fasset skills development€¦ · web viewbridges describes three phases of transition: ending,...
TRANSCRIPT
Managing ChangeHandbook
February 2010
Facilitated by
Faranani Facilitation Services Pty Ltd
The views expressed in this document are not necessarily those of Fasset’s.
INDEXSECTION 1: CONTEXT FOR CHANGE.........................................................................................5
1.1 INTRODUCTION.....………………………………………………………………………………………5
1.2 UNDERSTANDING WHAT CHANGE IS..............................................................................................6
1.3 THE ROLE OF CHANGE IN THE ORGANISATON..............................................................................14
1.4 DRIVERS OF CHANGE....................................................................................................... 16
1.5 EFFECTS OF CHANGE...................................................................................................... 17
1.6 CRITICAL SUCCESS FACTORS IN CHANGE MANAGEMENT.................................................... 21
1.7 PLANNED VS. REACTIVE CHANGE........................................................................................ 25
SECTION 2: IMPLEMENTING CHANGE.....................................................................................27
2.1 GUIDING PRINCIPLES OF CHANGE MANAGEMENT........................................................................ .28
2.2 CHANGE MANAGEMENT MODELS............................................................................................... .28
2.3 STAKEHOLDER INVOLVEMENT IN THE CHANGE PROCESS.............................................................49
2.4 TRENDS IN CHANGE MANAGEMENT.............................................................................................58
2.5 MANAGING CHANGE IN THE SECTOR.................................................................................. 59
2.6 FACTORS IN SELECTING A CHANGE MANAGEMENT STRATEGY......................................................61
2.7 CHANGE MANAGEMENT STRATEGIES..........................................................................................62
2.8 CREATING AN ORGANISATIONAL CULTURE THAT EMBRACES CHANGE MANAGEMENT......................65
2.9 DEVELOPING A CHANGE MANAGEMENT PLAN..............................................................................69
2.10 THE ROLE OF THE CHANGE AGENT...........................................................................................72
2.11 HOW HR/SDF CAN DELIVER CHANGE MANAGEMENT RESULTS...................................................81
2.12 WHY CHANGE MANAGEMENT OFTEN FAILS................................................................................88
2.13 MEASURING THE IMPACT OF CHANGE PROCESSES.....................................................................90
SECTION 3: ADAPTING TO CHANGE......................................................................................100
3.1.CREATING RESILIENT ORGANISATIONS......................................................................................100
3.2.DO’S AND DON’TS OF CHANGE MANAGEMENT...........................................................................104
3.3.CONSEQUENCES AND MISTAKES IN CHANGE MANAGEMENT........................................................105
3.4. INNOVATION PRACTICES TO ENHANCE CHANGE MANAGEMENT SUSTAINABILITY...........................110
Managing Change Handbook (2010) 1
3.5. MANAGING RISKS IN THE CHANGE MANAGEMENT PROCESS.......................................................111
3.6 MANAGING RESISTANCE TO CHANGE........................................................................................113
REFERENCES..................................................................................................................... 116117
HANDY RESOURCES.........................................................................................................119120
USEFUL LINKS....................................................................................................................119120
Managing Change Handbook (2010) 2
Acronyms and Abbreviations
AAP Advanced Administrative Procedures
ADKAR Awareness, Desire, Knowledge, Ability, Reinforcement
ATM Automated Teller Machine
CEO Chief Executive Officer
CFO Chief Financial Officer
CMO Change Management Office
CRM Customer Relationship Manager
EEO Equal Employment Opportunities
ERP Enterprise Resource Planning
GST General Systems Theory
HR Human Resources
ICT Information and Communication Technology
IPPC Integrated Pollution Prevention Control
MBA Master in Business Administration
MOC Management of Change
OCM Organisational Change Management
OSHA Occupational Safety and Health Administration
PDCA Plan, Do, Check, Act
PLOT Plan, Lead, Operate, Track
RBM Results Based Management
RVO Resilient Virtual Organisations
ROI Return on Investment
RTSC Real Time Strategic Change
SAP Systems Application and Products
SDF Skills Development Facilitator
SOE Standard Operating Environment
Managing Change Handbook (2010) 3
WIIFM What’s In It For Me
Section 1: CONTEXT FOR CHANGE
Introduction
“It is not the strongest species that survive, nor the most intelligent, but the ones
are most responsive to change” - Charles Darwin
Change Management is a structured approach to transitioning individuals, teams, and
organisations from a current state to a desired future state. The current definitions of
Change Management include both organisational change management processes and
individual change management models, which together are used to manage the people
side of change. Some thoughts on change to consider: Change takes time, but quick-
fixes are essential to make it happen; You can’t expect to get every-thing right, so expect
mistakes - don’t be paralysed at the possibility of making them; If you wait until all the
facts are in, they’ll be useless and the biggest risk in change processes is to avoid taking
any risks at all.
This handbook is a concentrated collection of various aspects of managing change in
organisations, teams and in individuals. Aspects covered include definitions and
concepts related to change, principles of change, drivers of change, models of change
management, the role of the change agent, the role that Human Resources (HR) and the
Skills Development Facilitator (SDF) specifically play within change processes, dealing
with resistance to change, and selecting and applying various strategies for change. As
part of the added value component of this handbook, additional aspects such as trends
in Change Management, which include Real Time Strategic Change (RTSC), as well as
creating Organisational Resilience, are included. Specific organisational Change
Management assessment tools are added as annexures for participants to use when
back in the work environment. These assessment tools will be discussed in the session
and focus on:
Organisational – Type Inventory
Organisational Climate Questionnaire
Managing Change Handbook (2010) 4
Organisational Readiness Inventory
Practical suggestions, steps and tips are given on specific aspects of Change
Management that related to selecting a change strategy, creating a culture that
embraces change and understanding why change often fails. Finally, useful references,
tools and handy links are provided for further reading and use by the reader.
Understanding What Change Is
“To cope with a changing world, an entity must develop the capacity of shifting and
changing - of developing new skills and attitudes; in short, the capability of learning” –
A De Gues, The Living Company
Change Management is most commonly understood from four basic perspectives which
define the concept, process and tools. In thinking about what is meant by “Change
Management,” at least four basic definitions come to mind:
1. The task of managing change.
2. An area of professional practice.
3. A body of knowledge.
4. A control mechanism.
The Task of Managing Change: The first and most obvious definition of “Change
Management” is that the term refers to the task of managing change. The obvious is not
necessarily unambiguous. Managing change is itself a term that has at least two
meanings. One meaning of “managing change” refers to the making of changes in a
planned and managed or systematic fashion. The aim is to more effectively implement
new methods and systems in an ongoing organisation. The changes to be managed lie
within and are controlled by the organisation. (Perhaps the most familiar instance of this
kind of change is the “change control” aspect of information systems development
projects). However, these internal changes might have been triggered by events
originating outside the organisation, in what is usually termed “the environment.” Hence,
the second meaning of managing change, namely, the response to changes over which
the organisation exercises little or no control (e.g. legislation, social and political
upheaval, the actions of competitors, shifting economic tides and currents, and so on).
Researchers and practitioners alike typically distinguish between a knee-jerk or reactive
response and an anticipative or proactive response.
Managing Change Handbook (2010) 5
An Area of Professional Practice: The second definition of Change Management is
"an area of professional practice." There are dozens, if not hundreds, of independent
consultants who will quickly and proudly proclaim that they are engaged in planned
change, that they are change agents, that they manage change for their clients, and that
their practices are change management practices. There are numerous small consulting
firms whose principals would make these same statements about their firms. And, of
course, most of the major management consulting firms have a change management
practice area. Some of these change management experts claim to help clients manage
the changes they face – the changes happening to them. Others claim to help clients
make changes. Still others offer to help by taking on the task of managing changes that
must be made. In almost all cases, the process of change is treated separately from the
specifics of the situation. It is expertise in this task of managing the general process of
change that is laid claim to by professional change agents.
A Body of Knowledge: Stemming from the view of change management as an area of
professional practice there arises yet a third definition of change management: the
content or subject matter of change management. This consists chiefly of the models,
methods and techniques, tools, skills and other forms of knowledge that go into making
up any practice. The content or subject matter of change management is drawn from
psychology, sociology, business administration, economics, industrial engineering,
systems engineering and the study of human and organisational behavior. For many
practitioners, these component bodies of knowledge are linked and integrated by a set of
concepts and principles known as General Systems Theory (GST). It is not clear
whether this area of professional practice should be termed a profession, a discipline, an
art, a set of techniques or a technology. For now, suffice it to say that there is a large,
reasonably cohesive albeit somewhat eclectic body of knowledge underlying the practice
and on which most practitioners would agree — even if their application of it does exhibit
a high degree of variance.
A Control Mechanism: For many years now, Information Systems groups have tried to
rein in and otherwise supervise on changes to systems and the applications that run on
them. For the most part, this is referred to as “version control” and most people in the
workplace are familiar with it. In recent years, systems people have begun to refer to this
control mechanism as “change management” and "configuration management."
Moreover, similar control mechanisms exist in other areas. Chemical processing plants,
for example, are required by OSHA (Occupational Safety and Health Administration) to
Managing Change Handbook (2010) 6
satisfy some exacting requirements in the course of making changes. These fall under
the heading of Management of Change or MOC.
The Content and Process Dimensions of Change
Organisations are highly specialized systems and there are many different schemes for
grouping and classifying them. Some are said to be in the retail business, others are in
manufacturing, and still others confine their activities to distribution. Some are profit-
oriented and some are not for profit. Some are in the public sector and some are in the
private sector. Some are members of the financial services industry, which
encompasses banking, insurance, and brokerage houses. Others belong to the
automobile industry, where they can be classified as original equipment manufacturers
or after-market providers. Some belong to the health care industry, as providers, as
insured’s or as insurers. Many are regulated, some are not. Some face stiff competition,
some do not. Some are foreign-owned and some are foreign-based. Some are
corporations, some are partnerships, and some are sole proprietorships. Some are
publicly held and some are privately held. Some have been around a long time and
some are newcomers. Some have been built up over the years while others have been
pieced together through mergers and acquisitions. No two are exactly alike.
The preceding paragraph points out that the problems found in organisations, especially
the change problems, have both a content and a process dimension. It is one thing, for
instance, to introduce a new claims processing system in a functionally organised health
insurer. It is quite another to introduce a similar system in a health insurer that is
organized along product lines and market segments. It is yet a different thing altogether
to introduce a system of equal size and significance in an educational establishment that
relies on a matrix structure. The languages spoken differ. The values differ. The cultures
differ. And, at a detailed level, the problems differ. However, the overall processes of
change and change management remain pretty much the same, and it is this
fundamental similarity of the change processes across organisations, industries, and
structures that make change management a task, a process, and an area of professional
practice.
Types of Change That Organisations Need to Manage
Different kinds of change require different strategies and plans to effectively gain
employee engagement and acceptance of change. The three types of change that occur
Managing Change Handbook (2010) 7
most frequently in organisations are developmental, transitional and transformational.
Change management theories effectively support how to deal with developmental and
transitional change, but are less effective at dealing with successfully implementing
transformational change. A critical step in determining which approach to use in
overcoming resistance to implementing organisation change is to determine which type
of change the organisation is experiencing.
Developmental Change
Companies are continually processing developmental change to some degree in order to
stay competitive. This type of change should cause little stress to current employees as
long as the rationale for the new process is clearly conveyed and the employees are
educated on the new techniques. When senior management want to bring about a major
change such as the decision to close a division, if the company attempted to implement
developmental change as the first step in streamlining the business, employees may be
more likely to accept the change. The employees could see that the company attempted
different strategies before determining that closing the division was the only option.
Transitional Change
A corporate reorganisation, merger, acquisition, creating new products or services, and
implementing new technology are examples of transitional change. Transitional change
may not require a significant shift in culture or behaviour but it is more challenging to
Managing Change Handbook (2010) 8
implement than developmental change. The future of the organisation is unknown when
the transformation begins which can add a level or discomfort to employees.
The outcome of transitional change is unknown so employees may feel that their job is
unstable and their own personal insecurities may increase. Education on the new
procedures should be commenced at each stage of the new process. This will allow
employees to feel that they are actively involved and engaged in the change. As an
employee’s level of engagement in the new procedure increases, their resistance to
change may decrease. Management should be cognizant of the impact and stress these
changes will have on their employees. The company should continue to inform the
employees of their status and offer support in helping them deal with the personal
adjustments they will be forced to make.
Transformational Change
When companies are faced with the emergence of radically different technologies,
significant changes in supply and demand, unexpected competition, lack of revenue or
other major shifts in how they do business, developmental or transitional change may
not offer the company the solution they need to stay competitive. Instead of methodically
implementing new processes, the company may be forced to drastically transform
themselves.
The Change Process as Problem Solving and Problem Finding
A very useful framework for thinking about the change process is problem solving.
Managing change is seen as a matter of moving from one state to another, specifically,
from the problem state to the solved state. Diagnosis or problem analysis is generally
acknowledged as essential. Goals are set and achieved at various levels and in various
areas or functions. Ends and means are discussed and related to one another. Careful
Managing Change Handbook (2010) 9
planning is accompanied by efforts to obtain buy-in, support and commitment. The net
effect is a transition from one state to another in a planned, orderly fashion. This is the
planned change model.
The word “problem” carries with it connotations that some people prefer to avoid. They
choose instead to use the word “opportunity.” For such people, a problem is seen as a
bad situation, one that shouldn’t have been allowed to happen in the first place, and for
which someone is likely to be punished — if the guilty party (or a suitable scapegoat)
can be identified. For the purposes of this paper, we will set aside any cultural or
personal preferences regarding the use of “problem” or “opportunity.” From a rational,
analytical perspective, a problem is nothing more than a situation requiring action but in
which the required action is not known. Hence, there is a requirement to search for a
solution, a course of action that will lead to the solved state. This search activity is
known as “problem solving.”
From the preceding discussion, it follows that “problem finding” is the search for
situations requiring action. Whether we choose to call these situations “problems”
(because they are troublesome or spell bad news), or whether we choose to call them
“opportunities” (either for reasons of political sensitivity or because the time is ripe to
exploit a situation) is immaterial. In both cases, the practical matter is one of identifying
and settling on a course of action that will bring about some desired and predetermined
change in the situation.
