Mastering Change Management: Key Strategies for Successful Transitions

Companies with an M&A centered growth strategy must have a structured change management approach to help stakeholders navigate change successfully. By defining a change management process in your organization, you can ensure that all teams feel informed and supported through any transition, large or small. This blog shares best practices for setting your organization up to successfully manage change and leverage technology to navigate change efficiently. 

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Types of Organizational Change 

Over time, organizations will encounter a wide range of challenges and opportunities. Change is the key to enabling organizations to address these challenges and opportunities in an impactful way. 

However, not all changes require the same level of effort or resources. Some are minor and have little impact, while others require significant organizational restructuring. For example, improving a workflow is much different than rethinking the entire business strategy. 

By understanding the different types of change,  incremental, transformational, and operational, your organization can adapt more effectively when responding to internal or external shifts from M&A. 

Incremental Change 

Incremental change refers to small, gradual changes that occur over time. This type of organizational change aims for continuous improvement without breaking the status quo.  

An example of incremental change might be regularly updating software features based on user feedback to enhance the website's user interface (UI). It doesn't require a complete site redesign, but minor changes are needed to improve the navigation. Incremental changes are often done in preparation for a deal but do not necessarily require as many resources as other types of change. 

Transformational Change

Transformational change involves significant, radical changes that transform the organization. This large-scale change often consists of a strategy, culture, or operational shift. 

Transformational change often occurs due to market shifts, mergers and acquisitions, or the adoption of a new business model. It requires a strong leadership team and a well-planned approach to support employees' adaptation to major adjustments. 

In M&A, transformational change may look like shifting your business model or industry position after acquisition. These changes go beyond operational adjustments and reshape the strategic decisions that drive business forward. 

Operational Change 

Operational changes improve existing processes and systems. Examples of operational changes include resstructuring teams, revising processes, or implementing new technologies to make operations more efficient and cost-effective. 

According to Corporate Development Leader Nicole Markowski, shifting to a centralized M&A platform like DealRoom was a key operational shift to improve collaboration among her team. "Finding a unified platform, DealRoom, helped us streamline workflows and communication between teams."  

Each type of change requires a different management approach to ensure that the organization and its people can transition smoothly and achieve all desired results. 

Change Management Frameworks

Change management models were created to provide structure and help organizations facilitate change smoothly. Three approaches commonly used in corporate organizations are the ADKAR Model, Kotter's 8-Step Change Model, and the Prosci 3-Phase Process. 

Each model serves a specific purpose, from individual readiness to organizational transformation. Evaluate them with your organization in mind to learn which model best aligns with your goals, culture, and the scale of the change you plan to make. 

ADKAR Model 

The ADKAR Model is a goal-oriented change management framework that guides individuals through the change process. It focuses on both individuals and the organization to ensure that change is implemented successfully. 

This model provides straightforward, actionable steps for individuals to focus their efforts. It can be used for both small and large changes and focuses on transparency and reasoning behind decision-making. Aligning stakeholders on the same page and reminding them of the reason for change helps keep everyone aligned for growth. 

ADKAR stands for: 

• Awareness
• Desire
• Knowledge 
• Ability
• Reinforcement 

Kotter's 8-Step Change Model

John P. Kottor is a professor at the Harvard School of Business and the creator of the Kottor 8-Step Change Model in his book Leading Change. Kottor's research tells us that there is only a 30% chance that change will stick after being implemented. He also believes that change requires a specific approach to stick within an organization. 

The eight steps include: 

1. Create Urgency
2. Put A Team Together 
3. Develop Vision and Strategies 
4. Communicate the Change Vision 
5. Remove Obstacles
6. Set Short-Term Goals 
7. Keep the Momentum 
8. Make the Change Stick 

This model emphasizes the human side of change, addressing employees' concerns and fostering buy-in from teams across the organization. 

Prosci 3-Phase Process 

The Prosci 3-Phase Process focuses on preparing for change, managing change proactively, and ensuring the outcomes are sustainable in the long run. 

Developed by Prosci, a change management consultant agency, this framework provides structure to help organizations navigate change. As its name suggests, it has three phases.  

1. Prepare Approach 

The first phase of the Prosci framework involves preparing the organization for change and defining the strategy that will drive it. This includes creating a change management strategy, building a team around the strategy, and defining metrics. 

2. Manage Change 

Once everything is set up, implement your proposed changes. This phase focuses on managing the day-to-day activities of the change and supporting individuals through the transition. 

3. Reinforce Change 

Lastly, we have the third step of reinforcing change. This step highlights the need to sustain organizational changes and embed them within the culture. Here, organizations are to celebrate success, measure and monitor progress, and correct course as needed. The main goal here is to ensure that the work was not done in vain and that the changes made will stick. 

