Change management in our VUCA world: definition, models & success factors

What is change management?

For many years now, organizations have been using change management to tackle necessary changes: This means changing processes, structures and cultures or even fundamentally transforming the entire company.

The Gabler Business Dictionary defines change management as:

“ongoing adaptation of corporate strategies and structures to changing conditions”.

However, given the fast pace of today’s world, the demand for change management has increased dramatically. Conditions for people, companies and the economy are changing ever faster: technical innovations are coming onto the market at ever shorter intervals, the complexity of the world is becoming greater and more confusing and globalization is increasing networking and intercultural cooperation. Added to this are the demographic changes that are transforming the labor market, economic crises and rapidly changing competition. There is always new territory to explore; the world is changing rapidly.

We cannot foresee today what changes we will face tomorrow. This unpredictability that characterizes our time has a name: VUCA. How change management is changing with VUCA is the topic of today’s blog post.

What is VUCA?

The term VUCA is originally a military term and was first used by the U.S. Army War College. VUCA is an acronym and describes rapidly changing conditions using the terms volatility, uncertainty, complexity and ambiguity. What does that mean?

VUCA– Volatility:

Volatile, changeable, fleeting, unsteady, rapid change

It is not possible to predict when a situation will change or in which direction; things that were previously stable can change, and drastic, disruptive changes are happening more and more frequently. Due to these rapid changes, it is impossible to predict which products a company will offer in the future and, as a result, who will be customers or competitors in the near future. This requires a high degree of innovation capability from organizations.
Here you can read more about how to bring innovation into your company.

VUCA-Uncertainty:

Uncertainty, unpredictable, no strategies available

Uncertainty means: surprises are to be expected. However, it is no longer possible to calculate whether a best case, a worst case or a completely new situation will occur. On the one hand, this requires management by sight rather than long-term strategies; on the other hand, it is important to keep abreast of trends and stay informed about possible developments in the future.
Here you can read more about trends and possible developments.

VUCA– Complexity:

Complexity, multi-options, networking, speed

Global networking, advancing digitalization and intercultural differences have turned economic cycles into complex entities. An action has effects in many directions and subject areas. Due to complex links, it is no longer possible to say exactly what action triggered what, what was the cause and what was the effect. Instead of moving linearly in one direction, it has become necessary to think in many directions and to change strategies at short notice, i.e. to manage your company in an agile way. This will also have an impact on the employees of the future – different skills will be required. We have dedicated several articles to the topic of agility:

Agile transformation in 22 steps: Definition, basics & tutorial

Agile as a trend: The emperor’s new agility

Agility: What makes an agile company? Definition & Backgrounds

Agile product development: what is it and how does it work?

VUCA – Ambiguity:

Ambiguity, simple explanations do not work, multifactorial, non-linear, confusing

If a situation is complex and involves a wide variety of circumstances that can change at any time, the associated information is also ambiguous and must be viewed from different perspectives. What worked in one situation (best practice) can go wrong the next time. It is no longer possible to clearly determine what existing facts mean for the future or what actions are to be taken on the basis of a factual situation. Communication about this is also more difficult, as there are very different, justified perspectives on the same situation; sometimes paradoxes arise, which means that a precise assessment of a situation is hardly possible.

The consequences of VUCA

Ultimately, VUCA means that companies must remain mindful and alert and be ready for change at all times; in other words, they must become a learning and changing organization. This is where change management and organizational development come in handy.

Read our blog article here:
How to create a value profile and use it to change your company

The development of change management

The origins of change management

Change management is rooted in organizational development and has its origins in the USA almost 100 years ago. It was further developed by Kurt Lewin in the 1940s. Lewin looked at which phases changes go through. In 1996, John Paul Kotter, Professor of Leadership Management at Harvard Business School, published his “Eight phases of change management”. In it, he shows what steps the management of a company can take to lead a change. We take a brief look at these basics and then consider how change management has evolved in the meantime.

