The information age has highlighted the need for organizations to be agile to thrive in today's markets. Modern organizations face many risks to their operations, as highlighted in the 2019 World economic forum global risk report. Additionally, the business environment is very competitive. Unfortunately, there are significant barriers to organizational change. Not to mention that change is still a confusing construct for many companies.
We will walk you through the leading causes of unsuccessful organizational change and different strategies you can use to make organizational change successful.
Below is everything we will cover. Feel free to skip ahead.
- The top-3 barriers to organizational change
- 8 Essential strategies to address barriers to organizational change
- Key takeaway for strategies to address barriers to organizational change
- Manage your transformation with software built for change management: TrueNxus
The top-3 barriers to organizational change
Companies must have a culture of innovation if they are to survive the current business environment. For instance, the risk of an infectious disease materialized in the form of Covid-19, which dealt a deadly blow to hundreds of businesses. But innovative organizations pivoted and came out strong at the end of 2020 despite the pandemic.
Researchers have found that about 75% of organizational change efforts fail. Fallen giants such as Blockbuster, Borders, and Kodak were slow to embrace the changes brought about by Information Technology. Their dramatic decline acts as a cautionary tale for other organizations that don't embrace change.
It is our human nature to want the status quo maintained. So we often put up psychological barriers to anything that threatens to change our daily lives. Below are the top-3 barriers executives face when creating change.
1. Resistance from senior management
One of the most significant barriers to organizational change is senior management's resistance to change efforts. Front line managers may perceive the change as a threat to their jobs. This is especially true if the changes are technological advances meant to reduce the workforce.
Middle management often resists change when they are stuck in specific ways of doing things. It requires a lot of effort and energy to learn how to do things differently. So many people don't have the drive or inclination to change their preferred processes.
Lower-level management may also lack interest in organizational change if it doesn't affect their daily operations. The resistance amongst senior managers could be a result of office politics and ego clashes. Some managers may oppose any change efforts that rival managers champion.
2. Misdiagnosis on what to change
Another primary reason why most organizational change efforts fail is pursuing wrong changes. In a fast-paced environment, focusing your efforts and resources on the wrong tasks could lead your business to bankruptcy. Before starting a change effort, the executive team must be clear on which changes the company should pursue first.
One famous example of misdiagnosis of change efforts is Ron Johnson's strategy while he was CEO of JC Penney (JCP). Johnson had successfully transformed Target's and Apple's stores to appeal to younger crowds. So, he immediately went about making the same changes at JCP with disastrous results.
What JCP needed was to streamline its online operations with its store operations. Also, the company is required to give its bargain-seeking consumers more discounts.
Johnson alienated the JCP customer base by stopping discounts and using resources the company didn't have to revamp their stores. Sales reduced, and the company fell into severe financial trouble. Luckily Marvin Ellison, the CEO who followed Johnson, identified the right changes to restore the company to profitability.
Pursuing the wrong changes is costly for a company because it worsens while employees focus on the incorrect changes. Additionally, the misdiagnosis harms performance and morale and wastes the company's resources and time.
Once a change initiative fails, employees also become resistant to future attempts to change. They then use the failed initiative as a reference point against future proposed changes.
3. Lack of skills and resources
An organization may lack the resources it requires to effect a change that it needs. For instance, it may be necessary for a company to move online and start selling its goods worldwide, but there may not be enough funds to create an online shopping infrastructure. Additionally, there may be no one in the company with enough IT knowledge to steer such a change effectively.
Facing overhead challenges and misusing resources is an easy way to watch an organization begin to crumble. Proper strategy and acknowledging each person and tool's value and genius zones is essential. This helps you to leverage and compartmentalize time and effort for tasks effectively and efficiently.
8 Essential strategies to address barriers to organizational change
Management researchers have found that the best way to motivate organizational change involves your management and employees in all stages of the change process. When employees see change as a necessary step in an organization's development and seek their views and input on the change process─ changes go smoother. Below are the best strategies to address barriers to organizational change.
1. Identify the right areas to focus on.
Once an organization gets a trigger to change, like reducing profitability, its management would need to identify the right changes to pursue. Strategy options include globalizing your company, increasing your customer focus, increasing operational efficiency, innovation, and sustainability.
Each strategy has its challenges and will need things to be done differently within the company. Many executives may feel that their company needs to pursue all the strategies, but dive goals are too many to handle. Organizational change is more effective when the leader identifies the most pressing change and the best strategy for it.
2. Explain the reason for the change.
One reason why many employees resist change is that they don't understand the reason behind the changes. Due to the "false consensus" phenomenon, leadership often overestimates the agreement that the employees have towards the change. Additionally, our human nature makes us think that other people have the same level of knowledge that we do; hence we neglect to explain what we feel is obvious.
For instance, a company's executives may have discussions for weeks about pursuing different markets to improve profitability. When they finally roll out the plan, they may assume that the management team will have the same level of knowledge as they do on the importance of diversifying. They then get shocked when the management team resists the change as they have no awareness of the need to pursue new markets.
To make your change process more manageable, do a lot of internal communications on why the change is necessary. When your team understands the "why", they will be more likely to engage with the change process.
3. Allow your management team to lead the change process.
Senior managers are often the most motivated, ambitious, and talented members of your organization. So, it makes sense to put their skills and talents to the best use to develop the organization. Giving your managers the authority to manage the change process also secures their buy-in and participation.
Involve senior managers in high-level strategy meetings to have a deep understanding of the organization's vision and mission. With the knowledge of where the organization should be, they can point out the company processes that need to change to achieve organizational goals.
