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Change Management: Meaning, Benefits, Framework, and Steps to Do It


18 June 2024
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In a company, changes can result in decreased work productivity and even losses. Therefore, proper change management is needed.

There are several types of frameworks that you can use to ensure changes in your business can be implemented and accepted well. In this article we will explain in full about change management.

What is Change Management?

Change management is a systematic step that companies must take in implementing organizational, operational changes, and the technology adaptation process. In other words, companies must ensure change continues while encouraging employees to take part in it.

According to TechTarget, change within a company, on any scale, can cause stress and discomfort. Decreased productivity and job satisfaction are only a small part of the negative impacts of messy change.

Before making changes within your company, you should consider the following:

  • Impact of changes on operations and employee conditions.
  • Prepare clear stages and implementation schedule.
  • Document all stages and change processes so that nothing is missed.

All of the above considerations will form the right change management plan. You can also choose a framework that suits the type of change and all employees.

Benefits of Change Management

If the company has a structured and systematic change management plan, the following are a number of benefits that will be felt:

For companies

  • Complete system and documentation.
  • Ensure the similarity of expected and occurring changes.
  • Automation systems can be adopted precisely and quickly.
  • Can identify what needs to be changed and eliminated.
  • Can determine infrastructure whose function can be changed.

For employees

  • Understand the reasons and solutions carried out by the company in the change process.
  • Understand the role and impact that can be provided during the change process.
  • Equalize the perspective and feelings of each employee towards change.
  • Understanding that his and the company's future is on the same path.
  • Can compare expectations and facts of changes that will occur.

Types of Change Management Frameworks

As mentioned above, there are several types of change management frameworks to ensure a smooth process. Summarizing Apty, here are four frameworks commonly used by companies in carrying out change management.

Kotter change management

This framework was popularized by Harvard professor John Kotter. The process he introduced is popular and has been used by many companies since 1996.

Kotter divides the change management process into eight important steps.

  1. Create urgency for change.
  2. Building collaboration within the organization to support change.
  3. Create a strategic and realistic vision.
  4. Can convey the vision well and clearly.
  5. Encourage various parties to take part in the process.
  6. Celebrate all small and short-term achievements.
  7. Maintain the duration and speed of the change process.
  8. Cultivate and form a corporate culture within the company.

When creating urgency for a change, you must be able to convey the reasons and the problem you are trying to solve. Make sure this information is conveyed transparently to employees.

Lewin's change management model

This change management model is quite simple, Lurt Lewin describes the following three phases.

Unfreeze

This phase is used to map out what needs to be changed and what kind of preparation is needed. In detail, pay attention to the following three things:

  • Decide what to change.
  • Analyze the company's current operations and what changes need to be made.
  • Communicate changes transparently.

Change

This phase is when all changes begin to be implemented. Make sure these two things are done:

  • Ensure all employees understand the positive impact of change.
  • Provide training and time for employees to adapt.

Refreeze

This final phase is to ensure the changes are implemented correctly. Three things to do are:

  • Convey again the goals and impacts that will occur from changes to the company's internal processes.
  • Ensure company stability during and after changes.
  • Celebrate success and success in making changes.

PDSA

This change management is a framework that prioritizes continuity. This means that even though changes have been implemented, the process will continue to be optimized and developed. The PDSA stages are:

  • Plan – Identify changes and develop a plan.
  • Do – Make changes from the smallest scale.
  • Study – Analyze the results of changes and identify successful patterns that need to be corrected.
  • Act – Make decisions and implement changes based on analysis and lessons learned.

This change management helps companies and employees to remain flexible and develop.

ADKAR model from Prosci

This framework prioritizes perceived outcomes in change management. Prosci outlined these five results or achievements:

  • Awareness – Company management explains the changes that will occur and their causes.
  • Desire – Leaders and managers ask for employee support through case studies and facts about company conditions. It is recommended to conduct 1-on-1s to understand employee opinions and concerns.
  • Knowledge – Changes are implemented thoroughly. Companies must hold training to support employees in adapting.
  • Ability – Employees will begin to apply changes in their daily work.
  • Reinforcement – ​​Give appreciation to employees for implementing and making the change a success.