Kurt Lewin’s 3-phase model

Lewin’s 3 phase model is a simple model that deals with social changes within a society and has great benefits for organizational development. It is, so to speak, the original theory of change management. As the name suggests, Lewin divided a change process into 3 stages.

Unfreezing: The thawing phase – loosening up

In this first phase, the need for change is identified. It is important to clearly communicate this need for change to everyone involved and to justify the change so that there is a willingness to change. This is where change is prepared so that “the system”, the organization, is soft and open to change.
Moving: The movement phase – Change

The actual change takes place here. It is usually accompanied by a drop in performance. If the preparation in phase one went well, the implementation of the change is easier.
Refreezing: The freezing phase – Stabilizing

The last of the phases is the adaptation phase. Routine should be built up through repetition and practice. The performance curve is rising again. However, there is a great danger of falling back into old patterns. It is important to check whether the changes have taken effect until they are fully integrated into everyday life.

The 8 phases of the change process according to John P. Kotter

Dr. John Paul Kotter found that 70% of the changes failed. As he discovered in the course of his research, the main reasons for this are resistance to change and relapsing into old patterns of behavior. In 1996, Dr. Kotter published his book Leading Change, which has since become a standard work in change management. In it, he presents his 8-step model, which he developed on the basis of the Lewin 3 Pasen model. He has since revised this model. We briefly present the current version here.

Create a sense of urgency

Raise awareness of the urgency of change in the company! Communicate risks and opportunities, appeal to reason and emotion!
Build guiding coalition

Build a leadership coalition that jointly leads and supports change!
Form Strategic Vision and Initiatives

Develop a vision and strategy!
Enlist a volunteer army

Organize as large a group of volunteers as possible who are ready and willing to work on the change!
Enable action by removing barriers

Remove obstacles, change structures and systems that jeopardize the achievement of your vision!
Generate Short Term Wins

Make short-term successes visible!
Sustain acceleration

Keep driving the change! Support employees who are implementing the vision, apply the new processes to new projects!
Institute Change

Anchoring changes in the corporate culture. Communicate the link between the change and the company’s successes.

Read our articles on agile leadership here

Agility: How agile project management & agile leadership work

Lateral leadership – tips for leadership without power

Change management yesterday and today:

How is change management changing?

From change to change management – change is also changing.

“Nothing is as constant as change”

Heraclitus of Ephesus, ca. 500 BC.

From a project with a beginning and an end to permanent change

Both models, Lewin’s and Kotter’s, assume that the change process has a beginning and an end. And that’s how it used to be, change management had a project character. They realized in their day-to-day work that something needed to be changed. This was turned into a project and this change project was completed at some point. The change was complete and the organization was able to continue working with the integrated change.

Today, things are different because the world has changed: Change is now something that takes place continuously.

In recent years, organizations have noticed that change has become increasingly necessary and that change management is therefore being used more and more frequently. The employees became restless because things were constantly changing, no stone was left unturned, one change process followed the next. – The world is changing in the direction of VUCA.

In the meantime, change management has also adapted to our VUCA world: In a world that is constantly changing, you can only survive if you are constantly adapting to change, in other words – if you can change yourself. In this respect, change is something that must be a permanent element in the company. Change management is no longer a project that begins and is completed at some point; rather, change must be integrated into normal processes. Today, change is the norm.

From a clear goal to a rough direction

In the past, a change process began with the formulation of a goal and ended with the achievement of that goal. However, as we now live in a VUCA world, a clear goal is quickly outdated and the world often looks completely different by the defined time. The environment and framework conditions are changing so quickly today that it simply makes no sense to define a target. What is needed is an attractive vision that shows the approximate direction and has a more emotional character.

We have to be flexible to react to changes in every business unit. Dieter Zetsche, CEO of Daimler AG, recently said in an interview with the FAZ that there will be fewer quantitative targets: “Five years ago, Audi and BMW were our benchmark. Today, we no longer operate in a traditional competitive environment. Many things are difficult to predict. As a consequence, the ability to do things that are not in the business plan must be developed.”

