Change Management is a vague concept. It has been around for about fifty years, but there it lacks an 100 percent agreed upon definition. A cynic would say it’s almost like people built an entire industry without fully understanding what it is they were claiming to do. John Kotter, who popularized the term, originally considered it an 8-step linear process. PROSCI, the largest and most well known change management firm, defined it as “the discipline that guides how we prepare, equip and support individuals to successfully adopt change in order to drive organizational success and outcomes.”
These are partially correct, but holistically wrong. Change Management is just the tactical implementation of strategy.
Constant change is the new norm
Change is implicit in nearly every single business strategy because technology and globalization are upending nearly every single industry. Taxi Medallions were a safe investment for fifty years; today banks essentially refuse to finance them. Microsoft’s inpenetrable OS monopoly is increasingly devalued. The lifespan of a Fortune 500 company is shorter than it ever was. The public sector isn’t immune either. ISIS and other non-state actors are using modern technologies to actively compete–and win–against modern nation states. This was unthinkable twenty years ago. To stay alive, organizations and governments have to change course in the time it used to take to approve a press release.
Change Management = Strategy
To understand why change management is just the implementation of strategy, you need to understand the difference between strategy and implementation. Germany, Norway, France, Sweden, and Finland all decided that the best strategy to build a modern economy was to foster an environment of entrepreneurism and innovation. They’ve implemented this strategy by offering free college education mixed with classical liberal economic policies–creating a generation of educated and debt free entrepreneurs. (From a change management perspective it will be interesting to investigate what additional practical policies they did to both fund and communicate the change.) After decades of languishing behind American innovators, Europe is catching up. Stockholm now has 6.3 billion dollar companies per million people. That’s good for second in the world.
The key word in that last paragraph was implementation.
Creating a strategy to deal with the new reality is the fun part of the business equation. It’s what every MBA student dreams of doing. Unfortunately it may be easier to get 100 strangers to agree on dinner than to successfully implement a strategy. Take traditional retail. It’s common knowledge that major retail chains are struggling. More and more people are shopping online and the 2015 Holiday season was the worst in five years. Traditional retailers are responding by investing in personalized smartphone apps, betting on outlet stores, or selling shopping “experiences”.
You can make a coherent argument for any of the three strategies:
- Invest in personalized smartphone apps
- 92% of purchases are still done at actual stores; redefine what in-person shopping means with personal apps
- Bet on outlet stores
- Aggregate demand is dropping; target a more budget conscious demographic
- Sell shopping “experiences”
- Income inequality is rising; target the affluent who will pay for an experience
None of them will work if they aren’t implemented correctly. All of them involve change: change of business processes (who is responsible for what), change of training, change of supply chain, change of IT, change of mindsets. In order for the strategy to work change needs to happen.
That’s why change management is just the tactical implementation of strategy.
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