Companies that take a proactive approach to change management drive nearly 3 times more revenue than companies with below-average change effectiveness. This, according to new research from leading global advisory, broking and solutions company WTW. The new white paper, “Accelerating change amid disruption,” also reveals the employee experience as a key differentiator to succeeding in change management.
The research, based on an analysis of 600 global organizations, terms those most effective at change management as “change accelerators.” These organizations perceive change management not as an expense but as a catalyst for superior financial and business outcomes. Because of this, change accelerators outperform transitional companies — those that struggle to manage through change — across several different metrics: one-year revenue change (6% versus –30%), three-year revenue growth (4% versus –7%) and gross profit margin (19% versus –13%).
According to the paper, change accelerators also recognize the employee experience as a key differentiator to success, prioritizing four critical dimensions:
- Purpose: A majority (90%) of employees in change accelerating organizations reported that their leadership had a clear vision for the future, maintaining a relentless focus on communicating why the change is happening and what the organization is trying to achieve. This compared to only 73% of employees in transitional organizations.
- People: Almost 90% of employees in change accelerating organizations expressed satisfaction with their involvement in decisions that affect their work, denoting a stronger trust level in the company and its leadership.
- Total rewards: 79% of employees in change accelerating organizations said their company encourages good performance through recognition and non-monetary rewards. Only half reported doing so in transitional organizations.
- Work: 84% of employees in change accelerating organizations think that decisions are made in a timely manner versus 68% in transitional organizations. Companies that focus on embedding the change into their organizations’ culture and daily work routines are more effective at convincing employees that the changes being made will be long-lasting.
“In today’s world of constant global disruption, companies must concentrate on effective change management to navigate challenges, remain competitive and achieve transformation objectives effectively,” said Craig Keller, global leader of Change Management and Organizational Transformation, WTW. “By prioritizing their people, understanding risks and leveraging insights, companies will achieve superior financial and business results and expedite their return on investment.”