At the heart of change management lies the change problem, that is, some future state
to be realized, some current state to be left behind, and some structured, organized
process for getting from the one to the other. The change problem might be large or
small in scope and scale, and it might focus on individuals or groups, on one or more
divisions or departments, the entire organisation, or one or on more aspects of the
organisation’s environment.
At a conceptual level, the change problem is a matter of moving from one state (A) to
another state (A’). Moving from A to A’ is typically accomplished as a result of setting up
and achieving three types of goals: transform, reduce, and apply. Transform goals are
concerned with identifying differences between the two states. Reduce goals are
concerned with determining ways of eliminating these differences. Apply goals are
Managing Change Handbook (2010) 10
concerned with putting into play operators that actually effect the elimination of these
differences (see Newell & Simon).
As the preceding goal types suggest, the analysis of a change problem will at various
times focus on defining the outcomes of the change effort, on identifying the changes
necessary to produce these outcomes, and on finding and implementing ways and
means of making the required changes. In simpler terms, the change problem can be
treated as smaller problems having to do with the how, what, and why of change.
The change problem is often expressed, at least initially, in the form of a “how” question.
How do we get people to be more open, to assume more responsibility, to be more
creative? How do we introduce self-managed teams in Department W? How do we
change over from System X to System Y in Division Z? How do we move from a
mainframe-centered computing environment to one that accommodates and integrates
PCs? How do we get this organisation to be more innovative, competitive, or productive?
How do we raise more effective barriers to market entry by our competitors? How might
we more tightly bind our suppliers to us? How do we reduce cycle times? In short, the
initial formulation of a change problem is means-centered, with the goal state more or
less implied. There is a reason why the initial statement of a problem is so often means-
centered and we will touch on it later. For now, let’s examine the other two ways in which
the problem might be formulated — as “what” or as “why” questions.
As was pointed out above, to frame the change effort in the form of “how” questions is to
focus the effort on means. Diagnosis is assumed or not performed at all. Consequently,
the ends sought are not discussed. This might or might not be problematic. To focus on
ends requires the posing of “what” questions. What are we trying to accomplish? What
changes are necessary? What indicators will signal success? What standards apply?
What measures of performance are we trying to affect?
Ends and means are relative notions, not absolutes; that is, something is an end or a
means only in relation to something else. Thus, chains and networks of ends-means
relationships often have to be traced out before one finds the “true” ends of a change
effort. In this regard, “why” questions prove extremely useful.
To ask “why” questions is to get at the ultimate purposes of functions and to open the
door to finding new and better ways of performing them. Why do we do what we do?
Why do we do it the way we do it? Asking “why” questions also gets at the ultimate
Managing Change Handbook (2010) 11
purposes of people, but that’s a different matter altogether, a “political” matter, and one
we’ll not go into in this handbook.
The Approach taken to Change Management Mirrors Management's Mindset
The emphasis placed on the three types of questions just mentioned reflects the
management mindset, that is, the tendency to think along certain lines depending on
where one is situated in the organisation. A person’s placement in the organisation
typically defines the scope and scale of the kinds of changes with which he or she will
become involved, and the nature of the changes with which he or she will be concerned.
Thus, the systems people tend to be concerned with technology and technological
developments, the marketing people with customer needs and competitive activity, the
legal people with legislative and other regulatory actions, and so on. Also, the higher up
a person is in the hierarchy, the longer the time perspective and the wider the range of
issues with which he or she must be concerned.
For the most part, changes and the change problems they present are problems of
adaptation, that is, they require of the organisation only that it adjust to an ever-changing
set of circumstances. But, either as a result of continued, cumulative compounding of
adaptive maneuvers that were nothing more than band-aids, or as the result of sudden
changes so significant as to call for a redefinition of the organisation, there are times
when the changes that must be made are deep and far-reaching. At such times, the
design of the organisation itself is called into question.
Organisations frequently survive the people who establish them. At some point it
becomes the case that such organisations have been designed by one group of people
but are being operated or run by another. Successful organisations resolve early on the
issue of structure, that is, the definition, placement and coordination of functions and
people. Other people then have to live with this design and, because the ends have
already been established, these other people are chiefly concerned with means. This is
why so many problem-solving efforts start out focused on means.
Some organisations are designed to buffer their core operations from turbulence in the
environment. In such organisations all units fit into one of three categories: core, buffer,
and perimeter.
Managing Change Handbook (2010) 12
In core units (e.g., systems and operations), coordination is achieved through
standardization, that is, adherence to routine. In buffer units (e.g., upper management
and staff or support functions), coordination is achieved through planning. In perimeter
units (e.g., sales, marketing, and customer service), coordination is achieved through
mutual adjustment (see Thompson).
People in core units, buffered as they are from environmental turbulence and with a
history of relying on adherence to standardized procedures, typically focus on “how”
questions. People in buffer units, responsible for performance through planning, often
ask “what” questions. People in the perimeter units are as accountable as anyone else
for performance and frequently for performance of a financial nature. They can be heard
asking “what” and “how” questions. “Why” questions are generally asked by people with
no direct responsibility for day-to-day operations or results. The group most able to take
this long-term or strategic view is that cadre of senior executives responsible for the
continued well being of the firm: top management. If the design of the firm is to be called
into question or, more significantly, if it is actually to be altered, these are the people who
must make the decision to do so.
Finally, when organisational redefinition and redesign prove necessary, all people in all
units must concern themselves with all three sets of questions or the changes made will
not stand the test of time.
To summarise: Problems may be formulated in terms of “how,” “what” and “why”
questions. Which formulation is used depends on where in the organisation the person
posing the question or formulating the problem is situated, and where the organisation is
situated in its own life cycle.
“How” questions tend to cluster in core units.
“What” questions tend to cluster in buffer units.
People in perimeter units tend to ask “what” and “how” questions.
“Why” questions are typically the responsibility of top management.
In turbulent times, everyone must be concerned with everything.
Managing Change Handbook (2010) 13
1.3 The Role of Change in the Organisation
Change management plays an important role in any organisation since the task of
managing change is not an easy one. When we say managing change we mean to say
making changes in a planned and systemic fashion. With reference to the IT projects we
can say the change in the versions of a project and managing these versions properly.
Changes in the organisation or a project can be initiated from within the organisation or
externally. For example a product that is popular among the customers may undergo a
change in design based on the triggering factor like a competitive product from some
other manufacturer. This is an example of external factors that triggers a change within
the organisation. How the organisation responds to these changes is what is more
concerning. Managing these changes come under change management. Reactive and
proactive responses to these changes are possible from an organisation.
Change management is done by many independent consultants who claim to be experts
in these areas. These consultants manage the changes for their clients. They manage
changes or help the client make the changes or take up the task themselves to make the
changes that must be made. An area of change that needs attention is selected and
certain models, methods, techniques and tools are used for making these changes that
are necessary for the organisation.
When there is a process in an organisation it is not an easy task to make changes to this
process immediately. Sometimes a single organisation may have varied business
entities and changes in an entity may be reflected in another entity. In such
organisations changes are not so easy. There are different types of organisations which
have many branches across the world with varied cultures. Implementing a change in
such organisations is a task by itself.
The change process can be thought of as a process which stops the current process,
makes the necessary changes to the current process and the runs the new process. It is
easy said than implemented. Stopping a current process in some industry is fatal for that
organisation. Hence it has to be done in steps which have the minimal effect in the
process. These changes can not take place for a longer time in the organisation since
that may also be a disaster for the organisation. The involvement of the staff concerned
is also very important for the change process to be smooth.
Managing Change Handbook (2010) 14
The change process could also be considered as a problem solving situation. The
change that is taking place could be the result of a problem that has occurred. You
should know that a problem is a situation that requires some action to be taken positively
to handle that situation. This positive action is known as problem solving. The change
process could be problem solving for a particular situation. In this process there is a
move from one state to another so that the problem gets solved. The change process is
leaving the current state and moving to the final state through some structured organized
process.
Managing the changes in an organisation requires a broad set of skills like political skills,
analytical skills, people skills, system skills, and business skills. Having good analytical
skills will make you a good change agent. You should evaluate the financial and political
impacts of the changes that can take place. You should know that following a particular
process at that instant would fetch you immediate financial effects and start that process
so that the change process is noted by the management. The workflow has to be
changed in such a manner to reflect the financial changes that are taking place.
Operations and systems in the organisation should be reconfigured in such a manner
that you get the desired financial impact.
Hence change management plays an important role in an organisation. This allows the
organisation to give a reactive or a proactive response to the changes that happen
internally or externally. Knowing the change management and its process would help an
organisation and its processes to be stable.
Performance improvement in organisations is built around three core areas of focus:
Leadership sponsorship
Project management
Change management
Managing Change Handbook (2010) 15
This diagram shows the interrelations between these three core elements of
performance improvement in any organisational environment. The application of all
three will result in projects meeting organisational objectives, which directly results in
delivery on time and on budget with a significant return on investment.
Successful change management in organisations therefore requires effective
communication, full and active executive support, employee involvement, organisational
planning and analysis and widespread perceived need for the change. These are the
big five when successful change is achieved.
1.4 Drivers of Change
Organisational change management is becoming increasingly important to the business
community. The intensification of competition from manufacturers in emerging
economies who can produce superior goods at cheaper prices, the introduction of new
technology and changing consumer preferences and tastes can result in companies
having to redefine their business goals and objectives. The following factors are some of
the primary drivers of organisational change.
Managing Change Handbook (2010) 16
Inadequate Financial Performance: Companies that fail to achieve financial
benchmarks are forced to evaluate their business objectives and processes. This is one
of the most important drivers of organisational change. If a new competitor enters the
market with cheaper labor or a superior technology, companies that formally enjoyed
prosperity can suddenly find a cannibalization of their market share. A failure to maintain
a competitive presence in the market place can stress company resources and force a
rethink of the opportunity cost of capital and resource redeployment.
Change in Strategic Objectives: If a company shifts its focus form a product centric to
a customer centric orientation, new processes are required to facilitate this re-
orientation. This can result in redundancy to existing staff or manufacturing processes.
Company restructuring from this is a primary driver of organisational change as the old is
replaced with the new.
End of the Product Development Life Cycle: A product can reach the end of its
product life cycle and companies are forced to cut production and operating costs or exit
the market. At this stage some companies sell out or merge with existing competitors.
This results in structural changes to a company’s business processes to either maintain
profitability or refocus on new opportunities.
New Technology: New technology can be a significant driver of organisational change.
Consider the effect the internet is having on old style media and print companies. As
internet access levels increase on a worldwide scale, companies are forced to adapt
their existing operations to shifting consumer preferences. Companies that neglect rising
trends face a diminishing market share to competitors who better understand and
address the demands of their customers.
Mergers and Acquisitions: When companies merge or consolidate operations,
significant costs cutting and a re-engineering takes place. Redundancy and restructure
to align with management objectives drives organisational change. The integration of
two companies creates significant challenges to streamline operations and integrate
existing IT operations into a centralized structure. Consider the implications of merging
two independent billing systems which use different platforms and infrastructure. The
careful dedicated planning required to bring this to fruition is part of the change
management process.
Managing Change Handbook (2010) 17
1.5 Effects of Change
Managing change has intended and unintended effects for both organisations, teams
and individuals that are involved in the process. This section contains some of the
effects that you should consider as part of your plans and processes for managing
change.
Managing organisational change will be more successful if you apply simple principles.
Achieving personal change will be more successful too if you use the same approach
where relevant. Change management entails thoughtful planning and sensitive
implementation, and above all, consultation with, and involvement of, the people affected
by the changes. If you force change on people normally problems arise. Change must
be realistic, achievable and measurable.These aspects are especially relevant to
managing personal change. Before starting organisational change, ask yourself: What
do we want to achieve with this change, why, and how will we know that the change has
been achieved? Who is affected by this change, and how will they react to it? How much
of this change can we achieve ourselves, and what parts of the change do we need help
with? These aspects also relate strongly to the management of personal as well as
organisational change.
Do not “sell” change to people as a way of accelerating “agreement” and
implementation. “Selling” change to people is not a sustainable strategy for success,
unless your aim is to be “bitten” at some time in the future when you least expect it.
When people listen to a management high-up 'selling' them a change, decent, diligent
folk will generally smile and appear to accede, but quietly to themselves, they're thinking,
"No chance mate, if you think I'm standing for that load of old nonsense you've another
think coming…" (And that's just the amenable types – the other more recalcitrant types
will be well on the way to making their own particular transition from gamekeepers to
poachers.)
Instead, change needs to be understood and managed in a way that people can cope
effectively with it. Change can be unsettling, so the manager logically needs to be a
settling influence. Check that people affected by the change agree with, or at least
understand, the need for change, and have a chance to decide how the change will be
managed, and to be involved in the planning and implementation of the change. Use
face-to-face communications to handle sensitive aspects of organisational change
management. Encourage your managers to communicate face-to-face with their people
Managing Change Handbook (2010) 18
too if they are helping you manage an organisational change. Email and written notices
are extremely weak at conveying and developing understanding.
If you think that you need to make a change quickly, probe the reasons – is the urgency
real? Will the effects of agreeing a more sensible time-frame really be more disastrous
than presiding over a disastrous change? Quick change prevents proper consultation
and involvement, which leads to difficulties that take time to resolve. For complex
changes, refer to the process of project management, and ensure that you augment this
with consultative communications to agree and gain support for the reasons for the
change. Involving and informing people also creates opportunities for others to
participate in planning and implementing the changes, which lightens your burden,
spreads the organisational load, and creates a sense of ownership and familiarity among
the people affected.
For organisational change that entails new actions, objectives and processes for a group
or team of people, use workshops to achieve understanding, involvement, plans,
measurable aims, actions and commitment. Encourage your management team to use
workshops with their people too if they are helping you to manage the change. You
should even apply these principles to very tough change, like making people redundant,
closures and integrating merged or acquired organisations. Bad news needs even more
careful management than routine change. Hiding behind memos and middle managers
will make matters worse. Consulting with people, and helping them to understand does
not weaken your position – it strengthens it. Leaders who fail to consult and involve their
people in managing bad news are perceived as weak and lacking in integrity. Treat
people with humanity and respect and they will reciprocate.
