Mar 64 min read

Market Corrections in a Flexible Industry: Fine-Tuning Change Management

Updated: Mar 10

In the past three decades the market for change management has changed enormously. My first exposure to change management was a well-funded cultural change program linked to a business-critical transformation. It was really well executed, inclusive, comprehensive without being excessive and involved a discussion of ideas and opportunities for employees, focussing on the core business driver and positive aspects of making the change. This change would see our business survive, not making the change would not.

Ultimately the privatisation of the organisation achieved success against the credit rating downgrade that threatened its survival. It's previous appetite for operations as a wealthy, high-margin, high-commission business were flattened and aligned to doing business in the new, more accountable world of financial services post-2000. The organisation was divided up into lines of business. Initially the retail arm acquired banking assets and was later acquired by a larger bank. Other brands were prepared for sale and reorganisation, and one brand remains active in the marketplace.

In the late 1990s, many change managers were called Business Project Managers or Strategic Business Consultants. The profession of change management didn't really become widely known in this country until the Change Management Institute was originated and incorporated in Australia in 2005.

Since then, the market for change management has often found itself in a state of fluctuation, something like a seesaw swinging between demand and supply. Amidst the corrections, one recurring theme has stood out: the variability of rates for contract change managers. This flexibility speaks volumes about the underlying issues within the industry, highlighting the reasons for occasional market corrections and the need for intentional fine-tuning or disruptive innovation.

There are pain points throughout the world of change. From those experiencing unwanted change, to those under pressure when leading and managing it, to the teams who coordinate tangible implementations with limited time and resources, right through to those who govern the spending and take accountability for the risks.

Stakeholders face multi-layered challenges at every level of change management. And again, amidst these challenges, the compensation rates for change managers often seem to reflect a shallow understanding of the complexity of their roles.

At first glance, the allure of cost-cutting may prompt hiring managers to take on those change managers offering lower rates. However, this initial attraction often proves short-sighted as organisations soon realise they hired talent that isn't yet experienced enough to work with all the moving parts. The fallout from such decisions can be costly, both in terms of financial resources, workplace engagement risk and the overall success of change initiatives.

A more experienced professional woman sits on one side of a seesaw, a much larger figure than the less experienced professional man on the other side.

A cycle typically unfolds as organisations, trying to do too much, find budgets under pressure and see change management as a 'nice to have'. They subsequently opt for budget-friendly change management talent. Contractors eager to secure work may reduce their rates to remain competitive, or take on roles without having sufficient experience. As the true demands of the job emerge, shortfalls in expertise and experience become apparent. The result? Projects stall, deadlines loom, and the organisation finds itself scrambling to rectify the situation.

This pattern of underestimating the value of skilled change management is symptomatic of a broader issue within the industry. Change management is often perceived as an ancillary function, rather than a strategic imperative. Consequently, organisations fail to recognise the critical role it plays in navigating complex transitions effectively.

Further, the lack of standardised qualifications and certifications within the field confuses the problem. Unlike more established professions where formal credentials serve as a benchmark for competency, change management lacks clear-cut standards. Popular methodology and management courses fill the gap for those without appropriate tertiary qualifications. This ambiguity allows individuals with varying levels of expertise low barriers to entry, further muddying the waters and contributing to the fluctuating market rates.

To address these challenges, business leaders can fine-tune their understanding of the change management industry.

1. Recognition of Change Management as a Strategic Function: Organisations would do well to acknowledge the pivotal role that change management plays in achieving strategic objectives. By elevating its status within the organisational hierarchy, businesses can ensure that resources and expertise are allocated where necessary to drive successful transformations.

2. Nothing beats experience: Look for change managers with appropriate tertiary qualifications in business and a CV of practice to back them up. Other certifications exist within the field of change management, and certifications can be useful, but they may not represent equivalence. Be aware that change management has seen an influx of inexperienced practitioners and be prepared to supplement skills with knowledge transfer strategies like traineeship and mentorship. By promoting a culture of continuous learning and professional development, organisations can ensure that their change managers possess the requisite skills and knowledge to excel in their roles.

3. Investment in Talent: Recognise that skilled change management is not as common as organisations might like. While cost considerations are important, they should not come at the expense of quality. Top-tier talent offers better value through lower risk and higher competence. By prioritising value over price, organisations can avoid the pitfalls of the low-rate cycle and set themselves up for success in managing change effectively.

4. Embrace Innovations: The advent of innovations like online learning and delivery, artificial intelligence tools and collaboration platforms presents an opportunity to revolutionise the way change management is conducted. By leveraging these tools to level out resourcing gaps and streamline delivery, organisations can intentionally design for the achievement of better outcomes.