Enable javascript in your browser for better experience. Need to know to enable it? Go here.
Edition 24 banner image
Edition 24 banner image
Edition #24 | November 2022

Change management: Why it matters, and how to make it stick

1. Intro: The case for change management  


As digital transformation comes into focus for more organizations, there’s rising awareness that technology, as crucial as it is, is only part of the equation. Research from organizations deeply involved in the practice, including Thoughtworks, show that rather than technical solutions, it’s ‘soft’ factors such as the people involved, finding the right partners and the ability to formulate a clear vision that drive meaningful transformation outcomes.

 

The real secrets to transformation success

 

“How important were each of the following in driving your organization’s success in modernization/digital transformation?”

Bar chart showing that communication, continuous improvement, and skilled practitioners drive transformation success Bar chart showing that communication, continuous improvement, and skilled practitioners drive transformation success

Source: Forrester / Thoughtworks

 

Along with the right systems, enterprises need a structured and intentional approach to defining a transformation strategy and ensuring their people remain on board throughout the process – in other words, change management. “More organizations are coming around to the value and significance of the change management discipline, because it underpins so much of what organizations need to be successful,” says Kiran Rouzie, Head of Technology Strategy, North America at Thoughtworks.


“More organizations are coming around to the value and significance of the change management discipline, because it underpins so much of what organizations need to be successful.”

 

Kiran Rouzie
Head of Technology Strategy, North America, Thoughtworks


Yet a lot of companies continue to wrestle with what change management entails – and how to get it right. “There’s often a gap between strategy and execution, and having the necessary resources to be effective,” says Rouzie. “It’s a common mistake to underestimate the impact of a digital transformation initiative and not consider how to leverage change management to improve adoption, utilization and maximize ROI realization – or to think change management is nothing more than a communications plan.”

 

“Another misconception is that change is either linear or iterative – it is both,” she notes. “The phases of change an individual experiences are linear, whereas aspects of how you implement the change may be iterative. What’s more, many organizations assume change can happen quickly or by force.”             

 

The confusion is understandable, because change management can be a delicate process. “The transactional portion involves coordination, tools, and skills uplift, which can be achieved with a competent project management team,” says Thoughtworks Domain Specialist, Peter Barnes. “But the other portion is organic and affects employee engagement and motivation. It’s far more elastic and time consuming, requiring strong leadership, and is the key difference between change management and project management.”  


“A change management program is not just about managing change as a series of activities in a plan. It’s not a project to manage – it’s a mission to drive."

 

Dee Wauchope
Organization Transformation Principal, Thoughtworks


“A change management program is not just about managing change as a series of activities in a plan,” agrees Dee Wauchope, Organization Transformation Principal, Thoughtworks. “It’s not a project to manage – it’s a mission to drive."

 

For enterprises that get it right the rewards are manifold. Studies suggest organizations that effectively apply change management to an initiative are six times more likely to meet their objectives.

 

Chance of meeting goals rises with the success of change management programs

 

Correlation of change management effectiveness with meeting objectives

Organizations with initiatives with excellent change management are six times more likely to meet objectives than those with poor change management. Organizations with initiatives with excellent change management are six times more likely to meet objectives than those with poor change management.

Source: Prosci

 

“A well-orchestrated change management program helps employees feel prepared, equipped and supported throughout the digital transformation journey,” Rouzie says. “In contrast, when change management is neglected, poorly executed or only executed partially, organizations can expect to face issues such as extended project schedules, cost overruns, low adoption and utilization. Above all, from what we’ve seen, employees can be caught off guard, overwhelmed and beset by change.”  

 

As Wauchope points out, leaving employees bewildered may lead to the perception that change is being done to them rather than with them, and potentially breed negative sentiment and resistance around the change.

 

Regardless of the organization’s context, the best change management practices are broadly similar and applicable to any transformation initiative, notes Wauchope. They span the critical areas of people, processes and technology. But they are all oriented around a sense of purpose, because in change management “it’s necessary to understand the ‘why’, in order to be able to successfully know that the ‘how’ and the ‘what’ will work,” she points out.