Be mindful that the chief insecurity of most staff is change itself. Senior managers and
directors responsible for managing organisational change do not, as a rule, fear change
– they generally thrive on it. So remember that your people do not relish change, they
find it deeply disturbing and threatening. Your people's fear of change is as great as your
own fear of failure. The employee does not have a responsibility to manage change -
the employee's responsibility is no other than to do their best, which is different for every
person and depends on a wide variety of factors (health, maturity, stability, experience,
personality, motivation, etc). Responsibility for managing change is with management
and executives of the organisation - they must manage the change in a way that
employees can cope with it. The manager has a responsibility to facilitate and enable
Managing Change Handbook (2010) 19
change, and all that is implied within that statement, especially to understand the
situation from an objective standpoint (to 'step back', and be non-judgmental), and then
to help people understand reasons, aims, and ways of responding positively according
to employees' own situations and capabilities. Increasingly the manager's role is to
interpret, communicate and enable – not to instruct and impose, which nobody really
responds to well.
Be wary of expressions like 'mindset change', and 'changing people's mindsets' or
'changing attitudes', because this language often indicates a tendency towards imposed
or enforced change, and it implies strongly that the organisation believes that its people
currently have the 'wrong' mindset, which is never, ever, the case. If people are not
approaching their tasks or the organisation effectively, then the organisation has the
wrong mindset, not the people. Change such as new structures, policies, targets,
acquisitions, disposals, re-locations, etc., all create new systems and environments,
which need to be explained to people as early as possible, so that people's involvement
in validating and refining the changes themselves can be obtained. Whenever an
organisation imposes new things on people there will be difficulties. Participation,
involvement and open, early, full communication are the important factors.
Workshops are very useful processes to develop collective understanding, approaches,
policies, methods, systems, ideas, etc. Staff surveys are a helpful way to repair damage
and mistrust among staff – provided you allow people to complete them anonymously,
and provided you publish and act on the findings. Management training, empathy and
facilitative capability are priority areas – managers are crucial to the change process –
they must enable and facilitate, not merely convey and implement policy from above,
which does not work.
You cannot impose change – people and teams need to be empowered to find their own
solutions and responses, with facilitation and support from managers, and tolerance and
compassion from the leaders and executives. Management and leadership style and
behavior are more important than clever process and policy. Employees need to be able
to trust the organisation. The leader must agree and work with these ideas, or change is
likely to be very painful, and the best people will be lost in the process.
Planning, implementing and managing change in a fast-changing environment is
increasingly the situation in which most organisations now work. Dynamic environments
Managing Change Handbook (2010) 20
such as these require dynamic processes, people, systems and culture, especially for
managing change successfully, notably effectively optimising organisational response to
market opportunities and threats. Key elements for success in these dynamic
environments include:
Plan long-term broadly – a sound strategic vision, not a specific detailed plan (the
latter is impossible to predict reliably). Detailed five year plans are out of date two
weeks after they are written. Focus on detail for establishing and measuring delivery
of immediate actions, not medium-to-long-term plans.
Establish forums and communicating methods to enable immediate review and
decision-making. Participation of interested people is essential. This enables their
input to be gained, their approval and commitment to be secured, and automatically
takes care of communicating the actions and expectations.
Empower people to make decisions at a local operating level - delegate responsibility
and power as much as possible (or at least encourage people to make
recommendations which can be quickly approved).
Remove (as far as is possible) from strategic change and approval processes and
teams (or circumvent) any ultra-cautious, ultra-autocratic or compulsively-interfering
executives. Autocracy and interference are the biggest obstacles to establishing a
successful and sustainable dynamic culture and capability.
Encourage, enable and develop capable people to be active in other areas of the
organisation via “virtual teams” and “matrix management”.
Scrutinise and optimise ICT (information and communications technology) systems
to enable effective information management and key activity team-working.
Use workshops as a vehicle to review priorities, agree broad medium-to-long-term
vision and aims, and to agree short term action plans and implementation method
and accountabilities.
Adjust recruitment, training and development to accelerate the development of
people who contribute positively to a culture of empowered dynamism.
Management's responsibility is to detect trends in the macro environment as well as in
the micro environment so as to be able to identify changes and initiate programs. It is
also important to estimate what impact a change will likely have on employee behavior
Managing Change Handbook (2010) 21
patterns, work processes, technological requirements, and motivation. Management
must assess what employee reactions will be and craft a change program that will
provide support as workers go through the process of accepting change. The program
must then be implemented, disseminated throughout the organisation, monitored for
effectiveness, and adjusted where necessary. Organisations exist within a dynamic
environment that is subject to change due to the impact of various change "triggers",
such as evolving technologies. To continue to operate effectively within this
environmental turbulence, organisations must be able to change themselves in response
to internally and externally initiated change. However, change will also impact upon the
individuals within the organisation. Effective change management requires an
understanding of the possible effects of change upon people, and how to manage
potential sources of resistance to that change. Change can be said to occur where there
is an imbalance between the current state and the environment.
1.6 Critical Success Factors in Change Management
In today's fast pace business environment where the business landscape continually
changes in response to shifting consumer preferences, new and superior production
processes, and the development and introduction of disruptive technologies, companies
need to have flexible and planned business practices to facilitate change to adapt to the
market environment. Aligning resources and employees to a company’s goals and
objectives is imperative. Whilst machines can easily adapt to a change in command, the
human composition does not always provide for such an easy transition. Dealing with
the human psyche, entrenched values, fears, anxieties and insecurities necessitates
careful change management planning. Several critical success factors for organisational
change are discussed further below.
Change to company processes requires dedicated organisational strategic planning.
With the dependency between integrated business units, a change in one area of the
business can severely impact another. Consider the implementation of a new project
management framework in a web development company. Failure to consider the
requirements and dependencies of the production process can sabotage development
time and create project cost blowouts. Involving team members from business units that
will be affected by the change will maximize planning feedback, minimize areas of risk
and improve the chances that team members will be prepared for and accept the change
to the organisational process. Having the foresight to involve important personnel is a
critical success factor for organisational change.
Managing Change Handbook (2010) 22
Adopting a long term vision is a critical success factor for managing change. Companies
that commit to the process are more likely to experience a greater acceptance than
those who implement short term or damage control practices. Initiatives take time to
iteratively refine and sometimes processes require an adjustment for best fit. Managing
and committing to this can raise a company’s chance of success.
Building performance metrics to measure the change process
provides a framework for benchmarking the change process.
The evaluation stage of change management scopes and
bounds this requirement. When you know where you are
going you have an immediate point of reference for
determining how close you are to goal realization and can
make the necessary adjustment when slightly off course.
Establishing performance metrics is a critical success factor
for organisational change.
A top down approach is important for widespread company adoption. If management set
the mandate and fail to adhere to the initial objectives, company personnel can start to
assume that goals and objectives are no longer important. It is, therefore, imperative that
all levels of management champion the cause and remain accountable.
Committing to employee training and development is a critical success factor for
organisational change. When technology processes change or new initiatives are
adopted, empowering the workforce, overcoming fear or failure and facilitating change is
improved by educating the affected personnel. This is imperative for change
management strategic planning success.
An awareness of critical success factors for organisational change better prepares a
company for the strategic planning and implementation of change. The above guidelines
are an example of proven considerations that need to be factored into the change
management framework.
Further to the above, while the executive vision and support, clearly communicated, is
important, it is not enough. More fundamental approaches to planning and analysis need
to occur to encourage effective change management.
Managing Change Handbook (2010) 23
Assess the readiness of your organisation to participate in the change. Instruments
are available to help you assess readiness, as well as qualitative information from
internal or external staff and consultants. Answer questions such as these: What is
the level of trust within your organisation? Do people feel generally positive about
their work environment? Do you have a history of open communication? Do you
share financial information?
These factors have a tremendous impact on people’s acceptance of and willingness
to change. If you can start building this positive and supportive environment prior to
the change, you have a great head start on the change implementation.
Turn the change vision into an overall plan and timeline, and plan to practice
forgiveness when the timeline encounters barriers. Solicit input to the plan from
people who “own” or work on the processes that are changing.
Gather information about and determine ways to communicate the reasons for the
changes. These may include the changing economic environment, customer needs
and expectations, vendor capabilities, government regulations, population
demographics, financial considerations, resource availability and company direction.
Assess each potential impact to organisation processes, systems, customers and
staff. Assess the risks and have a specific improvement or mitigation plan developed
for each risk.
Plan the communication of the change. People have to understand the context, the
reasons for the change, the plan and the organisation’s clear expectations for their
changed roles and responsibilities. Nothing communicates expectations better than
improved measurements and rewards and recognition.
Determine the WIIFM (what’s in it for me) of the change for each individual in your
organisation. Work on how the change will affect each individual directly, and how to
make the change fit his or her needs as well as those of the organisation.
Some stakeholders might find the development of a theoretical underpinning for the
change effective in helping individuals understand the need for change.
Be honest and worthy of trust. Treat people with the same respect you expect from
them.
Managing Change Handbook (2010) 24
In building support for effective change management provide as much information as
possible, to as many employees as possible, about the business. Share financial
information, customer feedback, employee satisfaction survey results, industry
projections and challenges, and data from processes you measure. Assuming
decisions about needed change are made based on relevant data, an informed
workforce will understand and agree with the need for change. (They may not agree
on the how and / or what, but you are miles ahead if you have agreement on the why
and the whether.)
Create urgency around the need to change. Project for your workforce what will
happen if you don’t make the needed changes. Communicate this information
honestly and use data whenever it is available. You do have compelling reasons for
making the changes? Right? Spend extra time and energy working with your front
line supervisory staff and line managers to ensure that they understand, can
communicate about, and support the changes. Their action and communication are
critical in molding the opinion of the rest of your workforce.
Align all organisational systems to support needed changes. These include the
performance management system, rewards and recognition, disciplinary
approaches, compensation, promotions, and hiring. A consistency across all Human
Resources systems will support faster change. Align the informal structures and
Managing Change Handbook (2010) 25
networks in your organisation with the desired changes. If you can tap into the
informal communication and political network, you will increase change commitment.
(As an example, eat lunch in the lunchroom and discuss the changes informally.
Spend extra time communicating the positive aspects of the change to people you
know are “key communicators” in your organisation.)
1.7 Planned vs. Reactive Change
“The main dangers in this life are the people who want to change everything or
nothing” - Lady Nancy Astor
Planned Change: This occurs when a change results from a deliberate decision to alter
the organisation. A company may wish to move from one structure to another and, thus,
engage in a carefully constructed or orchestrated approach to alter the structure or
functions of the organisation. Planned change has three facets:
• Incremental change: This is change of a relatively small scope, such as making a
small modification in a work procedure. It is change involving minor improvements.
• Strategic change: This is change of a larger scale, such as the restructuring of an
organisation. In strategic change, the organisation moves from an old state to a
known new state during a controlled period of time. Strategic change usually involves
a series of transitional steps.
• Transformational change: This is the most massive scope of change. With this
change, the organisation moves to a radically different, and, at times, unknown future
state. In this change process, the organisation’s mission, culture, goals, structure,
and leadership may all change dramatically.
Unplanned Change: Alterations may occur as a result of imposed conditions. Such
change may be unforeseen. Unplanned changes may be environmental, for instance,
natural disasters. Government regulations and economic conditions may lead to abrupt
and unexpected changes for organisations. Whether forced or planned, but especially in
the case of the latter, change needs to be managed, especially because it can be either
disruptive or constructive.
Managing Change Handbook (2010) 26
Section 2: Implementing Change
2.1 Guiding Principles of Change Management
Guiding principles to consider and build into your change management plans are:
1. At all times involve and agree support from people within the system (system =
environment, processes, culture, relationships, behaviours, etc., whether personal or
organisational).
2. Understand where you / the organisation are at the moment.
3. Understand where you want to be, when, why, and what the measures will be for
having got there.
4. Plan development towards No.3 above in appropriate achievable measurable stages.
5. Communicate, involve, enable and facilitate involvement from people, as early and
openly and as fully as is possible.
6. When people are confronted with the need or opportunity to change, especially when
it’s 'enforced', as they see it, by the organisation, they can become emotional. So
can the managers who try to manage the change. Diffusing the emotional feelings,
taking a step back, encouraging objectivity, are important to enabling sensible and
constructive dialogue. To this end, managers and trainers can find it helpful to use
analogies to assist themselves and other staff to look at change in a more detached
way.
7. Just as the state of 'unconscious incompetence', needs to be developed into
'conscious competence' to provide a basis for training, so a person's subjective
emotion needs to be developed into objectivity before beginning to help them handle
change. None of us are immune from subjectivity, ignorance or denial.
2.2 Change Management Models
There are many different models on change management. Each attempts to describe
the process through which organisations successfully alter their business practices, their
organisational structure, or their organisational climate. A summary of the most popular and
Managing Change Handbook (2010) 27
practical models are included in this section for you as a reference. These models of change
include:
Model / Approach Summary
Lewin's three-step
model
Old activities must be unfrozen, a new concept introduced, then
new activities must be frozen
Bullock and Batten's
planned changeExploration, planning, action, and integration
Kotter's eight steps
Establish a sense of urgency, form a powerful guiding coalition,
create a vision, communicate the vision, empower others to act
on the vision, plan for and create short-term wins, consolidate
improvements and produce still more change, institutionalize new
approaches
Beckhard and Harris's
change formula
C = [ABD] > X, Where C = change, A = level of dissatisfaction
with the status quo, B = Desirability of the proposed change or
end state, D = practicality of the change, and X = cost of
changing
Nadler and Tushman's
congruence model
Organisation is a system that draws inputs from internal and
external sources and transforms them into outputs through four
components: the work itself, the people, the informal
organisation, and the formal organisation
Bridges's managing
the transition
Transition, which differs from change, consists of three phases:
ending, neutral zone, and new beginning
Carnall's change
management model
Change depends on level of management skills in managing
transitions effectively, dealing with organisational cultures, and
managing organisational politics
Senge et al.'s
systematic model
Start small; grow steadily; don't plan everything; expect
challenges
Stacey and Shaw's
complex responsive
process
Change emerges naturally from communication and conflict; and
managers are a part of the whole environment
Managing Change Handbook (2010) 28
Lewin's Three-step Model for Change
In the late 1940s social psychologist Kurt Lewin developed a three-step model for
implementing change based on the concept of force field analysis. Force field analysis
addresses the driving and resisting forces in a change situation. Driving forces must
outweigh resisting forces in a situation if change is to occur. Thus, managers must be
willing to advocate change strongly in order to overcome resistance from employees.
