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Why human-centric change management is key to transformation success

photography of Jia Yong Goh
Jia Yong Goh

Partner, People Consulting, Ernst & Young Advisory Pte. Ltd.

6 minute read 17 Jan 2022
Related topics
Workforce
Transformation Realized
Corporate culture
CHRO agenda

Beyond financial support, a human-centric change experience is vital to the success of transformation efforts.

In brief

  • Organizations are under greater pressure from the pandemic to accelerate their transformation efforts.
  • Even with financial support, such efforts can still fail due to poor change management.
  • Having adequate stakeholder buy-in and resourcing, overcoming cultural barriers and proper measurement of change effectiveness are critical.

With the COVID-19 pandemic precipitating many changes and greater uncertainty, organizations have had little choice but to accelerate their transformation efforts. Some organizations might have been adept at managing adaptive changes in the past, including the iteration of existing products, software upgrades, downsizing job roles or hiring new talent. However, they now find themselves challenged by the complex demands of larger transformational changes in the form of redesigned business models, M&As, culture shifts, remote working and new technologies. Be it small-scale adaptations or large-scale transformations, the agility and resilience of employees in adapting to organizational change have been tested time and again.

Even without the weight of the pandemic, transformations are hard. According to a study, which examined 128 global companies, 78% of organization change efforts were unsuccessful between 2016 and 2020, largely due to a lack of focus on inclusive initiatives for people.1

To cushion businesses from the impact of the economic fallout from the pandemic, governments have offered fiscal stimuli to enable them to stabilize, transform and grow. In Singapore, the Government has offered numerous grants and schemes to support businesses in their transformation journeys. For example, the Enterprise Development Grant offers 80% funding for projects that help businesses upgrade, innovate or venture overseas. The Productivity Solutions Grant further supports companies’ adoption of IT solutions and equipment to enhance business processes in the face of the pandemic. Another example is the SkillsFuture Enterprise Credit, which encourages companies to embark on enterprise and workforce transformation projects with a one-off S$10,000 credit to cover up to 90% of their expenses. Such support schemes seek to empower companies to use this opportune time to undertake transformative changes in a sustainable manner.

Yet having the means to invest in transformation is only akin to preparing for a battle. Organizations are often let down by poor change management. When a company’s people are not fully with it on the transformation journey, it has arguably lost half the battle. Organizations typically face three common issues: inadequate stakeholder buy-in and resourcing, culture and resistance to change as well as poor measurement of change effectiveness.

Inadequate stakeholder buy-in and resourcing 

Organizations that do not fully understand the value of change management or underprioritize people-focused activities tend to dedicate insufficient resources to manage the change process. This can leave them unprepared for people-related risks that require greater cost and effort to resolve.

Organizations must be clear on who the impacted stakeholders are in the ecosystem — and this may well extend to vendors and partners beyond the organization. To secure shared buy-in from a potentially large and diverse community of impacted people, it is necessary to conduct a stakeholder analysis that segments all impacted stakeholders into different groups (e.g., influential, directly impacted, indirectly impacted, interested) and analyze each group’s nuanced needs, expectations and risks.

In addition, conducting a change impact assessment will help identify current processes versus future ones and the resulting change impact. Organizations should anticipate the types of activities, training, communications and resources that will be required to ease the transition for each stakeholder segment or risk facing a lack of employee support.

How EY can Help

Culture and resistance to change 

Management consultant, Peter Drucker, once said: “Culture eats strategy for breakfast”. In Is digital culture the key to unlocking finance transformation?, a study by EY and ACCA in Singapore, 94% of finance leaders surveyed said the lack of a strong digital culture is a significant threat to the value of the transformation strategy.

 

Well-planned employee communications can help overcome ingrained cultural barriers and preferences for the status quo. On the other hand, insufficient communication and training to prepare employees often results in a lack of knowledge and understanding, giving rise to negative sentiments toward the transformation.

 

To address this issue, organizations can deploy a change management and workforce transition team to work alongside each functional workstream. This will allow the organization to understand the voice of the customer and the employee journey as well as support co-creation efforts in designing the to-be operating model. A tailored communication plan for impacted stakeholders, delivered through purposeful and immersive communications, will help employees understand the future ways of working, resulting benefits and upcoming activities, greatly reducing the chance of misinformation and resistance.

 

Organizations also need active and visible sponsorship by leaders, who play a key role in emphasizing the importance of the change. A change network comprising change champions within the organization who help cascade key messages to employees, coupled with employees who serve as change agents to influence peers and gather feedback from them, is also powerful in shaping sentiments on the ground.

A tailored communication plan for impacted stakeholders, delivered through purposeful and immersive communications, can help overcome ingrained cultural barriers and resistance to change.

How EY can Help

Poor measurement of change effectiveness

What doesn’t get measured doesn’t get done properly. Change effectiveness metrics and readiness assessments that are mapped back to the project’s desired outcomes provide a consistent measure of the success of change management efforts and help track employee readiness for the change.

 

Organizations should seek to monitor user sentiment and go-live readiness via pulse checks at strategic junctures of the program, and continually track employees’ training completion and confidence in skills to perform the new ways of working. Qualitative insights can also be obtained from the change network, workshops and training sessions.

 

Using these near real-time measures, the organization can then develop targeted actions to address stakeholder concerns, such as additional process-walkthrough sessions, supplementary work instructions, leadership briefing sessions and support clinics. The insights from measuring change effectiveness will allow organizations to make course corrections as needed to stay on the path to transformation success.

 

A human-centric change experience

Our experience in using the EY Change Experience methodology to advise organizations has shown that four factors have the greatest influence on the way employees experience change:
 

1.    Purposeful execution that focuses on business value and outcomes

2.    Personalized understanding of needs and mapping of audience experience

3.    Immersive communications with high fidelity content and collaboration

4.    Insightful, data-based tracking of change interventions for success
 

Yet change management is often overlooked in transformation plans — until things go wrong. Assessing change impact upfront can allow organizations to understand the scope of change, allocate resources and design interventions early to mitigate risks. Ultimately, the change experience is about putting humans at the center — aligning processes, structures and systems to empower employees.
 

This article was written by Jia Yong Goh, Partner, People Advisory Services — Workforce Advisory, with contributions from Alicia Tan, Senior Manager, People Advisory Services, both from Ernst & Young Advisory Pte. Ltd.


Summary

Employees’ agility to adapt to organizational change is critical regardless of its scale. Companies need adequate buy-in from all impacted stakeholders and well-planned employee communications to help overcome ingrained cultural barriers. Proper measurement of change effectiveness is also crucial to address stakeholder concerns and make corrections for transformation success.

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    About this article

    photography of Jia Yong Goh
    Jia Yong Goh
    Partner, People Consulting, Ernst & Young Advisory Pte. Ltd.
    People consulting professional. Experienced in supporting digital and workforce transformation. Professional Singapore Certified Management Consultant with TUV SUD.
    Related topics
    Workforce
    Transformation Realized
    Corporate culture
    CHRO agenda

    EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.