The Change Management Process

A Step-by-Step Guide to Managing Change

Preparing for Change 

The first step before any large-scale change is to prepare the organization. Preparations should start with raising awareness around the pain point you are looking to solve. This will need buy-in from employees, here is also the time to identify key stakeholders who will be impacted by the change or actively involved in the transformation.

Align your leadership team to serve as champions of the change. Ensure senior leaders can speak to the vision and reasoning behind the change and support employees emotionally and strategically. 

Another key piece of preparation is alignment around communication. Craft a message explaining the change's “why,” “what,” and “how” to highlight urgency and benefits. The statement should be transparent enough for stakeholders to understand the impact and be used as a source of truth to return to throughout the process. 

Approaching Change 

Craft a vision plan that includes a structured approach and strategy as you approach change. Ensure it is aligned with the company's vision and mission so that it inspires and motivates your team's buy-in. Here, you create a detailed roadmap that includes communication, training components, risks, and resistance management.

A big part of this stage that is often overlooked is setting up a measurement of success for the change. What key point indicators (KPIs) will capture the results of change? In M&A, this may look like employee retention or satisfaction after an acquisition or financial performance metrics like realized cost synergies or customer satisfaction. These KPIs will pivot depending on the change being implemented and the type of organization. To learn more about measuring success in M&A, check out this podcast with Jim Buckley, VP of Strategy Planning and Operations at Omnissa. 

Implementing Change 

You've got your plan; now it's time to get rolling. Empower your employees to take the necessary steps to reach the goals outlined in the plan. Host a kick-off event to announce the official start of change and outline the next steps. At the kick-off, share resources such as FAQs, guides, project plans, or trackers that will assist team members in navigating change. 

Additionally, set up recurring meetings to do status checks on updates as they continue to roll out, checking in on how things are progressing to 

Implement the changes, empowering employees to take the necessary steps to achieve the initiative's goals. 

Addressing Culture to Prevent Resistance 

Integrating change into a company's culture is often one of the most challenging parts of organizational transformation, particularly in M&A.

Meshing two cultures together can be one of the most difficult parts of the process to address. No two components of organizational culture are the same when each company has its own set of practices that influence how employees operate. 

Creating an environment where employees feel supported through cultural changes is important. The first step is to ensure that the leadership team models these behaviors and consistently demonstrates the new cultural values. This can also be done through training exercises or team-building activities to align employees with the organization's new goal. 

By focusing on cultural integration strategies, organizations can minimize resistance and improve the likelihood of successful mergers. 

Review Progress 

Once a change has been made, there needs to be a way to measure its impact and effectiveness. Looking back to the Approaching Change step, you should have determined what KPIs are important to the change. Measure, analyze, and share the results of the change to see what should be adjusted next time. Feedback from team members is important to review progress and analyze results to understand whether a change initiative was successful. 

Nicole Markowski explains, "Feedback loops are really important when implementing new technology or other changes. After implementing a change during a transaction, we have at least an initial feedback loop where we go back to the teams and ask questions. How did it go for you? Are there pain points you're still seeing in the system? How can we make this better?" 

Throughout this process, feel empowered to leverage data analytics and AI to inform the change management process and improve decision-making. 

Principles of Successful Change Management

Key Principles & Best Practices for Effective Change Management

In M&A, successful change management is crucial to ensure a smooth transition and integration of teams, systems, and cultures. M&A inherently brings uncertainty and disruption, making it even more critical to adhere to fundamental principles and best practices for change management. 

The first step is having a clear change management plan to act as a roadmap, guiding the integration process with detailed, step-by-step instructions. This plan could include defining milestones or creating a new organizational structure. Each step that will happen should be outlined. 

This plan has to be clearly communicated to all stakeholders. In M&A, transparent communication is critical to address uncertainty and build trust. Employees from both organizations need to understand the "why" behind the deal and how it aligns with the strategic goals of the newly combined company. 

Another key principle of change management is employee involvement and engagement. This includes providing opportunities for feedback and concerns to foster collaboration. 

Training and development are necessary for equipping employees with the skills and knowledge needed to adapt to changes. This includes both technical training on new systems and soft skills training to help employees adjust to new company cultures. 

By following these best practices- strategic planning, communication, engagement, and training, organizations can turn the challenges of M&A into opportunities for growth and innovation and ensure cohesive integration. 

Overcoming Resistance to Change

Strategies for Managing Resistance

Resistance to change is natural and more common than you might think. Organizations should anticipate resistance to change as part of their change management strategy in order to address it proactively. 

