Companies that manage change effectively are more likely to have a formal, systematic process and a dedicated staff than organizations that manage change poorly, according to new research by global professional services company Towers Watson. The research, from Towers Watson's Change and Communication ROI Study, also identified six activities — leading, measuring, communicating, involving, learning and sustaining — that influence a company's overall change success.
"When it comes to managing major organizational change, many companies have a difficult time getting it right," said Kathryn Yates, global leader of communication consulting at Towers Watson. "In fact, our research shows that less than half stay on schedule, come in at — or under — budget or hold people accountable for deadlines. Considering that the average survey respondent went through three major changes in the past two years and the effect change management can have on the bottom line, there is plenty of reason for them to learn how the best organizations manage change."
The Towers Watson study found that nearly two-thirds (65%) of companies with the best change management follow a formal, systematic process, compared with just 14% of companies with low change effectiveness. Additionally, 45% of respondents with high change effectiveness have a staff dedicated to change management efforts, versus just 16% with a lower level of change effectiveness.
According to the study, leading activities, which include finding executive sponsorship for organizational change, developing a clear vision of desired organizational change, creating an integrated communication and change management strategy, and creating strong employee motivation for making organizational change, have the most influence in the overall success of an organization's change. More than eight in 10 (84%) of highly effective companies have a clear vision of what their organizational change is intended to achieve, compared with just 19% of companies with low change effectiveness. Notably, both senior leaders and communication and change management professionals have an important role to play in these leading activities.
Measuring activities were also among the top drivers of change success. More than three-fourths (76%) of highly effective companies set clear, measurable goals up front for the impact of changes, compared with just 14% of low-effectiveness companies. Just under three-fourths (73%) of highly effective companies measure their progress against goals, versus 12% of companies with low-change-effectiveness practices.
The study also found that effective companies incorporate programs to sustain the positive effects of change over time. Nearly two-thirds (64%) of highly effective companies continue to exhibit new behaviors and use new skills after changes have been made, compared with fewer than one in 10 (8%) of low-effectiveness companies.
"Organizational change is a continuous reality. Regardless of the type of change an organization experiences or where an organization is located, the critical change activities remain constant. Organizations that get the leading, measuring and sustaining activities right will be the ones that experience the greatest success," concluded Yates.
• Roughly two-thirds of highly effective companies create a sense of co-ownership about organizational change initiatives and develop support from enough employees for change initiatives to succeed, compared with one in 10 low-effectiveness companies.
• More than eight in 10 (83%) of respondents reported that they train managers in the area of change management, but only 36% find it effective.
• Effective communication is an important element of change management and, if both are done well, can significantly impact financial performance. Companies highly effective at both communication and change management are 2.5 times as likely to outperform their peers as companies that are not highly effective in either area.
About the study
The 2011 – 2012 Towers Watson Change and Communication ROI Study includes responses from 604 organizations in various industries from around the world.