How Successful Entrepreneurs Maximze Benefits and Minimize Risks When They Make Changes

Nearly three centuries ago, Benjamin Franklin made a profound statement that every entrepreneur should live by: “When you’re finished changing, you’re finished.”

This value in this quote didn’t pass with the late genius. In the 21st Century, his advice is more relevant than ever.

Change is an inevitable part of entrepreneurship. New demographic trends, technology and other changes are constantly shaping the future of your business.

Unfortunately, most companies fail to implement change. According to Tor Benrick, nearly three quarters of these efforts are unsuccessful.[1]

A number of factors contribute to these failures. Fortunately, you can execute change more effectively by choosing the right change management models.

Overview of Top Change Management Models

Many change management models have emerged over the years. They include:

  • The Unfreeze-Change-Refreeze Model. This model focuses on the fact that certain customs and processes are built into the organization. Before change can take place, the organization must open itself up to the concept of change.
  • Kotter’s 8-Step Model of Change. This model focuses on setting short-term goals and creating a sense of urgency to every member of the team.
  • Bridge’s Transitional Model. The Bridge’s Transitional Model focuses on the impact change and complacency have on the organization and individuals within it. While this model can’t be implemented on its own, it is a great complement to other change management models.
  • Prosci ADKAR Model. This is an incremental, individualized process that all employees must embrace. Each individual sets their own objectives to make change more flexible.
  • Virginia Satir Change Process. The Virginia Satir Change Process is a more holistic change management model that focuses on the impact on individuals and helps them welcome new change.

Each of these models has its own benefits and drawbacks. Organizations should be aware of all of them and use them to their fullest advantage.

Which Is Best for Your Company?

Several change management models have gained acceptance over the past century. While these models all serve important purposes, some are better suited for specific business goals.

It is important to understand the merits of different change management models and know when to apply them. Here is an overview of some of the most widely used.

1. Unfreeze-Change-Refreeze Model: Break Resistance

In the 1940s, German-American psychologist Kurt Lewin developed the Unfreeze-Change-Refreeze model,[2] which remains one of the most widely used change management models to this day.

Lewin recognized that humans are ambivalent about change. They may recognize the benefits change brings, but fear of the unknown can halt efforts to execute change.

When is it most effective?

The Unfreeze-Change-Refreeze model focuses on breaking their resistance to change. In order to accomplish this, leaders must provide a motivation to venture out of their comfort zones. Tai Lopez [3] states that motivation can come in different forms: higher compensation, better working conditions and promise of future praise are all commonly used.

Once employees are given the motivation to embrace change, the process can begin. After it is completed, the change is permanently accepted as part of the company structure.

When is it less effective?

Negative motivators are less effective, such as threats of termination for failing to accept change. However, there may be instances where fear needs to be used, such as dealing with particularly stubborn employees during a crisis. As a rule of thumb, positive motivational strategies should be used whenever possible.

While the Unfreeze-Change-Refreeze model is undoubtedly effective, it has one key downside: it takes a long time to execute. Leaders need to gradually encourage employees to come around to the inevitable.

2. Kotter’s 8-Step Model of Change: A Collaborative Effort

John Paul Kotter, the Konosuke Matsushita Professor of Leadership, Emeritus, for the Harvard Business School, has been one of the leading organizational change researchers for 45 years. One of his most ground-breaking accomplishments was the development of Kotter’s 8-Step Model of Change.

This model is more detailed than Lewin’s. It relies on the following steps:

  • Communicating the urgent need for change
  • Developing the coalition to guide change
  • Formulating the vision
  • Communicating the vision
  • Empowering employees and delegating duties to execute change
  • Setting short-term goals
  • Consolidating gains and setting longer-term goals
  • Ingraining new changes into the company culture

When is it most effective?

For many organizations, the advantage this model has over the Unfreeze-Change-Refreeze model is that it makes change a collaborative process. For companies that strive to foster a sense of inclusiveness and mutual accountability, this is a better model.

Alberto Irace, CEO of Acea, has heavily praised Kotter’s system.[4]

These results and initiatives have an extraordinary and immense value, because it contributes not only to the spirit of the participants, but it also shows with evidence and tangible clarity that this dual system is for us reachable and doable and is dependent on the desire, curiosity, interest and passion that each of us can bring to his or her daily work.

When is it less effective?

However, it is still one of the top-down change management models, so it may not be participative enough for smaller companies. The nature of small companies which employees tend to take multiple responsibilities and are more familiar with the entire operation of the business renders the process of communicating the change and vision quite nonsense.

3. Bridge’s Transitional Model: Let go, comply and accept

Bridge’s Transitional Model focuses more heavily on the impact change and complacency have on the individuals within the company. While it isn’t a stand-alone model for driving change, it is a great tool to be used in conjunction with other models. The model is 3-stage which can be summarized by the diagram below:

The first phase involves ending, losing and letting go. These happen when people are forced to experience a change unwillingly and to let go of something they have been comfortable with.

The second phase involves the neutral emotion. People at this stage are trying hard to cope with the change and cause some emotional ups and downs.

The third phase involves a new beginning. At this stage, people have fully adapted to the changes and start developing skills around the change.

When is it most effective?

It requires entrepreneurs to get input from their employees through every stage of the process, thereby getting them to buy into it, so this model is ideal for smaller companies with more participative leadership styles.

When is it less effective?

As the focus of the model is on transition and how to cope with it smoothly, this model alone is ineffective in change management. Most usually, it is best employed with another change management to ensure the harmonious transition.

4. Prosci ADKAR Model: Incremental steps-oriented

The Prosci ADKAR Model is a goal-oriented approach to change-management. It requires businesses and individuals to setup incremental steps.

One of the unique things about the Prosci ADKAR Model is the focus on individual change and organizational change. By helping individuals set their own goals, they can often foster change better. However, individual goals need to be sync with the direction of the company.

When is it most effective?

The feature that it magnifies the potential pros and cons can be a confidence boost for employees to work harder for the change. While most companies fail their attempts to change due to their focus on the method employed, this model shifts the focus to maximize the contribution of employees.

When is it less effective?

While the model emphasizes the emotional aspect of human involvement in change, it actually doesn’t give a very concrete explanation on how to implement it. Also it mentions quite less about the actual management method.

5. Virginia Satir Change Process: Embrace negativity

Developed by a leading family therapy researcher, the Virginia Satir Change Process focuses on four stages:

  • Coming to terms with the problems of the status-quo
  • Recognizing the need to address new change into the process
  • Embracing chaos
  • Using chaos to inspire new ideas

When is it most effective?

The good thing about this model is that it forces people to embrace the stressfulness of change, rather than resisting it. Learning to properly handle the negativity can facilitate the change process.

When is it less effective?

Despite encouragement on the acceptance of the potential negative emotions arisen from changes, the model does not provide actual solution on how to deal with the problem.

Review Your Business and Choose the One That Fits It Most

Many different change management models have been developed over the years. They all have their benefits, but there are a variety of things you need to keep in mind before choosing one. The size of your company and the level of autonomy in your leadership style are the two biggest factors that need to be taken into consideration.

Reference

[1] Tor Benrick: Barriers to Organizational Change 
[2] MindTools: Lewin’s Change Management Model)
[3] Linkedln: Tai Lopez
[4] Kotter International: The 8-Step Process for Leading Change

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