Steps to Perform Change Management

If you look at the various frameworks above, the key steps for effective change management are:

Open-minded leader

Quoting Asis Online, feelings of frustration and uncertainty in change can be overcome by a company that can embrace all parties and be open. Internal stakeholders, clients, employees and consumers must receive a complete explanation and understand the new steps the company will take. The right leader will ensure all of those things happen.

Involvement of all related parties

Still related to the previous point, change requires help from all parties in the company. Every team, stakeholder and employee must work together to carry out and support the change process.

Open and clear communication

It can be concluded from the various frameworks above, transparent, intensive, effective and personal communication can help the change process run smoothly.

Change-related training

Employees must receive training and be given realistic time to adapt to changes. Managers can hold 1-on-1 sessions to check on employee conditions.

Clear success metrics

The final step is to determine realistic and clear targets for success. Frustration and uncertainty can result from metrics that are “too high” or impossible to achieve in a short time frame.

That is a summary of change management so that companies can avoid problems that could have a bad impact.

Through proper change management, the mission and vision of leaders and employees will be united. Therefore, change management is a process that must be prepared carefully.

Before making a decision, you should first study the change process and management.

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The GMS is a crucial forum where share owners gather to make important decisions that will affect the future of the company.

In it, there are intense discussions about company policies, performance evaluations of leaders, and vital decisions such as structural changes.

In this article, let's discuss GMS in more depth, starting from its meaning, function, to types.

What is GMS?

A General Meeting of Shareholders (GMS) is an official meeting regularly held by a company and attended by the board of commissioners, directors and shareholders.

The GMS has special authority that is not owned by the board of commissioners or directors.

This is regulated in Law Number 40 of 2007 concerning Limited Liability Companies.

To hold a GMS, the company must fulfill the following requirements:

  • The GMS must be invited by the Board of Directors or Board of Commissioners.
  • Notification to shareholders must be made no later than 30 days before the date of the GMS.
  • The GMS is only attended by legal shareholders.
  • Decisions are taken through deliberation to reach consensus. If this is not achieved, a decision is taken based on the majority vote.

GMS function

The GMS is a forum where shareholders have the opportunity to be directly involved in making important company decisions. GMS has a very important function for the company, namely:

1. Establish Company Policy

This meeting is a forum for shareholders to jointly formulate and review company policies for both the short and long term.

For example, whether the company will expand its business to new areas or whether it will launch new products.

These decisions are very important because they will affect the company's future growth and success.

2. Check the Company's Financial Health

One of the main agendas at the GMS is examining the company's financial reports.

Shareholders will look at whether the company made a profit, how much debt it has, and how money was used over the last year.

This is important to ensure that the company is well managed financially.

If there is a problem, shareholders can ask for an explanation and solution from company management.

3. Assess the performance of the Board of Commissioners and Directors

The GMS is also an opportunity for shareholders to evaluate the performance of company executives such as the board of commissioners and directors.

They will see whether the leaders have carried out their duties well and achieved the targets they have set or not.

If their performance is less than satisfactory, shareholders can decide to replace them with other people who are more competent.

4. Establish Dividend and Profit Sharing Policies

When a company makes profits, shareholders need to decide how those profits will be used.

At the GMS, they will discuss whether profits will be distributed to shareholders in the form of dividends or reinvested into the company for business development.

This decision must consider the company's short-term and long-term needs.

5. Amend the Company's Articles of Association

The GMS can change the basic rules that govern the company. These changes could be:

  • Merging a company with another company.
  • Separating a department from the company.
  • Disband the company.

This decision must be approved by the majority of shareholders.

The aim is to ensure that this major change is carried out with the support of many parties so that the company remains stable and has a clear direction.

6. Deciding on the Dissolution of the Company

The GMS can also decide on the dissolution of the company if the company experiences serious financial problems or cannot continue its operations.

This decision is usually taken if the company experiences serious financial problems or cannot continue operations.

Dissolution of the company is the final step and requires approval from shareholders.

Types of General Meeting of Shareholders (GMS)

The GMS is an important forum where shareholders gather to make important decisions about the company's direction and policies.

Based on the time it is held, the GMS is divided into two types, namely the Annual General Meeting of Shareholders (AGMS) and the Extraordinary General Meeting of Shareholders (EGMS).

