5 risks of change management failure
When your organization is on the cusp of a major change, it’s easy to get caught up in a whirlwind. It can also be easy to underestimate the risks. But if you’re moving so quickly you fail to account for the people side of change, even the best-laid plans and the sleekest software could leave your company behind the eight ball. And with 70% of change programs failing to achieve their goals, the importance of change management is more clear than ever before.
The last thing you want when trying to implement change is for the project to fail. A successful approach to change management involves assessing the risks associated with your particular situation so you can plan accordingly and be prepared for what might happen.
Not sure where to start? You can avoid catastrophe by taking these 5 change management risks into account.
1. Exceeding budgets
It’s no surprise that when your corporate travel change plan fails, it means you’ve wasted money on something that didn’t work out. But what change leaders often forget to consider is the additional costs of having to go back and fix the inefficiencies and mistakes of a failed plan. One of the biggest reasons for change plans failing is that leaders underestimate the money, time, and resources required for change management, leaving them ill-prepared for unforeseen delays, obstacles, or push-backs.
It’s imperative to understand that change is an ongoing process – especially in an industry as dynamic as corporate travel, where what works today might not get you through tomorrow. Through poor change management, you may have wasted the original budget that was set to cover the entire project, resulting in additional budgets needed to complete the project effectively. And if your department does not have the luxury of providing these extra funds immediately, you could have to wait until the next quarter, the following year, or worse indefinitely.
2. Future changes are stalled or fail
Remember: sometimes it only takes one bad mark to tarnish the whole record. A legacy of failed change presents a significant and ever-present backdrop that all future changes will encounter, result in them being stalled or ultimately failing in return. This is especially true if there is a lack of trust between parties involved in the change. In this case, key decision makers, such as investors or corporate executives, may be unwilling to devote additional time and/or resources as needed to support the change because they do not believe in its value after witnessing a history of failed change.
3. Increased resistance to change
When employees are inadequately introduced to changes that affect how they work (especially when the benefits of those changes are not immediately obvious) they may become resistant. While this behavior is normal and should be expected, neglecting to address the “people side” of change will lead to a greater likelihood of impacted staff not adopting a new system or new way of working – especially if they’ve seen similar change plans fail in the past. Employees who don’t understand what’s being expected of them are more likely to resist change out of fear that their job will be less secure or because they feel like their time isn’t being spent wisely or efficiently. And no matter how effective the rest of your change process is, if you don’t have your employees on board with your change, the results will not matter.
4. Lose valuable employees
While the total cost of change can be difficult to measure, we do know how expensive it is to replace valuable workers who become dissatisfied or even malcontent with change if the process is not communicated properly. A lack of clearly communicated change management objectives leads to an increase in stress, confusion, and fatigue among employees, and divisions between “us” and “them” begin to emerge. Some friction can be anticipated during significant operational change. However, there can often be an unexpected and unwanted loss of top talent.
For instance, traveling sales representatives may have been too comfortable with the old way of booking, so if you suddenly change your OBT with little-to-no explanation of how or why, they may feel as if their time and efforts are unvalued, thus leading them to question their role at your organization. Such flawed travel program change management results in extra costs, loss of productivity, and a reduction of quality at work. One study from the Society for Human Resource Management (SHRM) reported that it costs 6 to 9 months of an employee’s salary to replace them. For example, losing an employee that made $60,000 per year comes out to $30,000 - $45,000 in recruiting and training costs.
5. Your clients are impacted
When an organization is going through change, it’s important to make sure it’s executed in a way that doesn’t impact the client experience. But if you’re not careful, they could get hurt by the change. According to Prosci, a global leader in change management solutions, poor execution of change plans leads to a reduced quality of work, productivity plunges, and overall decline in morale – all of which affect your organization's ability to interact with and provide for your clients. And if they aren’t receiving the same services or information they expect out of your organization, this could be a catalyst for many different problems, including customer dissatisfaction and churn.
Your solution to mitigating risks?
Focus. On. People. Change management is important and there are risks when you don’t do it well. To save your organization from a failed change plan, you need to consider the people who your change will affect. Do this early on and integrate it into your whole strategy, from start to finish.
Mastering the change management process is one of the most challenging issues for any organization, and the statistics reflect that. However, careful planning, modern tools, and frequent, thoughtful communication will help stack the deck in your favor.