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Alyssa Martin
Alyssa Martin

Four steps to successful change management

Sound planning, thoughtful execution are critical to establishing an effective change management process.

September 6, 2012
by Alyssa Martin, CPA

Increasing globalization, economic turmoil, and technological advancements are just some of the changes that businesses navigate daily. Each of these external changes results in significant internal changes for many companies. 

But internal change must be executed carefully and thoughtfully to optimize success. Too much—or too frequent—change, without full absorption, can be a destructive force, leading to chaos and causing employees to doubt the benefits and, therefore, not adapt.

So it’s up to you as a participant in the implementation of a proposed change to establish an effective change management process. Your goal is to avoid creating an environment where employees believe they are under constant change pressure.

What does an effective change management process look like? Its essence can be captured in four significant milestone steps: vetting and agreement; formal announcement and explanation; implementation; and imbedding the process.

The key is to fully embrace each step and require milestone reporting at each level. Formal reporting helps verify that the change has been fully implemented and is actually accomplishing the goal.

1. Vetting and agreement. Thoroughly vet all proposed changes through a collaboration between knowledgeable personnel and the subject matter expert for the targeted function to help determine objectives and expected outcomes. Come to an agreement about change implementation, available resources, the people who will be involved, a realistic time frame, the costs, and needed resources from external sources.

Typically, changes are aimed at improving one of your company’s key performance indicators (KPIs), either directly or indirectly. For example, the changes may focus on implementing more efficient processes or adding automation to improve a critical metric such as sales distribution by product, profit margins, labor costs, commissions, or shipping costs. If your proposed changes are aimed at profitability, the vetting process should include a full understanding of past and current profitability within the identified KPI. Then you can develop a change process properly aimed at improvement. Without a good vetting process, you risk trying to fix something that is not broken.

Once your team has reached an agreement on the appropriate changes and has established concrete ways to measure the effectiveness of the proposed changes, document your objectives and a plan to reach them. This becomes the basis for the explanation you will provide to affected employees. It also provides the objectives to hold the group accountable to a workable change management process.

2. Formal announcement and explanation. Since you already have a clear situational view and a focused plan, you are more likely to clearly articulate the details of the changes. This helps employees embrace proposed changes and understand their role in the process. Milestone reporting is important at this point, too. Monitoring your announcements helps ensure that your communication reaches the proper audience, is understood, and received with acceptance as you intended.

3. Implementation. The implementation stage is typically the longest and most volatile part of the  process.

Milestone reporting within the implementation portion of the process is critical in monitoring the success of change implementation and the actual success of the changes. Monitoring the timeline set against the actual time is critical to the success of the implementation. Modifications to the timeline are common and usually appropriate in order not to force change and skip a critical task in the implementation.

Monitoring expected change benefits is also critical in this phase. For example, if you have identified changes aimed at improving profitability, your milestone reporting must document both the effectiveness of the process itself and the ultimate success of the changes—improved profitability by the amount intended.

4. Imbedding the process. The cycle is not complete until your changes have been practiced on some recurring frequency and have become part of the organizational structure. This should also be documented in a final milestone report—but do not rush this step. Employees often embrace change but then execute those activities over time, putting the acceptance process on a longer cycle than management realizes.

A common management team mistake is measuring the company’s ability to absorb additional change based solely on the time that passed between change announcements and implementation, assuming that sufficient time means the new processes have been fully absorbed. However, such time-based measures often demonstrate a lack of understanding of the change cycle.

For optimal effectiveness, any future changes affecting the same group—whether internal or external—should not be implemented until the last changes have been fully imbedded in the organization. Then a new process can begin, starting with the vetting process.

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Alyssa Martin, CPA, is the Dallas executive partner and partner in advisory services for Weaver, an independent accounting firm with offices throughout Texas.