Change management concepts and applications

Organisations exist in a constantly evolving environment, warranting change. Organisational change occurs as a result of factors such as industry and market shifts, technological advances, socioeconomic changes, as well as political and regulatory shifts (Hayes, 2014). Adapting to change is a crucial ingredient of success in today’s world. Indeed, examples of previously powerful organisations that have declined or even collapsed due to failure to adapt to change are not uncommon. Nokia, BlackBerry, Motorola, Kodak, Sears, U.S. Postal Service, Blockbuster, Yahoo, and Xerox are ideal examples. These organisations failed to innovate and embrace change, leading to either acquisition by other companies or collapse. In an ever changing world, organisations must remain innovative – they must embrace change by introducing new products, services, processes, and/or structures (Euchner, 2013). This paper critically evaluates research on change management. Following a comprehensive definition of the field of change management, attention is specifically paid to innovation in change management as well as the future direction of change management research.
Defining Change Management
Change management within the context of organisations essentially denotes the process of initiating, implementing, and monitoring change (Hayes, 2014). It is the processing of managing the redirection or redefinition of organisational resources, processes, or other aspects that substantially change how an organisation processes. Change management is further defined as the management of transition from one state to another (Cummings & Worley, 2013). The process is anchored on diverse disciplines, including behavioural science, sociology, psychology, and information technology (Cameron & Green, 2012). Tremendous scholarly advancements have been made in the field of change management since the 1980s, and the field is now a major subject in organisational behaviour. Scholarly work has focused on issues such as reasons for change, change implementation, change evaluation, antecedents of successful change management, and change management challenges.
Change may involve introducing new products or services, terminating new products or services, pursuing new markets, withdrawing from some markets, reorganising business divisions, adopting a new organisational structure, introducing new processes, and so forth. These changes may be a driven by technological, economic, political, industry, and socio-cultural factors (Cameron & Green, 2012; Cristina, 2013). For instance, technological advancements have caused organisations in diverse sectors and industries to integrate social media into customer relationship building processes such as marketing. Equally, improved economic growth in developing countries has presented multinational organisations with significant market expansion opportunities. Irrespective of the reason, organisational change is mainly intended for enhancing internal efficiency, increasing competitive advantage, as well as improving bottom line performance (Hayes, 2014).
Scholarly work has also produced a range of change management models. Popular change management models include Kotter’s 8-step model, Kurt Lewin’s unfreeze and freeze model, McKinsey’s 7-S model, and Deming’s plan-do-check-act (PDCA) model (Kotter & Schlesinger, 2008; Hayes, 2014). Though every model is unique in its own way, there are considerable similarities. The models depict change management as a systematic process that generally involves preparing for change, mapping the future desired state, addressing obstacles that may hinder change, executing change, monitoring change, and making change part of the organisation’s culture. Even so, change management remains a difficult undertaking for many organisations. At times, change may not bring about the anticipated outcomes, and at other times it may be abandoned before completion, leading to wastage of time, effort, and resources (Cameron & Green, 2012). All in all, if effectively managed, change can be beneficial to an organisation.
Innovation in Change Management
An important aspect of change management relates to innovation. Change in most part encompasses changing how things are done in an organisation or introducing better products and processes. This is the core of innovation. Simply, innovation is a key driver of organisational change (Euchner, 2013; Chen & Adamson, 2015). Organisations cannot survive in a constantly changing world unless they innovate (McKinley, Latham & Braun, 2014). They must pursue new business models, eliminate wasteful processes, adopt technology, make their products or services better, and so forth. Indeed, innovation is about taking advantage of internal and external factors to become more competitive in an ever changing environment. For instance, if a mobile phone manufacturer makes its handsets more physically appealing, it takes advantages of shifts in consumer preferences to gain competitive advantage in the fiercely competitive mobile phone industry. Equally, a financial firm that introduces online banking takes advantage of technological advancements to improve the customer service experience. These are just a few examples of how change and innovation are heavily interconnected.
The topic of innovation and change management is premised on a number of theories in addition to the previously mentioned theories. An important theory is the organisation learning theory. The theory views organisations as learning entities – they keep on acquiring knowledge (Cummings & Worley, 2013). Knowledge acquired at present and in the past helps an organisation navigate an increasingly uncertain future. Based on organisational learning theory, adapting to change requires learning. An organisation that successfully implements change is one that learns continuously. Internal and external triggers motivate organisations to invest in new learning required for innovation (McKinley, Latham & Braun, 2014; Hsu, 2015). External triggers may include customer needs, competition, new technology, demographic shifts, economic factors, industry changes, environmental concerns, and regulatory shifts. Internal triggers on the other hand may include operational problems, inefficiency, organisational growth or decline, as well as change in leadership. Essentially, these events provide an opportunity for organisations to learn, innovate, and change. As Tidd & Bessant (2013) put it, innovation is a response to change triggers.