 

2. Identifying the need for change management – and managing expectations 

 

Change management programs may vary in size or scope, but are advisable whenever organizations aim to successfully adopt and utilize innovative technologies or processes, especially when those technologies or processes impact people – which, as Rouzie points out, most inevitably will.  

 

“Digital transformation, whether driven by expected or unpredictable change, often results in a shift in the organization’s culture,” she explains. “Change management is critical when you ultimately need to sustain that cultural shift, when you’re tackling a must-win project, program or enterprise-wide transformation.”  

 

“A criteria that I use to define transformational change is the threshold on the level of human impact,” says Barnes. “Where you're changing enough about people's roles, what they do and why, or how they do it, it brings into question their ability to make that change successfully, to remain engaged, and to continue to deliver value.” 

 

“Instead of trying to get from point A to B and stopping there, organizations need to take it one step further and prepare people within the organization for what will, for most organizations, be continuing change going forward,” he adds. 


“Instead of trying to get from point A to B and stopping there, organizations need to take it one step further and prepare people within the organization for what will, for most organizations, be continuing change going forward.”

 

Peter Barnes
Domain Specialist, Thoughtworks


While business leaders may want to see a financial rationale for change management, or to only apply it to projects of a certain size, Rouzie notes multiple other anchors or catalysts can indicate it’s a necessity. 

 

“Lack of alignment to the vision, goals or objectives for the change itself; resistance to participating or leading the change; lack of knowledge of what needs to change, or the mechanisms within the culture to reinforce those changes,” she says. “These are examples that can take place every day in the workplace, that people are affected by, or cause enough pain, that there’s an incentive for action.” 

 

Wauchope notes when organizations decide to undergo a digital transformation, they should begin with an honest effort to determine the root causes of the enterprise’s constraints or challenges – and recognize technology alone will not necessarily address them. 

 

“Perhaps the biggest misconception around change management is that technology will fix whatever problems the organization is trying to solve,” she says. “Technology often is a huge assistance to solving problems, but it’s only as good as its ability to support the people and processes that an organization needs to have in place.” 


“Perhaps the biggest misconception around change management is that technology will fix whatever problems the organization is trying to solve. Technology often is a huge assistance to solving problems, but it’s only as good as its ability to support the people and processes that an organization needs to have in place.”

 

Dee Wauchope
Organization Transformation Principal, Thoughtworks


 

Common misconceptions about change management

 

1.   The problem can be fixed just by implementing new technology 

2.  The project team is solely responsible for managing the change process

3.   There is a defined end date

4.   Change can be implemented quickly 

5.   Change management is nothing more than a communications plan

6.   The experience for people going through change is linear

7.    ROI doesn’t have to be a primary consideration 

 

All this means that, when planning a digital transformation and intending to lead people through change adoption, along with their tech capabilities, organizations “need to assess their leadership, overall organizational ecosystem, values, enablement, rewards and overarching structure,” notes Rouzie. 

 

Drilling down into structure, factors like organizational design, operating models, talent and readiness for change can all be critical to transformation outcomes. While change management involves everyone, this kind of organizational knowledge and analysis is most often the domain of leadership. 

 

This connects to another common misstep in change management – making it entirely a project team’s responsibility to oversee and deliver, when committed leaders are needed to provide impetus and direction on the journey. 

 

“Having leaders support and guide people through the process is critical, and an element that cannot be outsourced,” Barnes notes.

 

3. Rallying change management champions

 

While leadership is vital to change management, it’s by no means a strictly ‘top down’ process. Along with shifting organizational structures and employee expectations, change management practices have evolved over the past couple of decades from a ‘waterfall’ approach to one aligned to agile methodologies.


“Hierarchical organizational structures, and the authority that is often wielded as part of those, have given way to more empathetic behavior, more suited to a talent market where employees have abundant choice. Change management can form part of the employee experience that is critical to overall business performance.”

 

Peter Barnes
Domain Specialist, Thoughtworks


“Hierarchical organizational structures, and the authority that is often wielded as part of those, have given way to more empathetic behavior, more suited to a talent market where employees have abundant choice,” says Barnes. “Change management can form part of the employee experience that is critical to overall business performance.” 

 

Leaders with the capacity to demonstrate the behaviors, mindsets and ways of working that they are expecting from those required to participate in change can be a key source of motivation, and inspiration, for employees to act in alignment.