There are three steps in Lewin's model. The first step is "unfreezing," which involves
dismantling those things that support or maintain the previous behavior. In an
organisation, these elements of the old could be the compensation system or the
approach to performance management. In the second step, the organisation "presents a
new alternative." This means introducing a clear and appealing option for a new pattern
of behavior. The final step in this model is "freezing" which requires that changed
behavior be reinforced both formally and informally in the organisation. It is in this step
that managers can have a great amount of influence through their use of positive
reinforcement.
Lewin's model does not explicitly state the notion that simply introducing change will
result in the change being adopted or being sustained over the long run. If an attempt to
create change in the organisation is unsuccessful, it means that there is a problem in
one of the three steps in the model.
Managing Change Handbook (2010) 29
Bullock and Batten's Phases of Planned Change
R.J. Bullock and D. Batten derived their ideas from project management and they
recommend using exploration, planning, action, and integration for planned change.
Exploration occurs when managers confirm the need for change and secure resources
needed for it. These resources may be physical or they may be mental, such as
managers' expertise. The next step, planning, occurs when key decision makers and
experts create a change plan that they then review and approve. Next, action occurs
with enactment of the plan. There should be opportunities for feedback during the action
phase. Finally, integration begins when all actions in the change plan have taken place.
Integration occurs when the changes have been aligned with the organisation and there
is some degree of formalization, such as through policies and procedures in the
organisation.
Managing Change Handbook (2010) 30
Kotter's Eight Steps
John P. Kotter identified eight steps every organisation must follow in order to reap long-
term benefits from organisational change: establish a sense of urgency; form a powerful
guiding coalition; create a vision and strategy; communicate the vision; empower others
to act on the vision; generate short-term wins; consolidate improvements and produce
still more change; and institutionalise the new approach (i.e., make it a part of the
organisational culture).
The first step, establishing a sense of urgency, involves selling the need for change to
managers and employees. Kotter recommends creating a "felt-need" for change in
others. The second step is for managers to create a powerful group of people who can
work together to enact change. Their power will be a driving force as it encourages
others to adopt change. Third, the organisation must have a vision that will guide the
entirety of the change effort, and this vision must be communicated repeatedly (step
four) — as much as ten times or as often as one would expect to.
Steps five through eight occur after the sense of urgency is created and these steps are
easier to delegate or decentralize. In step five, others in the organisation are empowered
to act on the vision. Managers should assist in this process by eliminating barriers such
as old systems or structures. Step six asks managers to plan for and to create short-
term wins. This means that small improvements should be recognized and celebrated
publicly. In step seven, the current improvements are built upon with new projects and
resources. Finally, in step eight, the new approaches should be institutionalized; that is,
they should become a routine path to organisational success.
Managing Change Handbook (2010) 31
Beckhard and Harris's Change Formula
The change formula is a mathematical representation of the change process (see Exhibit
1). The basic notion is that, for change to occur, the costs of change ( X ) must be
outweighed by dissatisfaction with the status quo ( A ), the desirability of the proposed
change ( B ), and the practicality of the change ( D ). There will be resistance to change
if people are not dissatisfied with the current state of the organisation ( A ), or if the
changes are not seen as an improvement ( B ), if the change cannot be done in a
feasible way ( D ), or the cost is far too high ( X ).
C = [ABD] > X
This formula can also be conceptualized as ( A × B × D ) > X. The multiplicative nature
of this formula indicates that if any variable is zero or near zero, resistance to change will
not be overcome. In other words, the variables of A, B, and D do not compensate for one
another, and when one is very low, the cost of change is likely to be too high.
Nadler and Tushman's Congruence Model
Nadler and Tushman's model presents the dynamics of what occurs in an organisation
when we try to change it. The foundation of this model is that of the organisation as an
open system, in which organisational subsystems are influenced by the external
environment. The organisational system draws inputs from internal and external sources
– such as the organisation's own strategy, its resources, and its environment – and
transforms them into outputs, such as behavior and performance. This transformation
from inputs to outputs occurs through four organisational elements: the work, the people,
and the formal and informal organisation. The work involves the daily activities carried
out by individuals in the organisation. The skills and capabilities of the people involved in
the organisation are critical. The formal organisation is characterized by its structure, its
standard procedures, and its policies. The informal organisation encompasses things
such as norms, values, and political behavior.
In this model, effective change occurs when all four components (work, people, formal,
and informal organisation) are managed, because they are all interrelated. A change in
the work procedures themselves may not be effective if the people do not have the
capabilities to engage in the new practices. A change to the formal organisation may not
be effective if the beliefs and values of people (i.e., the informal organisation) do not
Managing Change Handbook (2010) 32
support it. If there is a lack of congruence among these four elements, then there is
resistance to change. Furthermore, there may be control issues in which there is
confusion over who regulates the new structures and processes. Finally, power
problems may occur as managers and employees feel threatened that their current
power may be removed by the change.
William Bridges's Managing the Transition.
William Bridges distinguished planned change from transition. He believes that transition
is more complex because it requires abandoning old practices and adopting new
behaviors or ways of thinking, whereas planned change is about changing physical
locations or organisational structures. Bridges believes that transition often lags behind
planned change because it is more complex and more difficult to achieve. Because it is
psychological, it is harder to manage.
Bridges describes three phases of transition: ending, neutral zone, and new beginning.
Ending is similar to Lewin's concept of unfreezing in that you must end a current
situation before you can begin something new. So, in this phase, old structures,
practices, and behaviors must be stopped. Ideally, this ending can be commemorated or
marked in some way. In the second phase, the neutral zone, the old practices have been
stopped, but new ones have not yet been adopted. In this phase, many employees will
feel disoriented and anxious; nevertheless, it may be a time in which creativity rises.
Finally, new beginnings are not planned and predicted, but must evolve as
organisational members psychologically adjust to transition. Managers can encourage,
support, and reinforce these new beginnings. Bridges recommends that four key
elements be communicated to people during a new beginning: the purpose behind the
change; a picture of how the organisation will be after the change; a step-by-step plan to
get to that stage; and the part they can play in that outcome.
Carnall's Change Management Model
Carnall's view of change is focused on managers and the skills they can use to manage
change. Carnall describes three skills that must be present at all levels of management:
(1) managing transitions effectively; (2) dealing with organisational cultures; and (3)
managing organisational politics. Managing transitions involves helping employees learn
as they change and supporting a culture of openness and risk-taking. Managing
organisational cultures involves creating a "more adaptable culture." This is an
Managing Change Handbook (2010) 33
organisational culture in which people are more open, there is greater information flow,
and perhaps greater autonomy. Finally, to manage organisational politics, the manager
should recognize and understand different organisational groups and their political
agendas. The manager should be able to build coalitions and control the agenda through
his or her political skill.
Senge's Systemic Model
Senge and colleagues encourage managers to think like biologists when approaching
organisational change. That is, to better understand how organisations react to change,
one should view them as systems bound by many interrelated actions that may affect
each other over a long period of time. To enact change, Senge et. al., recommend that
managers start small, grow steadily, do not plan the whole thing, and expect challenges.
Furthermore, Senge et. al., offer a number of issues related to the challenges of first
initiating change, then sustaining that change, and finally redesigning and rethinking
change.
Other alternative models of change include:
ADKAR
The first step in managing any type of organisational change is understanding how to
manage change with a single individual. Prosci's model of individual change is called
ADKAR – an acronym for Awareness, Desire, Knowledge, Ability and Reinforcement. In
essence, to make a change successfully an individual needs:
Awareness of the need for change.
Desire to participate and support the change.
Knowledge on how to change.
Ability to implement required skills and behaviors.
Reinforcement to sustain the change.
ADKAR describes successful change at the individual level. When an organisation
undertakes an initiative, that change only happens when the employees who have to do
their jobs differently can say with confidence, "I have the Awareness, Desire,
Knowledge, Ability and Reinforcement to make this change happen."
Managing Change Handbook (2010) 34
Because it outlines the goals or outcomes of successful change, ADKAR is an effective
tool for:
Planning change management activities.
Diagnosing gaps.
Developing corrective actions.
Supporting managers and supervisors.
The 3-phase process gives structure to the steps project teams should take. Prosci's
organisational change management process was first introduced in 2002 after the third
change management benchmarking study was conducted. Prosci felt that with the third
study, there was a strong enough research basis for the process below. This process is
built in steps that a project team can complete for a particular change or initiative they
are supporting. The methodology includes research-based assessments and templates
that are available in the online Change Management Pilot or hardcopy Change
Management Toolkit, or by attending one of Prosci's 3-day certification programs.
Phase 1 - Preparing for Change
The first phase in Prosci's methodology is aimed at getting ready. It answers the
question: "how much change management is needed for this specific project?" The first
phase provides the situational awareness that is critical for effective change
management.
Outputs of Phase 1:
Change characteristics profile.
Organisational attributes profile.
Change management strategy.
Change management team structure.
Sponsor assessment, structure and roles.
Managing Change Handbook (2010) 35
Phase 2 - Managing Change
The second phase of Prosci's process is focused on creating the plans that are
integrated into the project activities - what people typically think of when they talk about
change management. Based on Prosci's research, there are five plans that should be
created to help individuals move through the ADKAR Model.
Outputs of Phase 2:
Communication plan.
Sponsor roadmap.
Training plan.
Coaching plan.
Resistance management plan.
Managing Change Handbook (2010) 36
Phase 3 - Reinforcing Change
Equally critical but most often overlooked, the third phase of Prosci's process helps
project teams create specific action plans for ensuring that the change is sustained. In
this phase, project teams develop measures and mechanisms to see if the change has
taken hold, to the see if employees are actually doing their jobs the new way and to
celebrate success.
Outputs of Phase 3:
Reinforcement mechanisms.
Compliance audit reports.
Corrective action plans.
Individual and group recognition approaches.
Success celebrations.
After action review.
Managing Change Handbook (2010) 37
The image below shows the connection between the change management tools
developed in the organisational change management process and the phases of
individual change described by the ADKAR model. This picture is the essence of
effective change management and is the core of Prosci's change management
methodology.
.
Change Management Matrix Approach:
The four key factors for success when implementing change within an organisation are:
Pressure for change – demonstrated senior management commitment is essential.
A clear, shared vision – you must take everyone with you. This is a shared agenda
that benefits the whole organisation.
Managing Change Handbook (2010) 38
Capacity for change – you need to provide the resources: time and finance.
Action – and performance – “plan, do, check, act” (PDCA) – and keep
communication channels open.
Factor 1. Pressure for Change (The Top Down Approach)
Firstly there must, of course, be pressure for change – a driving force. The need for
change has been identified, the decision to proceed has been taken, and this now needs
to be communicated throughout the organisation.
Pressure for change could be senior management commitment from the outset, but it
may have come from customers or clients in a supply chain. It could come from a
regulatory regime, such as Integrated Pollution Prevention and Control (IPPC), the
implementation of an Environmental Management System or, and this can often be the
most effective source, pressure from the workforce itself.
Who wants to work for a company or an organisation that has developed a notorious
reputation for polluting the environment or exploiting its suppliers? It is widely accepted
that when people take pride in the organisation they work for, they perform better and
will more readily put themselves out to help achieve corporate goals.
For success, however, regardless of where the original pressure came from, senior
management commitment and drive for change is essential if momentum is to be
maintained for effective implementation.
The rest of the organisation will need to be convinced of the need and the case for
change - this is dealt with in more detail in Factor 2 (A clear shared vision). Only this can
happen to good effect if senior management, including the Chairman and Chief
Executive, are collectively behind the changes sought.
Senior management must be seen to be fully supportive by what they do and say - both
privately and publicly. If, however, senior management “talks the talk” by failing to back
up their statements with action and a continuous commitment, progress can soon stall.
Other conflicting or new priorities emerge and the momentum can be lost if senior
management fail to remain fully supportive of the project.
So, get senior management signed up to the change. And communicate this to all staff –
giving them the opportunity to feed in their contributions and feel that they have joint
ownership of the change being implemented.
Managing Change Handbook (2010) 39
Forward-thinking companies are already signed up to becoming more sustainable
through resource efficiency, using cleaner technologies, minimising waste and
embracing the principles of producer responsibility. But being more sustainable in its
broadest sense also means attending to social responsibilities as a good employer by,
for example, encouraging fairness at work; helping staff to develop their skills;
introducing green transport plans; being a ‘good neighbour’ that is responsive to the
local community; and as an ethical trader. That is the positive message that needs to be
communicated throughout the organisation.
An environmental policy (whether new or improved) can be the signal to staff that things
are changing, and that they have a role to play in making this happen. It’s their agenda
too. It’s in their interests and in the interests of the organisation that the changes are
made. This is where a clear, shared vision (Factor 2) is essential.
Factor 2: A clear, Shared Vision
“Businesses are nothing more or less than organisations of people trying to get to a
jointly defined future” – Professor Howard H Stevenson, Harvard Business School
“As a manager the important thing is not what happens when you are there, but what
happens when you are not there” - Ken Blanchard
For change to be effective, it needs to be implemented at all levels; embedded in the
culture of the organisation. To keep colleagues with you and not against you they need
to be motivated and you need to understand what motivates them. You should never
forget that change is a major cause of stress amongst the workforce. Staff will usually
respond well to challenges (that they feel they can meet!); it’s fear of the unknown that
raises stress levels. Getting staff motivated to support the changes that are to be
implemented is therefore crucial for success.
Staff, their managers and senior managers are all motivated by similar things. They do
not, however, necessarily place them in the same order of importance. These
‘motivators’ include pride, happiness, responsibility, recognition, security, success, and,
of course, money. The trick in successfully managing change and getting the
Managing Change Handbook (2010) 40
commitment and support from staff is to provide these ‘motivators’ for your staff – or at
least as many of them as possible. Here are some tips, questions and ideas to help you:
Pride
“Follow where your enthusiasm takes you”
When was the last time you [or senior management] told or showed your staff how proud
you are of what they have achieved? The performance of your staff can drop
significantly if they feel unappreciated or taken for granted. Staff that take pride and
some level of enjoyment in their work and working environment are much more likely to
perform well and provide new ideas for improving the organisation’s own well being.
