Change Management: Cultural Shift in Times of Skill Shortage

1. What does Change Management mean?
2. Why do businesses need changes? And why now?
3. When do businesses need a change?
4. The change of Change Management – This is how the process of change also changes.
5. In which areas is change and cultural change becoming increasingly important?
6. What is the goal and task of Change Management, particularly with regard to cultural change?
7. Change management process – How does the change proceed?
8. What challenges do employees and managers face during the change process?
9. Which Change Management methods are there?
10. Dealing with ongoing projects and daily business during the change
11. What causes Change Management projects to fail?
12. Which tools support change management?
13. Is Change Management in a company ever finished?
14. Conclusion on change management

“Who does not go with the times, go with the time”
This quote has indeed already been heard by everyone and has never been more current than now. The daily requirements for companies are increasing. Reactions must be constantly optimized, efficient and even a little bit faster. On top of that, there is the matter of the skilled labor shortage. Looking away is no longer an option. It is time for change and a culture where the needs of both the employees and the employer are met and at the same time economic viability is ensured. How you can successfully implement this is exactly what you will learn here.

 

What does Change Management mean?

When it comes to changes, these are usually associated with the term change management. But what exactly is that? Let's just translate change management: Change management means management of change. Unfortunately, making a change is not necessarily associated with an improvement. This can lead to the first failure in practical implementation. More on this later. Back to the basic definition: It's about implementing new strategies, structures, systems, processes or ways of behaving through targeted measures and/or implementation.

Why do businesses need changes? And why now?

We are still at the very beginning of the shortage of skilled workers and a red alert is already in place. Employees and their requirements to employers have changed and will continue to change in the coming years. In order to continue and in the future to remain competitive as attractive employers and at the same time to be able to react to economic fluctuations, it is essential to break up outdated and thereby artificially slowed down processes and ways of thinking. Especially considering the lack of skilled and executive workers, it is necessary to focus heavily on cultural change during this transformation. Because after all, a company is just that, a culture – a gathering of different individuals which, depending on the organization, has taken shape over years.

When do businesses need a change?

The question of necessity arises in two respects.

a) Is there an acute problem that cannot or can only be difficult to solve with current procedures?

Or

b) Do I want to use the change as a preventive measure to set myself up for the future?

Many of today's companies find themselves at at least one of these points. Whereas b) can also be a result of a). Anyone who has recognized this need should consider initiating a change in order to improve.

The change of Change Management – This is how the process of change also changes.

Not only companies and organizations must change, but also the procedures by which the change is carried out. Traditional change management has existed for decades and may function to this day, depending on the respective organization. However, it is also important to adapt these processes and make them as simple as possible in our increasingly complex and sometimes incomprehensible world. 

This revision of change processes is already evident in the companies that have the options for change and those that can afford to undergo a change management process. Until now, this, often very cost-intensive service, was particularly reserved for large companies, which not only had external and internal changers, but most importantly – a budget. Change should no longer be a luxury product exclusive to large companies by 2022.

A number of changes and ongoing challenges are taking place every day, this state will continue to increase with growing digitization in the future. However, something must not be forgotten: the human being. Because after all, it is this human being who should be at the center or at best, already is.

Every human being is an individual and it is practically impossible for even the most committed employee to understand all the interrelationships, let alone solve them on their own. Issues are becoming increasingly incomprehensible with the change in the external world. It is thus even more important to keep the journey of change, especially of cultural change, as simple as possible in order to make it accessible and applicable.

In which areas is change and cultural change becoming increasingly important?

You could say: Everywhere where people work. Differentiating between industries isn’t necessary here. Whether you are talking about agencies, nursing, e-commerce, real estate, industry or handicrafts does not impact the importance. Requirements and wishes of employees as well as customers are changing in all areas, particularly with regard to digitization.

Anyone who thinks about change irrespective of the industry should primarily ask themselves the following questions:

• Where is what kind of change reasonable?
• Why should this happen?
• What should be achieved through this?
• How is this achievable?

Changes just for the sake of changing is never a solution and should not be an approach.

What is the goal and task of Change Management, particularly with regard to cultural change?

