Why is Change & Change Management Important to Organizations? Everything You Need to Know
Organizations change either because they want to or because they have to. Sometimes circumstances cause unexpected change, as was the case with the global coronavirus pandemic.
Other times, organizations drive change so they can grow, transform, and stay competitive by using the latest technological advancements.
Why is change important in an organization?
If an organization never changes, they end up stagnant and falling behind their competition. They can quickly become irrelevant or be overtaken by circumstances that they can’t adapt to.
The Importance of Change Management in an Organization
Just because an organization wants to or needs to change, doesn’t mean that transformation is going to go smoothly. If there is no plan, and the people impacted by the change aren’t guided properly, things can go wrong.
This is the reason why change management is important in an organization. Change management uses proven methodologies that address the change from a “people” perspective to resolve resistance and ensure new behaviors are being adopted to support the change project.
If you’ve ever wondered, “Why is organisational change important?” (UK spelling) or “Why is change important in an organization?” (US spelling), the quote below by Darwin can shed some light on the importance of change.
“It is not the strongest or the most intelligent who will survive but those who can best manage change.” -Charles Darwin
In this AGS insight article, we’ll explore why organizations need to change and the importance of change management to ensure an organizational transition happens successfully.
Why is Change Important in an Organization?
Without change, an organization can’t realize growth, expand its capabilities, or adapt to external events that impact its business.
For one company in the US, a change may be needed to take advantage of technology to reduce costs with automation. For a UK company asking, “Why is organisational change important?”, it may be necessary for surviving during the pandemic by coming up with contactless ways to serve customers.
Being agile and adapting to one’s surroundings and having forward thinking and adapting to innovate and gain a competitive edge are hallmarks of successful companies.
Whether a company is innovating or just surviving, the importance of change and the importance of change management in an organization is evident when you look at the statistics.
According to an article by Everwise, companies that use change management best practices to manage change are 3.5 times more likely to outperform their peers.
Additionally, projects using change management methodologies to guide people through a change can expect a return that’s between 2.5 and 6.5 times higher than the spend, depending upon project size.
Reasons Companies Must Change
Here are a few of the factors that cause companies to change and also realize the importance of change management as they’re going through that transformation.
- Gaps in Performance: Companies often change to resolve shortcomings when performance isn’t meeting desired results.
- Taking Advantage of Opportunities: Adding a new product or service to take advantage of an emerging opportunity can be a driver for change.
- Adapting to a Crisis: Whether it’s an economic downturn, a global pandemic, or another unexpected event, companies need to change quickly to survive a crisis event.
- Adopting New Technology: Tech innovations are happening constantly, and companies can often completely transform workflows for the better by changing to adopt them.
- Mergers & Acquisitions: Large changes in organizational structure due to the melding of two companies, will significantly change the organizations involved.
- Cost-Cutting: Companies often change to reduce costs, which can mean layoffs, site closures, and other measures to cut expenses.
- Societal Changes: Some changes are driven by the evolution of societal values, such as the movement to become more sustainable and reduce carbon footprints.
Change is crucial for any organization that wants to stay competitive, take advantage of ways to do things better, and keep up with a world that continually changes around it.
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Why Do We Need Change Management?
Change doesn’t just happen on its own because you have a plan on paper. It involves an organization full of people successfully adapting the new behaviors and norms required for the transition.
For those in the UK asking about the importance of change management in an organisation or US companies wondering, “Why is change important in an organization using change management?”, you can think about it in the following way.
Trying to make a change in an organization without using change management is like loading your staff onto a boat, pushing it off the shore without a map or captain to navigate, and just hoping it gets where it needs to go.
The importance of change management is that it provides a critical structure for a change project that guides people through a change so that the organization can achieve the desired outcome.
At the heart of change management is the fact that change happens from the bottom up. Projects that just try to force change from the bottom down, often fail because they ignore the fact that for an organization to change, its people have to change and adopt the new behaviors dictated by the change.