Happiness
“A happy team is an effective team”
A culture where laughter is permitted and encouraged can make all the difference in
helping everyone get through the day. A caring approach to your staff can reap many
benefits; because if they know their employer cares about them as individuals then they
will be more likely to care about the employer’s interests. Taking the approach of
‘treating others as we would wish to be treated ourselves’ is the ‘golden rule’ for
strengthening and improving relationships between everyone at all levels in the
organisation.
Responsibility
“It is amazing what you can accomplish if you do not care who gets the credit" –
Harry Truman
Giving people more responsibility is a demonstration of trust. If people feel they are
trusted they usually respond by taking greater care and pride in their work. Is
management prepared to delegate responsibility and provide the back-up? Will
management then take responsibility when things go wrong? – Or does it have a blame
culture?
Success
“Success in your life is not a single achievement. It’s all that you do with others and for
others”
Managing Change Handbook (2010) 41
We all have slightly different views on what constitutes success. But there can often be
common factors such as market profile, corporate reputation and product quality. A
useful exercise here is, following a presentation on why change is being undertaken, to
ask staff, individually or in small focus groups, what they have as a vision for the
company / organisation and also for themselves as individuals. Good questions to get
things going are:
(i) What or where are you now?
(ii) What or where would you like to be?
(Ask teams to apply these questions to the company as well as themselves)
A facilitated discussion can tease out where ideas overlap and demonstrate where
common ground exists and can be strengthened.
Recognition
When the leader’s work is done, the people say “We did it ourselves” – Lau Tzu
Are your staff valued and made to feel part of the organisation’s success? Even when
times are hard? When was the last time you took time out to say ‘thank you’ to staff at all
levels of the organisation for their individual contributions? To ignore this important
motivator would be a serious error; and could result in losing the support you need when
implementing change.
An effective approach employers can take is to treat its employees as it’s most important
and valued customers. The employer is providing employment activity and wages; the
employees purchase these with their effort. The spin-off is that the external customers
benefit from a more highly motivated company to do business with.
Managing Change Handbook (2010) 42
Security
“You do not lead people by hitting them over the head – that’s assault, not leadership” -
Eisenhower
Whenever change is being implemented the fear factor can set in. This can be the fear
of change itself and its consequences such as the possible loss of job security or loss of
responsibility or control. Continuous, honest and open communication is essential here.
Change can take people out of their ‘comfort zone’ and raise their stress levels. The
challenge is to demonstrate that the new ‘zone’ is even more comfortable and secure –
or at least it will be once the initial short-term discomfort of implementing change has
been overcome.
Money
“I am not interested in money. I just want to be wonderful”
- Marilyn Monroe
Money is of course an important motivator. Underpaid staff feel under-valued and are
less likely to respond positively to change – especially if it means more effort for little or
no increase in either pay or recognition – or both! Many, especially those with
captivating outside interests, ‘work to live rather than live to work’, but we need to
recognise that most full-time employees spend more of their waking hours at work than
they spend on pursuing leisure interests or with their families. This means that providing
the other six motivators are equally as important as paying a fair wage for a fair job of
work done.
If your company is already highly profitable, staff may not have a strong inclination to
reduce operating or production costs by, for example, switching off equipment when not
in use – especially if the shareholders rather than their own pay packets benefit from
cost-saving measures. However, informing staff of the environmental impacts of the
organisation (for example carbon dioxide emissions or waste volumes going to landfill)
and how staff have an important role in reducing these, can be an effective motivator –
especially as environmental awareness continues to increase amongst the general
population. The positive feedback to staff of reductions in harmful environmental impacts
can increase this motivation (“Haven’t we done well, can we keep this up and do
better?”).
Managing Change Handbook (2010) 43
Staff suggestion schemes, with financial rewards for employees, need to be handled
sensitively. Make sure you do deliver the rewards that you promise. Better still, let a
percentage of costs savings (subject to a capped limit perhaps) go towards supporting a
local charitable cause that has been chosen by staff. This can motivate those who are
not unduly concerned with environmental issues, but who may have local community
interests.
Finally, management and staff alike need to remember that, in the words of Henry Ford,
“It is not the employer who pays wages; he only handles the money. It is the product
that pays wages”.
Factor 3. Capacity for Change (Resources)
“More business is lost every year through neglect than through any other cause” -
Jim Cathcart
Capacity here means resources and these are staff time and, where appropriate, money.
To implement change you need to identify the resources that will be required before you
proceed and make sure these are provided. Often, the cost benefits from implementing
energy efficiency measures and waste minimisation programmes can provide the
financial resources for an ongoing programme of improvement.
It is usually the organisation’s own employees that have the information, intuition, ideas
and instincts necessary for implementing change effectively. When given the capability
and the opportunity to participate in improvement programmes, it is employees who
often can find the greatest cost savings and efficiency improvements.
Factor 4. Action
“We are what we repeatedly do. Excellence then, is not an act, but a habit” - Aristotle
Having got the other three factors in place (pressure, a clear shared vision and capacity)
you now have to implement the planned change.
“Energy is equal to desire and purpose” - Sheryl Adams
Managing Change Handbook (2010) 44
Keeping up momentum is what matters here and implementing the PLAN – DO -
CHECK – ACT management methodology is essential to maintaining the effectiveness
and appropriateness of the change. Good monitoring and analysis of the resulting data
is essential. Make sure you continue to keep employees informed of progress.
The Change Management Matrix
Managing Change Handbook (2010) 45
Managing Change Handbook (2010) 46
Other interesting approaches to managing change
Appreciative Inquiry, a collaborative approach to organisational change, is partly
based on the assumption that change in a system is instantaneous ('Change at the
Speed of Imagination').
Scenario Planning provides a platform for doing so by asking management and
employees to consider different future market possibilities in which their
organisations might find themselves.
"Organise with Chaos", by Robin Rowley and Dr. Joseph Roevens. Essentially,
change-efficiency can improve greatly when management realise that "People do not
resist their own ideas". Open, information-sharing teams and networks, knock power
hierarchies flat when it comes to rapid innovation and change. The authors describe
Change as a creative cyclical process where some events can be managed, but
others must be deliberately “under” managed and left alone to self-organize, ripen,
and eventually improve the business naturally. By looking at how things change in
Nature, the authors observed that major changes in the environment can precipitate
a ubiquitous process of transformation. Essentially the system moves away from
efficient Control and refinement and disintegrates into creative Chaos. As all the
various dormant mutations and experiments begin to assert themselves in the
evolutionary soup, many fail, but a few of them “fit” successfully and may reproduce.
Thus, they move through a transformational phase, back into a higher level type of
Control. Watching the system as a whole, it appears to move through four distinct
cyclical phases, which run like this: ENHANCE / PERTURB / ATTRACT / EXCITE.
In practice, Management can ENHANCE (a response to events shifting in the
environment, or the "change field"). PERTURB (self-organising perturbations occur
spontaneously; old ways disintegrate, etc.). Under-management and executive
silence reigns here if the natural process is not to be prematurely collapsed. The
system then moves into a creative, “free for all” state of Chaos. ATTRACT
(eventually new people, groups, ideas and / or actions emerge, cluster and maybe
resonate. EXCITE (time, energy, resources and management can now be applied to
enable the new systems to synergise and develop). Profits occur as higher order
control and efficiency rule temporarily. Then, depending on the stabilty of the
environment, or market competition, it all starts over again as a continuous cycle of
change.
Managing Change Handbook (2010) 47
Theory U of Otto Scharmer who describes a process in which change strategies are
based on the emerging future rather than on lessons from the past.
The Solution focused brief therapy approach to change, developed to assist
individuals, is equally useful for organisations.
The Closework theory of intervention says change is driven by the champions, be
they internal project teams or consultants, working alongside the delivery team,
individuals and management in the places where the work gets done. Champions
should get involved rather than instruct and bring practical and implementable ideas.
2.3 Stakeholder Involvement in the Change Process
Everybody talks about change and Change Management. Few people actually know
what it means in practice. And, yes, we know that 90% of Change Management is good
leadership, transparency, a little bit of good luck and a strong belief in the higher Gods of
management.
On the other side, most large organisations run so many change projects at the same
time, that change fatigue predominates the attitude of their staff: new companywide
software, new training programs, new leadership guidelines, merger and acquisitions,
implementation of matrix organisation, new customer relation management programs,
etc. – all this happens, if not in parallel, then at least in a short subsequence.
Seeing the reality of many companies, what often surprises (and fascinates) us is the
fact that they still produce and sell (and often very successfully)! So, if organisations
want to change, what is the best route? A central question for a manager who is about to
start a new project is the question of stakeholder involvement. In few cases, those who
want to initiate a change process ask themselves, whether top down or bottom up is the
right direction to drive the change. The history of failures shows that in many cases
those who are affected by the change are not consulted before the start of a project.
A good example is Nestlés ERP story. Read more at:
http://www.cio.com/archive/051502/nestle.html. Whoever thought that companywide
projects for implementation of a new software has something to do with Change
Management – here is the proof!
Managing Change Handbook (2010) 48
"Nestlé learned the hard way that an enterprise wide rollout involves much more than
simply installing software.” When you move to SAP (Systems Applications and
Products), you are changing the way people work,' Jeri Dunn, CIO of Nestle, USA, says.
“You are challenging their principles, their beliefs and the way they have done things for
many, many years.”
For a systems thinker, there is no alternative than involving the whole system in the
change. Because of the auto-poetic forces of a complex system, it will always try to
rearrange internally to avoid change. Because change is firstly a threat, and only
secondly an opportunity.
However, the reality of many organisations is different. Involving many stakeholders in a
change process does not only need a lot of resources. It also needs a new approach to
leadership that identifies more with process facilitation than with process control. Not all
companies qualify for that call.
Therefore, although we advocate whole systems change, we know that not all
organisations are ready to go along that path. Should we leave those alone? Should we
talk them into organisation of large stakeholder conventions in which the vision and the
strategy of the company is delivered from bottom up – even if they are not ready? The
answer is a clear NO. As change practitioners, we need to see the reality of the
organisation, and make appropriate suggestions for a change strategy. This could be
advice to a strong and charismatic boss of a medium size company to implement her
dreams against all odds. Or it could be helping the well established international
organisation promoting new tools and techniques for planning. Or, it could be a large
institutional learning process involving the "Whole System". The following matrix is
based on a design Peter Senge has provided in his famous Fifth Discipline Fieldbook. It
shows the different steps of involvement and participation in change processes:
"Telling" means that decisions about the change process are taken on the highest
managerial level. Stakeholders / employees have only the choice of accepting the top-
down plan or to leave the system. Implementing an entire change process top-down
leads to frustration and refusal of co-operation.
"Selling" means that change plans are designed at top-level and stakeholders are
invited to join in the change is advocated. The limitation of selling lays in the fact that the
Managing Change Handbook (2010) 49
top management wants to hear a "yes", and the staff wants to hear that they will keep
their jobs. So, most will give a compliant "yes", which is not a safe base for commitment.
"Testing", whilst still a top-down approach, lays the vision out for inspection by the
stakeholders and asks for their comments. The management intends to find out whether
stakeholders support the change process, and opens up for proposals. Testing can be
done on a limited scale ("piloting") perhaps better to expand, to differentiate between
representation and piloting, but could also concern the whole system. The vision
remains as is, but the way to reach the vision is subject to negotiations between the
different stakeholder groups.
"Consulting" is the preferred mechanism for a management that recognises that it can
not possibly have all the answers. Consulting the stakeholders about the change,
strengthens the vision of change. In recent time, many tools have been developed to
allow a large number of stakeholders to participate in the planning process. However,
such a process takes time and requires commitment at the top-level to correct initial
decisions.
"Co-creating" means developing a vision jointly with stakeholders from the very
beginning. It secures the highest degree of ownership.
Have a look at a figure that shows tools that are related to the five different steps, and
the required degree and type of leadership.
Managing Change Handbook (2010) 50
Managing Change Handbook (2010) 51
Ralph Stacey's Agreement and Certainty Matrix
In the last ten years, complexity science had a strong impact on the theory and practice
of change facilitation. Tools like Open Space Technology, Appreciative Inquiry and
others are based on the assumption that highly complex social systems like
organisations follow certain generic principles and resemble other systems such as the
body, colonies of ants, swarms of fish or birds, etc. Also, cybernetic models have been
applied, for example for the description of systems archetypes by Peter Senge.
Searching for a model that gives a simple road map for dealing with complexity, the
model of Ralph Stacey is most useful.
As it can be seen in the diagram below, Stacey has proposed a matrix that introduces
two dimensions with regards to management of organisations: Certainty and Agreement:
Certainty depends on the quality of the information base that facilitates individual and
joint decisions in organisations. Rational management has tried hard to increase
uncertainty by introducing tools like fishbone analysis, the Boston Matrix, customer
research, etc. And, in fact there are many day-to-day decisions in management, where
analytical decision making is highly successful. There are, however, many situations in
which decisions are made on assumptions. Depending on the number of stakeholders
involved, the projected time frame, the susceptibility of the project to external influence
factors, etc., projects might become very complex and it becomes impossible to
realistically predict outcomes.
Modern social systems such as organisations are mainly self-organised on the base of
negotiation processes. The degree of agreement among the people directly involved on
what should be done ("the truth") with respect to the implementation methodology of a
project is an important factor determining success.
Many simple business processes are situated at a level in which it is certain what needs
to be done and people involved agree on that. Here, traditional management
approaches, e.g. management by objectives apply and work well. However, leaders
should always question themselves, "How do we know that we know?", "Have we
assessed all the critical variables?" and, "What have we done to assure that people in
our organisation share a common perspective?" Often, managers are blinded by their
own vision. A tool to assess different perspectives is a participatory risk analysis.
Managing Change Handbook (2010) 52
Very often, strategic analyses show a strategy that is most likely to lead to a better
business performance. What has to be done, and what will be the outcome, is quite
obvious to analysts. However, members of the organisation might not agree or, for any
reason, show resistance to the planned changes. Take, for example, the implementation
of company-wide software platforms that facilitates management of business processes.
There are hundreds of examples where such projects have faced severe problems
during the implementation phase. A case study how Nestlé has learned this the hard
way can be found at http://www.cio.com/archive/051502/nestle.html.
So, what to do in situations characterized by certainty but disagreement and resistance?