Change Management itself is at first just the process, i.e., the procedure, the analysis, planning, execution and/or coordination of the transformation. These tasks particularly fall to the individuals carrying out the process, such as Change Managers. The goals on a corporate level can be very individual, but there are, of course, overlaps or overarching economic goals that can be achieved with successful change. These include:

• Increased customer satisfaction
• Increased profit
• Increased sales
• Recruiting 
• and above all, retaining skilled employees

All these goals ultimately ensure competition on the corporate level.

Regarding the point of recruiting employees, we will also discuss cultural change in times of a shortage of skilled workers. When taking the ensuring of enough and qualified personnel as an overarching goal, it turns out again and again that people like to work and perform well. However, the condition for this is an environment that enables exactly this.

At the same time, however, the requirements or the concept of the working world by employees are changing. Even if you shouldn't think in generations as a rule, the trend is that employees are placing freedom and experience before security and a long-term job. This change in needs also becomes apparent when everything in the relationship between the company and the employees seems to be in order. This is why the goal should not only be to find and hold qualified personnel, but also to build systems that can absorb this new type of fluctuation.

In relation to the company culture, a change could look like the following for example:

• Integration of an error culture
• Breaking up hierarchies
• New comprehension of leadership
• Promoting interdisciplinary teams
• Visibility and transparency of roles and responsibilities
• Promotion of autonomy 
• Increased commitment
• Integration of a feedback culture

Change management process – How does the change proceed?

In practice, a lot depends on the respective company and its setup, possibilities and the will of the individual employees as well as managers. However, just as with the goals, there are recurring overlaps that proceed in a similar fashion.

The desire for change does not necessarily have to come from the management or the top-levels of management, but should be taken seriously, especially when it originates from the employees. Nobody can promote change and especially improvement better than those who recognize a greater need and want to meet this need.

After this awareness has been created, the first practical steps can be taken, whereby it is important not to act blindly.

First, the current state should be analyzed and a goal determined. This is primarily a means of measuring the results, after all, change must be economically viable.

Depending on the goal, setup and possibilities, it then goes into implementation. Here various change management models can be advantageous. However, I want to mention at this point that models, methods or frameworks should only be seen as tools. Not every procedure is suitable for every type of change or transformation.

It is also important to understand that changes always affect 80 percent of the culture and accordingly the people in the organization. This mainly includes teamwork, handling of errors, openness, development as well as autonomy but also, and this is very important, the understanding that not every employee wants to be a part of it.

Therefore, it is basic to make the change manageable. Stop naming it and show the employees their advantages or take them and their wishes and suggestions seriously. At the end of the day, every company is only as good as its team members. Anyone who actively gets the chance to promote change and is fully integrated at the same time, also builds a better commitment to the employer. If implemented correctly, you can speak of a win-win situation.

What challenges do employees and managers face during the change process?

It depends. People are highly individual and there is neither “THE manager” nor “ THE employees”, even if there are of course recurring patterns. Typical phases and challenges also show up depending on from which ranks the desire for change arises or where this decision was made. Change processes are typically initiated top-down, i.e., by management. The current change however clearly shows that more and more employees are expressing the desire for change and want to actively push this.

To get an overview of the phases or challenges that individual team members go through, the following acceptance matrix of the types of change is very appropriate.

Matrix of Change Types

Promoters: Do not see a disadvantage for themselves on a personal or factual level, but partly even see advantages, which is why they welcome and even support the change.

Objectors: Vote against a change due to factual as well emotional reasons and thus form a form of resistance.

Brakers: Agree factually but fear personal disadvantages.

Skeptics: See factual or professional problems, however, they usually do not resist.

In addition to these types of change, there are recurring fears or hurdles that practically arise in every change process. These include the following:

• Fear of loss of control: Especially when it comes to the change of hierarchical structures in companies.
• Resistance: This is also very apparent in connection with the types of change. Resistance is not negative per se but can also be seen and used as a driving force.
• Leaving the comfort zone: People like comfort. Change is strenuous as it means old and over a long period, learnt behavior and work patterns have to be abandoned.

Which Change Management methods are there?

There are a lot of change management methods or models that have proven themselves over decades. Here, I would like to list the three most well-known change management models that build on each other or are similar.

• 3-phase model by Kurt Lewin
• 8-stage model by Kotter
• 5-phase model by Krüger

Both models, methods and frameworks are tools that are given to you. Sticking to them one hundred percent can be particularly helpful if you lack experience or you don't know how and where you can start with the change.

