Change management is a discipline that puts a set of processes and tools to handle the change. Management and leadership organizations today are faced with the rapid pace of change. While accepting this reality and a willingness to change, it is important to be able to predict and manage the risks associated with implementing the change.
What does Change Management Involve
Before we broach the topic of risks, let us understand briefly what the change management process entails. In the corporate setup, change management is initiated to deal with either an evolutionary or a revolutionary change.
* Evolutionary change is a gradual process often managed well due to lack of pressing timelines, for example, a culture shift in an organization.
* Revolutionary change, on the other hand, has to be implemented in a shorter time frame and is usually a one-time effort. This requires people and processes to adapt quickly.
If a company has been through a merger or acquisition exercise, the smaller organizations usually have to quickly scale up to the parent organization's processes. Both types of changes involve overcoming several barriers to change when it comes to their implementation.
If change barriers are not predicted and overcome in a timely manner in preparation for change implementation, it is certainly going to pose some risks and challenges during what is commonly called the "go-live" phase. While each project or program has a different set of attributes resulting in different risk factors, we can derive certain commonalities among them.
We can broadly categorize two types of risks: risks from a cost perspective and other, let's call them "intangible" risks, for want of a better word. You will find several more categories of risks that experts in project management have formulated, however, let us restrict our scope of this article to just these two very broad categories.
Before we broach the topic of risks, let us understand briefly what the change management process entails. In the corporate setup, change management is initiated to deal with either an evolutionary or a revolutionary change.
* Evolutionary change is a gradual process often managed well due to lack of pressing timelines, for example, a culture shift in an organization.
* Revolutionary change, on the other hand, has to be implemented in a shorter time frame and is usually a one-time effort. This requires people and processes to adapt quickly.
If a company has been through a merger or acquisition exercise, the smaller organizations usually have to quickly scale up to the parent organization's processes. Both types of changes involve overcoming several barriers to change when it comes to their implementation.
If change barriers are not predicted and overcome in a timely manner in preparation for change implementation, it is certainly going to pose some risks and challenges during what is commonly called the "go-live" phase. While each project or program has a different set of attributes resulting in different risk factors, we can derive certain commonalities among them.
We can broadly categorize two types of risks: risks from a cost perspective and other, let's call them "intangible" risks, for want of a better word. You will find several more categories of risks that experts in project management have formulated, however, let us restrict our scope of this article to just these two very broad categories.
Typical Risk Factors
The risk usually cost as follows:
* The delay in achieving the milestones and scheduling goals because of a lack of resources and/or as a result of incorrect timeline estimates
* Budget overruns
* The cost of rework due to lack of communication between the implementation teams or due to some unexpected challenges that appear along the way (and this is especially true for new projects where there was a previous Executive experience, etc.)
* Costs arising from new technology, upgrade technology, or because of a change in regulatory requirements (such as a change in government policy, etc.)
* The costs resulting from the lack of funds and/or human resources (this would include staff attrition, lack of skills on the implementation team, etc).
Other hazards which do not directly lead to the risk of costs would be as follows:
* Resistance to change: the smallest change is known to provide at least a small amount of stress to people. From the perspective of organizational change, resistance to change can be active and passive workers alike. Hostility is a general feeling that needs to dealt with a very sensitive way. For example, layoffs inflate the enormous hostility. It raises feelings that would have a direct impact on the decline, but also the results not only in the power struggle within the implementation teams. While timely, frequent contact and transparent and accurate is the key to this kind of risk, at the end of the day after all the efforts, it is still a real danger.
* Project frozen or abandoned altogether: these are the main risks that proved to be widely prevalent during difficult economic conditions such as recession and currency depreciation. No doubt about it always affects costs as staff morale.
* Project fails to deliver results: imagine if the change has been implemented and has spent millions of dollars, and resistance to change has been handled and dealt with most of the other risk factors. It appears the project has been implemented successfully, but does not seem to be delivering results as expected. Not realized the potential benefits, and everyone is just wondering what was wrong.
Managing Risks during Change Implementation
An effective way to manage the risks mentioned above is to prepare for change implementation in advance and approach it in a systematic fashion. An important activity in risk management is Risk Assessment and Impact Analysis.
Risk Matrix: The diagram below is a representation of this standard exercise.
Risk Matrix
Probability Axis: It is a very simple process where the "Probability axis" denotes the probability of each identified risk. For this, you need to first enlist each risk (refer to the ones listed above) to the smallest detail possible and predict the probability of its occurrence. Now, this would naturally take a lot of experience and expertise but it would be time well spent.
Impact Axis: Next on the vertical "Impact Axis", assign a percentage of impact, in the event that the risk does occur. At the end of this plotting, you would obviously want to focus on the 'red quadrant' on priority. In short, you want to first manage the risks that have a high likelihood of occurring and in the event that they do occur, the change implementation would be affected to a great extent.
Please note that the above risk matrix is not a do-it-once exercise. The matrix should be revisited at regular intervals of change implementation and the risk factors must be reviewed to see if they still exist or need to be moved to a different quadrant. This kind of periodic review will ensure better risk management. Taking timely action on projected risks will ensure greater success of the change implementation process.
An effective way to manage the risks mentioned above is to prepare for change implementation in advance and approach it in a systematic fashion. An important activity in risk management is Risk Assessment and Impact Analysis.
Risk Matrix: The diagram below is a representation of this standard exercise.
Risk Matrix
Probability Axis: It is a very simple process where the "Probability axis" denotes the probability of each identified risk. For this, you need to first enlist each risk (refer to the ones listed above) to the smallest detail possible and predict the probability of its occurrence. Now, this would naturally take a lot of experience and expertise but it would be time well spent.
Impact Axis: Next on the vertical "Impact Axis", assign a percentage of impact, in the event that the risk does occur. At the end of this plotting, you would obviously want to focus on the 'red quadrant' on priority. In short, you want to first manage the risks that have a high likelihood of occurring and in the event that they do occur, the change implementation would be affected to a great extent.
Please note that the above risk matrix is not a do-it-once exercise. The matrix should be revisited at regular intervals of change implementation and the risk factors must be reviewed to see if they still exist or need to be moved to a different quadrant. This kind of periodic review will ensure better risk management. Taking timely action on projected risks will ensure greater success of the change implementation process.
Change management process and associated risks and dangers largely differ from one organization to another, and project to project. Can offer a laundry list of risks and risk management solutions for the same reason. It needs to be placed in each scenario. However, to ensure a systematic approach to risk management through identification, assessment and analysis of each challenge during implementation of change management, make it nightmarish experience for all stakeholders. Hope scope article here asserts the fact that successful change management application as a result of a comprehensive process to recognize and mitigate risks throughout the life cycle of change.
Modifying or changin in any business method and associated risks and dangers for the most part dissent from one organization to a different, and project to project. offers a laundry list of risks and risk management solutions for constant reason.Thank you for sharing your info.
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