How improving change capability can boost the bottom line

Companies need to build employees’ change capability to avoid productivity declines

Companies need to build employees’ change capability to avoid productivity declines, according to recent research, which found that organisations may be underestimating the impact that just one change can have on their bottom line.

Employees who are stressed by change are five per cent less productive, costing the average organisation $32.5 million per $1 billion in revenue, according to the CEB research.

The amount of organisational change has increased dramatically over the last few years.

Last year, employees worldwide experienced on average three major changes (such as acquisitions, new product development or restructuring), compared to nearly half that just three years ago.

Unfortunately, despite having more practice, most organisations fail to implement change effectively, according to CEB, which has found that only one-third of change efforts are clear successes.

“Change truly is the only constant in business today,” said Dorian Cundick, executive advisor, CEB.

“An organisation’s ability to achieve the goals of their change initiatives is critical to their overall success, especially as we expect to see an increase in the frequency of change across the next three years.

“Employees’ ability to quickly adapt to change is crucial to the success of transformative objectives, and organisations need to pay closer attention to how they enable their workforce to process and implement change.”

“There are plenty of employees who are highly committed and throw themselves into their work, but despite how hard they work, they don’t see results”

To improve change capability, most companies focus on one-off, individual responses to organisational changes.

They use communications to create employee commitment to each new initiative by sharing rationale and context, building a business case for the change.

While these efforts can improve employees’ attitudes about the change, they don’t minimise the disruption on roles, teams and objectives.

The companies that have the most success with transformation build their employees’ capability to manage through today’s continuous state of change.

Increasing employee ability to perform through change and their overall change capability has over three times as much positive impact on performance as increasing commitment alone.

“There are plenty of employees who are highly committed and throw themselves into their work, but despite how hard they work, they don’t see results,” added Cundick.

“This understandably creates stress, which ultimately worsens performance.

“Employees who are both committed to their work and are capable of managing through change are those that will help organisations achieve success during transformation.”

To increase employee capability and sustain performance through change, organisations should focus on:

  • Ensuring the availability of tools, information and people: after change occurs, employees need resources to help them construct a new understanding of their job. Leaders can make this easier by developing specific tools and training and directing employees to them, promoting sharing across peers, and monitoring progress and course-correcting when needed.
  • Increasing employee self-confidence: Although some people are naturally more confident than others, self-confidence is teachable. By reminding employees of past achievements and sharing and promoting peer progress and success, leaders can build employees’ assurance.

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