Change management: what it is and its importance for companies

Transformation Guide

We often hear about Change Management, but what does it really mean? Let's clarify.

Change management, or the ability to manage change, has become an indispensable element for organizations operating in an environment characterized by volatility, uncertainty, complexity and ambiguity, known as the VUCA environment. In this scenario, the rapidity with which the market and technologies evolve forces companies to continually review their operating model, adopting innovative and transformative methodologies to remain competitive.

Change management comprises a set of activities and tools aimed at introducing a structured approach to change, simultaneously intervening in people, organizational models, processes, and technologies. The main objective is to achieve successful transformations, based on the assumption that the real driver of change is not the corporate structures, but the people involved. Only by changing the behavior, habits, and mindset of individuals can change be translated to the organizational level.

Change management: a structured approach to business transformation

In business contexts, change projects often involve:

  • Reorganization of corporate structure as a result of mergers or acquisitions
  • Introduction of new management software
  • Process redesign in Lean optics
  • Launching digital transformations in key Industry 4.0

In all of these cases, successful change depends on the organization's ability to step out of its "comfort zone" and embrace new opportunities, even if it means tackling uncharted territory, often perceived as threatening or challenging.

One of the central aspects of change management is thebalance between soft and hard levers. Soft levers include intangible factors such as:

  • Corporate culture: A shared environment that promotes openness to change.
  • Leadership: The ability of leaders to inspire and guide staff through the change process.
  • Rationale: The commitment and willingness of employees to adapt and contribute to change.

These elements, although difficult to measure, are crucial to creating a climate conducive to change.
Without a shared culture and effective leadership, even the best strategies are likely to fail. On the other hand, Hard levers represent the measurable and tangible aspects, including:

  • Timing: precise indications of the time required to complete the change.
  • Resource allocation: Planning and distribution of resources needed for the initiative.
  • Financial goals: Setting clear and measurable business objectives related to change.

Only the integration of these two aspects - the emotional side and the rational side - enables the development of a truly effective change management strategy.

Change management should be a structured path to guide the company toward change. Based on our experience, we have developed a four-step approach to achieve sustainable transformation.

The first two stages of organizational change: from awareness to preparedness

The first phase, called "Awareness", represents the moment when the organization recognizes the need for change. This awareness may emerge from a current problem, such as a decline in sales, or from future forecasts, such as the entry of a new competitor into the market. At this stage, the recognition of the problem generates a tension and sense of urgency, essential elements for mobilizing the entire corporate structure. Methodologies such as the Best Practice Tour, also known as Kaikaku, which allows managers to observe on the ground the achievements of other companies already engaged in transformation paths. In addition, Hoshin Kanri, an approach that translates strategic goals into operational actions at different hierarchical levels, is used.

The second phase, "Preparation", focuses on defining the change roadmap and implementing an effective communication process. At this stage, it is critical to develop a clear project vision and a detailed transformation plan, including the definition of a "view to be"-that is, a desired future scenario-and the Creation of a Roadmap that establishes specific milestones and goals.

In addition, key roles are identified and Change Agents, crucial figures who will lead and support the process, are selected. Communication becomes a strategic tool: a well-defined plan and the creation of a "Journal of Transformation" enable the transfer of commitment to all stakeholders, strengthening motivation and dispelling doubts and resistance. It is also important to train and prepare managers and change agents, ensuring that they have the necessary skills to manage the process effectively.

The successive stages of organizational change: from transformation to sustainability

The third phase, "Transformation", represents the operational core of change and is divided into two distinct steps: organization and action. During the organizing phase, the coordination mechanisms and structures needed to connect the different levels of the company are defined. The goal is to create collective involvement toward the new goals and to establish clear procedures for escalation and resolution of problems that may arise during the process.

Once the organization is complete, it moves to the action step, characterized by Lean principles. At this stage, the Lean approach manifests itself in the continuous search for inefficiencies and waste to eliminate. This is done through the adoption of new organizational and managerial routines, the implementation of control systems such as Job and RACI, and the activation of training activities such as mentoring, coaching and team coaching. These problem-solving-focused actions are key to ensuring that change translates into concrete and measurable improvements.

The fourth and final stage, "Sustainability", aims to consolidate change and ensure that the results achieved are maintained over time. At this stage, the focus is on continuous skill development through a structured education training plan, which, together with rewarding mechanisms, reinforces individuals' confidence in the path taken.

Another key tool is widespread auditing at every level of the organization, which allows for continuous monitoring of transformation processes and leading them toward continuous improvement. Among the activities implemented to ensure sustainability are the extension of training to other departments or company locations, the adoption of Leader Standard Work, the selection and implementation of digital solutions, and the activation of celebration and rewarding mechanisms. Also the Best Practice Tour and the Study Tour fall under this umbrella, fostering the sharing of positive experiences and mutual learning among different businesses.

The success of change management

The real success of a change management journey is based on a systemic and integrated approach, combining the side "soft"-related to relationships, culture and motivation-with the "hard" side, which is concerned with the measurable and operational aspects of change. In an ever-changing environment, only companies that are able to adopt methodologies that consider both of these aspects are able to maintain their competitiveness and adapt to new market dynamics.

Another crucial element is the importance of training and continuing education. Change management should not be seen as a temporary intervention to solve a critical issue, but as a Deep transformation process that requires a sustained commitment over time. The implementation of training, mentoring and coaching programs, along with auditing and rewarding systems, is the key to ensuring that newly acquired skills are consolidated and that change becomes an integral part of the corporate culture.

In this context, the business consulting plays a key role, as it provides the skills and strategies needed to guide organizations through the change process. Investing in ongoing training and employee support not only facilitates the adoption of new practices, but also promotes a positive and motivating work environment, where staff feel valued and involved in the change process. In this way, companies can meet future challenges with greater resilience and determination.

Change management as an engine for growth and continuous improvement

The four-step approach-Awareness, Preparedness, Transformation and Sustainability-helps address the change in a structured way, involving all components of the organization and creating an environment conducive to innovation. Through the use of specific tools, proven methodologies and the support of experts in the field, change management is transformed not only into a response to market challenges, but into a real engine for growth and continuous improvement.

Only through shared commitment and a willingness to constantly renew themselves can organizations meet the challenges of the VUCA era and turn uncertainties into opportunities for development. In this context, consulting management plays a crucial role, providing the skills needed to drive change effectively.

To explore these issues further, we invite you to view the background paper prepared by Bonfiglioli Consulting.