HR’s guide to change management in complex business environments

To manage the increasing volume and complexity of change within organisations, HR leaders should embrace their role as influential change agents. 

The only thing business leaders can be certain of these days is that change, in some shape or form, is always just around the corner. And while the adage suggests that “change is as good as a holiday,” we must also pay attention to an equally clichéd idiom: “You can have too much of a good thing.”

Recent research from PwC suggests more than half of the 56,000 global workers it surveyed felt their organisations were dealing with too much change at once, putting them at risk of experiencing change fatigue.

Separate research from Gartner showed that as of 2016, the average business faced two planned enterprise-wide transformations each year (such as restructures, mergers, major technology changes, etc.). In 2023, that rose to 11 per year.

As the volume of change is increasing, so too is the complexity.

“The most common changes we see are organisational restructures, senior leadership transitions and technology implementation programs,” says Neal Woolrich, Director of HR Advisory at Gartner. 

“These can be complex and disorienting for employees because they all have the potential to disrupt the structures, workflows and networks that people are familiar with and rely on to get their work done efficiently.”

At the same time, Gartner found that in 2023, only 41 per cent of employees were willing to support their company’s change initiatives, down from 43 per cent in 2022 and 74 per cent in 2016.

“A drop in change willingness can be corrosive across a number of business and talent outcomes, but the biggest impact is on responsiveness, which is the ability of employees to know their stakeholders, anticipate a change in stakeholder needs and adapt,” says Woolrich. 

“An organisation suffering from change fatigue can see responsiveness cut by more than half.

“The key talent impact from a lack of change willingness is on intent to stay, which can drop by up to 24 per cent. That can put an organisation into a downward spiral – more employees leaving means more change, and the risk of greater change fatigue.”

Overwhelmed by change

HR leaders are equipped with many of the skills required to enable successful adoption of organisational change. Often, they just need to know which levers to pull.

“HR don’t always tend to get involved with change. It seems to go through strategy, technology or operations, but there’s a big opportunity for HR to step forward and own the policy framework around change in organisations,” says Dr Jen Frahm, author and co-founder and Managing Director of the Agile Change Leadership Institute. 

“One of the biggest levers HR execs have got is the most recent change to workplace health and safety legislation: the psychosocial risk [management] requirements. If we’re not designing change well, if we are not being cognisant of our people’s experience of that change, there could be pretty significant consequences.”

While there are many external factors impacting the amount of change businesses are experiencing, internal factors can also perpetuate employees’ sense of overwhelm.

“In some organisations, it’s a lack of connectivity. They genuinely don’t realise that other parts of their business are also introducing change projects,” says Frahm.

“Leaders have this immense pressure to deliver business outcomes, and they see change as a natural way to do that. But that lack of connecting the dots inside the organisation means your people are being hit with multiple changes at the same time.”

Another reason change overwhelm could be taking hold is because many organisations reward leaders who are seen to be “transformational”, says Frahm.

“There’s a strong sense of identity and prestige associated with being the leader who brings in change.”

This can mean some leaders engage in change initiatives for the wrong reason: to boost their standing in the business rather than to align with the strategy and move the organisation closer to its goals.

“When you’re not thoughtful or prudent about the change you do, you risk cannibalising the change that needs to be done,” says Frahm.

That could result in productivity issues, poor customer experiences or increased stress leave due to poorly managed processes. This is when change fatigue kicks in, which can lead to lower rates of enterprise contribution, poorer performance and lower intent to stay.

HR’s role in change management

In order to keep change fatigue at bay, organisations need to embed a high amount of trust and facilitate strong team cohesion. One way to do this is by practising open-source change management, which engages employees in the change process.

“There are three key pillars to open-source change management: employees co-creating their change decisions, employees owning implementation planning, and also [giving] employees permission to talk openly about change,” says Woolrich.

Organisations that successfully embraced open-source change initiatives saw a reduction in change fatigue by up to 29 per cent.

“And employees’ willingness to [embrace] change is almost 50 per cent higher in those organisations,” he says.

For employees to contribute to an open-source model, they need mental space.

“Very few organisations put a moratorium on voluntary change when external changes hit,” says Frahm. 

“That’s really problematic because people don’t have the capacity to absorb that much change [when] they’re still required to do their business-as-usual work. When you’re overloading them with change, everything sinks. 

“If we talk about the cost of poorly managed change, the biggest cost is to employees’ wellbeing. The cognitive overload and attention tax is significant. People are really paying the price when it comes to how their brains are operating and functioning under too much change.”

“There’s a strong sense of identity and prestige associated with being the leader who brings in change.” – Dr Jen Frahm, co-founder and Managing Director, Agile Change Leadership Institute

In many respects, people are still trying to “adapt to the new world and its operating rhythm” post pandemic, says Michelle Lim, Organisational Culture and Change Lead at the Reserve Bank of Australia.

“As HR professionals, we need to be able to help translate what this change means on a behavioural level.”

This can look like modelling desired behaviours, she says.

“When embedding and implementing a new or enterprise-wide change, HR leaders and people managers should define and exemplify the behaviours they wish to see in their teams,” says Lim. “Essentially, they need to first walk the talk and embody the behaviours they wish to see.”

It’s also important to take the time to connect your people to the broader changes.