“Having people at the top living those values, and leading by example, is such an important thing. If you're saying everyone needs to change, but the people at the top are doing just fine and don't need to, it's really not going to fly.”

 

Dee Wauchope
Organization Transformation Principal, Thoughtworks


“Having people at the top living those values, and leading by example, is such an important thing,” notes Wauchope. “If you're saying everyone needs to change, but the people at the top are doing just fine and don't need to, it's really not going to fly.”  

 

A solid first step then is to position the change management program at the right level so it receives the necessary sponsorship and attention. Particularly if the transformation initiative is emerging from an IT or product organization, Rouzie notes, it may need to be elevated and centralized to gain the prominence and traction to be successful.

 

“Sponsorship is the number one point of failure or success for change management efforts,” she says. “A primary sponsor should actively and visibly participate to give the program credibility, and to authorize the necessary ongoing funding, support or resources.” 


“Sponsorship is the number one point of failure or success for change management efforts. A primary sponsor should actively and visibly participate to give the program credibility, and to authorize the necessary ongoing funding, support or resources.”

 

Kiran Rouzie
Head of Technology Strategy, North America, Thoughtworks


Sponsor effectiveness directly impacts the success of change management initiatives

 

Correlation of Sponsor effectiveness with meeting objectives

Projects with extremely effective sponsors were more than twice as likely to meet their objectives than those with very ineffective sponsors. Projects with extremely effective sponsors were more than twice as likely to meet their objectives than those with very ineffective sponsors.
Source: Prosci

 

Sponsorship may be spearheaded by the CEO or centralized within a dedicated transformation office – but the more intersection there is with different parts of the business, the better. “I’ve seen in organizations that are really siloed, or where teams are highly competitive with one another, that having change management centralized gives it the best shot at success, because you've got somebody who's objective, managing and overseeing its success, as opposed to it being owned by anyone's personal agenda,” Rouzie explains. 

 

Communication is another important consideration. As Rouzie notes, leaders are also defined by the ability to articulate a clear and compelling vision for change, and to make sure that it is well understood.

 

Since, as Barnes notes, large-scale digital transformations can have impacts well beyond the organization's walls, there’s also an onus on business leaders to think through how the impending change might affect the way of life of the people it targets, and the possible ethical or reputational consequences. 

 

“Organizations often look at the impact of change within their own boundaries – what it means for employees’ roles, their reporting lines and what and how they do their jobs,” he says. “However, changes to the organizational structure and ways of working can actually bleed out into people’s personal and social lives.” 

 

The leadership’s commitment can’t evaporate after the planning or sign-off stage. To engineer and embed meaningful change, organizations must see through three key phases aligned to how people move through the change journey: preparation, execution and reinforcement.


“Organizations often look at the impact of change within their own boundaries – what it means for employees’ roles, their reporting lines and what and how they do their jobs. However, changes to the organizational structure and ways of working can actually bleed out into people’s personal and social lives.”

 

Peter Barnes
Domain Specialist, Thoughtworks


 

4. Preparation: Laying the groundwork through open dialogue 

 

Preparation for change may take place on multiple fronts, including organizational restructuring or getting the right infrastructure in place. But in change management, it boils down to getting the support of the people and teams impacted, and helping them navigate the process. 

 

Thoughtworks experts are unanimous in emphasizing the importance of giving individuals or teams moving through a change the sense they’re participating in it fully, not being dragged along for the ride. This requires letting people know how change should be tackled – and making sure they understand the rationale and goal. Failure to do this becomes a precursor for adoption issues when the implementation goes into full swing.

 

“Organizations often think they’ve already communicated something six, seven times, so employees should know what's being changed and why,” says Rouzie. “They underestimate the alignment activities needed to prepare leadership and craft mission and vision statements, and the need for pre-socialization, getting everybody on board, and ensuring that they're adequately prepared to undergo the transformational efforts.”

 

Barriers to change are frequently rooted in lack of awareness, which again highlights the need for clear and constant communication.

