Change management for sustainability - SUM: Sustainability Management Wiki

Authors: Jacek Bednarek, Philipp Buerfeind, Marlon Janßen, Jannik Wiegrefe
Last updated: August 1, 2024

1 Definition and relevance

The concept of change management developed from organizational development or organizational change. It is defined as a systematic approach toward the transition or transformation of an organization’s strategy (i.e., vision, objectives), organization (i.e., structures and processes), culture (i.e., core values and norms), and technology (i.e., methods and procedures) with the aim of achieving long-term improvement (see figure 1). ¹ Change management is about achieving an optimal design of the transition path. ² It is of great importance , since changes in an organization’s environments can have severe consequences for the organization’s performance and ultimately threaten its survival³ At the same time, achieving change in organizations is also important from a societal perspective, since it may be the only way to achieve specific societal and ecological goals (e.g., reducing organizations’ impact on climate change or securing jobs). In this context, change management for sustainability, i.e. change management that seeks to promote social and ecological objectives in organizations next to financial ones, has gained importance in recent years.

Figure 1: *Dimensions influenced by change management (own illustration based on Rasche & Rehder (2018)¹*)

2 Background

Organizational change and its management have long been investigated in the disciplines of social and organizational psychology as well as organizational and management studies (economics). The debate on change management extends from the scientific management founded by Frederick W. Taylor in 1911 to today’s organizational development. ¹ Scientific management aimed at increasing operational efficiency and optimizing management, labor and enterprise through strict specialization and standardization. The Hawthorne studies, among others, showed that social factors have a great influence on work behavior and work motivation, as do employee surveys and supervisor evaluations for the joint identification and implementation of necessary changes. ¹ Within the framework of sensitivity training, the influence of individual behavior on a group was analyzed. ¹ Finally, organizational development can be described as a planned systemic approach controlled by managers with a view to the entire system or organization. It aims to increase corporate health through planned influence on the corporate structure, processes, strategy and culture. ¹

2.1 Types of change

To choose an adequate change method, the literature noted the importance of a clear definition of the change type as well as change enablers. A change type can be classified into mainly two dimensions: the change scale and the duration of change (see figure 3). The changing scale distinguishes large and small scales and was defined “as the degree of change required to reach the desired outcome”. ¹⁰ Large-scale changes include an all-embracing transition of processes and behaviors within an organization that influences the output. ¹¹ Next to the organization itself, large-scale changes also cover stakeholder involvement, emphasizing the necessity of visionary leadership as well as cooperation in order to succeed. ¹² In literature, large-scaling changes are viewed as controversial, because the large extent of those ambitions needs to take into account the decentralized structures of a company, more concretely differences in unit cultures. ¹³ Furthermore, it is commonly believed, that the success of large-scaling changes depends on the level of organizational resources. ¹⁴ In contrast, smaller changes are perceived as changes of lower dimension and importance and are more applicable to specific projects (e.g., quality improvement projects). ¹⁵

The change duration can be defined as “the period over which changes take place” and change processes can be either implemented long- or short-term. ¹⁰ Long-lasting change processes are often characterized as challenging and demand a high level of leadership in combination with active employee involvement throughout the change process. ¹⁶ This results in the importance of the consideration of human behavior as well as the requirement of preceding leaders. Because of previously described factors, long-term change processes are often seen as less successful in literature. Additionally, a short-term process is more successful when the responsiveness of companies for smaller changes is faster. The faster the reaction, the more probable a company can reach competitive advantages. ¹⁷ However, short-term duration is most effective in smaller, steadier processes. ¹⁵

However, as organizational sustainability is seen as a key strategy, that considers economic, environmental and social dimensions to contribute to the sustainability equilibria, small scaling and short-term changes might not live up to the requirements. The goal of organizational sustainability requires the inclusion of all organizational elements, such as production, strategy and management, governance, assessment, and reporting which simply cannot be covered by small scaling in the short term. ¹⁸ That is why it is important to be aware that sustainability can be implemented best through large scaling and therefore implies arising challenges mentioned above. Furthermore, the implementation of organizational sustainability will require a lot of time and must especially consider human behavior and leadership. ¹⁰