Formerly top down, today with all employees

The world used to be a lot clearer. Top management knew what the right direction was and how a change should take place. In this respect, the change could take place top down: The management set clear guidelines that the employees had to implement.

Today, the world is much more complex: you can no longer see the details from above, nor can you control them. It is therefore important for Changes to organize its company in such a way that each employee can act independently and autonomously. Organizations need employees who think along with them and make the changes appropriate for their area.

For example, the vision could be “No. 1 in customer orientation”, but the path could look different not only in every country but even in every region, because customer needs are different. Employees would be given a framework for action, for example a budget and the general direction of change. How these are structured could then be discussed and decided by the employees in each region.

Read our article here:
Change Manager: Leading change successfully – definition, background, tips

Trends in change management

It is already apparent that a new awareness of change management has developed in companies. No company can afford to ignore the need for change. Because it is no longer about earning more money or saving costs through change; it is about keeping your company alive. Grow or blow – because if you don’t move with the times, you move with the times.
Change projects used to be driven by hard facts: for example, you needed a new program or a new network. Today, we know that soft facts are essential for change: People need to be involved in change. If it is ignored, this can block or even completely prevent change. In many companies, change management is therefore already strongly integrated into project management.
The third trend in change management is the increased willingness to invest: companies have become aware that they need to make resources such as time, money and manpower available for good change management. After all, if change only happens on the side, projects can fail.
Another trend is towards the development of change management skills: on the one hand, this means that organizations have internal change managers and, on the other, that change competence is integrated into the core competencies of management. Managers are now increasingly being selected on the basis of their ability to shape change.

A little anecdote: I was at Google and asked: “How do you as an HR department shape change management in the company?” The HR manager looked at me a little puzzled and said: “We don’t need change management. Change management is the norm for us and every manager is a change manager, because that is their job every day. This means that nothing more is needed from outside, we are a change organization.”

The 10 success factors of change management in times of VUCA

You are probably wondering how you can integrate permanent change into your company in times of VUCA and what you can do specifically to achieve this. We have listed the 10 basic success factors for you here:

1. create an attractive, emotional vision!

We have already said above that targets no longer work. This means, for example, that a one-year business plan whose final result has already been determined no longer works. What you need instead is an appealing vision, i.e. an emotionally charged image that points the people in your company in the right direction. Examples of this: “We are the best in service” or “We are the most attractive employer in the region”. Sure, that’s a bit vague – and it can’t be measured either. Nevertheless, such a mission statement attracts people, motivates them and provides clarity: “This is the direction we need to go!”. Employees may decide for themselves on a day-to-day basis in their own area. The vision provides orientation and if something needs to be changed, employees can use their scope for action.

2. provide internal and external resources!

You need resources for a change organization. Change does not happen by chance – it needs people who shape it and drive it forward, who focus on change. Half-hearted change is detrimental to your company! This makes them untrustworthy and makes further changes more difficult. Ideally, you provide external and internal resources. These can be external consultants, for example, who bring experience to the table and broaden your perspective with an objective view from the outside. Internally, it is advisable to release people for the change so that they can concentrate on it and manage the change from within. It doesn’t always have to be a complete leave of absence, but your employee must have resources available for it. What doesn’t work: Entrusting either external consultants or internal employees with the change, because you need a combination of both.

3. ensure support from top management!

Your change is doomed to failure if the leadership, i.e. top management, ignores it or sends other messages, if the leadership does not support it or even torpedoes the change. You can forget about a change that is managed exclusively by the HR department – you’re wasting your good money. Therefore: Make sure that top management and change management are pulling in the same direction; that both communicate to the outside world at all times that they are fully behind the change and support it to the best of their ability.

4 Communicate openly, make the change transparent!

Change causes uncertainty. It scares people to leave their familiar paths. It is therefore very important that you communicate openly at all times. Choose carefully when you speak to the entire workforce and how you do it. Think about what messages you want to get across to your employees and how managers can convey these messages. The top priority is the greatest possible openness in order to give people in the company orientation and security.

