Cost of Change

Sharon McCutcheon

Change is good for an organization. It’s not only good, it’s necessary.  Change makes sure that the organization is actually listening to the needs of the customers / citizens and to its own employees.

But there is a darker side to change that is mentioned as the great inhibitor of change.  It is mentioned by people who don’t want the change because it interferes with their own plans, which aren’t necessarily in the best interests of the customers / citizens.  It is mentioned by those who are thinking in terms of a short-term strategy and not long-term.

What is this darker side?  The cost of a change.

Change is not free.  It never has been and it never will be.  But it is inevitable.  For those that are old and remember the days when you couldn’t skip the commercials, this is a commercial that sums up paying for change.

Fram was relatively successful in their advertising campaign, talking about how if you invested just a little bit now you saved a lot later on.  Organizational change is like that commercial.  You can make the change now, pay for it now, or make it later at a much higher cost.  The same thing is true of finding and repairing bugs in software applications.  If you find it when the developer is still coding the cost is less than when it hits user acceptance or production.

Organizational change is particularly difficult, however, as there are many other factors that need to be considered, many of them intangible.  What impact will this have on your customers?  Will they accept the change or will they go to someone else?  Will my employees stay or will they leave?

There is a tangible cost to change – money – and there are intangible costs to change.  Perhaps one of the most important intangible costs is employee satisfaction.

If a change is done at the right time, when the employees feel it is the right time, then the odds are that employee satisfaction will climb.  They understand where the organization is going and agree with the change.  Indeed, the employees could even be champions of the change allowing it to be implemented faster, with fewer problems.

If the change is done late, then employees will feel that they are just “catching up” to the rest of the world and their satisfaction level will likely not change significantly.  Yes, some people will be more satisfied because of the change, but others will be less satisfied wondering why it took so long to do what the rest of the world was already doing.

And let’s not forget the actual change process itself.  You know, the vision, the long term goals, the strategy on how to reach those goals and even changing the organization structure to achieve those goals.  If these pieces are not done well then any goodwill that the organization may have had with its employees can just be tossed out the window.

In the competitive private sector world, where knowledge is considered King, the idea of sharing ideas, sharing information about the change, can seem wrong or even against the idea of what you are trying to do.  But what so many organizations fail to understand is that people are at the core of the change.  Both those “running” the change and those being affected by the change.  Providing people with information, being “transparent”, does not harm the organization, it only makes it stronger.

The idea that things must be kept secret about organizational change has long since passed into ancient history.  And those companies that still adhere to that philosophy?  They too may be consigned to the ancient history scrap heap.

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