2.2 Stage/phase models for change management

For a concept as flexible, dynamic and individual as change management, there is no optimal or universally valid model. Therefore in the literature, there are various stage/phase models for change management, such as the eight-stage model according to J. Kotter from 1996, the seven-phase model by R. Streich from 1997, the Action Research Model, the five-step positive model and the Six Main Change Models and Theories discussed by Kezar. ¹^,³

Lewin’s three-phase model

The cornerstone of all these more detailed models is the three-phase model according to K. Lewin from 1947. This consists of the three key elements unfreezing, moving, and refreezing. ¹ According to his conception, there is an actual state consisting of habits, certainties and traditional procedures as well as legal, political, economic and social conditions, that could destabilize this state. In the first of the three phases, the aim is to temporarily unfreeze this actual state, generating awareness of change among both, the actors and those affected by the change. In the second phase, changes are made and certain areas/processes move to a new level that is (at least temporarily) higher than the previous actual state. In the third phase, this state resulting from the changes in phase two is refrozen. This is intended to bring about the changed aspects and their long-term implementation in attitudes and behaviors. ¹

Kotter’s eight-stage model

Many of the models developed after Lewin’s three-phase model build on its basic assumptions. However, the three-phase model is in part insufficient to track today’s very complex dynamics of change management. Thus, the eight-stage model according to Kotter (see figure 2) is usually used today, because it specifies the steps in more detail. ¹

*Figure 2: Eight-step-model (own illustration based on Rasche & Rehder (2019)¹*)

In the first step, the management will assess internal organizational strengths and weaknesses, considering market activities and the level of competition, to identify the status quo and the potential for improvement. Subsequently, it is of central relevance to create an awareness of the need for change among the employees and thus establish a sense of urgency. The second step is to appoint an influential and powerful guiding coalition, which is a group of competent and committed stakeholders who are able to lead and implement the change process, e.g. by encouraging the other group members to work closely together as a team. The third step is to develop a vision and strategy, where the vision represents concrete guidelines for the direction of the strategy development and the implementation of concrete action plans (linked to sustainability). The fourth step is one of the most important steps in change management. Here the change vision and the newly developed strategy are communicated in detail by the guiding coalition to all relevant stakeholders (especially employees) through various channels. ¹^,³ These first four steps correspond to the first phase according to Lewin (unfreeze). ¹ It is important to align as many stakeholders as possible behind the desired change. Therefore, the fifth step of the model is to minimize obstacles in the change process, to change structures and systems that hinder change and to encourage and empower employees to actively participate in the change process as well as encourage risk-taking, creativity and innovation. In the sixth step, adequate short-term wins are generated, each with a defined beginning and a concrete end, and are made measurable and visible to all participants. In this way, those who adopt new ways of behaving and participate positively in the change process can be rewarded. The seventh step consists of consolidating gains and producing more change. The partial successes that have already been achieved should be used to change further structures, processes and systems. This can, on the one hand, be done by training, promoting, and developing stakeholders or on the other hand by employing external change agents, who can contribute to the achievement of the vision and foster the change process with new (external) initiatives, interventions and in-depth knowledge. ¹^,³ Steps five to seven correspond to the second phase according to Lewin (moving). ¹ The eighth and final step is to help stakeholders understand the link between the new behaviors and the improvement in the performance of the organization. Finally, the new behaviors, practices and approaches are anchored in the culture of the organization. The sustainable supply of junior staff with an affinity for change plays a central role in the future development of the company. Step eight corresponds to the third phase according to Lewin (refreeze). ¹^,³

2.2 Principles of change management

To implement change management successfully in a company, four central principles must be followed. The first principle is to create an understanding of change by strongly promoting the benefits for the organization and how it will affect people positively. It needs to be enough discomfort in the old procedures so that people will feel more confident with the new approach. The second principle is adequate planning of the change, as change varies from organization to organization and project to project. Here , itis particularly important who suits best to be involved in the design and execution of the change. The third principle is to implement the change, e.g. by putting the change into practice through the eight-step model according to Kotter (see chapter 2.1). All relevant stakeholders should be involved in the change, including those who initially refuse or are skeptical, to convince them of the new practices so that they can become the norm in the long run. The fourth principle is to communicate the change to the stakeholders clearly and appropriately, so people understand what to do and why. Doing so, the AKDAR principle (Awareness-Desire-Knowledge-Ability-Reinforcement) can be helpful. ¹⁹