Annual General Meeting of Shareholders (AGMS)

The AGMS is held at least once a year, no later than six months after the company's financial year ends.

The following are several important agenda items that are usually discussed at the AGMS:

  • Company annual report.
  • Company financial reports.
  • Dividend distribution.
  • Appointment and dismissal of members of the board of commissioners and directors.
  • Changes to the articles of association.
  • Merger, consolidation or separation of companies.

Extraordinary General Meeting of Shareholders (EGMS)

The EGMS is held to discuss and decide on extraordinary or urgent matters that cannot be postponed until the next AGMS.

The following are some of the agendas that are usually discussed at the EGMS:

  • Changes to the articles of association.
  • Merger, consolidation or separation of companies.
  • Appointment or replacement of curator.
  • Postponement of debt payment obligations.
  • Filing a bankruptcy petition.
  • Termination of business activities.

General Meeting of Shareholders Mechanism

A GMS is an important meeting that is strictly regulated in accordance with the applicable regulations in the company's articles of association.

The following are the main stages in the mechanism for holding a GMS:

1. Summons to the GMS

The summons for the GMS must be made by notifying all shareholders no later than 30 days before the implementation date.

The invitation must state the time, place and agenda that will be discussed at the meeting.

This is done to ensure that all company stakeholders can manage their schedules and participate in important discussions.

2. Validity of the GMS

To be considered valid, the GMS must be attended by shareholders representing more than half of the total shares with voting rights of the company.

If the number of members is not met on the first day, the GMS can be continued on the next working day provided it is attended by shareholders representing more than 1/3 of the total number of shares with voting rights.

This is important to ensure that the decisions taken at the GMS reflect the will of the majority of shareholders.

3. Discussion of the GMS Agenda

The GMS agenda includes various strategic matters that influence the company's direction and policies.

Shareholders have the opportunity to discuss and decide on the company's annual report, financial reports, dividend distribution, appointment or dismissal of members of the board of commissioners and directors, as well as changes to the company's articles of association.

Decisions at the GMS are reached through deliberation to reach consensus. If there is no agreement, the final decision is taken by majority vote.

4. GMS Report

After the GMS is held, an official report will be prepared by the notary who was present at the meeting.

This report records the results of discussions, decisions taken, as well as voting results on each agenda item discussed.

The GMS report must be submitted to all shareholders no later than 30 days after the GMS is held. The aim is to ensure transparency and accountability of the company's decision-making process.

As explained above, the GMS is an important forum for shareholders to participate in monitoring and making strategic decisions for the company.

By following this clear and orderly mechanism, the GMS ensures that every decision taken is the result of a transparent and fair discussion in accordance with the interests of all shareholders.

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David Altman, PhD, Chief Research and Innovation Officer at the Center for Creative Leadership (CCL), has noted, “The journey to elevate women is not just a moral imperative; it is a strategic necessity.”

The World Economic Forum reports that closing the gender gap will take 149 years in South Asia and 189 years in East Asia and the Pacific. Women remain underrepresented in top positions across both the private and public sectors. According to Fortune, women accounted for only 10.4% of Fortune 500 CEOs in 2023. It is clear that the lack of progress is not due to a lack of ambition among women.

Despite advancements in education and employment opportunities, women in Indonesia still face significant challenges in career development. The female labor force participation rate was around 53% in 2021, a figure that has seen little change over the past two decades. Many women are stuck in low-productivity and low-paying jobs, and the gender gap in labor force participation remains one of the largest in the country.

A significant number of women leave the workforce after marriage and childbirth. The difficulty of balancing childcare responsibilities with work obligations is a major obstacle to their productivity. The shortage of quality childcare services, lack of family support, and cultural values that prioritize women as primary caregivers force many women to leave their jobs.

Research conducted by CCL, in collaboration with Prasmul-eli, underscores the issue of women's leadership in the Asia Pacific region. The study, titled “Elevate The System: We do not need to change women — we need to change systems,” reveals that Indonesian women with families often handle most domestic responsibilities, leading to burnout and fatigue. The prioritization of family remains a significant barrier to women's career advancement.

For a detailed analysis, download the full report for free at the following link.

