Peril awaits companies that forego change management

Companies spend millions of dollars on new enterprise resource planning systems designed to improve productivity and increase efficiency. They allocate just pennies, however, for organizational change management, which is the difference between success and failure when installing new systems.

“Change management is essential to ensure impacted associates understand how to operate in their new world and can adapt to the new systems and processes,” says Beth Thomas, executive vice president and managing director of Consulting Services at Sequent. “If they can’t adapt, the initiative will fail.”

She says success hinges on preparing the organization at all levels for what this new world will look like and how associates can be successful within it.

“When we change the working world, the people operating within it lose a sense of what success looks like. It’s up to the change management partners to make sure everyone understands how they transition from old to new and how to be successful.”

Smart Business spoke with Thomas about the change management process with system implementation.

Why do enterprise projects fail?

The No. 1 reason projects fail is because they don’t have adequate executive leadership support or sponsorship. Without leadership, 56 percent of projects fall behind schedule and 37 percent run over budget. More than one-third of projects are considered complete or partial failure, and less than 20 percent fully achieve the stated objective.

Without strong leadership behind the change process, employees express confusion and frustration because of the lack of support and direction. They become disengaged, which increases mistakes, reduces productivity, causes turnover and leads to the failure of the project.

What is the responsibility of the C-suite in change management?

Leaders want to get behind the critical initiatives that are tied to new technology, but they rarely serve as an example of proper adoption — they talk the talk but don’t walk the walk. It’s not enough to speak about the importance of change. Their actions need to support that sentiment because that will set the tone for the entire organization.

Company executives need to champion the change by speaking about it at every opportunity, asking questions, getting feedback from associates on the transition and holding people accountable for the success of the implementation. They also need to let go of the old system and embrace the new. They can’t tell associates to get out of their comfort zone and then ask them to generate a report from the old system.

It’s helpful if executives present the benefits of making the change. Talk about why the new system is being implemented and the benefits to company and employees.

Also, set realistic expectations. Give associates time to learn and be patient with their questions and concerns.

What are the steps of change management?

First, do a needs assessment to understand the transition, where the company is going and where it’s coming from, where the greatest impact will occur in the business and who will be affected. An impact analysis and change readiness assessment will help a company understand whether it has the right staff, culture, timeline and project milestones in place.

It’s important to get everyone on the same page, from an organizational change team to each associate, the managers and the executives, to set expectations. A change agent network can be created that comprises department leaders and influencers to make sure they are prepared to help lead the rest of the team through the process.

Change management requires a lot of communication. It must be clear why the change is happening. Many companies stop the change management activities when the system goes live. That’s a mistake because that’s when people need the most support, and it ensures the change is sustained when the system is live.

In essence, change management is about winning people’s heads and hearts in order to gain the desired results from your transformation. It’s your insurance policy to gaining your ROI of those expensive new systems. Are you ready to change?

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