As the implementation of sustainability within an organization and the associated change process seem to be challenging, it is important to think about promoters of organizational change to increase the probability of success. ²⁰ It is crucial, that the evaluation of change enablement is at the beginning of the implementation process. In general, an organization must analyze its environmental conditions, which will directly affect the change process. Those conditions most importantly imply employees’ sense of change requirements within the organization. ¹⁰

Three general aspects a reasonable change strategy should consider were suggested by Anderson and Ackerman (2001): content, people and process. By naming content, they were taking the strategy itself, systems, technologies and work practices into account. The aspect of people addresses the role of humans involved and their behavior in the change process. The focus on the personal dimension enhances the probability of a successful change process. Lastly, the process refers to specific operations required in the implementation process. Related to the change toward organizational sustainability those factors previously mentioned are also playing a crucial role to facilitate the process and will be directly addressed in the chapter that deals with the method of implementation. ²⁰

Al-Haddad & Kotnour (2015) later reviewed several studies from the literature and finally determined three key change enablers consisting of commitment, knowledge and skills as well as resources. ¹⁰

3 Practical implementation

3.1 Particularities in sustainability-oriented change

When trying to foster change toward sustainability, the organizational culture plays an important role. ²¹ Similar to society an organization like a company has its own culture that is underlined by values and norms that define the importance and appropriateness of individual behavior. ²³

Another important aspect that has been highlighted as particularly important in sustainability-oriented change is the role of organizational leaders. Leadership usually serves as an initiator for a change in thinking and should continue their commitment beyond change targets. The challenge for leaders mainly lies in the alignment of sustainability with work practices and strategies. The best leaders expand their focus beyond their organization and try to positively influence their industries. By considering environmental conditions, management must focus on employees, customers, policymakers and society. ²² Although the integration of sustainable thinking is seen as difficult (will be addressed in 4.1 Barriers), existing values need to be aligned with a more holistic and long-term perspective.

A third important aspect is that the organizational governance system needs to change to promote the transformation towards sustainability. Governance in general can be described as “the way information is gathered and shared, decisions are made and enforced, and resources and wealth are distributed”. It is argued that sustainable change requires new or modified governance systems that assure systems thinking, transversal collaboration, employee empowerment and stakeholder engagement. ²³

3.2 Best practices

As elaborated by Anderson & Ackerman (2001), there are several best practices focusing on the strategy of the change. It is useful to build strategies, policies and similar around sustainability practices. Those could potentially deal with specific sustainable targets or give valuable guidance to execute certain procedures in a sustainable way. ²⁴ A further best practice covering several change enablers and presented tools, is the installation of sustainability change agents on employee- and management levels. ²⁵ Change agents are people, who use their own competencies and skills to promote organizational culture.²⁶ Two additional best practices dealing with the strategic component are finally the creation of a focal point and group works on sustainable topics. To put the responsibility on a focal point, arguably emerges inter-organizational and cross-departmental collaboration, whereas work groups additionally have a significant impact on developing realistic sustainable strategies. ²⁶

Regarding people with their knowledge and skills (see figure 4), hiring sustainability experts is a common practice to gain people with the required competencies. Those experts can be explicitly brought in to disseminate the idea of sustainability. ²⁶ Moreover, the establishment of departments dedicated to sustainability could concretize the goal of organizational sustainability and transfer the mission to the respective employees in charge. ²⁷ The use of sustainability training sessions can enhance employees’ knowledge and skills. ³⁴ Further practices, that should be mentioned briefly are the potential use of guidelines, signs or instructions which deal with sustainable topics at the company and the creation of awards in cases of proper realization. ²⁶

