CHANGE MANAGEMENT: PEOPLE AS THE COMMON DENOMINATOR

by Nuno Pena (Translation from article published in Portguese by @RHmagazine by IIRH)

OVERVIEW

Organizations evolve at a rapid pace, technologies advance daily, and roles continuously adapt to these changes. From implementing technology to enable a more mobile workforce, to reengineering processes for regulatory compliance, or driving organization-wide transformations centered on customer experience, one element remains constant in all these changes: People.

People are the common denominator in achieving the desired outcomes. Despite this, various studies report that around 70% of all change management initiatives fail. This highlights the critical need to focus on people as the key to successful change management.

THE CONCEPT OF CHANGE

Heraclitus of Ephesus, a pre-Socratic philosopher (circa 500 BC - 450 BC), famously stated, "No man can step into the same river twice," because both the water and the person change. Change, therefore, is a constant in our personal and organizational lives. Yet, despite this inherent constancy, we often perceive change as disruptive—a break in our routine, a disruption to our "normality" or status quo.

But what is "Change"?

In simple terms, change can be defined as moving from point “A” (the current state) to point “B” (the future or desired state). The process between these two points is the "transition state". In essence, change is the transition from a current state (how things are today) through a transition period to a future state (how things will be done).

RECOGNIZING THE NEED FOR CHANGE

How do we recognize that we are at “Point A”?

We realize this when we perceive ourselves to be in a “current state”, and this “current state” is misaligned or no longer ideal. This realization, awareness is often triggered by threats or opportunities, which disrupt our daily certainties and force us to acknowledge that the “current state” is not desirable or sustainable. At this point, we begin to envision a “future state”, “Point B,” which represents an improved or ideal scenario.

In organizational contexts, several indicators can signal the need for change. Some are explicit, others more subtle. We must remain vigilant to these signals, actively monitoring, even in periods of apparent normality. For example, if key business metrics—such as revenue, EBITA, customer satisfaction, or employee turnover—are declining, or if market share is shrinking, these are clear, explicit signs that "State A" is no longer sustainable. Urgent action is required!

But what happens when the signals are less obvious?

Missing the Early Warning Signs

I recall a situation where the CEO of a company I worked for shared with his leadership team the latest results from the Gartner Report (Magic Quadrant). Once again, we were the clear market leader, scoring highest in “ability to execute” and “completeness of vision.” The audience celebrated enthusiastically, and there was a long round of applause. We all felt proud and motivated, recognized for our efforts.

However, the CEO’s expression remained unchanged. For those who knew him well, this was concerning. He then shared the image from the previous year’s Magic Quadrant (-1). Although we had also been the market leader then, it was clear that the number of competitors had increased significantly. Additionally, a “technological giant” had entered the market niche. When he showed the image from two years prior (-2), it became “brutally” evident that, although we were the standout leader, the competitive landscape had changed dramatically, with fewer competitors and a much wider gap between them and us.

The conclusion was crystal clear: although things appeared fine on the surface, there were signs of a potential crisis ahead. It was necessary to act with a sense of urgency, identify a guiding coalition, and develop a plan.

The lesson I took from this experience was highly practical, not poetic! It was experienced, not read in an academic manual: always be attentive to the signals, clues, indicators, and internal and external business metrics - even in times of apparent success. As Wittgenstein said, “What is most important to us is often hidden under a veil of simplicity and familiarity. We do not notice something simply because we see it all the time. No one thinks anymore about the true foundations of our questions” (Wittgenstein).

RESISTANCE TO CHANGE VS. READINESS FOR CHANGE

While defining the concept of change is relatively simple, implementing change is incredibly difficult, primarily because it involves … People.

As people managers, we need to change our preconceived notions about how we perceive and manage change.

1. Be alert to the signs of change. Understanding how to identify and interpret both explicit and implicit signals of the need for change is crucial.
2. Recognize that resistance to change is natural. Understanding that “resistance” is the most expected and natural reaction of people involved in the process. Although typically seen as negative, resistance can have positive aspects. It can force decision-makers to consider overlooked aspects of the change process.

In other words, resistance to change should be viewed as a valuable source of information. Most people are naturally reluctant to leave behind what is familiar. We tend to be suspicious of the unknown, concerned about the transition from the "old" to the "new," especially when it involves learning something new and the risk of failure. Resistance is a normal and natural response to change because it involves moving from the known to the unknown. Change creates anxiety and fear, which are powerful enough to generate resistance. Ask yourself: why is this person resisting to change? What is (are) the cause(s)? How can I clarify the “why” and “how”?

Managing Resistance: Identifying Key Factors

From a change management perspective, it is essential to examine the most common factors influencing employee resistance. To reduce resistance effectively, we need to understand its root causes. Let′s start with Pareto principle (20% of the effort or input leads to 80% of the results or output). According to research by O’Connor, there are five primary causes of resistance to change:

1. Lack of belief in the need for change,
2. Differences in perceptions of the need for change,
3. Lack of agreement on change objectives,
4. Lack of belief in the ability to achieve the change, and
5. Lack of trust in the change managers.

