5 Change Management Strategies for Digital Transformation
Explore these 5 strategies, tips, and techniques for change management during digital transformation initiatives at your business in this blog from Impact.
May 15, 2023
Companies operating in the modern business landscape are increasingly finding themselves managing more than just employees, customers, and products. Change management is one of the most important strategies for ensuring successful digital transformation initiatives at a business.
Change management involves handling the introduction of new technologies, the sudden appearance of new opportunities, and shifts in the way consumers in a market interact with brands.
Yet, as with any drastic upheaval in an organization, formulating a structured change management plan can be difficult.
Employees may be reluctant to “try new things.” It can be tough to secure a budget as decision-makers may not see the need to update processes which seem like they’re working. And even if they do, getting the right people involved to the extent they need to be can be a challenge in itself.
The ability to address and adapt to change within an organization is becoming a critical element of survival for many modern businesses in the current digital transformation landscape.
Is your company preparing to undertake change, or struggling to manage it? It’s time to learn how change management has evolved and what you can do to help create a viable, successful strategy at your company. Explore Impact’s five tips and change management strategies:
Unlike project management—where it’s easy to point to schedules, tangible objectives, and specific outcomes—change management follows a more reactive and indefinite route.
What change management looks like may vary from organization to organization, but all strategies will share three primary goals:
Improve the bottom line. All digital transformation-related changes should be installed to improve the efficiency and productivity of your workforce. Whether it’s the technology to better communicate between departments or the tools to carry out skilled design work effectively, every change should help your employees do their work better and faster.
Create a competitive advantage. Companies evolve to get better at what they do. By giving the process of change a structure, change management helps companies spot opportunities to gain a competitive advantage through reduced costs, specialization, innovation, or increased quality of service.
Energize and empower employees. Research estimates that some 70% of change initiatives fail, in large part due to a lack of support from employees. Change management helps make sure employees feel recognized and supported, thereby empowering them to support change initiatives.
Current Problems of Change Management in Digital Transformation
As we mentioned, making big changes to existing business processes is often a long journey, and not an easy one. This is particularly the case when making necessary upheavals to business components that have been in place for many years.
A Harvey Nash/KPMG CIO Survey points out that only 41% of companies have an enterprise-wide digital strategy, and only 18% of companies rate their use of digital technology as “very effective.”
Failure in digital transformation projects almost always comes down to a lack of preparation and strategy.
Clear communication, objectives and consistent reporting of progress, staying in budget; all of these are crucial to see an initiative through from start to finish.
Businesses that find themselves disappointed in the results of their digital projects often lack direction in these key areas.
One of the reasons businesses more frequently use managed service providers (MSPs) is for this precise reason. Outsourcing the strategy and implementation to a third party that has demonstrated expertise over a number of years in similar projects is appealing to businesses looking to transform.
Having a watertight change management strategy should be an organization’s top priority when embarking on adopting and implementing new technology.
So, without further ado, let’s jump into the most important change management techniques.
5 Change Management Strategies for SMBs
Change management strategies are critical to the success of any change initiative in a company, whether it’s a specific, targeted transition within a department or significant digital transformation across the organization. Here are five best practices for technology change management within small and medium businesses:
1. Start from the Top
Changes which affect the fundamental operation of the business will affect the company’s culture. Therefore, such changes must start from the C-suite.
The role of leadership during periods of change is well-documented in management research. For example, research around leadership during mergers has found that, when leaders took a more active role in change management, the merger process itself produced a more positive work environment.
The leader’s presence, guidance, and support signaled to their employees that they knew about and supported what was happening. It allayed fears, reduced anxiety, and helped employees feel more confident about the future.
Change which starts at the top reflects a committed, invested, unified leadership that’s on the same page about the future of the company. It’s the only way you will be able to elicit and promote the culture needed to encourage the rest of the company to embrace change.
2. Make Sure the Change Is Necessary and Desirable
Introducing too much too soon can be a huge problem down the line if a business doesn’t have a solid strategy in place.
One of the primary reasons for this is that decision-makers are unsure of how to correctly approach a digital transformation and the impact it will have on their business.
A lack of a comprehensive audit can lead to the implementation of solutions which are unnecessary for an organization’s needs, meaning added costs, additional training, and increased—often unrealistic—expectations.
It is all the more pertinent for SMBs that are pursing digital transformation to be conscious of the effects that the introduction of new solutions will have on the company.
Will the proposed solutions be an overall benefit to the operational capacity of the organization, accounting for staff onboarding and familiarity issues? This also leads us to the next point:
3. Minimize Disruption
What employees feel is necessary or desirable change may vary between departments, levels, or performance records. The main indicator? How much a change disrupts their daily role.
As many executives will know, having to change existing processes within an organization can be a headache. Mitigating the effects of changes on employees is vital.
All too often, employee anxiety around change stems from the introduction of new strategies or technologies designed to make management and business operations more efficient.
For instance, whereas leadership may see the introduction of automation into core business functions as a way to save time and money, employees who were previously tasked with these roles may feel replaced, threatened with obsolescence, or lacking a direction.
In addition, organizational restructuring may cause employees who are moved to another position to feel indignant, confused, or wondering what was wrong with the previous structure.
The result in both cases is lower morale, more unsatisfactory performance, and a brain drain as your best performers flee. Therefore, disruption among the workforce can be minimized by:
Planning for some disruption and getting the word out early.
Providing employees with the training and resources to adapt to changes.
Fostering a culture which supports change or transformation.
Empowering champions such as project managers or team leaders to provide clarity and context for changes.
Making sure your IT department is in the loop and ready to support technological or infrastructural changes.
4. Promote Communication
We’ve alluded to the need for proper communication during organizational change, as it seems to be one of the underlying factors which determine the success or failure of a transition or transformation.
Excellent communication keeps everyone on the same page and assures the people who will feel the brunt of these changes that they’re not in any danger.
Talking about change candidly and openly is one of the most powerful things you can do to help your company embrace it.
MIT conducted a study on the effects of communication by leadership to employees during digital transformation. While 93% of employees supported digital transformation once it was discussed, only about 36% of CEOs communicated their vision sufficiently to their organization’s employees.
Likewise, encourage communication not just from leadership to employee, but also from employee to leadership.
Create channels for employees to reach out with questions or concerns. Support cross-department communication to help ideas and innovation spread as new processes take hold. Like your vision, communication drives efficiency and has the potential to shape culture.
5. Recognize That Change Is the Norm, Not the Exception
Are you treating change as a project with a defined beginning and ending? You may run into difficulties because change is not a one-off project but an ongoing process.
Today’s world moves exceptionally fast—technology, markets, consumer preferences, even environmental conditions are all rising and dissipating in the blink of an eye.
Businesses not only need to transform their operations to be able to keep pace with their customers, they need to anticipate change and be ready for it when it occurs.
Harvard Business Review defines change readiness as “the ability to continuously initiate and respond to change in ways that create advantage, minimize risk, and sustain performance.”
Sound familiar? That’s nothing less than the goals of change management outlined earlier. You can only be change ready if you recognize that change is the norm, not the exception to the rule.
Organizations are unique and change affects them in different ways. Change management strategies will look different across a constellation of organizations.
Successful change—whether large or small—requires a committed, active leadership which fosters good communication, a culture of learning, and a clear vision of what that change entails.
Change is an inevitable, vital element of running a business in today’s world. However, by embracing change readiness, businesses can turn change into an opportunity rather than a challenge.
All change brings some disruption to the workplace, but you can mitigate harmful disruption while allowing it to breathe innovation into your operations.