Communication and assessment are important parts of the theoretical framework of an implementation process of change. A practice, that promotes both is the installation of an assessment system, that enables the measurement of sustainable performance. ⁵⁰ Such frameworks could be then complemented by internal audits or diagnostics, dealing with energy efficiencies for example. ²⁶ To continue with the area of communication, several practices like digital questionnaires, conferences or similar events have emerged as suitable options to spread and update employees’ as well as stakeholders’ knowledge. ⁵¹

4 Drivers and barriers

Studies have shown that the failure of change processes is not a usual phenomenon at all. ⁵⁸ A failure rate of change processes of 75% is considered standard internationally. ⁵⁹ As mentioned in previous sections, for successful change management implementation and associated successful change, it is necessary to identify and overcome barriers. This section will look at what barriers are usually responsible for the mentioned failure rate in relation to sustainable change management and how there can be a better chance to overcome these barriers. In the context of overcoming barriers, some drivers of change management are also of great importance in relation to driving and supporting sustainable change processes. These drivers will be examined in more detail after the barriers have been presented first. Since change management is more concerned with how companies manage internal change, we will also have a more detailed look at internal barriers and drivers than at external factors. The external barriers and drivers are more limited to regulations and developments that make a change necessary and justify it in the first place.

4.1 Barriers

According to Post and Altma (1994), a distinction can be made between two types of barriers: industry and organizational barriers. Industry barriers reflect the “special and unique features of the business activity in which the firm engages” ⁶⁰. Those barriers are therefore very industry-specific and differ a lot depending on the industry. This does not apply to organizational barriers. Organizational barriers complicate a firm’s dealing with any form of change, including environmental change. ⁶⁰ This section will primarily deal with this type of barrier.

The main barrier leading to the high failure rate of change processes is resistance from employees. In addition to the predictable and logical resistance due to, for example, salary cuts or loss of power of employees, there is also resistance for which there is not always a clear reason. These resistances are even more important for managing changes because they are hard to predict and manage. The origin of that unreasonable resistance is usually found in psychological reasons like, for example, the general tendency of people to build resistance against changes that are associated with a loss of freedom. ⁵⁸ In this context employees could associate sustainable changes with a loss of freedom due to more restrictions and regulations. Whereas previously employees might have been guided only by economic goals, now environmental goals are added, which limits their freedom to shape their work and could therefore lead to resistance.

These resistances can be reinforced by different reasons that make change more difficult. Those reasons can also be considered as barriers and can be grouped into personal factors for resistance, organizational factors for resistance and factors that are specific to the change itself. ⁶¹ For personal factors for resistance, an important factor is employee attitude. For example, if an employee is unwilling to commit to change, does not give sustainability a high priority and acts in an unmotivated manner, it slows down the success of the change. It would also be possible that the employee is just not capable of the changes because of a lack of skills or knowledge. ⁶⁰ In addition, the fear of failure, the fear of the unknown and the disruption of routine can also be mentioned as personal factors for resistance. ⁶¹

An example of an organizational factor for resistance is the bad quality of communication. ⁶⁰ It can be very important that employees understand the reason for the change and the benefit that can result from the successful change. If this is not the case, the employees most likely won’t support the change process. The same can result from inadequate top management leadership. ⁶⁰ Other organizational factors are a lack of trust between management and employees, a lack of participation of the employees, internal conflicts for resources and a lack of consequences for inadequate or bad performance. As factors that are specific to the change itself, the content of the change and poor implementation planning can be mentioned. ⁶¹

Another potential barrier, but also a potential driver, is the pressure of other stakeholders, for example, the shareholders. ⁶² Shareholders are often very profit-oriented, which could be inconsistent with sustainability. This way, the stakeholder pressure could be a barrier to sustainable change.

Most of the mentioned barriers can be understood as reasons for resistance as well, which is the main barrier to change processes. The drivers of sustainable change management, which will be presented below, can help overcome these resistances, or even prevent them from arising.

