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Audit and Assurance FRS 102 Periodic Review Series – Other changesOn 27 March 2024, the Financial Reporting Council issued amendments to FRS 100 – 105 (known as GAAP, or Generally Accepted Accounting Practice), a suite of accounting standards applicable in the UK and Ireland. These are used by an estimated 3.4 million businesses in preparing their financial statements.
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I was reading a book recently from Erika Andersen, titled, “Change from the Inside Out”, which very much reflects my own approach to change management over the last 30-years or so. To put it simply, for change to work and be sustained, it needs to be driven from the inside out, reflecting an organisations’ leadership, culture, values, beliefs and practices.
Change used to happen slowly and incrementally, but the speed of change has accelerated and its magnitude has grown. Typically, something new forces people to behave differently to what they know, as it pushes their comfort zones. The concept of change from the inside-out, is to vision a more meaningful and practical dimension to ease change, recognising change as less of an object and more a shift in organisational culture, that is accepted from the inside to acknowledge on the outside.
Firstly, leaders and managers can aid change from the inside by being accountable to employees and especially as a point of contact for those most affected. Initially, managers should connect with employees to articulate the need for change; this includes defining what the change entails alongside any positives or negatives which are relevant, with careful explanation of these, and this should diminish immediate concerns. Involving people from the beginning will prevent organisational obstacles encountered during the execution of the change.
The most common question employees have is; what will this change bring? Hence, it is important to articulate the challenge and do so clearly, showing how the outcome of the change is beneficial for most employees. This also prevents contradictory views from other employees or functions, which may be uncertain of the change, generating growing frustration and resistance among some staff.
Secondly, leaders must define the behaviours that exemplify the change they want to see. The use of incentives can be of benefit here, and help with behaviour change. Leaders can start by leading by example and supporting those employees who follow, again changing from the inside out.
Using a Work Breakdown Structure (WBS) can be helpful when implementing change, as this structure creates deliverables and tasks assigned to an owner who can ensure that their area is completed. Added is a sense of ownership around the new change, that will help any staff struggling to deal with the new environment, expected behaviours, and culture.
Further, leaders should evaluate the change for sustainability. Identifying the changes that will be successful in the short-term, as these are the best improvements to focus on and easiest when it comes to sustaining the change. This can be difficult, as resistance may still occur or reoccur as time passes and requires reassurance of the need and impact of the new changed environment.
An important part of sustaining the change is measuring success, as this lets people know that you are monitoring and evaluating it, enforcing a sense of follow-up and control.
Lastly, while sustaining the change, it is important to remember people will move through change at different speeds depending on their own personal abilities to readjust and become familiar.
To conclude change from the inside, out, is necessary for an efficient transition to a new organisational culture and environment. Leaders and managers must have the vision to communicate what lies ahead and to help others comprehend it. Paint a picture of what success looks like for the organisation and its people after the change, and depict that achievement. Commit it to paper – diagram or picture, and use the present or past tense to define the future.
Unless leaders lead by example, people will resist change, which is why it needs to be from the inside out.