“If you don’t have a strong culture and if people don’t feel aligned to the changes you’re making, or feel like they can play a role, they start to feel disconnected. That’s when you start to see people leaving the organisation.”

Value-adding consultancy

Frahm says that to ensure considerations such as this are factored into all organisational change initiatives, HR leaders should be involved at the early stages of green lighting and approval of funding of change initiatives.

“This is a really strong opportunity for HR to get involved in assessing the case for change by providing that value-adding consultancy and partnership. 

“It means you’re not using HR to clean up when things go wrong, which is operational and tactical work, such as mediating conflict, policing policy adherence and coordinating extra communication.”

There are often perception barriers that HR practitioners need to overcome before they can truly make an impact in this type of work, says Lim.

“There’s often this tension where people see HR as a blocker to getting things done. How do we as HR professionals – or as people who are mobilising change in an organisation – influence and change that mindset?”

The key, says Lim, is to develop a robust communications strategy in conjunction with your change strategy.

“I feel frustrated when people don’t understand how important communication is. It’s everything. If you can cater your key message to different audiences’ risk appetite and their involvement, that’s when you see transformational change,” she says. “It also means the change is more likely to stick.”

“A strong foundational culture acts like a compass of stability during times of change.”  – Michelle Lim, Organisational Culture and Change Lead, Reserve Bank of Australia

Tailored communication is always more powerful than generic messaging. Leverage the insights gleaned from your relationships with key stakeholders to create tailored communication plans, she adds.

“Align that with your organisation’s goals and purpose. Then take the time to learn what motivates and drives your key stakeholders, and craft your communication in a way that resonates with them,” says Lim.

Frahm says it’s also important to ensure you’re also comfortable using specific change management tools.

“The main tools you need are: a change impact analysis, a stakeholder analysis and a change readiness assessment. If every HR business partner knew how to run these tools, every conversation about change would be so much more constructive.”

Gain the skills you need to effectively approach change management and learn how to apply suitable models and frameworks with AHRI’s change management short course.

Enterprise-level change

Trying to flow change through an entire organisation is no easy feat. There are some useful things you can do before and after a change program that can set you up for success.

Before the change

Be aware of your ‘change runway’

This is about knowing how many changes you can run in tandem with one another, says Frahm.

You need to develop systems to determine if you’re conducting too much or too little change.

“Understand what the volume of change is at the moment and what’s planned. 

“Map that against the business-as-usual activity in the organisation and then pull the people data that gives you information on capacity to absorb change – such as employee engagement, sick leave, stress leave and exit interviews.”

Find your change champions

Lim says these people don’t necessarily need to be at the executive level in the first instance.

“It could be an employee resource group [ERG], for example. Say you’re trying to create change around the gender pay gap and you want to get something over the line. You need to connect with a group that resonates [with your end goal], such as your DEI ERG.”

Once you’ve got this group on board and have developed momentum towards your desired change, then you would connect this to an executive sponsor at the top of the organisation who can help to move the initiative forward, she says.

Bundle change into themes

Base all change around the key priorities in your business strategy, of which there should be no more than four, according to Frahm.

“Our brain has the capacity to chunk things down, but four seems to be the magic number. You want to be clear about how you describe any changes you’re implementing in the language of your four or fewer objectives.

“So for one change, you want to be able to say something like, ‘This is an example of how we’re chasing customer centricity.’ You’re chunking all of your change into your strategic priorities. That makes it easier for your employees to understand it.”

After the change

Focus on the adoption of the change rather than just the installation of it

“What a lot of companies do is put all their efforts into when the change is going live, and then the resourcing gets pulled away,” says Frahm. “Whereas the reality is, the benefits you’re hoping to get out of a change are always going to lag after installation. Keep the attention on the change for three to six months post-launch.”

Be prepared to work with your resistors

Change is disconcerting for a lot of executives, especially if the status quo has suited them. So you’ll likely come up against some change-resistant stakeholders during the process. 

When this happens, Frahm suggests presenting them with a business case for change done poorly.

“If the exec is change-resistant, they already have a fairly strong negativity bias, and a threat response to change. Trying to use logic, persuasion or influence doesn’t always work with these people. You’ve got to use a business case that talks to the commercials of poorly done change.

“You can also try one-on-one engagement.  Seek to understand why that executive is resistant to change, then see if you can gain their permission to try a few experiments to shift their thinking. Make it small enough that it’s not going to impact the business. That gives them some data to reconsider their thought processes. You give them control over changing their mind.”

Duty of stability

Employees are exposed to incredible amounts of change outside of their work lives too, so a critical aspect of HR’s role is to ensure stability. Organisations that are effective at building stability have employee engagement levels 61 per cent higher than organisations that are not, says Woolrich.

“While it may seem inevitable that more change is coming our way, HR leaders also have an opportunity, and I would say a duty, to provide stability for their people.

“Organisational culture is a huge untapped opportunity to provide stability. Only one in four employees feels a connection to their organisation’s culture, so it’s incumbent on leaders to set clear expectations on how we do things and provide a strong foundation for employees.”

Lim concurs, “A strong foundational culture acts like a compass of stability during times of change. When you can get this right, innovation flourishes and resilience grows.” 

A longer version of this article originally appeared in the October-November 2024 edition of HRM Magazine.

The post HR’s guide to change management in complex business environments appeared first on HRM online.