In the course of digitalization and globalization, many companies are undergoing radical changes. For example, work steps or even entire jobs that were previously carried out by human hands can now be done by computers. Another red-hot change we are seeing is meetings that can be conducted using software such as Zoom or Slack. Home office is a keyword, especially with regard to COVID-19, and various companies have recognized the opportunities it offers and are largely switching to this modality, at least for the mid to long term.

Other changes, not related to the COVID-19 situation, include the relocation of parts of the value chain abroad, where cheaper production factors are available. To counteract this, there are more and more possibilities to free various business areas and their processes from expensive manual work by means of digitalization and to do it with machines, robots and software instead. As a result, opportunity costs are increasingly minimized and the decision to migrate to alternative production countries is no longer the logical consequence. These changes are a big step not only for the companies but also for their employees. These fundamental changes require a rethinking of the employees. But of course they also need mobility in their actions. You can imagine that such changes do not simply happen so smoothly from one day to the next. On the contrary – these changes are often accompanied by resistance, fear, uncertainty and lack of understanding. Companies should not underestimate this. After all, employee loyalty and the identification of employees with their employer often represent a decisive competitive advantage. In order not to lose this advantage and to implement the changes with the least possible resistance, communication and leadership are particularly important in times of change.

In this series of blog articles, I will briefly present a few of the most important and most frequently used theories on change management in chronological order that you can use for your company. It is important to note that there is neither right nor wrong and all the theories explained have their right to exist, but this does not mean that you can rely on them in every situation.

The 3-phase model of organizational change by Kurt Lewin

Since change management was important even before the advent of digitization and globalization, science has been interested in this topic since early on. One of the pioneers was Kurt Lewin, who with his 3-phase model created a widely used framework that describes the phases of change in social groups.

3 phase model lewin

The model is intuitive and relatively simple:

  • Unfreezing describes the preparation of the old structure for change. Time is spent to prepare for the change. Plans and scenarios are developed, analyses are carried out and those affected are prepared for the change.
  • Moving describes the phase of the actual change. Changes are implemented, those affected are retrained and new structures and processes are established.
  • Refreezing describes the phase of consolidation of the changes. They are now part of the new everyday life and are seen by those affected as a new normality. This also includes monitoring the implemented changes and their possible adaptation. If they are successfully consolidated, this ultimately leads to a new structure and the cycle closes.

The three phases thus describe how an original state of equilibrium is changed to a new state of equilibrium that is characterized by greater efficiency or effectiveness.

However, it can also be argued that nowadays there is no refreezing at all, as many companies are in a state of constant change. Therefore agility is so important in today’s world and that’s why tools like Scrum or Kanban are becoming increasingly important. Furthermore, the simplicity of the model also has its disadvantages. Although it is intuitively understandable and universally applicable, it does not offer a concrete definition of the necessary steps that management must take to successfully implement the changes. Academician John P. Kotter recognized this and consequently developed the Lewin 3-phase model further.

The 8-step model from John P. Kotter

The 8-step model of Kotter is widely used in science as well as in practice. Kotter’s model contains eight steps, which he sees as a success-critical component of every change management. After a comprehensive analysis of change processes in companies, he has identified the eight most important causes for the failure of change. The eight steps provide solutions to remedy these problems. Since Kotter’s model is based on the 3-phase model, a relation of the models can be made. The first four steps belong to the Unfreezing phase in Lewin’s model, steps five to seven belong to Moving and the last step belongs to the Refreezing phase.

8 steps model kotter
  1. Create a sense of urgency

The first step is to create a sense of urgency for change among employees and managers. As long as this has not been achieved, the next steps are not very effective, as the focus is not on the change process.

  1. Create a guiding coalition

In a second step, a group of managers should be formed to act as a strong leadership force. Because great changes cannot be achieved by a single charismatic leader. When building the coalition, managers from different departments with different perspectives should be involved. In addition, they should have good leadership qualities and be highly credible.

  1. Develop a clear shared vision

Once the leadership coalition is established, a vision and a strategy for achieving the vision should be developed. A vision can be useful because it provides a direction for action, motivates those concerned and facilitates decision-making. Only the option that most closely matches the vision should be chosen.

  1. Communicate the vision

The vision developed is then to be widely communicated in the next step. Because a vision does not achieve the desired effect if it is not understood by all members of a company and clarifies the new goals and direction.

  1. Empower people to act on the vision

If not everyone in the company helps with the change, it will most likely not succeed. Therefore it is important to empower employees, to motivate them and enable them to act according to the vision.

  1. Create short-term wins

With all the work that is put into a change process, it is important that first successes can be observed after a short time. The successes motivate those concerned to continue to achieve the vision and also validate the strategy for achieving the vision. For this reason, short-term successes should be planned in advance by the leading coalition.

  1. Consolidate and build on the gains

With the achievement of initial successes, momentum can be gained. This should be used to drive further, more profound changes and not to lose focus.

  1. Anchoring changes in the corporate culture

After a successful change process it is important that the changes are deeply anchored in the corporate culture. Otherwise, the old corporate culture can still prevail again if the people who drove the change stop implementing and anchoring the new practices.

Despite the widespread acceptance of the 8-step model, there are also some criticisms. In addition to the lack of empirical validation, the top-down approach – i.e. the initiation of change processes by top management – is often criticized.

In the second part, we will see that bottom-up is also a possible approach for change processes.