4. Explain everyone's role in the change process.
Management and employees are often resistant to change as they fear losing their jobs or getting their roles and responsibilities reduced. You can overcome much resistance to your change process by assuring the team that they won't be losing their jobs.
Sell your vision of what you want the organization to grow into following the change and what everyone's role in the new organization will be. This will encourage employees and management to be partners rather than resistors to your change process.
5. Highlight the consequences of a lack of change.
Organizations often change to increase their profitability and market share. Keeping business as usual when facing organizational threats and missing out on market opportunities may lead to reduced profits and even the collapse of the company.
A classic example is Blockbuster, which went bankrupt after failing to make changes in their operations when Netflix entered their market. Point out the negative consequences of not changing to reduce resistance to the changes you need to make.
A great way to get management buy-in by highlighting the adverse side effects of not changing is a "Kill The Company" exercise. Assemble your employees and split them up into different groups. Ask them to come up with several ways in which they could put your organization out of business.
You could also call-in other stakeholders like suppliers and college students to contribute to the exercise. Usually, by the end of it, employees have a deeper understanding of their organizations' risks. They are also typically willing to embrace change to prevent their company from failing.
6. Reinforce desired behavior with formal reward mechanisms.
Another great strategy to overcome organizational change barriers is to reinforce desired behavior using an effective reward system. Employees who embrace change and deliver expected results could get bonuses or other rewards and recognition for their performance.
Money isn't the only motivator and should be part of a larger reward scheme. Your employees may value recognition or growth opportunities more than financial bonuses. So you could save much money by giving rewards that your employees find fulfilling.
Make sure that your reward scheme is fair. Employees may feel demotivated if they discover that their colleagues got a better reward than theirs if they achieved similar results.
Also, for reinforcement to work as a change strategy, the right behaviors must be rewarded. For instance, a manufacturing company with one of its central values as quality products may make losses if it starts rewarding production efficiency. This is because the production team may sacrifice quality to achieve its production targets.
7. Make innovation a part of your company culture.
Another great strategy to overcome organizational change barriers is to make adaptability and innovation a part of your company culture. Encourage employees to suggest changes to your processes by rewarding those that make innovative suggestions. Ensure that those whose ideas increase the company's efficiency and profitability get a financial reward for their recommendation.
Employees that try out new things shouldn't get punished when their attempts fail. Instead, encourage innovation by acknowledging all new ideas even if you don't implement most of them.
8. Create training and development programs to support organizational change.
Companies seeking change should identify the employee mindsets and behaviors that would propel the organization to its desired level. You can then develop these traits in employees through training and performance management. Leaders should also model these traits to show their employees the kind of behavior required to flourish.
For instance, if an organization decides to change into a global company, employees will need to increase their cultural awareness and even learn new languages. The company can support the change by hiring a diversity and cultural awareness coach and paying for language classes for relevant employees.
Key takeaway for strategies to address barriers to organizational change
Globalization, information technology, and the risky business environment have made change and innovation a must for any modern business that wants to thrive. But effective change is still an illusion for most organizations as about 75% of company change efforts fail. Poor change management can lead to financial losses for the company and a reduced market share, and lower employee morale.
Using the strategies above and an effective change management process can help you address barriers to organizational change.
Manage your transformation with software built for change management: TrueNxus
TrueNxus is a cloud-based program and project management software that can help you manage the barriers to organizational change. Additionally, the entire team can collaborate, plan, execute, and monitor and control the whole change management process.
TrueNxus will be your single source of truth where you can instill change management best practices. Not to mention, everyone will be aligned with real-time access to where things stand in each change management initiative.
Below are several features on how TrueNxus can help you plan and execute organizational change management.
1. Project charter
Leverage OKR and create a project charter. You can ensure you address barriers to organizational change by documenting and aligning the project's objectives, benefits, and risks from the very beginning.
2. Personalized views
Every business function specializes in a specific domain and, as such, thinks about organizational change management differently. To ensure change management's successful execution, you need a project management software that provides personalized views. These views need to be in sync as well.
TrueNxus provides you with the following views:
A list is a table that allows you to manage your project plan easily. Organize the work into groups such as workstreams or any logical way to categorize tasks.
Visualize the change initiative as a Timeline, a Gantt-chart like view that lets you understand how the entire project fits together. Make updates to the project plan through an interactive interface.
3. Automated project status reports
We understand that each team member is busy balancing multiple priorities, from your day-to-day responsibilities to various organizational change management initiatives. Therefore, TrueNxus successfully executes organizational change management by automatically analyzing the change initiative's health in real-time, giving senior leadership and the team the insights they need to make decisions and move the ball forward.
4. My Work
You can also address barriers to organizational change by understanding what you're on the hook for delivering. With TrueNxus, you can view every task and every dependency vital to you, across every change initiative, in one location, ensuring success.
Additionally, we know that you don't want to let your colleagues down or be let down. You can ensure the successful delivery of organizational change initiatives even in matrix organizations through collaboration and documenting task dependencies. By doing so you, you can be accountable when others are reliant on you. You can understand dependent tasks, change implications, and adjust course as needed.
6. Automated notifications
You can also successfully execute organizational change management by using project management software to notify when changes occur. With TrueNxus's 20+ out-of-the-box automated notifications, you will have the transparency you need to stay in-the-know.
Lastly, the entire team can ensure that organizational change initiatives are successful by collaborating directly in the app. With TrueNxus, you can communicate with colleagues and third parties in tasks.
TrueNxus has everything you and your company need to manage change and address any barriers to organizational change.
See for yourself, and sign up for a free trial today (no credit card needed).