If you can't (or don't want) to fire all that are blocking your plans, there is no other way
Managing Change Handbook (2010) 53
than selling your project. This takes time and resources but will save you a lot of money
at the end. Of the modern Change Management approaches, Real Time Strategic
Change (RTSC) is certainly one methodological framework to be applied in such
situations.
The other extreme in which managers find themselves and their organisations is
characterised by a high agreement of stakeholders – what Senge calls "shared vision",
but a high degree of uncertainty. "How will our business sector evolve?", "What new
technologies will be available tomorrow?", "Which political decisions will influence our
future?” etc. are just some key questions that apply. This is the area of scenario design.
Also, the current theories of Otto Scharmer (http://www.ottoscharmer.com/) provide
leverage to navigate through such environments. Also, participatory approaches for
defining strategies apply very well in such situations.
You wouldn't like to be in the manager's hot seat facing a situation in which the future is
highly uncertain and the stakeholders are far beyond any agreement. However, many
political leaders are operating in exactly such an environment. In an organisation you
would do everything to avoid that situation, because it is what complexity scientists call
"The Edge of Chaos". The fall of the Berlin wall, is such a story that illustrates
complexity, where a system that had been stable for 40 years, collapsed in one night of
freedom celebration.
Most contemporary management processes are situated in a field that fluctuates
between the extremes that have been delineated above. Characterised by a medium to
high level of uncertainty and by stakeholders with highly diversified perspectives on what
should be done. Here, laws of complexity science and neurobiology apply to change in
organisations, and change is the norm. In such environments, the main task of
management is to facilitate the co-creation of the organisation's future, to provide room
for self-organisation and to let people decide themselves about their own and their
organisation's issues. I firmly believe that such strategies are the only way to lead out of
the political crisis of the world, and that more and more profit and non-profit
organisations will adapt management tools for co-creation, such as Open Space
Technology, Appreciative Inquiry, World Café, and other tools to come.
Managing Change Handbook (2010) 54
2.4 Trends in Change Management
The top ten trends identified in 2009 were:
A recognition of the need for change management
Overall, participants saw a greater understanding of and appreciation for the role of
change management. Organisations and project-focused employees saw change
management as important and as a needed aspect of any change project. Change
management was identified as a key contributor to project success. There was a wider
appreciation of the role change management played in contributing to return on
investment (ROI) and benefit realization of projects; it was viewed as essential. A
number of participants also commented on the growing interest and attention by senior
leaders.
Change management competency building
Viewing change management as an emerging and necessary competency moved up
from number five on the trends list in 2007 to number two in the 2009 study. Participants
indicated more demand for training and knowledge around change management, as well
as more widespread competency building programs. Change management
competencies were becoming evident in senior leadership levels and front-line
management levels.
Dedication of resources for change management
Participants identified the use of dedicated resources focused on change management
as a key trend in their organisation. Project leaders were more likely to appoint change
management resources to support their change initiative, and change management
specialists were being identified and developed within the organisation.
Use of change management tools
The fourth most-cited trend was a greater adoption of change management tools,
processes and methodologies. Participants indicated that change management and its
application was becoming more consistent and formalized in their organisation. The use
of more structured and formal processes was number two in the list of trends in the 2007
study.
Managing Change Handbook (2010) 55
Application of change management on projects
Participants commented that change management resources were now sought out by
project teams, rather than looking for projects to support as they had done in the past.
Project teams were bringing change management resources on board earlier in the
project, during the planning phase, and were considering people-side issues earlier.
Several participants indicated that change management had become a requirement and
that no major projects moved forward without change management.
Project management and change management integration
Integration of change management and project management moved down several spots
from the 2007 study in the list of top trends. Participants commented on the partnership,
alignment and involvement in the planning process that was taking place with the project
management and change management functions.
Change saturation
As evidenced by other findings in the study, organisations were increasingly facing a
point of change saturation. The recognition of this condition and an increasing pace of
change were highlighted as emerging trends. One participant noted the “change
avalanche” the organisation was experiencing.
Standard change management approach
More organisations were establishing a standard change management methodology for
the entire enterprise.
Establishment of a change management group
Some organisations were creating and staffing a change management function in the
organisation, sometimes called the Change Management Office (CMO). Advances were
made in staffing this group which centrally supported change management and change
management training efforts. A number of participants indicated they were currently
trying to decide where this group would reside in the organisation.
Management of the portfolio of change
Several participants indicated that their organisations were making progress in
understanding the people impact across the multiple projects underway. Participants
Managing Change Handbook (2010) 56
mentioned steps including managing the portfolio of change, tracking projects, mapping
future changes and prioritizing projects based on the change load.
Trends in Terms of Change Management Methodologies: Principle-based Real Time Strategic Change
Real time: This principle challenges people to think and act as if the future were
now.
Preferred future: This principle reminds people to pay attention to bringing the best
of the past and present with them while at the same time they build the future they
desire.
Creating community: This principle encourages people to join together as strong
individuals while at the same time becoming a strong community, and vice versa. A
key question related to this principle is: "What kind of community do we want and
need to be?"
Common understanding: This principle ensures that informed decisions are made
through inviting diverse viewpoints while at the same time establishing a larger
collective organisational intelligence.
Reality is a key driver: This principle guides decisions and actions through people
focusing in on specific issues and opportunities that provide significant leverage for
change. They simultaneously scan for relevant information amidst the complex,
wide-ranging, and often messy realities of change.
Empowerment / Inclusion: This principle focuses on empowering individuals and teams through inclusion and delegation while clearly defining where power will
be retained where it currently resides.
Managing Change Handbook (2010) 57
2.5 Managing Change in the Sector
As primary agents of transformation within finance and,
increasingly, the company at large, Chief Financial Officers
(CFOs) are expected to demonstrate a high level of expertise in
change management. Just about any initiative, from
implementing a new software package to a restructuring the
department calls on this crucial set of leadership skills. But while
change management has been the subject of much research for decades, there's not a
lot of evidence that corporate leaders are getting any better at it. Consulting firm Bain &
Co. recently studied 100 strategy and performance improvement projects and concluded
that in more than 80 percent of cases, companies failed to establish a true point of
departure for their initiative: They failed to adequately understand the performance
issues that they wanted to tackle.
The basic elements of successful change management are straightforward, but many
leaders omit or ignore them. In a new report, Bain offers a useful framework for driving
change based on the acronym PLOT: plan, lead, operate, and track. Along the way, the
report gives some fascinating insights into failed initiatives as well as massively
successful ones, such as Idris Jala's turnaround of Malaysia Airlines.
Plan. The first stage involves cutting through complexity to identify the primary drivers of
change, defining the current state and the successful end-state, and mapping the
transition from the one to the other. While this may seem like not much more than
common sense, many initiatives end up unraveling precisely because leaders devote
insufficient time and attention to this phase.
They also underestimate the human capital and financial resources they need to get the
job done. Under-investing in the project leads to two problems: it sends a signal that the
initiative may not be that important after all, and it often results in slow progress toward
key goals. The result is a negative cycle that can easily derail the project.
Lead. This is the people phase; it centers around assembling the right team for the job,
setting accountabilities, and communicating the goals. It also encompasses the process
of creating milestones and mobilizing the troops around them. At Malaysia Airlines, for
example, Jala held prolonged think sessions with key managers to identify ways to
Managing Change Handbook (2010) 58
achieve interim goals. He then broke the objectives down into specific activities and
assigned responsibility for each one.
Operate. At this point, leaders have to make the difficult choices, including people-
related ones that are necessary to keep the project on track. They may need to overrule
or remove managers who are resistant to change. And they'll certainly need to develop a
system to keep people accountable. For example, Jala achieved that by establishing a
separate P&L statement for every route in the airline's book. And he made sure that
each P&L has a manager responsible for overseeing it.
Track. As the initiative unfolds, leaders need to monitor a small number of key
indicators, reward relentlessly, and celebrate successes. Bain recommends a review of
progress every two weeks to two months. Incentive programs can be linked not only to
personal performance and the company's financial objectives, but also to specific
operational milestones.
Jala's initiative is sharply focused on his company's cash position, and he receives a
daily report showing exactly how much the airline has in its various accounts around the
world. He also gets a P&L statement and details of sales and passenger loads on a daily
basis. It seems to be working. Jala's approach has helped him take Malaysia Airlines
from near-bankruptcy to profitability levels nearly five times original projections for 2007
-- within the space of two years.
Case study example: Australian Finance Change Management Project
Managing Change Handbook (2010) 59
Overview: Australian Bank was merging with a Finance and Insurance company. A
significant component of this merger was to create one way to operate across all
customer contact points (branches, call centers, websites, automated teller machines
(ATM’s) etc). Our assignment was to project manage the:
Creation of a Standard Operating Environment (SOE).
Develop and implement a new "front end" for a post-merger banking system.
The system was to be used by 235 bank branches, 450 Call Centre staff and
corporate staff; in total over 2,500 end users.
Our assignment was to manage the project, across entire lifecycle:
Strategy development.
RFP's and vendor selection.
Detailed scope.
Build and test, pilot.
Implementation and review.
Post Go Live support.
Project budget was AUD$25M with a team of 65 (internal and consultants). The project
was completed on time within budget and with full functionality.
2.6 Factors in Selecting a Change Management Strategy
Generally speaking, there is no single change strategy. You can adopt a general or what
is called a "grand strategy" but, for any given initiative, you are best served by some mix
of strategies. Which of the preceding strategies to use in your mix of strategies is a
decision affected by a number of factors. Some of the more important ones follow.
Degree of resistance. Strong resistance argues for a coupling of Power-Coercive
and Environmental-Adaptive strategies. Weak resistance or concurrence argues for
a combination of Empirical-Rational and Normative-Re-educative strategies.
Target population. Large populations argue for a mix of all four strategies,
something for everyone so to speak.
Managing Change Handbook (2010) 60
The stakes. High stakes argue for a mix of all four strategies. When the stakes are
high, nothing can be left to chance.
The time frame. Short time frames argue for a Power-Coercive strategy. Longer
time frames argue for a mix of Empirical-Rational, Normative-Re-educative, and
Environmental-Adaptive strategies.
Expertise. Having available adequate expertise at making change argues for some
mix of the strategies outlined above. Not having it available argues for reliance on
the power-coercive strategy.
Dependency. This is a classic double-edged sword. If the organisation is dependent
on its people, management's ability to command or demand is limited. Conversely, if
people are dependent upon the organisation, their ability to oppose or resist is
limited. (Mutual dependency almost always signals a requirement for some level of
negotiation.)
2.7 Change Management Strategies
Change strategy components:
• Clarify what “change” is understood as for the business – link to strategy;
• Clarify role of change management support (change agent) – what can be expected,
included and excluded;
• Clarify process / philosophy to be used to approach and deal with change – include
possible levels, types, outputs, inputs, processes and outcomes.
Managing Change Handbook (2010) 61
Strategy Description
Empirical-Rational
People are rational and will follow their self-interest —
once it is revealed to them. Change is based on the
communication of information and the proffering of
incentives.
Normative-Re-educative
People are social beings and will adhere to cultural
norms and values. Change is based on redefining and
reinterpreting existing norms and values, and developing
commitments to new ones.
Power-Coercive
People are basically compliant and will generally do
what they are told or can be made to do. Change is
based on the exercise of authority and the imposition of
sanctions.
Environmental-Adaptive
People oppose loss and disruption but they adapt readily
to new circumstances. Change is based on building a
new organisation and gradually transferring people from
the old one to the new one.
Types of Change Management Strategies Include:
1. Directive strategies. This strategy highlights the manager's right to manage change
and the use of authority to impose change with little or no involvement of other
people. The advantage of the directive approach is that change can be undertaken
quickly. However, the disadvantage of this approach is that it does not take into
consideration the views, or feelings, of those involved in, or affected by, the imposed
change. This approach may lead to valuable information and ideas being missed and
there is usually strong resentment from staff when changes are imposed rather than
discussed and agreed.
2. Expert strategies. This approach sees the management of change as a problem
solving process that needs to be resolved by an 'expert'. This approach is mainly
applied to more technical problems, such as the introduction of a new learner
management system, and will normally be led by a specialist project team or senior
manager. There is likely to be little involvement with those affected by the change.
Managing Change Handbook (2010) 62
The advantages to using this strategy is that experts play a major role in the solution
and the solution can be implemented quickly as a small number of 'experts' are
involved. Again, there are some issues in relation to this strategy as those affected
may have different views than those of the expert and may not appreciate the
solution being imposed or the outcomes of the changes made.
3. Negotiating strategies. This approach highlights the willingness on the part of
senior managers to negotiate and bargain in order to effect change. Senior
managers must also accept that adjustments and concessions may need to be made
in order to implement change. This approach acknowledges that those affected by
change have the right to have a say in what changes are made, how they are
implemented and the expected outcomes. The disadvantage to this approach is that
it takes more time to effect change, the outcomes cannot be predicted and the
changes made may not fulfill the total expectations of the managers affecting the
change. The advantage is that individuals will feel involved in the change and be
more supportive of the changes made.
4. Educative strategies. This approach involves changing people's values and beliefs,
'winning hearts and minds', in order for them to fully support the changes being made
and move toward the development of a shared set of organisational values that
individuals are willing, and able to support. A mixture of activities will be used;
persuasion; education; training and selection, led by consultants, specialists and in-
house experts. Again, the disadvantage of this approach is that it takes longer to
implement. The advantage is that individuals within the organisation will have
positive commitment to the changes being made.
5. Participative strategies. This strategy stresses the full involvement of all of those
involved, and affected by, the anticipated changes. Although driven by senior
managers the process will be less management dominated and driven more by
groups or individuals within the organisation. The views of all will be taken into
account before changes are made. Outside consultants and experts can be used to
facilitate the process but they will not make any decisions as to the outcomes. The
main disadvantages of this process are the length of time taken before any changes
are made, it can be more costly due to the number of meetings that take place, the
payment of consultants / experts over a longer time period and the outcomes cannot
be predicted. However, the benefits of this approach are that any changes made are
more likely to be supported due to the involvement of all those affected, the
Managing Change Handbook (2010) 63
commitment of individuals and groups within the organisation will increase as those
individuals and groups feel ownership over the changes being implemented. The
organisation and individuals also have the opportunity to learn from this experience
and will know more about the organisation and how it functions, thus increasing their
skills, knowledge and effectiveness to the organisation.
