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Frequency Of Change Hitting Corporate America's Bottom Line

Companies Need to Build Employees' Change Capability to Avoid Productivity Declines, Says CEB

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News provided by

CEB

Mar 29, 2016, 08:00 ET

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ARLINGTON, Va., March 29, 2016 /PRNewswire/ -- Organizations may be underestimating the penalty that just one change can have on their bottom line, according to CEB (NYSE: CEB), a best practice insight and technology company. The company has found that employees who are stressed by change are five percent less productive, costing the average organization $32.5 million per $1 billion in revenue.

The amount of organizational change has increased dramatically over the last few years. Last year, employees worldwide experienced on average three major changes (acquisitions, new product development, restructuring, etc.), compared to nearly half that just three years ago. And unfortunately, despite having more practice, most organizations fail to implement change effectively. In fact, only one-third of change efforts are clear successes.

"Change truly is the only constant in business today," said Dorian Cundick, executive advisor, CEB. "An organization's ability to achieve the goals of their change initiatives is critical to their overall success, especially as we expect to see an increase in the frequency of change across the next three years. Employees' ability to quickly adapt to change is crucial to the success of transformative objectives, and organizations need to pay closer attention to how they enable their workforce to process and implement change."

Commitment Counts, But Only So Much

Most companies focus on one-off, individual responses to organizational changes. They use communications to create employee commitment to each new initiative by sharing rationale and context, building a business case for the change. While these efforts can improve employees' attitudes about the change, they don't minimize the disruption on roles, teams and objectives.

The companies that have the most success with transformation build their employees' capability to manage through today's continuous state of change. Increasing employee ability to perform through change has over three times as much positive impact on performance as increasing commitment alone.

"There are plenty of employees who are highly committed and throw themselves into their work, but despite how hard they work, they don't see results," added Cundick. "This understandably creates stress, which ultimately worsens performance. Employees who are both committed to their work and are capable of managing through change are those that will help organizations achieve success during transformation."

To increase employee capability and sustain performance through change, organizations should focus on:

  • Ensuring the availability of tools, information and people – After change occurs, employees need resources to help them construct a new understanding of their job. Leaders can make this easier by developing specific tools and training and directing employees to them, promoting sharing across peers, and monitoring progress and course-correcting when needed.
  • Increasing employee self-confidence – Although some people are naturally more confident than others, self-confidence is teachable. By reminding employees of past achievements and sharing and promoting peer progress and success, leaders can build employees' assurance.

For more information on how to build employees' change capability, visit CEB.

About CEB

CEB is a best practice insight and technology company. In partnership with leading organizations around the globe, we develop innovative solutions to drive corporate performance. CEB equips leaders at more than 10,000 companies with the intelligence to effectively manage talent, customers, and operations. CEB is a trusted partner to nearly 90% of the Fortune 500 and FTSE 100, and more than 70% of the Dow Jones Asian Titans. More at cebglobal.com.

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SOURCE CEB

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http://www.cebglobal.com

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