4.2 Drivers

Prior literature defines the term “change drivers” in two different ways. The first definition defines change drivers as drivers that facilitate the implementation of change in an organization and the individual adoption of change initiatives. In this chapter, we will deal with the drivers defined in this way. The other definition of change drivers focuses on drivers of the necessity for change. ⁶³ In terms of sustainability, those drivers are for example the increasing natural disasters in a macroeconomic view, but also political regulations that companies must deal with. These drivers can be understood as external drivers.

One of the main internal drivers for change is that the change vision is accepted by employees and other stakeholders. This means, that the employees and other stakeholders should be considered that the change vision is positive for the organization and also for themselves. ⁶³ The change visions should motivate employees and lead to lower resistance by giving a basic orientation and a realistic picture of the future. ⁵⁸ Prior research has shown that this driver has a positive impact on individual employee change and widespread change implementation and therefore is essential for successful organizational change. ⁶⁴

Another driver of sustainable change management is good leadership. The change-related actions of leaders are critical to the successful implementation of changes and can send important signals to employees. In this way, employees can be considered the importance of the change and their understanding of the change vision can be strengthened. ⁶³ An important leadership task that can drive the change process is the whole planning of the process. Setting a clear timeframe and addressing the critical factors affecting the change’s success can increase the success of the process. ⁶⁵ Another benefit of good planning and analysis is that the organization can always identify the progress of the change process to see how far they are from reaching their goals. ¹⁰ Good leadership through change is also characterized by certain human resource practices. Here, for example, the performance evaluation and reward system can be aligned with the intended target. ⁶³ To drive sustainable change, it would be conceivable here to use ecological indicators as performance appraisal criteria in addition to economic indicators.

A related driver of sustainable change management can be good communication. Since the main task of good leadership is good communication, this change driver is contained in almost all other change drivers. ⁵⁸ Good communication can remove any misunderstandings and obstacles about the intended change and facilitate the understanding and engagement of the employees. ⁶³ In this context it’s especially important to make clear why the change is necessary and to communicate the change vision and the related strategies as clearly as possible. ⁶⁶ As mentioned before, communication can also be a barrier and a potential failure factor. The choice of communication can therefore determine whether misunderstandings and barriers occur or whether the message (importance, vision, goals etc.) is clearly communicated and understood by employees so that the communication works as a success factor. ⁵⁸

Another aspect that can positively influence the success of a change process is change-related training. ⁶³ Prior investigations show that training can improve change-related knowledge, skills and behaviors ⁶⁷ and can therefore lead to more practiced handling of change initiatives of the employees. The acquired knowledge, in turn, can also act as a driver for innovations and new technologies, which are very effective and important, especially regarding the sustainable change. ⁶⁸ In addition, the knowledge can lead to a better understanding of the change necessary. The employees should be sensitized and educated in relation to the topic of sustainability so that they can understand the importance of sustainable change.

Given literature about this subject also shows that involving the employees in change-related tasks, for example in the implementation, can lead to a deeper understanding of the change initiative and to more commitment from the employees. ⁶³ In addition, the employees can get a better understanding of what the change will mean to their job, role or function. ⁶³ These mentioned consequences of more participation of those affected by the change, can increase their motivation and decrease their resistance to the change. ⁵⁸ Besides the direct involvement of employees in tasks related to the change initiative, an important method of participation can also be employee surveys. Through employee surveys, the management can get valuable information about the priorities and opinions of the employees, which can be difficult to get any other way. ⁶⁹ In this way, the management can also figure out where the employees possibly identify barriers and how the employee is evaluating the specific change initiative. In relation to sustainability, the employees might have useful information on how to work more sustainably, which the top management might not even have. Thus, an information gap between management and employees could be closed by using employee surveys.

As we have seen, there are a lot of potential drivers that can drive a successful sustainable change within organizations. Most of the mentioned drivers have in common, that they try to reduce the impact of resistance, which is the main barrier to change processes. By focusing on all the mentioned change drivers, the barriers to change can be overcome to maximize the probability of a successful change implementation that leads to the intended condition after the change.