1. Transparent Communication 

Consistent and transparent communication is one of the most effective strategies for managing resistance. Leaders must express the need for change by highlighting the benefits it will bring to the organization and its employees. Additionally, leaders should always bring the conversation back to the "why" behind changes being made. What is the bigger picture? What goals does this change help us set out to reach? Expressing these benefits is essential to getting everyone on the same page. When speaking to the team, address concerns and resistance in a timely and effective manner and keep lines of communication open.

2. Involve Employees in the Process 

Involving employees in the change process encourages ownership and collaboration. Providing opportunities for feedback and input to let team members know their concerns are valid and heard. This approach reduces resistance and ensures that solutions are more comprehensive and inclusive. 

3. Provide training and development 

Another way to manage resistance is to provide training and development to equip employees with the skills and knowledge needed to adopt changes. When employees feel empowered with the skills and expertise to take on new processes, their willingness to embrace change will grow. 

4. Addressing Resistance in M&A 

In M&A, resistance to change often presents unique challenges, particularly among employees of a target company. These individuals may feel uncertainty, loss of control, or even distrust as they didn't decide to sell or merge. This is new, uncharted territory for them. Many challenges occur in M&A when it comes to organizational change. To ensure a smooth transition, address resistance head-on for long-term success. 

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The Role of Data Analytics and AI in Change Management

Leveraging Data and AI for Effective Change Management

Leverage data and AI to enhance efficiency and measure the effectiveness of change management initiatives. By leveraging data analytics, teams can track KPIs to measure the impact of the changes. This visibility helps leaders understand whether a change is achieving its intended outcomes or if adjustments are needed to get across the finish line. 

In M&A, KPIs associated with change management might be employee engagement and satisfaction, feedback scores, system integration milestones, adoption rates for new technologies, etc. These KPIs depend on the deal and the integration that goes with it. Using a reporting tool, like BI Reports in DealRoom, you can use real-time data to make data-driven decisions. 

Additionally, AI has been shown to enhance decision-making by taking complex datasets and providing clear and understandable insights. AI-driven tools can also automate time-consuming tasks, freeing up resources and time. 

Finding ways to streamline processes is an integral part of expediting change management and will free up more time to focus on the bigger picture. Data analytics tools and AI will show you where impact is being made and how you can iterate the change during the next deal for further improvement. A data-driven approach ensures that change initiatives align with the organization's goals and deliver measurable results. 

Building Change Capability

When you are first developing an organizational change capability, it is important to first develop a strategy for implementing change. A change management strategy should be tailored to the organization's needs, acknowledging its culture, challenges, and long-term goals. This strategy should be a roadmap for managing transitions effectively, giving insight into the "why" behind the change. 

Note that the reason behind a change should always map back to the organization's goals, keeping inline with the mission and vision. 

The next step in creating an organizational change capability is to gather individuals with the right expertise, experience, and leadership skills to guide your organization through the change process. Building this team is integral to the success of the changes you are proposing. This team should include internal stakeholders who know the organization's structure and change management professionals who can provide feedback from an outside perspective. As things progress, this team will become your champions for change and serve as a resource to other team members. 

Training and development are critical for empowering employees to navigate change effectively. After identifying a strategy and leadership team, the next step in developing organizational change capability is investing in the tools and resources your larger team will need to adopt new processes. 

For example, if implementing a new technology, think about what onboarding or ongoing training will be needed. Nicole Markowski explains, "When implementing a new tool, people can feel unsure or overwhelmed, so it's essential to approach the process with transparency." Ask your team members what resources they need to feel more confident adopting the change. If you give team members too much all at once, there is a risk they won't adopt the tool, so be sure to approach it in manageable steps. 

Change is a part of all businesses at some point. Establishing a change management institute to provide ongoing support and guidance can help team members feel empowered and prepared. 

Solutions to Overcoming Challenges

Strategies for Successful Change Management

When putting together a change management plan, it is important to share strategies on how to overcome challenges. Obstacles are always going to arise, that is almost nonnegotiable. Proactively address the potential roadblocks to ensure the change process remains on track and minimizes disruptions. 

Start by identifying key stakeholders, including project managers and change management professionals. Once you have this group together, you'll want to get their buy-in upfront to address resistance areas. 

The next step is to develop a clear change management plan, communicate it to all stakeholders, and provide training to equip employees with the skills and knowledge needed to adopt changes.

Key Takeaways for Mastering Change Management

Change management is a critical component of organizational success. However, managing change can be difficult, whether addressing a minor improvement or a large-scale transformation. 

By fostering transparency, prioritizing the employee experience, and implementing centralized technology like the DealRoom M&A Platform, you can enhance collaboration and streamline processes to navigate the complexities of M&A. 

Ultimately, mastering change management equips businesses to respond proactively to challenges, capitalize on opportunities, and position their organizations for long-term growth.