2.8 Creating an Organisational Culture That Embraces Change Management
Changing your organisational culture is the toughest task you will ever take on and can
feel like rolling rocks uphill. Your organisational culture was formed over years of
interaction between the participants in the organisation. Organisational cultures form for
a reason. Perhaps the current organisational culture matches the style and comfort zone
of the company founder. Culture frequently echoes the prevailing management style.
Since managers tend to hire people just like themselves, the established organisational
culture is reinforced by new hires.
Organisational culture grows over time. People are comfortable with the current
organisational culture. For people to consider culture change, usually a significant event
must occur. An event that rocks their world such as flirting with bankruptcy, a significant
loss of sales and customers, or losing a million dollars, might get people's attention.
Even then, to recognize that the organisational culture is the culprit and to take steps to
change it is a tough journey. In no way do I mean to trivialize the difficulty of the
experience of organisational culture change by summarizing it in this article, but here are
my best ideas about culture change that can help your organisation grow and transform.
When people in an organisation realize and recognize that their current organisational
culture needs to transform to support the organisation's success and progress, change
can occur. But change is not pretty and change is not easy. The good news?
Organisational culture change is possible. Culture change requires understanding,
commitment, and tools.
Managing Change Handbook (2010) 64
Steps in Organisational Culture Change
There are three major steps involved in changing an organisation's culture.
Before an organisation can change its culture, it must first understand the current
culture, or the way things are now. Do take the time to pursue the activities in this
article before moving on to the next steps.
Once you understand your current organisational culture, your organisation must
then decide what the organisational culture should look like to support success. What
vision does the organisation have for its future and how must the culture change to
support the accomplishment of that vision?
Finally, the individuals in the organisation must decide to change their behavior to
create the desired organisational culture. This is the hardest step in culture change.
Plan the Desired Organisational Culture
The organisation must plan where it wants to go before trying to make any changes in
the organisational culture. With a clear picture of where the organisation is currently, the
organisation can plan where it wants to be next. Mission, vision, and values: to provide a
framework for the assessment and evaluation of the current organisational culture, your
organisation needs to develop a picture of its desired future. What does the organisation
want to create for the future? Mission, vision, and values should be examined for both
the strategic and the value based components of the organisation. Your management
team needs to answer questions such as:
What are the five most important values you would like to see represented in your
organisational culture?
Are these values compatible with your current organisational culture? Do they exist
now? If not, why not? If they are so important, why are you not attaining these
values?
Take a look at the rest of the actions you need to take to change your organisational
culture. What needs to happen to create the culture desired by the organisation? You
cannot change the organisational culture without knowing where your organisation wants
to be or what elements of the current organisational culture need to change. What
cultural elements support the success of your organisation, or not? As an example, your
team decides that you spend too much time agreeing with each other rather than
Managing Change Handbook (2010) 65
challenging the forecasts and assumptions of fellow team members, that typically have
been incorrect.
In a second example, your key management team members, who must lead the
company, spend most of their time team building with various members of the team on
an individual basis, and to promote individual agendas, to the detriment of the cohesive
functioning of the whole group. Third, your company employees appear to make a
decision, but, in truth, are waiting for the "blessing" from the company owner or founder
to actually move forward with the plan.
In each of these situations, components of the organisational culture will keep your
organisation from moving forward with the success you deserve. You need to
consciously identify the cultural impediments and decide to change them.
However, knowing what the desired organisational culture looks like is not enough.
Organisations must create plans to ensure that the desired organisational culture
becomes a reality.
Change the Organisational Culture
It is more difficult to change the culture of an existing organisation than to create a
culture in a brand new organisation. When an organisational culture is already
established, people must unlearn the old values, assumptions, and behaviors before
they can learn the new ones.
The two most important elements for creating organisational cultural change are
executive support and training.
Executive support: Executives in the organisation must support the cultural change,
and in ways beyond verbal support. They must show behavioral support for the
cultural change. Executives must lead the change by changing their own behaviors. It
is extremely important for executives to consistently support the change.
Training: Culture change depends on behavior change. Members of the organisation
must clearly understand what is expected of them, and must know how to actually do
the new behaviors, once they have been defined. Training can be very useful in both
communicating expectations and teaching new behaviors.
Managing Change Handbook (2010) 66
Additional Ways to Change the Organisational Culture
Other components important in changing the culture of an organisation are:
Create value and belief statements: use employee focus groups, by department, to
put the mission, vision, and values into words that state their impact on each
employee's job. For one job, the employee stated: "I live the value of quality patient
care by listening attentively whenever a patient speaks." This exercise gives all
employees a common understanding of the desired culture that actually reflects the
actions they must commit to on their jobs.
Practice effective communication: keeping all employees informed about the
organisational culture change process ensures commitment and success. Telling
employees what is expected of them is critical for effective organisational culture
change.
Review organisational structure: changing the physical structure of the company to
align it with the desired organisational culture may be necessary. As an example, in a
small company, four distinct business units competing for product, customers, and
internal support resources, may not support the creation of an effective organisational
culture. These units are unlikely to align to support the overall success of the
business.
Redesign your approach to rewards and recognition: you will likely need to
change the reward system to encourage the behaviors vital to the desired
organisational culture.
Review all work systems such as employee promotions, pay practices, performance
management, and employee selection to make sure they are aligned with the desired
culture. As an example, you cannot just reward individual performance if the
requirements of your organisational culture specify team work. An executive's total
bonus cannot reward the accomplishment of his department's goals without
recognizing the importance of him playing well with others on the executive team to
accomplish your organisational goals.
You can change your organisational culture to support the accomplishment of your
business goals. Changing the organisational culture requires time, commitment,
planning and proper execution - but it can be done.
Managing Change Handbook (2010) 67
2.9 Developing a change management plan
Change management is a process that allows companies to effectively implement a
change within their organisation. But, before you begin trying to implement the intended
change, you need to create a change management plan. There are many advantages
and disadvantages of change management. You need to decide for yourself if you are
willing to accept the disadvantages before you move forward with your plan. It helps to
read an overview of change management before you start.
Change management is necessary because most businesses nowadays are very
decentralized. Multiple employees or users may be the ones who are making a change
to a system. This could lead to trouble if those making the changes do not understand
how these changes could affect the organisation as a whole. This is why you should
always have a change management plan in place before a change is made.
Plan objectives
The objectives of your plan should be pretty obvious, but you should have them written
down somewhere. For example:
Train and educate employees, stakeholders, management, and clients about why
the change is necessary and what the change will involve.
Come up with back-out procedures in case the change is not having the desired
effect.
Implement the planned change.
Monitor and evaluate the change before, during and after its implementation.
Plan Guidelines
Your change management plan should involve plenty of documentation. Every change
needs to be documented so that you have a written record of what was done. Also,
communication before, during, and after the process is a must. You need to show why
the change is necessary, what is being done and what risks are involved in the change.
A change management plan can be broken down into several steps. If you follow these
steps, it will help you successfully implement your plan.
Managing Change Handbook (2010) 68
1. Create your plan and define your change management process.
You need to come up with procedures for your change management process. Who is
responsible for what? Who will be your change management coordinator? How will you
measure the change and its effectiveness? What tools will be used? What types of
changes are being implemented? What has priority?
2. Submission of change requests.
You need to obtain in writing all of the changes that are being proposed. Change
requests need to be given to the change management coordinator. You should have an
established change request form on hand, which contains both the date, time and what
is being requested. You can see an example of a change management request / record
form in our Media Gallery.
3. Start implementing your change management strategy, and monitor it before, during,
and after the change. You should have back-out strategies in place in case the change
is not effective.
4. Evaluation.
The change coordinator needs to see where change was effective, where it created
problems, and whether or not it was effective as a whole.
5. Update the change management plan if the initial plan is not effective.
You may need to modify the plan for a variety of reasons, including ineffectiveness, too
many back-outs, only a certain amount of changes are being handled, etc.
Once your change management plan has been implemented, you need to constantly
evaluate its success and its impact for years to come. A plan that was effectively
implemented, for example, could fall apart way after its adoption because employees
have slipped back into their old ways of doing things.
Managing Change Handbook (2010) 69
Managing Change Handbook (2010) 70
2.10 The Role of the Change Agent
A change agent may be a full time organisational development professional, a leader of
a division or a middle manager charged with the responsibility of bringing about a
change in their area. Anyone involved in helping a team achieve something new
becomes an agent of change. Depending on the type of change they are tasked with, a
change agent may perform any of the following roles.
However a change master is able to perform all of these roles.
Change managers are responsible for garnering support for change and overcoming
resistance to change. There are ten techniques that change managers can use to
accomplish this:
1. Plan well. Appropriate time and effort must go into planning change before
implementation begins.
2. Allow for discussion and negotiation. Employees must have some input into the
changes. This two-way communication can help reduce employee concerns.
3. Allow for participation. If employees participate in changes that affect them, they are
more likely to support those changes.
4. Emphasize the financial benefits. If employees can earn higher compensation
through organisational change, telling them about this possibility will help to increase
support for the change.
5. Avoid too much change. Employees can only handle a certain amount of change
before there are negative repercussions from stress, so changes should be
introduced slowly and over time.
6. Gain political support. For change to be successful, certain key employees (those
with informal power in the organisation) must support it.
7. Let employees see successful change. Employees will be more willing to support
change if they see that it has worked successfully in other companies or other areas
of their company.
8. Reduce uncertainty. Uncertainty about the change effort can cause negative
emotions and actions, and any information that change managers can give to reduce
uncertainty can reduce resistance to change.
Managing Change Handbook (2010) 71
9. Ask questions to involve workers. Change managers should ask workers questions
that move them toward a goal or objective or that reinforce positive
accomplishments.
10. Build strong working relationships. Better working relationships in general will aid in
change management; trust and mutual respect are critical elements of good working
relationships.
Managing change can be a reactive or a proactive process, and there are a number of
different models of organisational change. Each model emphasizes different approaches
to understanding and managing change. In many of these models, the role of the
change manager is emphasized. The change manager may be a part of a transitional
management team or may be a change agent. This person facilitates the changes to the
organisation and is often a critical element in the success or failure of the change.
The Various Roles of the Change Agent:
Diagnostician and developer of clear change goals
Like a medical practitioner, the change agent will begin by diagnosing what the real
issues are, and then proposing clear goal directed solutions. They will begin by
analysing:
The existing problems or issues.
The current reality of the organisation / division.
The desired future ideal state.
The barriers preventing the organisation from achieving that desired state.
The forces for change that exist within the organisation.
The dreams, goals and values of the key stakeholders within the organisation.
The organisation's future strategy.
The organisation's values.
The organisation's readiness and capacity for change.
Managing Change Handbook (2010) 72
Changes occurring in the organisation's external environment that may impact on the
organisation and its customers.
From this the diagnostician will determine the type of change required by the
organisation.
The facilitator
The most complex role of a change agent is getting others to 'buy in' to the change
process, and getting them committed to taking relevant actions. The facilitator gets
involved in:
Identifying the key stakeholders of the change.
Involving these stakeholders in the diagnostic process. This means helping them to
achieve consensus on the changes the organisation needs to make. When done in a
participative process, this helps create ownership for change.
Helping the stakeholders to set clear goals for their change process.
Educating these stakeholders about the changes they want to make and helping
them to understand how the changes they've selected will impact on the rest of the
organisation. (Systems thinking)
Helping the stakeholders to understand how these changes will benefit the company,
their division and themselves. This in turn builds commitment to the change.
Helping the stakeholders understand the 'costs' of these changes to the company,
their division and to themselves personally.
The designer
Designing a change process that will achieve specific change goals is a creative
process. This involves:
Reviewing all the change tools and interventions that are available.
Selecting those specific change tools and interventions that will help the organisation
to achieve its change goals.
Managing Change Handbook (2010) 73
Creating additional activities and interventions to fill any gaps.
Checking that each intervention supports every other intervention, and that all
interventions support the company's values and strategies.
Arranging and integrating these interventions into one simple, seamless, step by step
process.
Deciding on the roles that need to be played to support the process.
The project manager
Many different roles are required for a change process to work. Often a change agent
will play the role of a project manager and co-ordinate the activities of the different role
players. Typical roles in a change process include:
A change steering committee.
The CEO (Chief Executive Officer) of the company.
The executive team.
Regional coordinators (in large scale changes).
External consultants.
Internal consultants.
Middle managers.
Departmental or divisional change agents.
Communications coordinators.
Change web designers.
Marketing professionals.
Individuals within the company.
Managing Change Handbook (2010) 74
The educator
Those involved in managing the change, and those who will be affected by the change,
often are surprised by their feelings when confronted by change. Resistance, frustration
and confusion are common emotions associated by change.
A successful change agent educates people about what to expect from the change
process. This includes topics such as:
The psychological phases people go through when experiencing change.
How to deal with these feelings. How to help others understand and deal with their
feelings.
How to deal with 'resistance to change'.
How to make a change process fun, exciting and developmental rather than scary
and frustrating.
How to overcome barriers to change.
Tools for making your change process successful.
The role of creativity in a change process.
The marketer
Many individuals dislike change. While they see that it may benefit the company,
change to them simply means additional work, inefficiencies, feelings of
incompetence, and maybe a more limited career path.
The skillful marketer creates the belief that participating in this change will be:
o Fun and rewarding.
o An opportunity to develop new useful skills.
o An opportunity to increase one's visibility within the organisation.
o Like embarking on an exciting adventure through which every individual discovers
their personal magic.
Managing Change Handbook (2010) 75
To do this, the marketer applies innovative marketing techniques more often found in the
advertising, communications industries. These include:
Advertising.
Competitions.
Participative media such as web sites, theatre, and clubs.
Creative media such as themes, logos, slogans, story telling, art, music, songs and
'war cries'.
Themed gifts to reinforce the change.
Awards and prizes.
Role models and success stories.
Inspiration agent
Why is the Oprah show so successful? People react with love, energy, excitement and
creativity to anything that touches their soul. An inspiration agent finds ways to use the
change process to:
Help individuals discover the magic they have within them.
Help individuals to dream of the personal greatness they could achieve.
Encourage individuals to take risks to use their special magic.
Help individuals to overcome barriers to personal success.
Celebrate individual's small successes.
Systems integrator and co-ordinator
Often individuals who contribute to a change, get discouraged when they find they are
being punished rather than rewarded for their efforts. This situation arises when the
reward and recognition systems in the company are not aligned to the change. The
change agent often needs to ensure that the following systems support the change they
are making.
