Definition: What is change management?
Change management describes methods and techniques for implementing far-reaching change in an organization. Following an analysis of the current situation, a change plan with specific objectives is developed, which is then implemented and its success is finally monitored. Change management focuses on people, as employees often react to change with resistance. The aim is therefore to gain their acceptance. They are involved in the change process and given the opportunity to help shape the change.
Change management vs. transformation
The terms change management and transformation management are often used interchangeably. However, there are some differences between the concepts.
Change management refers to changes in an organizationto improve it step by step. The change can relate to a specific process, one or more departments or projects. It can therefore be relatively low.
Transformation is more far-reaching and experimental. It involves fundamentally changing an organization. As a rule, a transformation involves adapting strategies as well as culture, processes and tools. If not the entire organization is involved, at least large parts of it are. The aim is to position the company more promisingly for the future.
While change processes aim for a clearly measurable result , the goal of a transformation process is often less concrete and can change over time.
In a nutshell, change management is a building block of transformation. As a rule, many smaller and larger change projects are required for fundamental changes in a company. And while these are clearly completed, transformation is an ongoing process that requires companies to be highly agile.
What role does change management play in companies today?
Companies have been facing multiple crises for years. This omnicrisis, together with metatrends such as digitalization and sustainability This means that previous business practices and business models are no longer competitive. Companies must look for innovative solutions in order to remain relevant and master disruptive developments.
This first requires a fundamental willingness to transform. This is the basis for implementing the necessary changes. What might these be? Here are a few examples:
- Adjustment of the business strategy
- Introduction of new machining processes
- Launch of a new product
- Entry into new business areas
- Merger or takeover of competitors
According to economic expert Jamais Cascio, the markets are currently psychologically characterized by BANI: Fragility, Anxiousness, (Anxious) Nonlinearity and Incomprehensible. This mood will probably not only define the 2020s, but also the 2030s and make change management an essential success factor. This is because the concept not only takes into account the practical implementation of change, but also focuses on the employees and helps them to process this change well psychologically.
Also interesting: Practical guide – change management during ERP implementation
Change management: 7 phases of change
For change to succeed, change managers need to understand the psychological phases that people go through during change. A proven model for this is the 7 phases of change according to Richard K. Streich. This model is based on research by Elisabeth Kübler-Ross from the 1960s and is frequently used in change management.
- Shock
At the beginning, employees often experience shock and disbelief at the announced change. It is important for change managers to create transparency and provide initial information. This helps to allay fears and build trust. - Rejection
In the second phase, many employees deny the need for change. Here, it is the manager’s task to point out the urgency of the change through clear communication and to demonstrate the potential benefits. This is often enough to reduce resistance. - Rational insight
It is gradually becoming clear that change is inevitable. At the same time, there is great fear of the unknown among the workforce. Change managers should rely on rational arguments and show employees the opportunities associated with the changes. - Emotional acceptance
Employees begin to accept the change on an emotional level. The turning point in the crisis has been reached. Empathic support from managers is now crucial. It helps to motivate the team and encourage them to acquire new skills so that they can master the change. - Experimentation
Slowly, the workforce begins to actively adapt its working methods. Employees gain initial experience with the new, make mistakes, achieve successes – and strengthen their sense of competence in the changed circumstances. Change managers should establish a positive error culture and support learning successes with appreciative feedback. - Insight
The positive aspects of change are coming to light. Employees increasingly understand how change can improve their work in the long term. It is the task of managers to recognize these successes. - Integration
The change becomes part of everyday working life. Regular evaluations help to ensure the long-term success of the change.
Change management: 5 successful models
The 7-phase model focuses on the individual experience of change. But how can change managers safely guide the organization as a whole through a change process? Here are 5 established methods for successfully practicing change management.
3-phase model according to Kurt Lewin
In the 1940s, the German social psychologist Kurt Lewin developed a model for change in groups and organizations that is now considered a classic of change management. It divides change processes into three phases:
- Defreeze (Unfreeze)
- Change
- Freeze (Refreeze)
First, existing structures are broken up. In the second step, new measures are introduced and finally the change is stabilized.
The strength of the model lies in its simplicity: it is easy to understand and easy to apply. However, the model does not take any dynamic influences into account, but rather thinks of change in a strictly linear way. As a basic model, it remains relevant to this day. In a highly complex and dynamic world, however, it is more of a starting point for comprehensive concepts than a stand-alone solution.
McKinsey’s 7-S model
In the 1980s, the management consultancy McKinsey developed a model that identified seven key factors. They are all interlinked and should be taken into account in a change process: Strategy, Structure, Systems, Shared Values, Skills, Style and Staff (strategy, structure, systems, shared values, skills, management style and employees).
