The world of commerce faces an uncertain future. Revolving digital trends, ongoing globalization, and the rise of Artificial Intelligence (AI) all present unfamiliar challenges to businesses as they vie for success in ever-evolving economic landscapes.

In order to capitalize on the effects of these and other fundamental market changes, organizations should employ different types of change management and tactics to guide their decision-making. These organizational change management tactics can help businesses utilize change for their benefit, rather than being blindsided by its effects.

The importance of change management strategies in organizations’ plans cannot be understated. To help you get a firm grasp on the concept as a whole, we’re unpacking what change management is, why it’s crucial, and how to implement effective change management strategies into your operations.

Understanding the Role of Change Management

Change management refers to the collection of activities, tools, and functions organizations use to utilize the effects of change to benefit their survival and growth.¹ From training employees to completely restructuring, change management takes many forms in practical application. 

Change can occur within organizations in a variety of unavoidable ways:

• Market trends force brands to rethink their strategies
• Personnel move on or retire
• New systems are constantly being developed that alter the way organizations operate

Thus, it’s crucial for organizations to keep organizational change management central to their future planning. Doing so can:²

• Keep colleagues on track during difficult or tumultuous times by anticipating and communicating the effects of the change process before they occur
• Elevate morale while employees are adjusting to new systems and policies during a change initiative—which can cause them to feel stress at twice the rate of the rest of the workforce when not handled properly³
• Develop strategies to deal with fundamental staff changes, the ways they conduct business, and the markets they operate in

Effective change management planning can be the difference between an organization that flourishes in the face of a shifting future and one that fails because it’s unprepared. The right change management strategy can help organizations succeed by developing central goals for members to aspire to and establishing policies that utilize change to achieve these goals. 

To understand the effects of change management in practice, it can be helpful to review some real-world examples. 

Why is Change Management Important?

When Antony Jankins took over as Chief Executive Officer (CEO) of Barclays banking firm in 2012, the company was in dire straits. It had just pleaded guilty to manipulating the London interbank offer rate, an interest rate benchmark used globally. It was staring down a £290 million fine, and public trust was shattered.⁴

In order to revive Barclays’ image, restore stock value, and reset the firm on the path to a successful future, Jenkins employed some savvy change management strategies. First and foremost, he sought to change Barclays’ soiled reputation through a partial rebranding. Some steps Jenkins took to achieve this include:⁵

• Refocusing the firm’s operations on a few key profitable sectors—namely, corporate and retail banking in London, African banking businesses, and its credit card program
• Exiting and quietly closing riskier ventures that didn’t guarantee a return on investment (ROI)
• Nixing the word Capital from its name and centralizing all operations under a singular brand
• Making cuts and restructuring departments where necessary to sustain his new vision for the firm

Soon enough, Barclays began to feel the effects of their new CEO’s actions, and their stock price recovered from the massive dip the manipulation scandal caused. Jenkins eventually moved on from Barclays, but his efforts helped pull the firm up from a downward spiral. His strategies worked because:

• He recognized the need for massive organizational change to both Barclays’ operations and image
• He was bold enough to champion strategies with complex solutions
• He crafted a clear vision for his company’s new image and took large but achievable steps to reach it

A successful change management strategy isn’t only important for companies undergoing restructuring and other major organizational shifts, however. It can be essential for a less drastic change initiative as well, such as analyzing budgets and reassessing organizational spending habits.

When business tycoon Warren Buffet and Brazilian investment firm 3G took majority control of Heinz in 2013, for instance, they didn’t stop producing ketchup. Instead, they enacted a series of cost-cutting changes to raise their bottom line and increase their profitability. These included:⁶

• Selling the corporate jet and closing the aviation department
• Consolidating both corporate buildings into a singular headquarters
• Eliminating individual offices and having colleagues work together at communal tables
• Limiting the amount of business cards executives could print annually
• Hosting traveling employees in more budget-friendly accommodations

Perhaps these changes to company culture took some getting used to for executives, but they ultimately led to a leaner corporate structure. And, without having to shift sectors or alter production, Heinz was able to utilize change strategies to achieve its spending goals.⁷

Perhaps the biggest mistake an organization can make is thinking it doesn’t need a change management plan. Whether it’s restructuring, reassessing budgets, or other internal adjustments to prepare for the future, developing effective strategies to deal with change enables organizations to capitalize on its inevitability. 