The influence of internal and external factors means that an important step in innovation implementation relates to examining the internal and external environments (Hayes, 2014). Internal factors are factors the organisation has control over, while external factors are factors the organisation has no control over. For instance, an organisation has control over the type of employees it hires, but has no control over government regulation. Analysis of the internal environment enables the organisation to understand its strengths (resources, competencies, and capabilities) as well as its weaknesses (shortcomings, inefficiencies, and areas that require improvement). Analysis of the external environment enables the organisation to understand the opportunities available to it and threats that may hinder it from exploiting those opportunities. With knowledge of internal and external factors, the organisation can utilise its strengths to exploit opportunities, hence overcoming weaknesses and minimising threats (Tidd & Bessant, 2013). For example, in response to environmental concerns, an automobile firm with strong research and development (R&D) capabilities can introduce electric vehicles, consequently gaining competitive advantage in the automobile industry.
Nonetheless, implementing innovation in the context of change management may not be as straightforward depicted by theory. Indeed, innovation and change are often hampered by numerous factors. One factor is human resistance (Hayes, 2014). Human resistance is perhaps the biggest hindrance to innovation and change. Humans fear change due to uncertainty, fear of negative consequences, lack of adequate knowledge about the change, and unwillingness to depart from the status quo (Cameron & Green, 2012). For instance, a process innovation intended to reduce head count in an office may face internal opposition due to the fear of loss of employment. Innovation may also be impeded by external factors such as government regulation and consumer concerns (Betz, 2003; Tidd & Bessant, 2013). Present innovations in the automobile industry offer an ideal example. Firms like Alphabet are working on self-driving cars. This is a revolutionary innovation that could enhance traffic safety, but it is likely to face immense regulatory hurdles before it becomes a norm. Similarly, consumers may take longer than anticipated before they believe that self-driving cars are actually safe to ride in. Achieving such challenges requires extensive stakeholder engagement, collaboration, openness, and participatory decision making (Cummings & Worley, 2013; Hayes, 2014).
Though managing innovation can be a complex undertaking, the benefits could be overwhelming: reduced operational costs, improved competitive advantage, greater internal efficiency, better organisational performance, and so forth (Betz, 2003; Tidd & Bessant, 2013). These benefits can be reaped by any organisation irrespective of size or industry of operation. Whether it is a bank, a pharmaceutical firm, or an agricultural company, innovation has immense potential to revolutionise products and organisational processes. In the agricultural sector, for instance, innovation efforts are increasingly focusing on less use of inorganic fertilisers and pesticides. With concerns over consumer health on the rise, farmers that will adapt to this trend will reap significant benefits in the future. In the pharmaceutical industry, innovation efforts are being focused on aspects such as health sensors, precision medicine, 3D printing, and nanotechnology. These trends present valuable opportunities for pharmaceutical firms. To maximise the expected benefits of innovation, firms must remain abreast with changes in their industry of operation and the larger external environment. Organisations must also cultivate a culture of innovation – a culture in which strategy, processes, procedures, operations, and activities reflect commitment to innovation and change adaptability (Tidd & Bessant, 2013).
Future Directions
Overall, change management is arguably a growing subject, meaning there are still opportunities for further scholarly work. This is particularly because change management is increasingly becoming a critical factor for organisational success. Specific areas that will require further research include need for change management, managing the people side of change, leadership and change management, stakeholder involvement, change communication, sustainability in change management, tolerance for change, as well as technology and change (Price & Dick, 2012; Tidd & Bessant, 2013; Hayes, 2014). More knowledge on these areas will help organisations manage change more effectively.
The subject of innovation will especially have important implications for change management in the future. As mentioned earlier, innovation and change are closely intertwined concepts. This means that change management discourses in the near future will not exclude the subject of innovation. In other words, it is likely that change management research will be situated within the context of innovation. More research will be devoted to the interdependence between innovation and change management. The resultant knowledge will be valuable for innovation implementation and evaluation. As organisations progressively more rely on innovation for success in a dynamic world, innovation research will provide the required foundation.
To manage innovation effectively, however, organisations must adjust their communication and decision making structures. Innovation may not successfully thrive in the conventional organisational environment characterised by bureaucracy, hierarchy, or chain of command. Organisations such as Google have demonstrated that decentralisation, openness, collaboration, and flexibility are vital for cultivating a culture of innovation. Organisational leaders must allow ideas and information to flow more freely if the benefits of innovation are to be reaped (Staren & Eckes, 2013). This requires changing the way organisational members are managed, involved, and engaged. It also requires adopting more fluid organisational structures.


References
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