In the Age of Digital, Even Change is Changing

With all the talk of digital transformations, the inevitability of AI, and adopting new ways of working, increasingly another discussion must be had: change management.

At one level, “change management” is unnoteworthy. It is what it says: organisations change, managers deal with it. When management as a discipline was established, organisational psychologists, notably Kurt Lewin (1890 – 1947) an MIT professor considered the founding father of organisational development, provided evidence that workplace structures and processes had a direct effect on human behaviour (think Elton Mayo’s Hawthorne experiments between 1924 and 1932).

Maintaining a good workforce meant disrupting people as little as possible; instead, management practice championed continuous improvement as a way to achieve change without change. There was no “change management” because managers managed for stability.

After two decades of accelerating global change since the turn of the century, change management has emerged into a distinct discipline now worth US$2 billion. Its projected CAGR over the next two years is 14.93%, and is anticipated to grow in the following ten years to US$4.8 billion. However, it is a field of expertise that many organisations still do not realise exists.

Change managers follow a formalised process to steer people in an organisation through whatever transformation or upgrade is taking place. It deals with both the operational matters of change including resourcing and communications, and the psychosocial concerns including change readiness, change resistance and stakeholder impacts. It simultaneously front-runs the project to ready the business, and backs up the transition to steady the change as it establishes itself as the organisation’s business-as-usual.

With the expansion of digitisation, change management is no longer just the concern of government and big business. For four key reasons, change management is now needed by any organisation contemplating change beyond the day-to-day operation:

  1. Where change was once mainly procedure-by-procedure, most change today includes some form of digital which tends to impact more of the business in more ways at the same time.
  2. Change is constant. A change requirement can be out of date even before the change effort is complete.
  3. Changes do not happen one at a time. There are multiple drivers of change from within and outside the organisation that need to be considered, if not accommodated, at once.
  4. The final key reason, and the most significant, is that the structure and purpose of change is no longer to return to stasis. Where once stability was the absence of change, now change capability is the source of stability.

Whoever’s number you see on the failure rate of change and transformation projects – 60% (PMI), 80% (Gartner), 97% (pwc), >50% (HBR) – the chilling prospect for any organisation preparing for major change is that the initiative will cost more, run later and even then, not hit all its objectives. Change management does not guarantee a project will run exactly as the plan on paper says it will, but is there to provide the data on what you need to do to take out risks and help you to implement the mitigation actions.

Unfortunately, not knowing that change management exists, many leaders are still taking their teams into major change without the scaffolding that change management provides.

In a Making Change Work survey, IBM found that organisations prioritising change management had at least 56% more projects that resulted in complete success. A benchmarking study by Prosci showed a 7X project success rate when change management was integrated into the change process.

In the 1980s, companies realised the importance of a qualified finance function to the health and sustainability of their business. In the 1990s, they brought on qualified professionals in human resources for the same reason. As the 2020s roll on, and organisational rethink of operating models, ways of working, systems and technology is needed more often, the newer concern of change management is there to help them through the age-old issue of people’s fear of and capabilities for change.

About Meta Management

Meta Management is a consultancy specialising in helping its clients with the organisational assets that drive effective digital transformation and create value in a hyper-connected, constantly changing world.

This article is also featured in Edition 46 of The Bugg Report Magazine