5 Involve every employee and give them room for maneuver!

If you want change to actually happen in your company, if you want your company to really develop in the desired direction, then you need the support of all employees. This means that you should involve every employee. An employee who is left out will at best ignore the change, but is more likely to resist it. It is therefore extremely important to involve everyone and to apply the well-known slogan “Turn those affected into participants”. Go further than that: make those affected responsible. Let your employees shape the change in their area themselves. Don’t give orders from above, but allow freedom of choice. You need mechanisms that allow your employees to take ownership of the change, to be passionate about it.

6. make sure that all managers take responsibility!

For a change to succeed, all your managers must take responsibility for it. Everyone should have the topic of change on their agenda: Even the project manager in production should have the will and awareness to help shape it. It is not enough for Human Resources employees or external consultants to initiate change. All managers must be involved and act as change managers themselves. There are certain methods to achieve this.

7. plan opportunities for exchange!

The vision and the associated changes must remain in focus and must not disappear again. This means that employees must be able to exchange information on these topics on an ongoing basis. Even when hard facts are changed, for example when a new program is put into operation or a new process is started, the soft facts are affected: People in the company have values and feelings about this and behave accordingly. These soft factors can only change if your employees can communicate about them. So if you are planning a change, then include opportunities for communication in your plans!

8. give room to emerging resistance and use it for change!

The exchange among your employees should not only – but must – deal with the resistance that arises. Change scares people because they leave their security behind and there is no way of knowing what lies ahead. They often develop an unwillingness to accept new things because it is naturally much more comfortable to continue doing things the way they have always been done. In order to deal with these fears and resistance, it is necessary to put them on the table. You should make room for this – and handle it with understanding: Offer your employees a platform where they can express themselves and be understood! At the same time, there also needs to be clarity that the change is necessary and will be implemented. This balance is the trick: stick to the change and still allow resistance to it. Your employees may come up with useful ideas on how to make the change even better.

9. put your faith in the right people!

When we tackle change, we can expect around 10% of those affected to turn out to be notorious complainers and resistors. This in no way refers to the natural resistance just mentioned. Rather, they are people who demonize change with a lot of verve, take up a lot of space and block it, which tends to harm change. On the other hand, there are around 10% of the workforce who are quick on the draw, who find new things exciting, are enthusiastic about them and set the right tone straight away.
In between, rather restrained: A large group of employees who are taking a wait-and-see approach. – Is this just another sow being driven through the village or is it possibly a measure that really makes sense? These employees take a close look at the 10% on both sides. Depending on what they experience, they decide which direction to take.
How do you deal with these trends?
Don’t worry about the people who are notorious whiners! While you should accept their resistance, it is better to focus the majority of your resources on those who are at the forefront. Create forums, amenities and design options for your enthusiastic employees! Show your company that it is worth focusing on change. Highlight the people who are successful in change! Do not spend more time on the doubters than on the others! Here, too, the right balance is required: concerns should be listened to, but the focus must be on welcoming the change with joy.

10. keep the change alive!

With every type of change, there is a phase of euphoria and optimism at the beginning. But once the initial enthusiasm has faded, it often becomes exhausting. How easy it would be now to return to the familiar waters. Now we need time and patience to continue the change we have started and keep it alive. Stay persistent! Focus on change dynamics as a permanent quality of the company. Check the direction regularly and steer the change towards the current version. Be consistent. Don’t give people a chance to fall back into old behaviors: Switch off old programs and make old processes impossible. They can do this easily if they assign one person exclusively to drive the change.

How to prevent change

Here is a fun video in which Prof. Dr. Peter Kruse explains the “8 rules for total standstill” for companies. These are very funny methods – have fun!

Are you interested in the topics of change management, leadership and VUCA? Talk to us!

www.berlinerteam.de