More important than involving methods is however, the understanding of what is to be achieved and where the team and the organization stand. Not every approach is suitable for every goal but can always provide a new and possibly fitting approach.

In relation to the change of the change management procedure itself and the constantly changing requirements on the labor market, Management by Objectives and Key Results (OKRs) is also showing as a successful method. Even if this method of organizational development is not necessarily classified as classical change management, the introduction of an OKR system can be an excellent support for companies that want to position themselves agile.

Dealing with ongoing projects and daily business during the change

To not or minimally jeopardize ongoing projects as well as daily business requires an elaborate analysis and planning of the implementation.

Planning at this point, however, also means preparing for unforeseeable events but being able to react to these as fast as possible. Depending on the organization and implementation possibilities and objectives, it makes sense to start the change first in individual teams. First impressions and possible obstacles can be identified in a kind of “pilot transformation” and be specifically addressed.

This especially concerns problems of a technical nature as well as internal communication and processes. On a corporate level, it makes sense in most cases to make the change process transparent from the beginning in order to fully involve employees.

What causes Change Management projects to fail?

Only a little under 23 % of change projects carried out are actually successful, according to a study from 2018 by Mutaree GmbH. But what are the reasons for this? The advantages are right at hand after all.

Ultimately it is exactly this. Employees are not sufficiently involved in the change process which leads to them not also considering themselves as “change fit”. Managers who have to ensure during the change process that the daily business continues to function, but at the same time give room for innovation and testing have the biggest influence on this failure. Many managers are not familiar or even overwhelmed with these new requirements as these are additionally a new way of leading.

Which tools support change management?

There are a lot of tools that accompany change processes and also make them visible in numbers. Rarely is it addressed which tools actually support those affected by the change process during the change process– the employees.

A change is always a big step, it requires people to break from their comfort zone and try new things. At the same time, everything should of course continue to work as usual. Customers must continue to be satisfied and the results delivered on time. Therefore, it is even more important to fall back on simple software that everyone, regardless of the position and role in the company can use and also brings people together.

In times of home office, the joy of being able to return to the office or paired as hybrid work models, it shows how one can use simple tools to push big changes.

Zoom is one example of an Video Conferencing-tool

. Since Zoom has already gained a lot of trust through the lockdown, it also serves as a space for discussions and presentations during the change process. Through various functions such as screen sharing or the use of breakout rooms, interactive as well as group work is made possible. Zoom is also so self-explanatory that even employees who possibly don’t have a classic office job can also easily get involved.CollaborationPaired with the Miro-tool

, it’s simple to set up remote workshops and virtual whiteboards. It’s almost as simple and understandable as Zoom and gives the teams enough space for brainstorming, working on processes and ideas as well as for creating workflows, strategies and much more. In short, Miro is the whiteboard in the laptop bag.

Both tools are simple, manageable and applicable. They offer the possibility to create new things together and to push change without over-challenging or under-challenging employees.

Is Change Management in a company ever finished?

In the classic understanding of Change Management, you work towards a specific goal. Once this goal has been reached, the official change can be regarded as finished. However, companies, the economy and accordingly the requirements are constantly changing. Anyone who understands this also recognizes that change management itself must be conducted in a more agile manner today in order to be able to react to changing requirements during the change.

The only constant is change, therefore, it is a worthwhile goal to implement the Kaizen approach into the change process. This strives for continuous improvement and enables the team to react flexible and adaptable and provide continuously better performances in the long run. In the best case, the company should, following the official change, be able to permanently pursue this Kaizen approach on its own.

Conclusion on change management

Changes happen permanently, but anyone not daring to change themselves and their own methods of working will lose in the long run. Change processes should combine the improvement of economic and human goals and, moreover, build a bridge between the company and employees.

Change management is a process, this approach should no longer be a luxury product by 2022 because the challenges in our world of work may differ in size, but not in kind. Every day, we are facing a multitude of changes and continuously new requirements. Change should primarily offer one thing: The ability to react to these challenges as a team and as a community.

These changes have to be made manageable and applicable because there are many employees who would like to change something if they were allowed to. You should view these employees as a driving force – bring them aboard on the change journey. The best way to do this is through clear goals paired with mobility, transparency and openness without adversely affecting daily routine.