 

Employees more engaged and confident when leaders communicate the impact of change in a compelling way

Compelling communication of change from leaders increases employee engagement and confidence, and reduces feelings of burnout and stress Compelling communication of change from leaders increases employee engagement and confidence, and reduces feelings of burnout and stress
Source: Gallup

 

The best approach to broadcasting the overarching purpose and intended goal of a change management program can depend on the audience’s priorities. 

 

“If you’re presenting a change management proposition to a group of financially-minded individuals, then you might want to highlight the ROI in terms of how it generates revenue or decreases operational expenses,” Rouzie explains. “If you’re trying to garner sponsorship from people who are heavily invested in developing a strong organizational culture, they might want to hear about results from that perspective. But irrespective of the audience, there must be a clearly communicated vision that includes a sense of urgency for the change.”

 

Ensuring the change strategy is well understood can’t stop at articulating the message. It also involves getting affirmation from all levels of the organization that they understand and support how it will be translated from concepts into execution. This requires establishing a feedback loop through which employees can express their views without fear of repercussions – and can be confident those views will be heard. 

 

“If the organization has a command and control culture, change becomes more difficult to implement, because of the lack of buy-in,” Wauchope notes. “In these cases, a culture shift needs to happen at the same time as the change to technology and processes. Organizations that have been successful in effecting change are those with a culture of genuinely wanting to do the right thing by their employees, customers, and the company.”


"Organizations that have been successful in effecting change are those with a culture of genuinely wanting to do the right thing by their employees, customers, and the company.”

 

Dee Wauchope
Organization Transformation Principal, Thoughtworks


None of this is to say that if employees don’t like the change, all plans have to be shelved, notes Rouzie. “It still means that their feedback and where they are in the process has to be taken into consideration when the change management strategy and execution plan are developed – and adjustments made during the execution phase according to the feedback that comes in.” 

 

“It’s incredibly important to listen to employees, because people at the top are often so far removed from the day-to-day workings of the organization that they may have a completely skewed view,” agrees Wauchope. 

 

The question then, is how to gather the honest, unfiltered feedback that an organization needs to truly build empathy for all stakeholders. 

 

“Many companies say they have a feedback-first approach, but if they’ve not created a psychologically safe environment for people to want to share openly, they will be limited in what they're able to gather and action against,” notes Rouzie.  


“Many companies say they have a feedback-first approach, but if they’ve not created a psychologically safe environment for people to want to share openly, they will be limited in what they're able to gather and action against.”

 

Kiran Rouzie
Head of Technology Strategy, North America, Thoughtworks


To create that safe space where employees are comfortable enough to speak their minds, organizations can consider enlisting the help of trusted and influential change agents, she says. To ensure they reflect a well-rounded view, these influencers should come from levels of the organization that are most representative of the target audience or the impacted groups. 

 

Typically it’s “at the team level where organizations get the best feedback within a high trust environment,” says Barnes. “If you want feedback, you want it to be valuable and truthful. You have to demonstrate that you're listening to it, and that you're taking action. That playback of feedback, summarization and then demonstrating how it’s factoring into your steering is really powerful.” Also key is to be explicit from the start on the value of feedback and then create a mix of channels to gather it, so people can, to some extent, choose how they participate. 

 

“Well-designed communication touchpoints, from structured activities such as town halls, to anonymous surveys, direct response marketing techniques and internal social media channels, can all be employed to create meaningful engagement that elicits a more honest response,” Rouzie says.  

 

According to Barnes, high levels of regular engagement, trust and transparency can to a large extent alleviate or even prevent blowbacks like resignations or union activity that sometimes emerge when transformation affects people or their work personally. But the most effective approach of all is showing that feedback counts. 

 

As the change management initiative kicks into high gear, leaders’ active and visible participation becomes more important than ever, agree Thoughtworks experts. So too does their willingness to be open and honest. 

 

“Integrity plays a significant role when people are being led through change,” notes Barnes. “Leaders displaying humanity and providing support can deliver a markedly different outcome as opposed to those who rely solely on the project management team to front the program.”

 

 

5. Execution: Sustaining, and measuring success

 

Realizing and building on the value of change is possible only when employees not only come along for the journey, but are still there at the end. “Without that level of ownership, engagement and motivation will begin to wane once the change manager leaves and the technical elements of the transformation are completed,” Barnes explains.   

