Approximately 70% of companies fail to meet their change objectives. One root cause of failure occurs when companies do not anticipate the business risks associated with their proposed changes. Risk analysis and mitigation are important factors to consider when planning an organizational change. Four recommendations for effectively identifying business risks and developing risk mitigation strategies are listed below:
1. Maintain All Business Requirements. A change initiative can be time-consuming and distracting. Nevertheless, there are on-going, day-to-day business operations that must be managed to ensure performance goals are met. Below are a few pointers to keep you on track:
- Revisit existing goals and projects to ensure that they are still viable and relevant in light of the changes to be implemented
- Reprioritize goals and subsequent activities as needed
- Ensure that those responsible for meeting the established benchmarks are empowered to fulfill the requirements
2.Identify Business Risks. It is helpful to separate risks into two categories; those internal to the organization and those external. Externally, classify risks as those that impact customers and potential competitive responses. Internally, risks may be categorized as those that affect people, processes, stakeholder alignment, and systems. It is important to take the necessary time to:
- Engage your teams and stakeholders to identify business risks
- Determine the highest priority business risks that your team can address
- Communicate with other teams and leadership about identified risks outside of your team’s control
- Validate these risks with others
3.Develop Risk Mitigation Strategies. For each risk it is important to ask:
- What are some potential scenarios that could arise if this risk is not addressed?
- What are specific and measurable actions that can be taken to mitigate this risk?
- What is within control of the group and what is not?
- How is this risk associated with individual productivity, employee engagement, and overall talent retention?
4. Make Communication a Priority. Once the risks and mitigation strategies are developed, it is critical to share them with the leaders responsible for change implementation. Taking the time to communicate provides leaders and their teams the ability to problem solve and take action:
- Communicate continuously about how these risks relate to performance goals
- Ask team members to coordinate with their peers regarding risk mitigation efforts and to report any unanticipated risks that can develop
Failure to identify risks and develop risk mitigation strategies reduces the likelihood of achieving change goals and success. This “crash course” can help to ensure that risks are identified and blind spots are minimized. Leaders who recognize that risks can be mitigated are able to ensure successful change management.