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Managerial Skills as the Foundation of Leadership Success
28 June 2024

Aspiring to get a promotion as a manager in the company or just got the promotion? When occupying a leadership position in a company, there are skills required, one of which is managerial skills.

In the complex and competitive world of business, the success of an organization often depends on its leaders' ability to manage teams, projects and resources efficiently.

A skilled manager must not only understand the technical aspects of their job, but must also have a variety of other skills that enable them to lead effectively.

So, if you want to have good managerial skills to boost your career, read this article to the end, okay?

Definition of Managerial Skills

Managerial skills are the ability to organize employees so they can do their jobs better. Not only must a leader have it, but managerial skills need to be learned by everyone for career success.

Basically, someone who has good managerial skills can be more adaptive to various decisions or business directions from the company. Not only useful for yourself, managerial skills will also help the company develop further.

By continuing to sharpen managerial skills, a work team will be created that is more able to collaborate to complete work. Of course, this will be profitable so that the company can continue to run and innovate with the support of its employees.

Types of Managerial Skills

Here are three types of managerial skills that you need to understand and apply:

Technical Skills

This type involves knowledge for a specific field. With extensive knowledge, a manager will use special techniques that he learns to achieve his goals within the company.

Some examples that need to be understood regarding technical skills for managerial skills are work planning, increasing sales, and so on.

Conceptual Skills

Types of conceptual skills include understanding, how to think, and how to formulate ideas. With this concept, a manager can see an idea in outline, analyze it, and find out what action plan is needed.

Managers with good conceptual skills will usually better understand the advantages and disadvantages of choosing a work plan and can overcome them by making additional plans.

Interpersonal Skills

This type of interpersonal skill refers to how managers interact, work, and relate effectively with coworkers. This skill allows a manager to utilize human resources in the company and also motivates them.

Of course, the hope for the future is that the team can work better and produce something the company needs to develop.

Examples of Managerial Skills

To understand better, here are six examples of managerial skills that you need to pay attention to and learn!

Communication

Communication is the key to success. In managerial skills, a manager with good communication skills will tend to be more successful.

The reason is, by having good communication skills, a manager can convey information clearly and be understood by various parties. Apart from that, the better a manager's way of communicating also influences the quality of his team's work.

Planning

A manager must be able to plan or plan. This type of managerial skill is really needed because it will have an impact on the way you work in a team.

The planning skills possessed by a manager help him to create something that is visionary and still pay attention to obstacles and goals. Apart from that, in planning a manager must be able to do the following things:

  • Critical thinking
  • Think logically
  • Think strategically
  • Analyze the problem
  • Program management

Decision Making

Decision making is another example of managerial skill. The success of a company or organization depends on the decisions taken by superiors within it.

In order for a plan to run smoothly, it is necessary to make the right decision in every situation. A manager who is able to make effective decisions in every situation will help the company develop further.

Problem Solving

A good manager can solve problems in an effective way and prioritize common interests. Problem solving in a company also involves identifying problems and then reaching conclusions about how to solve them.

This managerial skill does not only apply to the interests of the company, miscommunication and other things can occur within the team while working.

Delegation of Tasks

A manager who has this ability is certainly able to reassign tasks or divide tasks within the team. With this managerial skill, a manager will better understand who is suitable to carry out the task and can do it more efficiently.

Delegation helps managers optimize their productivity and helps teams gain new learning or skills.

Motivation

Another example of a managerial skill that needs to be learned is how to motivate. A manager who can motivate his team is a valuable asset for the company.

Motivation triggers desired behavior or responses from employees. There are two types of motivation used by managers, namely intrinsic motivation and extrinsic motivation.

If a manager has mastered managerial skills, of course this will have a good impact on himself and the team. It doesn't stop there, having good managerial skills can also motivate other employees to learn more and have an impact on the company's success.

The company's success in question is synergy within the team to achieve company goals and continue to grow.

Want to learn more about managerial skills? prasmul-eli has a special short leadership program that you can follow. The program is held for two days with various materials that help you to sharpen your managerial and leadership skills in the team.

Not only the leadership program, Prasmul-eli provides other short programs for you professionals who want to increase their knowledge. The program is designed to be short but still provides the essence and employs facilitators who are experienced in their fields.


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