Why is Change Management Important?

Change Management Series – Chapter 4

If you’ve been following this series about change, then hopefully you appreciate that workplace change doesn’t “just happen”. Our experience is that people in organisations often say that they don’t “do” change very well. Naturally there are many reasons for this which are specific to their organisation. But there are also many types of reasons why change initiatives fail – a lack of leadership, an ill-defined change strategy, poor communication, a lack of support and the change being at odds with the established culture.

Searching online for “change management failure” produces some alarming statistics. McKinsey quotes a failure rate of 70% or more in their studies over the years. The amount of wasted time and effort that goes into change initiatives is equally alarming.

There is no end of advice available – from online articles, journals, books, expert advice etc. etc. There is probably no universal truth or approach that will guarantee success, but surely we must try to make things better when we implement change? We cannot simply sit back and ignore the fact that change is difficult and without some support, it is highly unlikely to be successful.

Many of us have seen the consequences of unsupported change in organisations. The company that is facing a crisis makes a major change which it imposes on the workforce – with little thought for their feelings, their understanding or their commitment to making the change work. They had to change in order to survive – the people will simply have to “get on with it”. At least they still have their jobs.

The Psychological Contract

There may be no choice but to make the change. But there is always a choice in HOW the change is made, particularly if we want to keep people onboard. If you’ve not heard of the psychological contract – it’s worth considering for a moment. Although identified originally in the 1960s, more recent research and the contemporary understanding is the work of University Professor Denise Rousseau (who was also involved in AWA’s research on Knowledge Worker Productivity).

The psychological contract is an informal set of expectations that exist between employer and employee. This isn’t a formal, binding legal document (like an employment contract that states the terms and conditions of employment) – but nevertheless over time we come to expect that we’ll be treated in a certain way by the other party.

Notions of fairness, honesty, equity and trust usually feature in people’s expectations – and when the other party acts in a way that breaches these expectations, there can be major consequences for the relationship. Not only might employees feel differently about remaining with the organisation, but they may also start to withdraw their discretionary effort, give less to their work, withhold information from colleagues, experience reduced meaning and motivation in their work.

When we are making changes in the workplace – moving to a shared environment rather than a dedicated one – and particularly where people “lose” their offices / cubicles / desks – there is a potential challenge to the psychological contract. People feel that they have a “right” to their own desk / space / office. There is nothing written down anywhere to this effect, but because they’ve always had it (and they were told “here’s YOUR desk” when they joined the company) there is an expectation that it’s part of the deal. We must tread carefully and not trample on people’s sensibilities.

Trust in the Workplace

A breach of the psychological contract is a major breach of trust. From our research into the productivity of knowledge teams and managing agile teams – we know that trust is an absolute bedrock upon which other aspects of team work rely. If trust is broken, it’s likely there will be resistance to change, or at the very least that it’ll take a lot more persuasion for people to want to give their time, effort and energy to this latest change.

Trust and workplace performance are quite intertwined, and we encourage all organisations undergoing change to consider it.

In conclusion, the importance of managing the change (or providing ‘change support’ as we often call it) cannot be overstated. As mentioned in an earlier blog, it is incumbent upon us to explain the change to those embarking on it. We must tell them why the change is happening; describe exactly what the change is and how they will be affected; outline how things will work in the future and how we will get them there in safety; and when they will be impacted. We must help them explore their options – identify wins and losses for them personally – and help them determine the all-important “what’s in it for me?”.

By managing the transition of change, we can help to protect the psychological contract and trust that are vital aspects of the working relationships on which our organisations depend.


This blog is part of a series of observations about behavioural change management which we hope will provide readers with a good understanding of what is needed to help people change.  This is based on 25 years’ experience from change and workplace professionals, supporting clients making a change to new ways of working. Next time we will discuss resistance to change.