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When it comes to organisational change, a lot of factors need to be taken into consideration. Like the impact to the business and the employees, the impact on revenue, productivity and shares, just to name a few. If the period of the change is shortened, your chances of saving on cost and impact are better. Looking at how change management can assist you through this process, brings another dynamic to the situation and additional factors to consider, for instance, should you make use of internal or external change management.
If you wonder if you should appoint a permanent change manager or only get someone for the period of the change, these are the things you can consider:
If we look at the advantages and disadvantages of internal change management, you are faced with the following:
When you have an internal change manager they will have close knowledge of the culture and the environment of your organization, which will assist in a quicker start-up time when it comes to any change. They will understand how the company’s processes work and what the best and available channels are within the organization to communicate effectively. They will also be more readily available and more cost effective. A study in the US determined that internal strategy advisors for a project may cost 4 to 6 times lower than the rates of one of their big 3 strategy consultancy firms (McKinsey & Company, Bain & Company or The Boston Consulting Group).
Internal change managers will have more authority within the organisation as they have already built the necessary relationships and trust, and don’t need to do it again before each change, as this can only now be improved and maintained after the first change, BUT the downside is also true, that if a relationship within the workplace suffered in some way, it is hard to re-establish that trust.
Having an internal change manager might make them very subjective and too close to the change when you absolutely need objectivity. They might also get stuck in a gear of “this is how I have always done it” and lose the necessary innovativeness that might be required by the change. In some cases, they might also create additional resistance if they are part of the problem. When the organisation is not faced with a change, they may be reassigned, or additional tasks might be added, that in turn could have an influence on their capacity when they need to act in the change management role again.
For one, they are objective to the change as they are not closely involved or personally impacted by the change. The fact that they are external, will increase the trust from employees to give more truthful feedback because they know that whatever they said or complained about, will not be directly linked to them if a survey is done anonymously. They are able to give a fresh look at the company culture and the effectiveness of the environment. Even though they need to build relationships within an organisation, they are not influenced by the company politics, which may also increase the trust they gain from the different stakeholders. They also bring along a vast experience gained from various companies. Together with this they also have specialised skills in dealing with a diverse range of problems, as well as ideas on how to overcome them, with tried and tested solutions. They might also possess more skills, technical knowledge and competence as they are in a habit of being independent players.
External change managers usually come from a specialised consultancy firm, which allow them to have access to a broader platform to gain knowledge more easily. They may also have more credibility, due to the track record of the consultancy firm’s track record. A consultancy firm also has a pool of change management consultants to pull from and will be able to match the project with a consultant that has the appropriate talents, best knowledge and experience for a specific project, whereas with an internal change manager, you are usually limited to the talent and experience they have.
They sometimes have a challenge with building the relationships in time that is needed for a successful implementation. Becoming familiar and gaining working knowledge and understanding of an organisation’s processes, culture, values and accepted behaviour also takes some time. This may result in the external change manager challenging the status quo of the organisation and the traditions that they may have formed. Another challenge is how to sustain the change, adoption of the change and the momentum of the company once the external change manager leaves. Lastly, an external change manager will require out of pocket costs, while an internal change manager has a consistent and budgeted salary.
When deciding whether you should opt in for an internal or external change manager, all advantages and disadvantages need to be considered. It is also dependant on the nature of the organisation as well as the culture, and the nature of the change, to be able to determine what would work best for the organisation and the employees. The nature of the change and the knowledge available to apply change management to manage the change will ultimately determine what you and your organization require.