 

This requires aligning employees with the change management vision not only at the outset, but also taking steps to reinforce that alignment throughout the lifespan of the program.   

 

For this reason Wauchope recommends organizations kick-start their change management efforts with smaller steps that have a relatively high likelihood of success, as a means to build momentum and provide ‘proof points’ for future change.  

 

“Validation exercises can achieve quick wins and gain the buy-in required to successfully implement larger initiatives,” she notes. “The need to bring people along on the change journey and constantly show them the benefits cannot be overemphasized.” 

 

Organizations should also pay particular attention to groups that may be getting – or at least feel like they’re getting – the shorter end of the stick in the change management process.  

 

“One of the issues that comes up frequently in larger enterprise-level transformation projects is the creation of the ‘second class citizen’ – essentially the people who are being left behind to keep the lights on while the new technology or process is being built,” Barnes notes. “Engaging them can be difficult but will contribute significantly to the program’s success.” 

 

Change management should never be rigid, but established methodologies can provide structure and techniques that help organizations engage employees with more confidence.


“Large scale ‘waterfall’ change frequently fails as people get lost on the way and don’t make it to the end of the journey. Agile or iterative methodologies on the other hand allow organizations to take the temperature at multiple levels frequently – and adjust accordingly.”

 

Peter Barnes
Domain Specialist, Thoughtworks


“There's a strong correlation between delivery methodology and feedback,” notes Barnes. “Large scale ‘waterfall’ change frequently fails as people get lost on the way and don’t make it to the end of the journey. Agile or iterative methodologies on the other hand allow organizations to take the temperature at multiple levels frequently – and adjust accordingly.”  

 

“Agile ways of delivering solutions are very similar to how organizations need to go about implementing a change,” Wauchope agrees. “Both employ the concepts of ensuring everyone feels empowered and involved in what's happening; having regular checkpoints to assess if things are working; having a baseline and measuring against that as the initiative progresses; and being prepared to pivot if needed.”   

 

Needing to regularly assess progress means metrics matter, though what those metrics are will vary depending on the program’s goals. 

 

Broadly speaking, organizations can choose from three main categories – organizational performance (including financial returns), individual performance (such as increased productivity, or job satisfaction), and organizational change management itself (such as the rate of change adoption).


“It’s also possible that what organizations measure in the beginning is not what ends up being most significant later on. Metrics themselves need to be continuously monitored and revisited as the maturity of an organization’s change efforts evolve.”

 

Kiran Rouzie
Head of Technology Strategy, North America, Thoughtworks


“What's key is striking a balance between these and knowing which are the most important,” Rouzie notes. “It’s also possible that what organizations measure in the beginning is not what ends up being most significant later on. Metrics themselves need to be continuously monitored and revisited as the maturity of an organization’s change efforts evolve.”  

 

“What gets measured depends on the change organizations are trying to achieve – but employee and customer satisfaction are metrics that will often be worth looking at regardless,” says Wauchope.

For Barnes, a key measure of success is not necessarily bringing everyone along – “but rather, how many of the people that you want to bring with you on the journey are still with you at the end. That can be measured in several ways, from both a human and systems perspective.” 

 

The ‘end’ however is best understood as a constantly evolving target. “It’s important to note that change management programs do not often come with defined start and end dates,” Rouzie explains. “They’re more akin to a bell curve: the peak is when organizations are at the height of their transformational journey and ability to make changes. The downswing is when organizations move to the evolutionary, business-as-usual phase, which is ongoing. The first leg of that journey is preparing for the changes.” 


 

6. Reinforcement: From change management to change-embedded

 

It’s often when organizations arrive at this crucial evolutionary phase that change management programs face a premature demise. 

 

“Reinforcement is the main step where companies lose the momentum and energy to continue to carry change forward,” notes Rouzie. “Altering mindsets, habits and processes requires practice, and it takes reinforcement to adopt changes so they become the new business as usual.”


“Reinforcement is the main step where companies lose the momentum and energy to continue to carry change forward. Altering mindsets, habits and processes requires practice, and it takes reinforcement to adopt changes so they become the new business as usual.”

