company processes are interdependent, some changes cannot happen without others as prerequisites. So finding such connections will help ensure that all dependencies are completed for the planned change to be incorporated successfully.  

The McKinsey 7-S Framework. 

We’ve now discussed the 7 R’s of change management, and these can further be supplemented by the 7-S framework, developed in the 1980s by the famous management consulting firm McKinsey & Company

The framework looks at seven key elements of an organization: strategy, structure, systems, shared values, staff, style, and skills. The framework is known as a “soft” model because it looks at the intangibles of an organization that are difficult to change.

Let’s take a closer look at each of the 7 S’s:

  1. Strategy. This is the direction that an organization is moving in. What are its goals, and how will it achieve them?
  2. Structure. This is the way that an organization is set up. How are different departments and teams organized?
  3. Systems. These are the processes and procedures that an organization uses to get work done.
  4. Shared values. These are the beliefs and attitudes that guide an organization.
  5. Staff. This is the human element of an organization. Who makes up the team, and what are their skills?
  6. Style. This is the way that an organization behaves. How do team members communicate and work together?
  7. Skills.This refers to the capabilities of an organization. What does it do well, and what does it need to improve?

The 7-S Framework can be illustrated like so:

Source: MBA Management Models.

The reason why Shared Values is in the center of the graphic is that it is of core importance to all the other elements; without a robust set of Shared Values, it is difficult to make anything work. This is particularly important for implementing changes that might transform the entire organization.

The framework categorizes its seven elements into two categories:

  1. Hard Elements — These are strategy, structure, and systems. They are quite easy to identify, and, more importantly, management teams can influence these directly by making decisions. 
  2. Soft Elements — These are shared values, skills, style, and staff. They’re not as tangible as the hard elements and are significantly influenced by company culture.

While the hard elements are easier to control, the soft elements can have an unpredictable impact on an organization. This is because the soft elements are what makes up company culture — and company culture can be very difficult to change. For organizational change to work, any new shifts must be embraced by all members of the company.  

The 7-S Framework is a helpful model for managers when trying to understand their organizations. However, it is important to keep in mind that the framework is not perfect. One criticism is that it does not take into account changes in technology and the external environment. Another limitation is that the framework focuses too much on organizational structure and not enough on people.

Regardless of this, the 7-S Framework remains a popular tool for leaders looking to improve their organizations and better manage change.

 

How To Use the 7-S Framework.

The 7-S Framework can be applied in a variety of ways. Here’s how you can use it:

  1. To assess your organization. By taking a close look at each of the seven elements, you can get a better understanding of what is working well and what needs to be improved.
  2. As a guide for change. If you want to implement changes in your organization, the framework can help you identify which areas to focus on.
  3. As a tool for communication. When trying to explain your business to others, the 7 elements are a great outline to define how your organization works. 
  4. To troubleshoot problems. If you are having trouble with a particular aspect of your organization, the framework can help you find the root cause.
  5. As a tool for brainstorming. An analysis using the 7-S’s can be a helpful way to generate new ideas for your organization. 

For any part of the framework, it’s imperative to define where the organization is right now, as well as where it could (and should!) be in the future — and what change needs to happen to support these goals. 

Final Thoughts.

Organizational change is necessary for businesses to improve and evolve. But company-wide transformation can be challenging, often involving different parts of the company and requiring many levels of cooperation. 

Developing a structured approach to managing change is critical to avoiding negative disruptions. To assess the current state of the organization and identify the need for change, business leaders can use frameworks like the 7 R’s of Change Management and the McKinsey 7-S Framework. These are effective ways to find pain points and areas of improvement in the company.

A defined strategy for change management will also help build a solid foundation to bring the change to reality. And, of course, to drive the change efforts, handle implementation, and keep track of progress, it’s essential to have a leader or project manager.  

Effective communication with both team members and stakeholders is another key success factor for smooth change. Everyone involved in the transition must understand the objective of the change, its process, and the expected outcome. This is a significant part of the overall change strategy, and should not be underestimated.  

How We Can Help.

At Mäd, we help clients make impactful, meaningful, and permanent changes in their business performance — and that includes helping navigate the complexities of organizational change. To do this effectively, we align stakeholders to key ideas and goals by linking their long-term roadmap to short-term tactical initiatives. Finding areas for improvement and development, we then craft a strategic approach to change that ensures our clients see progress every single day. 

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