Strategies for Effective Change Management

To utilize change management to steer an organization towards success, it’s key to craft a series of change management strategies. These strategies are best laid out in a change management plan, which can be crafted by:

• Identifying organizational goals – Whether it’s shifting industries, refining company culture to be more inclusive, or other equally significant objectives, lay them out clearly and concisely. Developing performance metrics to reference later can help organizations assess the effectiveness of their change management strategies.
• Employing strong leaders to communicate visions – A lack of faith in leadership is the primary factor fueling organizational resistance to change.⁸ To that end, it’s important to utilize strong, well-respected leaders at every level to convey and reinforce new strategies, policies, and visions for the change effort.
• Developing clear strategies and enabling employees to stick to them – With clear guidelines to follow, employees can help organizations achieve their goals. If you’re enacting budgetary changes, for instance, provide concrete figures for spending. If you’re revamping your Information Technology (IT) infrastructure, give firm deadlines for implementing new aspects of the system.
• Tracking progress and evaluating effectiveness – Some changes, such as increased sales, are easy to track. Others, such as higher employee satisfaction, are less material in nature. For more abstract changes, such as those to company culture or morale, having an industrial-organizational (IO) psychologist conduct assessment interviews or organizational studies can help gauge if changes are implemented to their desired effect.

The Connection Between Change Management and Organizational Psychology

Change management isn’t just the altering of business principles, bottom lines, and operations—it’s the process of shifting the way people work within an organization. While numbers and computer systems bend to our will, people are resilient, resolute, and, often, resistant to change.

Organizational psychology, however, can help businesses deal with internal resistance to change and sway staff opinions on emerging policies. In fact, the field has developed a myriad of techniques to deal with resistance to change initiatives, such as:⁹

• Prioritizing effective communication and openness during the change management process – Providing a well-defined future outlook can alleviate the fears of employees who are initially resistant to change. Provide staff with the rationale behind new changes, their proposed benefits, and any intended outcomes to help ease their concerns.
• Involving employees in the change process – Taking suggestions for new policies, holding open roundtable meetings, and generally including staff in the change management process empowers them, increasing their sense of control and ownership over their work. With staff steering some decisions and feeling more connected to your organization, there’s a lower likelihood of meeting resistance.  
• Equipping employees with new skills – Oftentimes, organizational members are resistant to change because they’re worried they won’t be able to excel in their newly structured environment. Providing training and development opportunities to help staff learn the skills they need to continue to thrive will alleviate much of their resistance to change management strategies. 

Organizational psychologists can help structure better change initiatives that meet less resistance by implementing these and other psychological principles. They’re key figures in developing modern change management theories and helping organizations structure successful change management plans. 

Preparing for a Career in Change Management

Careers in change management span a variety of roles in sectors such as business, government, the military, and education. They can also be extremely rewarding—especially for individuals who love seeing their plans come together right before their very eyes.

If you’re interested in pursuing a career in change management, a graduate degree in organizational psychology from Alliant International University can be an excellent launching pad.

The master’s degree program in organizational psychology (MAOP) at Alliant provides a critical look into the foundations of change management and other psychological concepts. The program combines informative lectures from our renowned faculty with experiential training.

For an even deeper look into the intricacies of change management, consider enrolling in our PhD in industrial and organizational psychology program. This program features compelling coursework and an interactive class structure where you can develop a diverse network of peers and professionals. 

Pursuing a master’s or PhD in organizational psychology can provide you with a better grasp of change management and other commercial and psychological concepts. It can also prepare you for a variety of exciting positions, such as those in:¹⁰

• Talent management
• Organizational development
• Training and development
• Human resource management
• Organizational leadership
• Diversity, equity, and inclusion initiatives

For more information about pursuing a career in change management, watch and read all about our programs in organizational psychology.