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Readiness for Change

Reducing resistance increases readiness for change (and vice versa). It is vital for organizations to be prepared for change before attempting to implement or manage it. Low readiness levels are often the main reason for change failure. In change management literature, readiness is one of the most critical factors in gaining initial support from employees. It combines beliefs, behaviors, and intentions toward the change, based on the perceived need and capability to implement it.

Managing readiness for change involves addressing the following five key criteria among employees:

1.?????? Confidence that the individual can make the change,

2.?????? Confidence that the change will personally benefit the employee,

3.?????? Recognition that organizational leaders support the change,

4.?????? Confidence that the change will bring long-term benefits to the organization, and

5.?????? Clear recognition of the need for change.

Communicating Change Effectively

For managers to successfully lead change, they need to clearly communicate the following to their teams:

• Why is the change necessary? Why is it needed in this way, at this time, and in this place?
• What is the change, and what preparation is required? What processes, structures, objectives, and standards will be affected? What will a successful change look like, and what does it mean for the people involved?
• Who will be affected by the change? Who should contribute to the change process?
• How will the change occur, and how will it impact the organization? How can we help facilitate the change, and how will we know if it’s successful?
• When will the change occur? When should the key messages be communicated?

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CHANGE MANAGEMENT: HOW TO SUCCESSFULLY IMPLEMENT AND MANAGE ORGANIZATIONAL CHANGE

Change management is essential for the survival and success of organizations in today's highly competitive and ever-evolving environment. However, various studies show that about 70% of change management processes fail. This high failure rate highlights the absence of a well-structured framework for effectively implementing and managing organizational change.

Should "change" be a skill to be developed, or a just problem to be managed? Clearly, it should be viewed as a skill to be developed. Below is a concise summary of a valid framework for successfully implementing and managing organizational change.

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ADKAR MODEL (ProSci)

The ADKAR model provides a structured approach to understanding and managing change at the individual level. It gives the tangible steps necessary to ensure the success of any change initiative. ADKAR is an acronym that stands for Awareness, Desire, Knowledge, Ability, and Reinforcement. Published by ProSci Research in 1998, following studies in over 900 organizations over ten years (Hiatt), the ADKAR model addresses the early stages of change management. According to this model, the key to successful change lies in something seemingly simple: how to facilitate change in a single individual.

AWARENESS

Awareness refers to an individual's understanding of the nature of the change, the reason behind it (the “why”), and the potential risks of not changing. This includes both internal and external factors (such as business indicators and metrics) that have created the need for change, as well as the question, "What's in it for me?" (WIIFM). The key questions here are: What is the change? Why is the change necessary? What will happen if we don’t change? The first step in enabling change is creating awareness of its necessity. No one will change without understanding the reasons for it.

DESIRE

Desire refers to an individual's willingness to support and engage with the change. Ultimately, this willingness is a personal choice influenced by the nature of the change, their specific situation, and intrinsic motivations unique to each person. Unlike Awareness, which can be actively built through clear communication, creating the Desire for change is more complex and beyond direct control. Many business leaders mistakenly assume that building awareness alone is enough to create desire, but the two are distinct steps.

KNOWLEDGE

Knowledge represents the information, skills, and training necessary for an individual to know how to change. This includes understanding new behaviors, processes, tools, systems, and techniques required to successfully implement the change. Once an individual has awareness of the need for change and the desire to support it, the next step is equipping them with the knowledge needed to proceed.

ABILITY

Ability is the demonstrated capacity to execute the change at the desired performance level. It involves transforming knowledge into action. Ability shows itself when individuals successfully apply their new knowledge and skills to achieve the desired outcomes. At this point, the change is visible in their actions or can be measured in its effects.

REINFORCEMENT

Reinforcement involves actions or events that strengthen and sustain the change for individuals and the organization. Both external and internal factors can reinforce change. External reinforcement can include recognition, rewards, or celebrations linked to the achievement of change goals. Internal reinforcement may be the personal satisfaction that individuals feel from accomplishing the change, or other personal benefits. Reinforcement is the final step of the ADKAR Model and is essential to prevent loss of momentum and to ensure that employees do not revert to old habits.

Applying the ADKAR Model to Organizational Change

The ADKAR methodology provides tools to assess readiness for change. Organizational change is only successful when high levels of Awareness, Desire, Knowledge, Ability, and Reinforcement are achieved.

According to this model:

• Low Awareness leads to Confusion among employees.
• Low Desire generates Resistance.
• Low Knowledge creates Fear and Anxiety.
• Low Ability leads to Frustration.
• Finally, low Reinforcement causes a Relapse into old behaviors.

By using the ADKAR framework, leaders can break down the change process into manageable steps, addressing both individual and organizational needs, and ensuring a higher success rate for their change initiatives.