Nowadays, it is common for finance departments in many organizations to undergo change. On one hand, emerging technology is driving fundamental changes – for example, process automation through robotics, machine learning, and artificial intelligence. On the other hand, finance organizations now create shared service centers and centers of excellence, bundling several processes for efficiency and effectiveness. Through this, internal customers within finance organizations have increased expectations from finance teams to create more business value, challenge the status quo, and co-drive innovation.
Why change management is more important than ever
Why is change management so important in finance? Because even a change that begins with the most positive intentions can happen in a way that could have a negative impact on employee engagement. And if employee engagement is decreasing, it can impact the organization’s productivity.
By default, employees are usually resistant to change and transformation. Most people are risk-averse by nature because change means giving up habits, which creates uncertainty for the future.
Therefore, almost all types of change initially create resistance – and this applies to most projects and initiatives. Dr. Ken Hultman (1995) defines resistance as “a state of mind reflecting unwillingness or unreceptiveness to change in the ways people think and behave.” Andrzej Huczynski and David Buchanan (2013) define resistance to change “as the unwillingness or inability to accept or to discuss changes that are perceived to be damaging or threatening to the individual.” There are many reasons for resisting change, such as the following:
- Self-interest: Employees typically want to maintain a status quo with which they are familiar and comfortable. Change, including introducing new tasks or ways of working, new relationships, or interfaces, etc., will push them outside of their comfort zone.
- Lack of understanding: Employees will resist change if they do not understand its storyline, reasons, and root causes.
- Difference of opinion: Even if employees understand the reasons for change, they may simply disagree and have a different opinion. However, this can be used to enrich the change storyline based on alternative opinions and make it even better.
- Tolerance level in the culture: Societies differ in their ability to cope with change. Some people have a low tolerance for ambiguity and uncertainty, and other cultures can be risk-averse.
- Appreciation: Employees may feel that their thoughts, actions, and feelings are not properly valued during change.
- Autonomy: During change, employees may feel that they are losing freedom of actions and decisions when they’re asked to do certain activities.
- Status in the organization: Because reorganization, roles, and hierarchies could change, people might perceive that their roles will become less important and lower-level.
- The role: If the content of their roles changes, employees may be dissatisfied with their new role.
Top-down vs. bottom-up approaches
An effective change-management framework addresses all the points above and thus significantly contributes to the company’s performance.
A classical top-down change-management approach works well to address employee engagement during transformation. This can include initiating an employee engagement survey focusing on engagement at all levels. In a multinational corporation, the survey should reach the furthest corners (from global to regional and local), educating managers to be accountable for the engagement of their teams. This feedback can help them not only manage but also inspire and lead their teams and take care of employees through the identification, retention, and development of their talents.
This top-down approach can work well if there is an aligned guiding team, sense of urgency, and right strategy during the change. This strategy should encompass a structured communications plan and attention to impacted employees, as mentioned above.
However, another approach that can bring significant benefits in some situations is bottom-up change management.
Creating internal social movements supported with a social media strategy is a good approach for bottom-up change management, particularly within large organizations. Here’s how it can be done by building a social movement:
- Create the guiding core team
- Develop a vision and strategy and a sense of urgency
- Communicate the vision and strategy through 1) social media in your organization and team meetings and 2) individual meetings
- Empower employees for broad-based action and train the trainers
- Generate short-term wins to start building momentum
- Consolidate gains and bottom-up input and produce more change to increase momentum
- Anchor new approaches in the culture and create habits before the movement declines.
Social movements in organizations ideally need to be branded – for example, with a well-designed logo and hashtag. Movements start with a small group of passionate and dedicated people, have shared and dynamic ownership, and can live both online and offline.
Most importantly, bottom-up change management through an internal social movement can get things done and make participants and advocates feel like rock stars.
Do you want to strengthen your knowledge about SAP’s API strategy? Then save the date for our webinar on December 4th!