Overcoming resistance to change and ensuring effective change management in business transitions

If your business is going to stay relevant in an increasingly evolving, advancing and competitive world, it has to be able to adapt to new ways of doing things. Agility is nothing short of critical. Despite this, the majority of efforts to introduce organisational transformation fail (an often-quoted statistic places this failure rate as high as 70%), mostly because of internal resistance to change. How can you overcome this resistance and implement change management solutions that really work?

According to Julian Shaw, Senior Enterprise Planning Consultant at Tahola, resistance to change doesn’t always manifest as outright opposition to a new way of doing things. “Often, there is simply apathy to change,” he explains. “Quite a lot of the time, people in business simply say, ‘I’m used to this. It’s how we’ve always done it. It works fine.’ The idea of investing in new solutions feels too onerous in terms of money, time and effort, and as a result, things stay the same.”

This shoulder-shrugging acceptance of the status quo may seem benign, but it can be as detrimental to your business as openly refusing to implement beneficial changes. Being able to identify the need for transformation — and acting on it — can be the very thing that sets your business apart from the rest and ensures its long-term success.

Why do people experience resistance to change?

The psychology of resistance to change is a widely studied field, but the research in it often comes to similar conclusions. By and large, studies suggest, there are several key reasons why employees push back against change. Are you experiencing one or more of the following?

Fear of redundancy

“If people feel that they’re in danger of losing their positions, there will inevitably be resistance to change,” Julian says. “In the era of automation, AI and ML — which is rapidly affecting almost every role in every industry — this fear has been exacerbated.”

There is some truth to these fears, and they shouldn’t be dismissed or undermined. A study by PwC estimates that 3% of jobs will likely be automated during the early 2020s, but that this will jump to 30% by the mid-2030s. People know this, and if their business is introducing new automated systems and processes, fear and resistance will be inevitable consequences.

But the businesses that will succeed in an increasingly AI-focused world are those that will use AI to automate mundane, repetitive and time-consuming tasks, and to reallocate human beings to roles that make better use of their skills and abilities, and have a material impact on the success and sustainability of their business. Communicating this transition is critical, which brings us to…

Poor communication

Failing to properly communicate not only what changes are happening, but why they’re happening is one of the most important contributing factors to resistance to change. “In our line of work, we often hear people say, ‘I’ve heard rumours that we’re implementing something new, but I know nothing about it’,” adds Julian. “This creates a breeding ground for resistance.”

If employees aren’t engaged from the very beginning and if the advantages aren’t clearly and openly communicated to them, they’re likely to feel disempowered, suspicious, and resentful of new processes.

Ineffective leadership

This issue is closely tied to poor communication. While it may seem obvious, studies have explored how fair communication and interactions strengthens the relationship between employees and their leaders. If these relationships are defined by a lack of communication, and unfair interactions, on the other hand, the chance of securing buy-in to business changes is greatly reduced.

The relationship between employees and line managers is particularly important here, since employees often see their direct superior as representative of the entire organisation. Strong leadership needs to be present at every tier, in other words, or else the chain starts to collapse and resistance to change gains momentum.

Faith in existing systems

On a more practical level, people who think their existing systems work well are less likely to be interested in alternative ways of doing things. In financial management systems and processes, Excel has established its position as one of the most widely used tools. While powerful, however, Excel is not without its limitations. It is static, uncollaborative, susceptible to human error, and fails to deliver a single version of the truth. It isn’t fit for purpose. And yet people believe in it — almost blindly.

EPM solution Jedox understands this, which is why it incorporates all the advantages of Cloud software, while still using an Excel-style interface that users will recognise. Pointing out the shortcomings of existing processes (through good communication and strong leadership), and proposing an intuitive, viable, and easy-to-use alternative should be part of any effective change management solution.

How to introduce change management solutions that work

It all starts with a change management plan or data strategy, one that considers the likelihood of employees being averse to change and incorporates strategies for overcoming resistance. (Looking for tips on drawing one up? We’ve got you covered.) If you’re prepared to counteract this resistance, whether active or apathetic, you have a higher chance of dealing with it properly.

Create enthusiasm for a better way of doing things

Until employees know better, a product is a product is a product. And it can often be difficult for them to get excited about yet another piece of software being added to their tool stack.

“Instead of focusing on the product itself, try to communicate and demonstrate what the product can do,” says Julian. “Is it going to save your employees hours of wasted time, for example? Is it likely to boost their productivity? Is it solving a pain point — about collaboration or version control, maybe — that has been bothering them for ages? Show that you’re aware of their frustrations, and that you’re actively finding solutions for them.”

Reinforce your leadership tiers

Yes, senior leadership has to drive change management efforts. But this also has to filter down through every level. If a new financial management platform has the CFO’s approval, that’s great, but it must be endorsed by the FD, and by every manager and supervisor beneath them, too. You need champions at all levels — even at the coalface.

Actively targeting your naysayers falls into this approach. Give those who are vocal about their misgivings access to your new chosen platform, and allow them to experiment with it. If you’ve done your due diligence, and your new solution is as powerful as you say it is, you could turn your naysayers into evangelists — and that’s enormously powerful. In these situations, employees aren’t only hearing the praises of the new tool through their leaders, but through their colleagues, too.

Make communication a two-way street

Yes, clear and lucid communication is critical. But as you communicate changes to your employees, be sure that you’re simultaneously gathering their feedback. This will help you to monitor employee buy-in as it unfolds, and perhaps more importantly, pre-empt and address any concerns or criticisms that emerge in the early days of your transition.

The bottom line

Encountering resistance to change is an inevitability — every business comes up against it as they seek to evolve and grow. By understanding this, taking measures to counteract it, and making sure that you create a supportive change management environment, your transformation efforts are likely to succeed.

For any help you need along the way, there’s always Tahola. Contact us today for advice on solutions, like Jedox, that can improve your financial planning processes, and support on implementing them effectively.