The critical role of leadership in mastering corporate change management
08 Jan 2024
Change is an inevitable part of doing business, driven by evolving opportunities and challenges. But navigating corporate change management remains a complex endeavour with a high failure rate – especially in large-scale transformations: according to BCG’s research, approximately 75% of such initiatives fail to achieve their objectives.
Nevertheless, in corporate change management leadership behaviours, organisational development and change management capabilities can play a pivotal role in ensuring the success of transformative projects.
Integral to any major corporate change is the need for strategic workforce planning, i.e.,forecasting your workforce supply and demand scenarios, including job architecture and skills taxonomy based on the organisation’s goals, external trends and competency needs from a strategic, long-term perspective. Success in this area requires strong change leadership.
Understanding change management
Change management’s primary aim is to facilitate a smooth transition from your organisation’s current state to a desired future state by using a structured approach to minimise disruptions and resistance.
Whether you’re undergoing a digital transformation, an operational overhaul to implement AI and automation or some other organisation-wide upheaval, change management requires that you meticulously plan, implement and manage these significant changes in structure, processes, culture or systems.
The key components of change management are assessing the need for change, creating a well-defined change plan, effective communication with stakeholders, providing support and resources and continuous monitoring and adaptation to ensure the change is sustainable and effective.
The importance of leadership behaviours and development
Leadership behaviours and development are critical to the success of change management initiatives. While respondents to the BCG survey ranked these second-most important for future success, the findings revealed a significant gap in capabilities, with most organisations’ current effectiveness ranking around 15th.
This highlights the need for leaders who can navigate change comfortably and oversee ongoing initiatives. Generative leadership, which emphasises head, heart and hands, is a powerful approach that can drive lasting change.
Head: leaders must reinvent the core business to benefit all stakeholders. This includes focusing on profit, people, community and the planet, integrating sustainability initiatives and adhering to ESG standards.
Heart: often overlooked, the heart involves cultivating purpose and culture and demonstrating genuine care and support for employees by committing to their well-being.
Hands: leaders need to act swiftly across ecosystems, embracing diverse teams and technology to drive innovation. Future-built leaders execute and innovate by collaborating with multiple external and internal stakeholders with varying skillsets.
Leadership’s role in change management isn’t just a noble endeavour – it’s also good for business. Companies that prioritise generative leadership can see a 96% increase in the success rate of their transformation initiatives.
Overcoming change distance and building employee agency
“Change distance” is a phenomenon that can cause these change initiatives to fail. It reflects the gap between senior leaders and rank-and-file employees in their perception of change.
Since senior leaders are closely engaged in the decision-making processes, they have less change distance and hence a more positive attitude to change. Meanwhile, lower-level employees may feel disconnected from the decision-making process and be resistant to what seem to them arbitrary and unnecessary disruptions to their ways of working.
To mitigate the effects of change distance, leaders can work to improve employee agency:
- Clearly communicate the purpose and importance of the change, recognising the value that employees bring to the initiative
- Engage with employees to understand their own needs, frustrations and constraints and work to accommodate them in the change process
- Acknowledge that negotiation tends to lead to compromise and that some demands may not be met. Focus on building trust through mutual understanding
- Gather feedback from employees and reflect on what you’ve learned during the negotiation process that may smooth and speed up future initiatives
Change management is a challenging but essential aspect of corporate evolution. Leadership behaviours, organisational development and effective change management capabilities are key to its success.
By bridging the change distance gap and actively involving employees in the change process, organisations can be more effective in ensuring long-term success. Generative leadership, with its focus on head, heart and hands, is a powerful tool in this process.
You may find our article on ‘Skills disrupted: bridging the talent gap’ interesting and relevant.