People Centricity: 2023
Target Operating Model (TOM) is a blueprint for how an organisation should operate in order to achieve its goals. It outlines the processes, systems, people, and structures that are necessary to support the organisation's operations and achieve its desired outcomes.
Implementing a TOM can be a complex and challenging transformational process, as it often involves significant changes to the way the organisation operates and delivers its service. This is where change management comes in.
Change management plays a critical role in any organisation that is implementing a new operating model. An operating model defines how a company conducts its business, and any changes to this model can have a significant impact on the organisation and the people. The success of implementing a new operating model depends heavily on the ability of the organisation to manage the change effectively.
What is change management?
Change management is the process of preparing an organisation for changes to its business processes, people, systems, or structures. It involves planning, communicating, and executing changes in a way that minimizes resistance and maximizes adoption. Change management aims to minimize the negative impact of change on employees, customers, and stakeholders while enabling the organisation to achieve its desired outcomes.
Why is change management important during a new operating model?
Implementing a new operating model is a complex and challenging process. It requires significant changes to business processes, people, systems, and structures, and it can be disruptive to employees and stakeholders. Change management is essential during a new operating model because it helps to:
Minimize resistance to change: Change can be difficult for employees to accept, particularly if it involves changes to their roles, responsibilities, or working practices. Change management helps to minimize resistance to change by involving employees in the process, communicating the rationale for the change, and providing support to help employees adapt to new ways of working.
Ensure effective communication: Communication is essential during a new operating model. Change management helps to ensure that employees, customers, and stakeholders are informed of the changes, understand the rationale for the change, and are aware of any implications for their roles or the organisation.
Manage risk: Implementing a new operating model can be risky, particularly if the changes are significant or involve new technology. Change management helps to manage risk by identifying potential risks and developing strategies to mitigate them.
Ensure adoption and sustainability: The success of a new operating model depends on the ability of the organisation to adopt and sustain the changes. Change management helps to ensure that employees are trained and supported to adopt new ways of working, and that the organisation has the resources and processes in place to sustain the changes over the long term.
Case Study: Implementing a New Operating Model at multinational manufacturing company
This case study is based on a multinational manufacturing company that produces a wide range of products. Over the years, the company has grown rapidly, and its operating model has become outdated and inefficient. In response to this, the company's leadership team decided to implement a new operating model that would improve efficiency, reduce costs, and enable the company to better meet the needs of its customers.
To implement the new operating model the company adopted a change management approach that involved the following steps:
The project team conducted a thorough change impact assessment of the current operating model and identified areas where the new model would have the most significant impact.
The project team developed a comprehensive change management approach and plan that outlined the steps required to manage the change, including communication, training, and support.
The company communicated the change to all employees, customers, and stakeholders, including the rationale for the change, the benefits, and any implications for roles or processes.
The company monitored progress closely and made adjustments to the change management plan as necessary.
In conclusion: The change management approach adopted by the company was successful, and the new operating model enabled the company to improve efficiency and reduce costs.
The Impact of Change during TOM
Implementing a new operating model (TOM) is a significant undertaking that requires careful planning, coordination, and execution. Change management is a critical component of any TOM transformation because it enables organisations to effectively manage the people side of the change. In particular, key change activities play a vital role in helping organisations successfully implement a new TOM.
Organisational Development (OD) leaders play a critical role in designing and implementing a new TOM. They are responsible for ensuring that the TOM aligns with the organisation's strategy and goals, and that it is structured in a way that supports the organisation's culture and values. The data gathered from the Change Impact Assessment can help the OD lead to design the new organisational structure.
The impact of change during a TOM can be significant for employees, customers, and stakeholders. The change may involve new business processes, new technology, or changes to roles and responsibilities. These changes can create uncertainty and anxiety, leading to resistance to the change. Without proper support and engagement, employees may struggle to adapt to the new TOM, leading to reduced productivity, increased absenteeism, and potentially even turnover.
This is where change management plays a critical role in supporting those impacted by change. Change management focuses on helping employees and stakeholders understand and embrace the change. By engaging employees and stakeholders in the change process, providing support and training, and addressing concerns and questions, change management can help mitigate the negative impact of change and promote successful adoption of the new TOM.
One way that change management supports those impacted by change is through effective communication and engagement. Communication is critical during a TOM to ensure that everyone understands the rationale for the change, the benefits, and any potential implications. Communication should be frequent, transparent, and delivered in a variety of formats to ensure that all stakeholders are informed and engaged. Effective communication can help to reduce anxiety and uncertainty, build support and buy-in, and promote successful adoption of the new TOM.
Another way that change management supports those impacted by change is through training and development. Providing employees with the necessary skills and knowledge to adapt to the new TOM is essential for successful implementation. Effective training and development programs should be designed to meet the needs of employees, taking into account their different learning styles and preferences. Training can help employees feel confident in their ability to perform their new roles and responsibilities and reduce resistance to the change.
Change management supports those impacted by change by engaging and involving employees in the change process. By involving employees in the process, organisations can tap into their knowledge and expertise, helping to identify potential challenges and opportunities. Engaging employees in the change process can also help build support and buy-in, reducing resistance to the change and promoting successful adoption of the new TOM.
In conclusion, Implementing a new operating model can be challenging, but effective change management can help to ensure that the process is smooth and successful. Change management helps to minimize resistance to change, ensure effective communication, manage risk, and ensure adoption and sustainability. By following the steps outlined above and having a dedicated change resources organisations can manage change effectively and realize the benefits of the new TOM and achieve their strategic goals.