 

Kiran Rouzie
Head of Technology Strategy, North America, Thoughtworks


According to Rouzie reinforcing change involves putting in place structures or processes that will endure past the program itself – “everything from new job roles or responsibilities, to tangible incentives for the kinds of behaviors that align with the program’s goals, to providing opportunities for ongoing feedback and learning.” Indeed research shows such mechanisms can at times double the probability of transformation success.

 

Embedding new changes into day-to-day processes paves the way for transformation success

 

Increased likelihood for successful transformations

Organizations who embed change into their day to day processes, including  weekly exec briefings, monthly or quarterly performance reviews, performance dialogues, objective setting, annual planning and budgeting, and capital, IT resource and talent allocation, are more likely to have a successful transformation. Organizations who embed change into their day to day processes, including  weekly exec briefings, monthly or quarterly performance reviews, performance dialogues, objective setting, annual planning and budgeting, and capital, IT resource and talent allocation, are more likely to have a successful transformation.
Source: McKinsey

 

Reinforcing change is especially relevant to digital transformations as they often fundamentally alter how people perform their work – for good. 

 

The impact of digitalization on field crews is a good example, notes Barnes. In his experience, field teams often feel threatened when they realize a large part of their workflow will be digitalized. “But when they were shown that the knowledge they accumulated was going to be embodied in a new technology and would persist long after they retired, they began to see the value,” he says. “These mindset shifts take away some of the resistance to change, and help it endure.” 

 

Organizations can identify and train people to carry on as change agents to keep the momentum going even after a formal program expires, notes Wauchope. 

 

“Look for people who aren’t just organized and can oversee change from a project management perspective,” she says. “Look for those that understand the organization, who work for it, and that are trusted by both employees and the C-suite. The people team, or human resource departments are good places to look because they might understand the ground in a way that other managers in the organization don't, since change management factors often contribute to the KPIs they are responsible for.”

 

As changes become business as usual, it’s likely that after a few years, any consequent improvements will begin to plateau, Wauchope notes. “At that point, organizations may want to reassess if further changes are helpful. Retaining the mechanisms initially set up to facilitate or monitor change, and continuing to use them on an ongoing basis, can help organizations understand the degree to which change remains effective over the longer term.”

 

“While mechanisms are important, the most critical factor in making change last is having leaders continue to behave in a way that incentivizes employees to do the same,” says Rouzie.

 

Regardless of whether the practices and processes they aim to instil endure over time, there is no doubt change management programs are encouraging organizations to explore, and adopt, better ways of working. 

 

In pursuing change management, “organizations are bringing in leaders from across the business to collaborate in ways that they haven’t done before because they recognize that it’s not enough to just build new technologies or create new processes,” Rouzie says. “They’re starting to see that people play a significant role in these achievements, and that they can't be ignored.”

 

Even more significantly, change management helps the enterprise flex its adaptive muscle – a vital capability in an environment characterized by economic, technological and customer shifts that regularly force businesses to alter course.


“Ultimately, change is difficult. But if people are experiencing the benefits of it, and are making use of the mechanisms established to continue measuring progress, and leaders maintain an open culture and listen to their employees, then it is possible for the organization to avoid going through another large-scale change management initiative in the near term.”

 

Dee Wauchope
Organization Transformation Principal, Thoughtworks


“Ultimately, change is difficult,” Wauchope says. “But if people are experiencing the benefits of it, and are making use of the mechanisms established to continue measuring progress, and leaders maintain an open culture and listen to their employees, then it is possible for the organization to avoid going through another large-scale change management initiative in the near term.” 

 

“If organizations succeed in embedding the change they want to see, their requirements for explicit change management programs may change,” says Barnes. “The entire process will very likely be easier the next time around, because organizations retain more of the embedded capability in their DNA.”


“If organizations succeed in embedding the change they want to see, their requirements for explicit change management programs may change. The entire process will very likely be easier the next time around, because organizations retain more of the embedded capability in their DNA.”

 

Peter Barnes
Domain Specialist, Thoughtworks


Perspectives delivered to your inbox

 

Timely business and industry insights for digital leaders.

The Perspectives subscription brings you our experts’ best podcasts, articles, videos and events to expand upon our popular Perspectives publication.

Marketo Form ID is invalid !!!