Change Management With Old School Industries
May 14, 2021
Change is easy to resist until, suddenly, it isn’t.
For the old school industries reckoning with change today – we’re looking at you, insurance – it’s important to put systems in place to make sure those changes are carried out successfully. According to Gartner, 50 percent of all organizational transformations fail, with only 34 percent of initiatives resulting in clear successes.
Whether adapting to new technologies, evolving compliance regulations, or general economic shifts, insurance companies simply can’t afford to have half of their organizational changes failing.
What’s organizational change, anyway?
Organizational change can be as small and iterative as updating the verbiage in an insurance policy or as large and transformative as integrating a new technology platform. Organizations need to stay up-to-date with new technologies, culture trends, and regulatory expectations in order to remain competitive in the industry.
So, if it must be done, you might as well do it right.
Dynamic companies bake change management into their processes and workflows, strategically buffering for the inevitable; change. But many companies resist it and, as a result, lose millions of dollars every year through poor planning and failed change management.
Why is change management important?
Change management refers to the step-by-step process of managing organizational transformations – across people, processes, and technology – from planning to completion.
Change management is dynamic. There should always be an agreed-upon starting point – the area or pain point that needs to change, and an agreed-upon endpoint – the ultimate goal for the outcome of the initiative. But the in-between, the steps that it takes to get from the starting point to the endpoint, varies based on needs and feedback across the organization.
While a period of adjustment is normal, change teams should be receptive to feedback. All changes need to work both for the organization as it stands today and for the organization as it will stand tomorrow. Implementing a new process or workflow that undermines the efficiency of teams will never work in the long term and may result in a failed initiative.
How to beat the odds
Too many initiatives fail unnecessarily. While there is no one way to go about change management, the following four tips and tricks are good starting points to ensure your company’s change initiative succeeds.
1. Hindsight may be 20/20, but foresight is the next best thing
Laying the groundwork for success before even starting a change initiative may seem impossible. After all, how can you know what needs to change until it needs to change? But there are a couple of ways that organizations can set themselves up for success before beginning a project.
- Companies that track economic, industry, and societal trends to identify the ones that’ll impact them can plan ahead and prepare before those changes become a problem. Not only will they be able to build a streamlined project scope for a single change initiative, but they’ll also be able to build a web of potential opportunities for innovation. This reduces disruption and helps customers and employees alike adapt to the change over time.
Consider insurtech: Innovation in insurance is increasing, as are the number of technology tools available to insurance companies. An insurance company may identify a specific technology they’d like to implement in the short-term, but they can also safely assume that in the next few years they will continue to implement new technologies to remain competitive in the industry.
- By keeping a finger on the pulse of industry changes, organizations can build a company culture of growth and innovation. As a result, employees are better prepared to adapt to changes, since it’s something they’re used to. Support from employees for change initiatives is crucial to success as they’re the ones who need to understand and use the changes.
- Finally, establishing a culture of innovation helps bolster leadership support when it comes time to begin an initiative. Many old-school industries struggle to get executives on board with change management. What’s wrong with the old process? Why do we need to invest in a technology that we’ve managed without for decades? Without leadership support, it’s an uphill battle to get the funding needed. It’s always a good idea to have pre-planned answers for questions leadership may have. That said, the best way to ensure support from the higher-ups is through a company-wide culture of innovation backed by successful change management.
2. Build a plan and communicate goals
Once an area of change is identified, leaders need to start putting together a dynamic plan.
A realistic plan takes into consideration the organization’s bandwidth. A too ambitious plan will leave employees feeling stressed and dejected. Remember, the best change initiatives help to eliminate pain points across the organization, not increase them. If employees feel too much pressure to meet aggressive deadlines, they’ll lose faith in the initiative altogether.
Establishing roles and responsibilities across the organization early on builds a network of change-makers and spreads the work across the organization. Employees can feel their impact and understand how the initiative will affect the overall organization.
This is where pre-agreed goals come into play. If everyone understands what the output needs to be – and their role in bringing it about – it’ll help eliminate any last-minute overhauls or re-work due to cross-team miscommunications.
Building out a game plan is also a good way to map any potential roadblocks. Understanding how to mitigate those roadblocks and building a plan b in the instance they do occur is just as important as building an initial plan. Remember, plans will likely change, and predicting what those changes might look like can go a long way in preventing project leaders from coming up on a deadline with egg on their faces.
3. Empower change-makers through implementation
The best-laid plans are only as good as the follow-through.
The team leading the change management should support all employees involved in the implementation process through completion. Rather than divvying up tasks and expecting teams to run with assigned duties and responsibilities, change leaders should provide clearly defined KPIs, milestones and accompanying deadlines, as well as guidance and support through roadblocks.
This helps to align cross-departmental teams and ensure everyone involved in the process is well placed to deliver on time.
4. Out with the old, in with the new
Change management requires people to do their jobs differently than they did before. That’s why it’s important to ensure stakeholder support throughout the lifecycle of the project, including after implementation.
Old habits die hard, and it’s easy for employees to revert back to the process or workflows they’re used to, even after investing time and money in creating a new one.
There will always be an adjustment period as employees familiarize themselves with the outcome, but after a time, the change should lead to improvements for the organization – whether that’s making processes more efficient, opening up access to data, or eliminating obsolete tasks. Making sure employees know how and why the changes will impact their day-to-day work life for the better can ensure a high rate of adoption.
Often, when employees resist change it’s because they worry about how it will affect their jobs. For example, when organizations adopt new technology, employees may worry that their job will be replaced by that technology. Direct communication with employees about how technology can augment their work, rather than replace their jobs, goes a long way toward easing those fears.
Change leaders can speed up the adoption process by giving employees the support they need to understand the processes. There’s nothing more frustrating than being handed a new technology without guidance on how to use it. Training materials and open lines of communication give employees the tools they need to succeed with a new process or workflow.
What does success look like?
Success is generally measured against expectations around deadlines, budget, and the quality of the output.
Having clearly defined goals for success creates a target that teams can work towards and focusses their efforts on the project scope. It also increases a project’s likelihood of success.
After implementation, organizations should analyze the output of the initiative and compare it against the original project goals. When measuring the success of an initiative, leadership should consider the below items:
- Rate of adoption – How many people are using the change? How long did it take them to be comfortable with it?
- Project scope and goals – Does the outcome satisfy the scope and goals outlined prior to implementation?
- Deadlines – Did the implementation teams meet the deadlines? If not, how can the organization empower them to meet deadlines in the future?
- Budget – Did the project come in at or below budget?
Even for those initiatives that don’t outright fail, they may not be clear successes, either. Sometimes, change initiatives close out with mixed results, as neither successes nor failures.
Finding success in a failed initiative
While the end result of a project might not meet the scope of the project goals, that doesn’t mean it isn’t valuable.
Organizations who learn from their failed change initiatives can use those insights when embarking on the next project. Again, change is inevitable, so there will always be a next project.
Track what worked, and what didn’t, but most importantly, listen to employee feedback. They’re the ones working directly with organizational transformations, making them best placed to identify any gaps in change management.