Today change is the “new normal” in organizations as leaders seize opportunities and react to marketplace threats. To stay competitive and relevant, it is not uncommon to have multiple change initiatives underway at the same time. There are many critical factors to consider when developing a change execution plan, one being the identification of risks and strategies to mitigate these risks. Common types of risk factors may include:
- Customer disruption
- Competitor advantages
- People and resources (e.g., knowledge, skill gaps, retention)
- Financial impact (e.g., revenue, expenses, cash flow)
- Legal, regulatory, or compliance related matters
- Policies and procedures
- IT Systems launches or enhancements
- Structures and incentives (e.g., what behaviors are being reinforced)
Use the following simple steps to identify and mitigate business risks and increase your chances of meeting your change goals:
- Stay focused on achieving continuing business requirements. The tendency is to be distracted from meeting vital on-going short, or mid-term business requirements and deadlines. It is critical to ensure an evaluation is completed of deliverables and to determine how they will be affected by the change initiative. Lastly, business requirements should be prioritized to stay on track.
- Identify risks that could jeopardize the success of the change initiative. Ask yourself the following questions: “In what way could the change have a negative impact on business?” “What difficulties could arise when trying to meet our change goals?” “What is the impact on our people, will they need to do things differently?” For large-scale change initiatives, top leadership should first identify organizational risks and then share with all groups and team leaders. Having a common understanding of what is at stake and what to be mindful of during change implementation allows for proactive management throughout the organization. Additionally, leaders throughout the organization can identify early warning signs and take the appropriate action(s) in a timely manner. When there are risks related to employees adopting the change and having the skill sets needed to advance organizational goals, specific action plans need to be developed to close gaps.
- Prioritize and validate risks. Focus the team’s effort on the risks that are most likely to have the greatest impact and where you are most likely to be successful. Validate the prioritized list with others, including your manager, peers, and other key stakeholders, e.g., leaders or champions of the change effort.
- Develop risk mitigation strategies. Leaders should work with their teams to develop strategies to mitigate the most important risks. Identify specific actions to address the high priority risks, and then assign responsibility and timelines for accomplishing each identified action. For example, if there is concern about the loss of customers, specific plans related to customer outreach need to be developed.
- Include risk mitigation efforts in the overall communication plan. Determine what risks need to be communicated and to whom. Also, set a timeline to establish when others should be made aware of the various risks and what their role is to mitigate them. To ensure a transparent and accountable environment, continuously share updates, plans, and successful implementation of risk mitigation strategies.