Mitigating People Risks in Transformational Programs

Competitive market pressures, ever-changing technologies, cost constraints and increased focus on customers’ needs are just a few drivers that compel companies to undertake significant transformational initiatives. These efforts are designed to increase customer loyalty and retention, enhance organizational agility, decrease costs while gaining efficiency and spurring innovation. Whether the goal is customer intimacy or product and service innovation, change management incorporates tools that can help drive the workforce and culture in the desired direction.

Change programs emerge from several sources: business transformation efforts, large scale software implementations, and mergers and acquisitions, to name just a few. Success of the program extends beyond selecting the right technology or defining the right process.  It also includes preparing people in the organization to understand, adopt and embrace the change. Numerous studies land on a common theme around successful or failed change efforts. Upwards of 70 percent of projects fail to achieve stated business objectives. The most frequently cited reason for failure? The inability of executives to manage people and organizational risk involved with the change.

Whether the change initiative is restricted to a single business line or an entire enterprise, there are seven crucial areas of risk that an organization should address to increase its chances of success: 

  • Leaders assume the organization is ready for change.
  • Not enough people know the business reasons for the change.
  • Top and middle management do not support the change.
  • The change is developed without input from those whom it affects. This problem is compounded by inadequate information sharing before, during and after the change managers’ and employees’ job roles, accountabilities and performance metrics are defined and reward the “old” way of conducting business.
  • Employees lack or do not receive the knowledge and skills to make the change.
  • Leaders do not budget resources to help avoid the first six risks.

Instituting a disciplined and leading practices approach to managing the people risks in any transformation initiative will greatly increase the ultimate goal of achieving its financial and operational business case objectives.  In summary, here are some basic risk mitigation steps that will drive a mentality of adoption of the new “world order”:

  • Leaders must clearly and continuously articulate a business case for change.  And when communicating it, develop the messaging that will make it relevant to all levels in the organization.
  • Establish a robust communications strategy and tactical plan that reaches out to all levels of audiences asking for their level of understanding and awareness of the benefits that will be derived from the change effort.
  • Educate and empower managers as change agents particularly first line supervisors who are the most influential change champions in winning the “hearts and minds” of their employees.
  • Carefully plan a workforce transition for employees to be equipped with the tools, knowledge and skills to be successful in their new roles following the transformation.  

As companies confront the numerous challenges that accompany change—regardless of the scale—success or failure can hinge on the deployment of an effective change management strategy.  Utilizing a pragmatic execution of a measurable strategic change methodology can serve as a critical success factor in mitigating people risks and driving sustainable business results.