References

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1
Rasche, C. & Rehder, S. A. Change Management. (Verlag W. Kohlhammer, 2018).
2
Lauer, T. Change Management: Grundlagen und Erfolgsfaktoren. (Springer Gabler, 2019).
3
Ha, H. Change Management for Sustainability. (Business Expert Press, 2014).
10
Al-Haddad, S. & Kotnour, T. Integrating the Organizational Change Literature: a Model for Successful Change. Journal of Organizational Change Management, Vol. 28 (2), 234–262 (2015).
11
Oldham, J. Achieving large system change in health care. JAMA: Journal of the American Medical Association, Vol. 301 (9), 965-966 (2009).
12
Margolis, P. A. et al. Designing a Large-Scale Multilevel Improvement Initiative: The Improving Performance in Practice Program. The Journal of Continuing Education in the Health Professions, Vol. 30 (3), 187–196 (2010).
13
Stock, Byron A. Leading Small-Scale Change. Training & Development (Alexandria, Va.), Vol. 47 (2), 45 (1993).
14
Bennett, W.L. & Segerberg, A. The logic of connective action. Information, Communication & Society, Vol. 15 (5), 739-768 (2012).
15
Berwick, D. M. Developing and testing changes in the delivery of care. Annals of Internal Medicine, Vol. 128 (8), 651-656 (1998).
16
Rachele, J. S. The Diversity Quality Cycle: Driving Culture Change through Innovative Governance. AI & Society, Vol. 27 (3), 399–416 (2012).
17
Ulrich, D. A new mandate for human resources. Harvard Business Review, Vol. 76 (1), 124-134 (1998).
18
Lozano, R. Proposing a definition and a framework of organizational sustainability: A review of efforts and a survey of approaches to change. Sustainability (Switzerland), Vol. 10 (4), 1–21 (2018).
19
Maiti, M. What is Change Management Educationleaves https://educationleaves.com/change-management/ (2021).
20
Anderson, D. & Ackerman Anderson, L.S. Beyond Change Management (Electronic Resource): Advanced Strategies for Today’s Transformational Leaders. (Jossey-Bass/ Pfeiffer, San Francisco, 2001).
21
Diaz-Iglesias, S. et al. Theoretical framework for sustainability, corporate social responsibility and change management. Journal of Sustainability Science and Management, Vol. 16 (6), 315–332 (2021).
23
Doppelt, B. Leading Change toward Sustainability. (2nd ed. Taylor and Francis, 2017). Available at: https://www.perlego.com/book/1546026/leading-change-toward-sustainability-pdf (Accessed: 18 August 2022).
22
Millar, C. et al. Sustainability and the Need for Change: Organisational Change and Transformational Vision. Journal of Organizational Change Management, Vol. 25 (4), 489–500 (2012).
24
Dahl Sönnichsen, S. & Clement, J. Review of green and sustainable public procurement: Towards circular public procurement. Journal of Cleaner Production, Vol. 245 (118901), 1–18 (2020).
25
Mendoza, J. M. F., Gallego-Schmid, A., & Azapagic, A. A methodological framework for the implementation of circular economy thinking in higher education institutions: Towards sustainable campus management. Journal of Cleaner Production, Vol. 226, 831–844 (2019).
26
Klein, N. et al. Factors and Strategies for Circularity Implementation in the Public Sector: An Organisational Change Management Approach for Sustainability. Corporate Social-Responsibility and Environmental Management, Vol. 29 (3), 509–523 (2021).
27
Figueira, I. et al. Sustainability policies and practices in public sector organisations: The case of the Portuguese central public administration. Journal of Cleaner Production, Vol. 202, 616–630 (2018).
34
Renwick, D. W.S. et al. Green Human Resource Management: A Review and Research Agenda. International Journal of Management Reviews: IJMR, Vol. 15 (1), 1–14 (2013).
50
Droege, H. & Raggi, A. & Ramos, T.B. Co-development of a framework for circular economy assessment in organisations: Learnings from the public sector, Corp Soc Responsib Environ Manag. 1715-1729 (2021).
51
Coutinho, V. et al. Employee-driven sustainability performance assessment in public organisations. Corporate Social Responsibility and Environmental Management, Vol. 25 (1), 29–46 (2018).
58
Lauer, T. Change management: fundamentals and success factors. (Springer, 2021).
59
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