The importance of change management in an organisation in the UK or an organization in the US is evident when you think about that aspect of change.
Change management focuses on the people going through a change. It addresses their needs for communication, training, and guidance, so they can successfully transition their habits, and thus the organization can achieve the best outcomes from the change.
Benefits of Change Management
There are many benefits to using change management to lead a successful company transition. It offers a framework that includes project management, people management, and process/asset management.
For those wondering, “Why change management is important in an organization” and those in the UK asking about the importance of change management in an organisation, the answer can be found by looking through the benefits.
Reduces Chances of Project Failure
As many as 70% of change projects don’t achieve their desired results. This is often due to a lack of support from the people impacted by the change. They go back to old ways of doing things and never fully embrace the change, so it’s doomed to fail.
The importance of change management is seen in the fact that it directly addresses the support or lack of support that stakeholders (those impacted by the change) have for the project.
Using methods like stakeholder analysis, resistance management, and communication planning, change management focuses on successfully changing the habits of the stakeholders so the change can be successful.
Keeps Projects from Going Over Budget
Without a plan or change management strategy, transformational projects can easily go over budget.
Part of change management includes tracking project metrics to ensure projects stay within budget and are being carried out efficiently.
Improves Employee Feelings About a Change
People are naturally resistant to change, which means most change projects will have barriers from the start as soon as employees hear that they have to change something in the way they work.
One of the answers to why change management is important in an organization is that it focuses on the soft skills needed to address resistance proactively and reactively. Hence, employees have fears allayed and are guided to a positive feeling of support for the change mission.
The Importance of Change Management Planning
Uses Proven Methodologies
If you go into a project that is causing a change in an organization without a proven plan to guide people through that change, it’s bound to have issues with resistance and lack of support for the change.
Change management uses proven change models, such as the Prosci ADKAR® Model or Lewin change model, to guide a successful change project. These are based upon years of studies related to how organizations change successfully and what causes change to fail.
Improves Communication About a Change
Lack of communication can cause change projects to fail. The importance of change management when it comes to communications is that it’s designed to enable smooth and continuous communications about a change project in a number of ways.
- Communication planning helps ensure stakeholders are kept informed and aren’t confused about what’s happening with the change project.
- Leadership coaching prepares leaders with the tools they need to effectively communicate the change to the employees they manage.
- A Change Champions Network ensures that there is communication happening at all levels of an organization by colleagues trained to drive the change in their specific departments.
Ensures a Change Can Be Sustained
Another factor in the importance of change management in an organization is that it considers the fact that change needs to be reinforced after the change project is complete in order for it to be sustained.
Without support after a go-live date, employees can hit road bumps with new processes that cause them to revert to the old methods. Change management lays out specific change adoption reinforcement tactics, designed to ensure new behaviors become the “way we do things” and are cemented into the corporate culture.
The Importance of Change Management in an Organization
Because change is important in an organization, change management is important.
For anyone asking, “Why is organisational change important?” (in the UK) or “Why is change important in an organization?” (in the US), all one has to do is look at the fast pace of technology and unpredictability of recent world events, and it’s evident that to adapt and change is vital to a company’s survival and growth.
The importance of change management to guide a successful change project can’t be underscored enough. Without it, projects often fail because they don’t address the most important factor in a change – the people that need to change.
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Conclusion: Why is Change Important in an Organization?
Whether the change is happening by choice or by necessity, the answer to “Why is change important in an organization?” is evident, especially in today’s innovative technological environment.
There is no question that organizations need to change in any number of ways, and that change often happens for a myriad of reasons.
The organizations that manage that change most successfully are those that use change management to guide the process and ensure changes happen from the bottom up so they can be sustained.
The importance of change management and the necessity for constant change and innovation means that any organization, no matter the size, needs to become familiar with the tenants of change management and how to deploy it to drive successful transformations.
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