Sources: 

1. Sartori, Riccardo, Arianna Costantini, Andrea Ceschi, and Francesco Tommasi. “How Do You Manage Change in Organizations? Training, Development, Innovation, and Their Relationships.” Frontiers in psychology, March 15, 2018. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5890109/. Accessed October 24, 2023.
2. Braley, Nicole. “Council Post: Why Change Management Is the Most Critical Leadership Skill.” Forbes, November 9, 2022. https://www.forbes.com/sites/forbescommunicationscouncil/2021/11/19/why-change-management-is-the-most-critical-leadership-skill/?sh=36e576323f22. Accessed October 24, 2023.
3. “Change at Work Linked to Employee Stress, Distrust and Intent to Quit, New Survey Finds.” American Psychological Association. https://www.apa.org/news/press/releases/2017/05/employee-stress. Accessed October 24, 2023.
4. Bray, Chad. “Antony Jenkins Ousted as Barclays Chief Executive.” The New York Times, July 8, 2015. https://www.nytimes.com/2015/07/09/business/dealbook/antony-jenkins-to-step-down-as-barclays-chief-executive.html. Accessed October 24, 2023.
5. Bray, Chad. “Antony Jenkins Ousted as Barclays Chief Executive.” The New York Times, July 8, 2015. https://www.nytimes.com/2015/07/09/business/dealbook/antony-jenkins-to-step-down-as-barclays-chief-executive.html. Accessed October 24, 2023.
6. Varchaver, Nicholas. “No More Business Cards for You! Inside the New Heinz.” Fortune, September 18, 2013. https://fortune.com/2013/09/18/no-more-business-cards-for-you-inside-the-new-heinz/. Accessed October 24, 2023.
7. Varchaver, Nicholas. “No More Business Cards for You! Inside the New Heinz.” Fortune, September 18, 2013. https://fortune.com/2013/09/18/no-more-business-cards-for-you-inside-the-new-heinz/. Accessed October 24, 2023.
8. “Oak Engage’s Change Report.” Oak Engage. https://www.oak.com/media/c5llwb4v/oak-change-report-digital.pdf. Accessed October 23, 2023.
9. Singh, Razual. THE PSYCHOLOGY OF CHANGE MANAGEMENT”: STUDY THE PSYCHOLOGICAL FACTORS INFLUENCING EMPLOYEE REACTIONS TO ORGANIZATIONAL CHANGE INITIATIVES. IDENTIFY EFFECTIVE CHANGE MANAGEMENT STRATEGIES THAT CONSIDER INDIVIDUAL ATTITUDES AND BEHAVIOR: A REVIEW-BASED STUDY. https://www.researchgate.net/profile/Ruzual-Singh/publication/373049637_THE_PSYCHOLOGY_OF_CHANGE_MANAGEMENT_STUDY_THE_PSYCHOLOGICAL_FACTORS_INFLUENCING_EMPLOYEE_REACTIONS_TO_ORGANIZATIONAL_CHANGE_INITIATIVES_IDENTIFY_EFFECTIVE_CHANGE_MANAGEMENT_STRATEGIES_THAT_CONSIDER_IN/links/64d5fd7bb684851d3d9e8847/. Accessed October 24, 2023.
10. “MA in Organizational Psychology.” Alliant International University. Accessed October 24, 2023. https://www.alliant.edu/psychology/organizational-psychology/ma.

The content of this page is only for informational purposes and is not intended, expressly or by implication, as a guarantee of employment or salary, which vary based on many factors including but not limited to education, credentials, and experience. Alliant International University explicitly makes no representations or guarantees about the accuracy of the information provided by any prospective employer or any other website. Salary information available on the internet may not reflect the typical experience of Alliant graduates. Alliant does not guarantee that any graduate will be placed with a particular employer or in any specific employment position.