If an organization is to survive and remain competitive, there will be times when things will have to change. Organizations are made up of people. It therefore follows that the people side of change, which is the most challenging and critical, will need to be managed.

There are two general sides of change management. The technical side, also known as the hard side, is complex. For instance, during a merger or acquisition, the hard side will involve financial arrangements, integration of business systems, and physical arrangements of the newly formed organization.

The people side, also known as the soft side, will involve bringing people on board and getting them to participate in the change. This is what makes the difference. Individuals will have to do their jobs differently, and it is the degree to which they change their behaviors and processes that will make or break change. The soft side of change is many times actually the harder side of change.

But what is change management, anyway?

Change management takes care of the people side of change. It does little good to create a new organization, design new work processes or implement new technologies if you leave the people behind. The financial success of these changes will be more dependent on how individuals in the organization embrace the change than how well you draw organization charts or process diagrams.

Change management is the process, tools and techniques to manage the people side of change to achieve its required business outcomes. It is the systematic management of employee engagement and adoption when the organization changes how work will be done. Ultimately, change management focuses on how to help employees embrace, adopt and utilize a change in their day-to-day work.

Change management is not just communication or training. It is not just managing resistance. Effective change management follows a structured process and uses a holistic set of tools to drive successful individual and organizational change.

Change management is both a process and a competency:

The change management process

From a process perspective, change management is the set of steps followed by a team member on a particular project or initiative. For the given transformational effort, it is the strategy and set of plans focused on moving people through the change. The process involves three main phases: preparing for change, managing change, and reinforcing change.

Change management competency

Change competency is a leader or manager’s ability to effectively lead their people through change. This will depend on the leader’s relationship to change. For senior leaders, change management competency means being an effective sponsor of change and demonstrating their own as well as the organization’s commitment to the change. For frontline supervisors, competency is related to coaching direct reports through their own change journey. While competency varies depending on one’s relationship to change, organizations are more effective and successful when they build change management competencies throughout their ranks.

The cost of poorly managing change

There are countless consequences of ignoring the people side of a change. If change is not managed effectively, productivity will decline among more people for a longer duration than necessary. Suppliers will feel the impact and sense the disruption caused by the change. Customers will be negatively affected. Employees will lose motivation, and there is the possibility of different camps forming within the organization. Valued employees will leave the organization.

Because of missed deadlines and overrun budgets as well as the work required to get the project back on track, projects will suffer or be completely abandoned.

To implement effective change management, both an individual perspective and an organizational perspective are required. Individual change management is an understanding of how people experience change. Change is successful once an individual has an awareness of the need for change, desires to participate in the change, knows how to change, can implement the required skills and behaviors, and can access reinforcement that will sustain the change. Organizational change management involves targeted organizational plans that outline the process and activities used by teams to support successful individual change.

In reality, while the people side of change is referred to as the soft side of change; it is actually the harder side of change. Investing the time and energy to manage the people side of your organizational efforts pays off in the end – in terms of success of the effort and avoidance of the numerous costs that plague poorly managed change.