The model is still used by companies today, especially for the management of cultural and structural adjustments. This is because it helps to align all relevant organizational elements towards a common goal. However, critics complain that the model remains very abstract and hardly provides any concrete recommendations for action. In addition, environmental factors are neglected and existing structures are reinforced.
8-step model according to John Kotter
In 1995, Harvard professor John Kotter developed an 8-stage model as a structured guideline for change processes, which is used today particularly for larger projects. The model is based on Kurt Lewin’s concept.
The eight steps:
- Demonstrate urgency
- Building a leadership coalition
- Develop vision and strategy
- Communicate vision
- Removing obstacles
- Aim for quick success
- Driving further change
- Anchoring change in the culture
The 8-step model scores points for its detailed structure and its focus on employee commitment and motivation. Similar to Lewin’s approach, however, the model is not very flexible and was not designed for today’s dynamic business world. It also focuses heavily on hierarchical leadership, which many feel is no longer in keeping with the times. Nevertheless, it is still one of the leading methods for change management today.
5-phase model according to Wilfried Krüger
Wilfried Krüger’s 5-phase model was developed in 2004 and is therefore one of the more recent change management concepts. It divides change into phases:
- Initiation
- Concept
- Mobilization
- Implementation
- Stabilization
The model is particularly strong in addressing typical challenges in change management, for example through clear communication and mobilization strategies. The model offers many detailed instructions for the sustainable anchoring of new processes. The downside is that it is relatively complex and can overwhelm smaller companies in particular.
Three Horizons of Growth Model
Another model that was developed in the early 2000s is the Three Horizons of Growth model. It structures changes into three time horizons: the current state (Horizon 1), medium-term adjustments (Horizon 2) and long-term innovations (Horizon 3).
The model is particularly helpful when companies are striving for long-term innovation and sustainable growth. This is because it helps to balance current requirements and future opportunities. However, implementation is challenging in dynamic markets because external factors are often difficult to predict. Nevertheless, it is a valuable method for strategic planning and innovation management.
7 must-have tools for change management
Digital solutions play a central role in the implementation of change. They help to develop and coordinate plans and adapt processes.
ERP systems
In ERP-Systemen werden Daten aus allen wichtigen Geschäftsbereichen gebündelt. Die Anwendungen legen damit die Basis für datengetriebene Innovationen sowie die Optimierung von Geschäftsmodellen und Prozessen. Für Change Manager sind sie ein wichtiges Tool, um den Status quo zu analysieren und Zukunftspotenziale zu entdecken. Die ERP-Lösung ist häufig auch das Tool, mit dem konkrete Veränderungen implementiert werden. Seine Leistungsfähigkeit entscheidet wesentlich über den Impact des Change-Projekts.
Find out more: Is it time to change your ERP system?
Project management software
Programme wie Asana, Trello oder Airtable unterstützen die Planung, Zuweisung und das Tracking von Aufgaben. Sie bündeln alle wichtigen Funktionen auf einer zentralen Plattform, um den Change-Prozess zu steuern und zu monitoren. Damit reduzieren sie Fehler und Missverständnisse im Projektmanagement und vereinfachen es, Ergebnisse zeitgerecht zu erreichen.
Communication and collaboration tools
Smooth collaboration in teams and between departments is fundamental to mastering change. Tools such as Microsoft Teams or Slack shorten communication channels via chats and video calls. With their channels and upload and sharing functions, they ensure a uniform level of knowledge.
Learning management systems (LMS)
Veränderungen bedeuten für Mitarbeitende meist, dass sie neue Kompetenzen erwerben müssen. Mithilfe von Plattformen wie Moodle oder SAP SuccessFactors können Unternehmen ihr Wissensmanagement zentralisieren und spezifische Schulungen für ihre Angestellten bereitstellen. Die LMS bieten verschiedene Funktionen, um Lernfortschritte der Kursteilnehmenden zu tracken, Prüfungen zu integrieren und den Wissenstransfer übergreifend zu analysieren.
Feedback and survey tools
In addition to the final tests of training courses, surveys can provide information on the extent to which the change process is successful. Tools such as SurveyMonkey or Qualtrics are ideal for anonymously recording the needs and wishes of employees. The detailed feedback is extremely valuable for change managers, as it enables them to evaluate the progress of the process more objectively and plan their next measures more effectively.
Data analysis and BI tools
Mit Lösungen wie Tableau oder Power BI können Unternehmen große Datenmengen aus ihren verschiedenen Systemen, beispielsweise ERP-, HR- und CRM-Lösungen, gezielt auswerten und visualisieren. Die Analysen liefern nicht nur Einblicke in den Fortschritt und die Auswirkungen des Change-Projekts und ermöglichen eine detaillierte Erfolgsmessung und Steuerung des Wandels.
Change management tools
There are also specialized tools, for example from Prosci ADKAR. The company has developed software that guides managers step by step through all phases of a change project. However, it is based on the ADKAR model and is not designed to be method-independent.
