Only 60% of businesses will survive over the next 10 years. The rest will fail unless they change in response to new technology, according to John Chambers, Chairman of Cisco. Management of change is a matter of life and death.
You’ve heard of the management of change but perhaps you’ve wondered what it is. Does your business need it? Read on to learn what management change is and what it could do for your business?
What is Management of Change?
Management of change isn’t just an obvious observation about the ubiquity of change. Of course, change is a feature of all management experience these days. Management of change describes a particular approach to the challenge of change in a management context.
Any plan to change something that has a positive aim also carries some risks. There are risks of failure as well as risks of unintended outcomes. Management of change recognizes that these risks exist and that they may need to be planned for.
Management of change procedures can apply to any operation where a change is happening. If your business experiences change, and what business doesn’t, you’ll want to have more info on management of change.
Change can apply to the physical environment such as facilities, equipment, and the environment. By the same token, management of change can apply to people including employees and customers.
Change and Risk
Management of change recognizes the importance of understanding risk. Risk is all around us. We are constantly calculating risk and making decisions as a consequence even though we are hardly conscious of it.
A decision to hire someone involves a risk assessment of sorts. Will they be successful and contribute to the organization or will they be a failure and bring the organization into disrepute? Selection processes seek to identify the risks and reduce them.
A management of change process aims to do the same thing. It makes conscious the risk assessment involved in a business change and to reduce the risk to a tolerable level. Systematic management of change turns what we do informally every day into a formal process.
You can apply these systematic processes in all aspects of your operations including engineering, manufacturing, service delivery, and elsewhere. Wherever there’s change, there’s a potential application for management of change process.
Examples of the type of change that might impact these operational areas include new equipment installation, office relocation, a change to legislation, and even a change of supplier. These all have risks that may need to be managed.
The Nature of Change
Understanding the nature of change is essential if you wish to manage it. Ironically change starts with a steady-state. This is the condition immediately before a change happens.
For a change to happen, inertia has to be broken. It sometimes takes some effort to break the inertia and there may be consequences arising out of that effort. Perhaps while you’re applying additional effort to get a change started, other aspects of the operation are not given proper attention and result in a performance dip.
Once the change is underway, there might be operations and people left in its wake. Not every operation or every person can keep up with the change and so there are potential problems. This could consist of employee behavior, inconsistent standards, or a failure to meet customer expectations.
It’s important not to assume that everybody recognizes the need to change. Nor is everybody necessarily clear about what the change means to them and how they should respond even if they wanted to.
Risk assessment is about two factors. You need to consider each of these factors both separately and together. The factors are concerning the likelihood of a hazard causing a problem and the impact this problem will have.
You can assess the first factor, “likelihood”, by assessing it as either very likely, moderately likely, or very likely. These three options are sufficient for most cases. I low likelihood would suggest a low risk and a high likelihood would suggest high risk.
When assessing the risk of failure of an aircraft in flight you might determine that it is a low likelihood that an accident will happen. Aircraft that are properly maintained and used according to the regulatory guidelines very rarely have accidents. The first part of the risk assessment would determine a low likelihood of an accident.
The risk assessment then moves on to the issue of the potential impact of a problem. A low impact, moderate impact, or high impact could be a useful scale to use. In the case of an aircraft, should an accident happen you might expect the impact to be high. An aircraft full of passengers falling out of the sky is an accident with a high impact.
Putting the two factors of the risk assessment together can help you arrive at an overall risk assessment. The high likelihood and high impact assessments are among the riskiest of activities. The low likelihood and low impact ones are among the least significant.
Deciding on Change
With a systematic and well-informed risk assessment behind you, you are now in a position to make some decisions about your plans. Should you progress with the change? Do you need to change the plan?
Just as valid a response is a decision to wait and to do more research.
Mitigating Risk and Making It Happen
Once you have decided to progress with the change, you can make plans to mitigate the risk. That is, you can try to reduce the likelihood that a problem will arise. You can also try to reduce the impact of such a problem should it happen.
Designing these control measures is critical in managing change. It’s this activity that reduces the potential for harm from change. It’s also important for this to mitigate any risk of unintended consequences.
With the mitigation in place, you’re ready for action. It’s now that you make the change happen.
As part of the implementation, it’s vital to carry out a pre-startup safety review. This step makes certain that any intended changes have been executed.
Have all the risks been addressed? Are all the planned mitigations implemented along with the planned change?
Management of change is necessary for any business. Every business changes and with change comes risk.
When you understand the importance of change management you can mitigate the risks. Managing that change safely makes the organization sustainable and protects people too.
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