The Psychology Of Change Management: A Complete Guide

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Last Updated on December 12, 2021 by Randy Withers, LCMHC

Change can be highly beneficial for companies. In this post, you’ll learn how the psychology of change management can help business leaders and employees better understand and embrace change.

Change is a natural part of the human experience. Without change, there wouldn’t be innovations and new business ideas. However, getting many people to change all at once can take time and willingness to change. Besides that, a significant change usually is accomplished by a group of people, but starts with an individual.

Some companies can accept that change is inevitable. Successful companies learn to adapt to change, though, and try their best to keep up with the various business world modifications, whether through the work environment or technological advancements.

Instead of following a hierarchical model, meaning the boss or chief executive officer (CEO) tells everyone what to do, they follow a less structured mindset and recognize employees as assets. They build upon a culture that supports employees and wants to make them successful, and they have a clear vision for where they want the company to go.

Still, even the most empowered employees and businesses can fail if they don’t follow specific steps of change.

What Is Change Management?

Many people hate change.

If something is going well in their lives or business, they are reluctant to turn it around in any way, shape, or form. Economies aren’t static, politics are often unpredictable, and technology is continually advancing and changing. If a business wants to continue to thrive, they need to keep up with change.

Often, the organizational leadership is responsible for moving the company forward and making changes.

Change management is a way to prepare both corporations and individuals for necessary changes within the organization, and to support each employee through the process.

Leaders have to motivate their employees for change and teach them what will be different once that change is accomplished, whether it’s financial, procedural, job roles, or other business components.

Overall, change management is the understanding that the organization doesn’t change — people do — and then the organization has an outward change due to inward reflection. Change only occurs from the inside out.

The same is true for other changes, like switching to a healthier diet, stopping a habit, or starting to journal or study more.

Understanding the Five Steps of Change

The psychology of change management focuses on five major steps of change for any person, group, or organization. Here are the five steps of change:

1. Stagnation: A business becomes stagnant when there are signs of trouble, like customer losses, drops in sales, or even difficulty hiring. Some are aware and begin to push for change, while others are in denial.
2. Preparation: Leaders decide to take charge and make a change. After an announcement of the change, others in the organization have mixed emotions, like fear, enthusiasm, and relief.
3. Implementation: From there, leaders take steps like assigning roles, and employees may feel like they’re in two worlds — one where they know the business is struggling, and another where they’re hopeful for a new and better workplace.
4. Determination: In this stage, changes haven’t been fully implemented, but there may be some differences, like new roles and processes. Those who didn’t want change may be on the lookout for every failure. This is the most vulnerable stage.
5. Fruition: Finally, the changes implemented come to fruition with tangible results.

Throughout this process, leaders need to shepherd their team through all of the emotions to succeed in change.

Why Change Management Initiatives Can Fail

All too often, change management fails because people may not see the whole picture or think that this change is too painful. Employees, even business leaders, and owners may have a vision in mind, but their mindset is that it will change from the outside in rather than the inside out. An idea or concept cannot change someone on its own.

A past of failure to change in a business won’t motivate employees. They may have been through past attempts and then rejected any further attempts. Without considerations of the broader impacts and even intangible impacts of a wanted change, the change management could fail.

Below are some reasons why change management fails:

• Failure to ask for or accept feedback: If a business leader disregards any input, they’re not keeping the employees in mind.
• Forgetting the goal or end-user: Without a focused plan or even forgetting about the goal, the change cannot occur successfully. Additionally, ignoring the end-user, whether it be a consumer or a consumer’s needs, could result in a loss of support for future changes.
• Little to no communication: Employees need to know what’s going on because, without their support, internal change won’t happen. Communicating early on often results in more controlled leadership and willingness to implement changes.
• Being unclear: Although communication is essential, too much information or confusing messaging, like corporate-speak, jargon, and other technical words, will cause the message to get lost. Keep the change goal clear and brief.
• Prioritizing speed over strategy: Strategy is one of the most critical factors in change management. Trying to get to the goal too soon means sacrificing technique, resulting in a loss of employee support for change.

Fortunately, though, there are ways for businesses to make a change both internally and externally. It takes management, clear communication, and support from employees.

How Change Occurs in Business

Generally, the consensus is that people hate any change. However, that’s not true. People enjoy the changes they can make on their own, like deciding to go on vacation for a change of scenery or changing their wardrobe to fit a new style. People don’t like changes that are forced on them.

First, managers must recognize how people deal with change, and then support it, which is called individual change. Through individual change, people need to first be aware of the need for change.

Then, they need a compelling reason to want to participate in the change. Third, they need knowledge of what they can do to change. Then, employees need the ability to implement skills and behaviors.

Finally, leaders can reinforce them to sustain change.

Once bosses and leaders understand how people deal with change, they can then implement organizational change. Perhaps the employer can section off employees into groups to implement this change. It might be a human resources issue or a production issue that needs to be addressed. This step in changing involves identifying which groups need to change to reach the end product.

Finally, enterprise change occurs when the entire company is targeted for change. This includes company policies, changes in roles, and other changes that affect the company as a whole.

When a company can reach enterprise levels of change, they’re well-equipped to handle future alterations and have built an adaptable workforce.

Final Thoughts

Change is good!

Businesses need to change to stay competitive. Without change, a business becomes stagnant and may fall behind. Leaders need to support their employees throughout the process; only then will their goals achieve fruition.

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