Structured Change Management Aligned with Business Goals is Crucial for Success
A couple of years ago, Adobe made a major corporate shift from perpetual licensing to a subscription-based model. To make this transition successful, the company made several strategic structural changes that helped it align better with the new business model. Firstly, it aligned its digital business solutions with functional and process activities to foster an increased subscriber base. Adobe also redefined performance metrics for employees in line with the new goals.
The results of this structured change management initiative are evident. In its latest earnings announcement, Adobe reported record quarterly revenues of $1.46 billion, representing year over year growth of 20 percent.
While the directional change was quite drastic and clear-cut in the case of Adobe; it’s far more fluid and often not so apparent when it comes to most companies. For instance, in the case of start-ups, they might be more focused on acquiring new customers and growing the business, rather than looking into organisational structure. Even in larger organisations, market transitions might not be apparent till they start to affect the company bottom line.
When organisations reach the point where they recognise the need to make internal changes, the first instinct is to focus on changing people’s behaviour through communication and trainings. But this approach is likely to backfire unless it is backed by structural changes that support and encourage the new expected behaviour. This is because a person’s behaviour is closely tied with the context in which they are operating. Unless the context changes, any behavioural change is bound to be unsustainable.
Any successful change management initiative needs to follow these steps:
Listen: In my experience, there is often a vast disconnect between the top management’s understanding of business goals and the way individuals and teams perceive those goals. An in-depth listening exercise that includes questionnaires, one on one interactions and group workshops can help understand the differences in perception that are affecting business outcomes.
Evaluate: Once the data is analysed, it makes it easier to draw insights and evaluate gaps in the organisation structure. It also exposes gaps in employees’ understanding of business goals as well as their competency/ training towards achieving those goals. These can guide discussions around structural change needed to meet current business goals.
Translate: Once the organisation goals are revised, it is important to translate them into actionable items at all levels – management, teams and individuals. More importantly, employee performance evaluation parameters need to be aligned to the new business goals and this needs to be communicated effectively to all levels.
Harvard Business School professors Michael Beer and Russell A. Eisenstat have developed a process called Organizational Fitness Profiling, which helps a CEO or business unit general assess how well an operation fits their espoused strategy and management principles.
Market landscapes and business priorities are constantly evolving. Regular evaluation and introspection to check if organisation structure is aligned to current business goals can spell the difference between success and failure. Managing employee behaviour is important, but ensuring that the organisations is aligned to support new behaviours is absolutely crucial.