“When you are finished changing, you are finished.”- Benjamin Franklin

Change is an integral part of everyone’s lives, and nothing in this world can circumvent change. Besides in biological discipline, other changes including culture-social, political, financial, economic, and technological accelerated globalization in past decades (Ayesha Naz, 2018). Yet, it is often easier to say than done.

Many external factors can affect the business of an organization, such as environment, technology, economic shifts and even social norms (Mukherjee, 2023). All these factors could lead to emergent change or planned change to be implemented by the organization. Therefore, for the success and sustainability of the business, leaders need to manage change carefully as resistance to change is human nature.

Change employees’ personalities or change their mindset?

Changes often bring about uncertainty and insecurity and the need to acquire new skills, therefore, different personalities have different appetites for change. For example, employees in larger corporations would prefer less change than smaller companies as less flexible in structure and rules. Another is the traditional industry is less accepting of change than innovation and technological companies. Little can be done to change a person’s character within a short period of time. However, leaders should understand employees’ fear of change and adopt appropriate strategies to overcome employees’ change-resistance mindset to improve their adaptability, such as delivering a clear vision, mission and view of future skills required for the change, the opportunities for employees to upskill and reskill, inspire and motivate employees to embrace change through clarity and transparency, and involving employees to create ownership and inclusion (PwC, 2023).

Kotter’s Theory

Kotter’s theory provides a comprehensive list of steps of managing change in an organization top-down. However, this model is limited to larger organizations where employee feedback is not included in decision-making and may pose a risk of employee resistance. Also, leaders are unable to identify any real urgency and the approach is rigid. As involving many steps more difficulties will be encountered during implementation. Critical mistakes at any stage would have a great impact and slow down the whole process. Examples of using Kotter’s Theory commonly applied in financial institutions will be further explained later on.

 

For smaller organizations where feedback is valued and will be considered in decision-making, leaders may include Nudge Theory to adapt to their change management process.

Nudge Theory

How to ensure successful change management?

There is no one fit for all models for change management as changes in environment, people, social norms, and technology can change anytime. Leaders should apply appropriate or a combination of different models that best fit their size, industries and characteristics of the employees. Good leaders should always be proactive and prepared to react to change while employees should embrace change with an open mind. Communication, motivation and inclusivity by the leaders are important as no organization can be successful without the collaboration of both the leaders and employees. Leaders should also not be resistant to employee feedback as effective feedback can lead to better performance of the management in achieving goals.

What are the positive effects of the change management model in the Financial Industry?

In a study on the effects of change management in the banks of Saudi Arabia and Keyana, it was found that banks in both countries have some kind of change management, though the types of changes may be different. The research shows the positive impact of symmetric communication. As a result of change management, employees have a greater sense of belonging and a higher level of commitment to be more productive. Most financial institutes in the 2 countries are deploying Kotter’s Model of Change (O., 2014; Alhaderi, 2021).

What are the Consequences of failure to maintain change?

The notorious case of Wells Fargo has opened about 2 million fake accounts without the customer’s consent is another case of a failure to comply with Kotter’s Model of Change. Despite top management being informed of such wrongdoing by thousands of its employees, such activities still persisted. The bank’s overambitious sales goals, with no intention to listen to what was on the ground, were what caused the company to be fined close to $3 Billion US Dollars for this incident (Bramwell, 2014; Skipworth, 2023).

Conclusion

Kotter’s Model of Change is one of the main benchmarks that is most prominent in discussions about the effects of change. I believe strongly that Change is prominent and if we fail to follow, embrace and react to the changing world and listen to the feedback from the ground, results will be disastrous. Thus, Let’s embrace change and plan on how to conduct and react on it.

References

Alhaderi, D. S. (2021). Kotter’s Eight Step Change Model for Employees’ Intentional, Cognitive and Emotional Readiness for Change and Developing Regional Economy in Saudi Banking Sector’s, Role of Homologous Communication, Learning Demand and Job Involvement. Journal of Legal, Ethical and Regulatory Issues, 24.

Ayesha Naz, E. A. (2018). Driving Factors of Globalization: An Empirical Analysis of the Developed and Developing Countries. Business & Economic Review: Vol. 10, No.1 2018 pp. 133-158, 26.

Bramwell, S. (2014). Ethical Change Management. US: Cornell University.

Mukherjee, R. (14 6, 2023). How non-economic factors like politics, conflicts, social factors also affect business. Retrieved from The Economic Times: https://economictimes.indiatimes.com/news/how-to/how-non-economic-factors-like-politics-conflicts-social-factors-also-affect-business/articleshow/100993950.cms

O., W. R. (2014). CHANGE MANAGEMENT IN FINANCIAL INSTITUTIONS:. Africa: UNITED STATES INTERNATIONAL UNIVERSITY – AFRICA.

PwC. (20 6, 2023). Global Workforce Hopes and Fears Survey 2023. Retrieved from PwC: https://www.pwc.com/gx/en/issues/workforce/hopes-and-fears.html

Skipworth, W. (08 08, 2023). Wells Fargo’s $125 Million Fine For Employees Using Personal Messaging Marks Latest Run-In With Regulators And Courts. Retrieved from Forbes: https://www.forbes.com/sites/willskipworth/2023/08/08/wells-fargos-125-million-fine-for-employees-using-whatsapp-marks-latest-run-in-with-regulators-and-courts/?sh=55a68ed65c62