As the world becomes increasingly digital, it seems that changes are occurring at breakneck speed. Whether it be shifts in marketing tactics or overall strategy, these changes are felt from the individual level to the broader organization. As companies move to keep pace with the rapidly transforming data landscape, they’re altering traditional ways of working to become more data driven.
It’s estimated that an organization undergoes five changes in three years, with as many as three data-oriented changes per year in the digital workplace. This could mean the organization is implementing new tools and technology or restructuring processes. However, without the appropriate structure in place to support these changes, most of these initiatives don’t last.
If you’re one of nearly 70% of organizations, you’ve probably spent thousands of dollars figuring out the ideal strategy for competitive advantage, then implementing state-of-the-art technologies; yet, you aren’t seeing the anticipated returns and may even be noticing some negative sentiment within your organization. Essentially, the data initiative seems to have failed because one seemingly insignificant part of the strategy was overlooked – the people side of change.
Change impacts employee stress levels
Most individuals are inherently averse to change, so any change results in increased stress levels. Higher stress can also lead to decreased morale and interaction within an organization as employees hypothesize what the change means for them or feel they don’t have the skills to keep up with the change.
These physiological and emotional responses also have financial repercussions. Gartner predicts that change-induced stress leads to 5% poorer employee performance, which amounts to a $32.5MM cost decline per $1B in revenue for the overall organization, essentially wasting hundreds of thousands of dollars spent on your change initiatives.
Communication issues can cause new initiatives to fail
Poor communication (both in terms of content and audience) also leads to decreased employee interaction. Sometimes the change has been effectively communicated to some key stakeholders in the department in which the change occurs (usually IT for the data-driven initiatives). Because it’s seen as an IT initiative, other departments feel it doesn’t concern them.
This type of mentality leads to a more fragmented/siloed organization where only certain individuals understand the reasons for change and how the change occurs. Even by implementing some change methodologies, the data initiatives don’t bring lasting change.
Include change management in your strategy
To overcome these challenges, organizations need an appropriate change strategy as an essential part of the overall strategy, complete with a clearly defined support structure for managing the change. Most effective organizations consider change management in their top ten list of priorities. The Prosci Change Triangle also recognizes leadership, project management, and change management as equal players for a successful project.
But what is change management in the context of a data initiative?
Change management acts as an insurance for your initiatives. These initiatives can be more technical (e.g., implementing a new tool within an organization) or more strategic (e.g., implementing/changing processes and ways of working, creating new positions for better governance, etc.).
If people within the organization do not adopt the new technologies/strategies or vehemently oppose these changes (which does happen!), there’s a significant risk on your ROI. And this is where change management brings value, mitigating some of these risks.
Incorporate change management to realize ROI
Every change management methodology is different, tailored for the type of initiative and the timing of its implementation. While it’s best practice to have a change management strategy before the initiative is underway, change management strategies can be effective at any stage in the process.
A step-by-step process that looks at the entire organization - from the people to the processes - ensures optimal adoption and brings lasting change. Your organization’s readiness for change should be assessed and a communication plan should include rollout strategies for new tools and training plans (with teaching sessions, reference materials, and more).
Any initiative is an organization-wide change. By focusing on the individuals and departments, you can break down the silos to overcome emotional and educational challenges, which in turn helps your organization realize ROI.