Managing Change Handbook (2010) 76
Budgeting.
Performance management.
Compensation systems.
Incentive and reward systems.
Reporting systems.
Measurement criteria.
Promotions criteria.
Monitor
Since organisations are integrated systems, any change to one part of the system may
trigger unexpected changes to other parts of the system. Similarly, unless you consider
changes to the culture of your company, you may find that certain elements of the
system may prevent your change from working.
The monitor role regularly measures progress towards the change goals. They
constantly question "what is working", "what isn't working" and "what do we need to
change".
They provide regular feedback on progress to:
The CEO.
The executive team.
Other change agents or change roles.
Managers.
Individuals involved in change.
They encourage them to:
Managing Change Handbook (2010) 77
Identify obstacles to change and find creative ways of overcoming these at their own
levels.
Identify obstacles that require changes to the entire system and may require
approval from the Chief Executive Officer (CEO).
Identify and share success stories.
Turn successful people into role models to encourage others.
Recognise and reward those who contribute to change
Qualities of a change agent
While many people will find that they can perform one or two of the agent roles with
ease, a change master would be able to perform all the change roles.
The ideal change master would have the following qualities:
Common sense and the courage to use it.
Credibility and trust – the ability to work at all levels in the organisation.
A wide range of business knowledge – preferably someone with experience in 3-4
different areas, or an Masters in Business Administration (MBA), or a general
management experience.
Knowledge of change management.
The ability to work with teams of people both inside and outside the organisation.
This includes the ability to work with people across all departments.
The ability to do very unstructured work.
Creativity. The ability to custom design processes to meet the goals of the
organisation.
Self confidence balanced by humility.
Facilitation skills.
Managing Change Handbook (2010) 78
Design skills.
Coaching skills.
A love of innovation and new ways of doing things.
A sense of humour and a sense of fun.
A spirit of caring.
The ability to inspire people. To bring out the magic within every individual and every
team.
Skills Essential for a Change Agent:
Skills and strategies
Managing the kinds of changes encountered by and instituted within organisations
requires an unusually broad and finely honed set of skills, chief among which are the
following.
Political skills
Organisations are first and foremost social systems. Without people there can be no
organisation. Lose sight of this fact and any would-be change agent will likely lose his or
her head. Organisations are hotly and intensely political. And, as one wag pointed out,
the lower the stakes, the more intense the politics. Change agents dare not join in this
game but they had better understand it. This is one area where you must make your own
judgments and keep your own counsel; no one can do it for you.
Analytical skills
Make no mistake about it, those who would be change agents had better be very good
at something, and that something better be analysis. Guessing won’t do. Insight is nice,
even useful, and sometimes shines with brilliance, but it is darned difficult to sell and
almost impossible to defend. A lucid, rational, well-argued analysis can be ignored and
even suppressed, but not successfully contested and, in most cases, will carry the day.
If not, then the political issues haven’t been adequately addressed.
Managing Change Handbook (2010) 79
Two particular sets of skills are very important here: (1) workflow operations or systems
analysis, and (2) financial analysis. Change agents must learn to take apart and
reassemble operations and systems in novel ways, and then determine the financial and
political impacts of what they have done. Conversely, they must be able to start with
some financial measure or indicator or goal, and make their way quickly to those
operations and systems that, if reconfigured a certain way, would have the desired
financial impact. Those who master these two techniques have learned a trade that will
be in demand for the foreseeable future. (This trade, by the way, has a name. It is called
“Solution Engineering.”)
People skills
As stated earlier, people are the sine qua non of organisation. Moreover, they come
characterized by all manner of sizes, shapes, colors, intelligence and ability levels,
gender, sexual preferences, national origins, first and second languages, religious
beliefs, attitudes toward life and work, personalities, and priorities — and these are just a
few of the dimensions along which people vary. We have to deal with them all.
The skills most needed in this area are those that typically fall under the heading of
communication or interpersonal skills. To be effective, we must be able to listen and
listen actively, to restate, to reflect, to clarify without interrogating, to draw out the
speaker, to lead or channel a discussion, to plant ideas, and to develop them. All these
and more are needed. Not all of us will have to learn Russian, French, or Spanish, but
most of us will have to learn to speak Systems, Marketing, Manufacturing, Finance,
Personnel, Legal, and a host of other organisational dialects. More important, we have to
learn to see things through the eyes of these other inhabitants of the organisational
world. A situation viewed from a marketing frame of reference is an entirely different
situation when seen through the eyes of a systems person. Part of the job of a change
agent is to reconcile and resolve the conflict between and among disparate (and
sometimes desperate) points of view. Charm is great if you have it. Courtesy is even
better. A well-paid compliment can buy gratitude. A sincere “Thank you” can earn
respect.
System skills
Managing Change Handbook (2010) 80
There’s much more to this than learning about computers, although most people
employed in today’s world of work do need to learn about computer-based information
systems. For now, let’s just say that a system is an arrangement of resources and
routines intended to produce specified results. To organize is to arrange. A system
reflects organisation and, by the same token, an organisation is a system.
A word processing operator and the word processing equipment operated to form a
system. So do computers and the larger, information processing systems in which
computers are so often embedded. These are generally known as “hard” systems. There
are “soft” systems as well: compensation systems, appraisal systems, promotion
systems, and reward and incentive systems.
There are two sets of systems skills to be mastered. Many people associate the first set
with computers and it is exemplified by “systems analysis.” This set of skills, by the way,
actually predates the digital computer and is known elsewhere (particularly in the United
States Air Force and the aerospace industry) as “systems engineering.” For the most
part, the kind of system with which this skill set concerns itself is a “closed” system
which, for now, we can say is simply a mechanistic or contrived system with no purpose
of its own and incapable of altering its own structure. In other words, it cannot learn and
it cannot change of its own volition. The second set of system skills is associated with a
body of knowledge generally referred to as General Systems Theory (GST) and it deals
with people, organisations, industries, economies, and even nations as socio-technical
systems — as “open,” purposive systems, carrying out transactions with other systems
and bent on survival, continuance, prosperity, dominance, plus a host of other goals and
objectives.
Business skills
Simply put, you’d better understand how a business works. In particular, you’d better
understand how the business in which and on which you’re working works. This entails
an understanding of money — where it comes from, where it goes, how to get it, and
how to keep it. It also calls into play knowledge of markets and marketing, products and
product development, customers, sales, selling, buying, hiring, firing, EEO (Equal
Employment Opportunity), AAP (Advanced Administrative Procedures), and just about
anything else you might think of.
Managing Change Handbook (2010) 81
2.11 How HR / SDF Can Deliver Change Management Results
Human Resources generalists, Skills Development Facilitators (SDFs), Managers, and
Directors, depending on the size of the organisation, may have overlapping
responsibilities. In larger organisations, the Human Resources Generalist, the Manager,
and the Director have clearly defined, separated roles in HR management with
progressively more authority and responsibility in the hands of the Manager, the
Director, and ultimately, the Vice President who may lead several departments including
administration.
HR directors, and occasionally HR managers, may head up several different
departments that are each led by functional or specialized HR staff such as the training
manager, the compensation manager, or the recruiting manager.
Human Resources staff members are advocates for both the company and the people
who work in the company. Consequently, a good HR professional performs a constant
balancing act to meet both needs successfully.
The Changing Human Resources Role
The role of the HR professional is changing. In the past, HR managers were often
viewed as the systematizing, policing arm of executive management. Their role was
more closely aligned with personnel and administration functions that were viewed by
the organisation as paperwork.
When you consider that the initial HR function, in many companies, comes out of the
administration or finance department because hiring employees, paying employees, and
dealing with benefits were the organisation's first HR needs, this is not surprising.
In this role, the HR professional served executive agendas well, but was frequently
viewed as a road block by much of the rest of the organisation. While some need for this
role occasionally remains — you wouldn’t want every manager putting his own spin on a
sexual harassment policy, as an example — much of the HR role is transforming itself.
Managing Change Handbook (2010) 82
New HR Role
The role of the HR manager must parallel the needs of his or her changing organisation.
Successful organisations are becoming more adaptable, resilient, quick to change
direction, and customer-centered.
Within this environment, the HR professional, who is considered necessary by line
managers, is a strategic partner, an employee sponsor or advocate and a change
mentor. At the same time, especially the HR Generalist, still has responsibility for
employee benefits administration, often payroll, and employee paperwork, especially in
the absence of an HR Assistant.
Depending on the size of the organisation, the HR manager has responsibility for all of
the functions that deal with the needs and activities of the organisation's people including
these areas of responsibility.
Recruiting.
Hiring.
Managing Change Handbook (2010) 83
Training.
Organisation Development.
Communication.
Performance Management.
Coaching.
Policy Recommendation.
Salary and Benefits.
Team Building.
Employee Relations.
Leadership.
With all of this in mind, in Human Resource Champions, Dave Ulrich, one of the best
thinkers and writers in the HR field today, and a professor at the University of Michigan,
recommends three additional roles for the HR manager.
Business and Strategic Partner
In today’s organisations, to guarantee their viability and ability to contribute, HR
managers need to think of themselves as strategic partners. In this role, the HR person
contributes to the development of and the accomplishment of the organisation-wide
business plan and objectives.
The HR business objectives are established to support the attainment of the overall
strategic business plan and objectives. The tactical HR representative is deeply
knowledgeable about the design of work systems in which people succeed and
contribute. This strategic partnership impacts HR services such as the design of work
positions; hiring; reward, recognition and strategic pay; performance development and
appraisal systems; career and succession planning; and employee development.
To be successful business partners, the HR staff members have to think like business
people, know finance and accounting, and be accountable and responsible for cost
reductions and the measurement of all HR programs and processes. It's not enough to
ask for a seat at the executive table; HR people will have to prove they have the
business savvy necessary to sit there.
Managing Change Handbook (2010) 84
Employee Advocate
As an employee sponsor or advocate, the HR manager plays an integral role in
organisational success via his knowledge about and advocacy of people. This advocacy
includes expertise in how to create a work environment in which people will choose to be
motivated, contributing, and happy.
Fostering effective methods of goal setting, communication and empowerment through
responsibility, builds employee ownership of the organisation. The HR professional helps
establish the organisational culture and climate in which people have the competency,
concern and commitment to serve customers well.
In this role, the HR manager provides employee development opportunities, employee
assistance programs, gain sharing and profit-sharing strategies, organisation
development interventions, due process approaches to problem solving and regularly
scheduled communication opportunities.
Change Champion
The constant evaluation of the effectiveness of the organisation results in the need for
the HR professional to frequently champion change. Both knowledge about and the
ability to execute successful change strategies make the HR professional exceptionally
valued.
Knowing how to link change to the strategic needs of the organisation will minimize
employee dissatisfaction and resistance to change.
The HR professional contributes to the organisation by constantly assessing the
effectiveness of the HR function. He also sponsors change in other departments and in
work practices. To promote the overall success of his organisation, he champions the
identification of the organisational mission, vision, values, goals and action plans.
Finally, he helps determine the measures that will tell his organisation how well it is
succeeding in all of this.
Changing and overlapping responsibilities plus diminishing staff have placed a burden
on HR departments as they struggle to change with the times.
“The traditional role of HR in the 21st century is changing into integrating HR into
organisational business planning, which adds another dimension to the delivery of HR
services,” says Frank Abbott, a corporate trainer program manager for Houston
Community College’s Corporate College.
Managing Change Handbook (2010) 85
“In this new role, HR professionals who are managers and supervisors must take on the
emerging roles of business partner, change agent, and leader in new organisational
structures different from the past.”
This becomes more challenging, he says, as HR professionals try to meet this challenge
while continuing day-to-day operational and political management of HR.
These new expectations and demands, combined with a steady decrease in HR staff
(one-third of the HR community will be eligible to retire in the next five years, Abbott
says), means a once-stable occupation is entering uncharted territory.
On top of these changes, he says, many HR departments must do all of this with a
downsized staff that does not have the expertise needed to meet the demands.
“The question is: Are HR professionals capable of meeting those challenges and what
must they do to meet those challenges?” Abbott asks. “Another question is: How do you
prepare existing HR professionals for leadership roles when their current leaders are
retiring or moving on?”
Among challenges faced in the 21st century for HR professionals are increased
outsourcing, downsizing of HR departments, a conflict of 20th century HR functions
versus more forward-looking responsibilities, a lack of understanding of “the business”
among HR staff that keeps them away from the decision-making table and an increased
emphasis on improving efficiency of HR services, among others.
“The major role of ‘strategic business partner’ for the HR professional is increasing
substantially,” Abbott says. “They are now identified as a member of the management
team involved with HR planning, organisation design and strategic change.”
He adds that HR executives are relying heavily on the Internet to educate managers
about existing HR responsibilities and procedures, which is taking them away from their
key role of providing HR services to employees and implementing policies and
procedures.
There is also a growing concern among HR professionals on how to meet organisational
needs with fewer staff, he says.
“There seems to be a new ‘mindset’ of ‘try to do at least better, if not more, with less,’ ”
he says. “Narrowly focused specialists are being asked to grow into the new generalists’
Managing Change Handbook (2010) 86
roles in the evolving workplace. The HR generalists of the 21st century will have to have
all the competencies necessary to have a place in the businesses of the future.”
Abbott offers the following ways to meet the challenges of the 21st century:
Obtain all of the skills necessary to play an active role in charting the strategic
direction of HR’s partnering within the company.
Develop new competency models that refocus and revitalize the HR workforce.
Newly developed competencies can offer HR practitioners an opportunity to define
excellence and, even more importantly, demonstrate what they can bring to their
organisation. HR professionals that can demonstrate their value to their company will
inevitably be rewarded with a “seat at the table.”
Show creativity and efficiency by adapting some of the existing competency models
and HR delivery systems and tailor them to fit individual organisational needs.
Identify improved technology that facilitates HR decision-making by managers and
reduces the workload for HR professionals. An effective and efficient on-line system,
used in conjunction with a computer-based long-distance learning system, has
received positive reactions from many managers. Check out the Air Force System,
PERMISS, which is currently being utilized efficiently by many organisations.
Make HR professionals aware of the competencies they must possess in order for
them to be successful in the 21st century world of HR.
Adopt new competencies, redefine roles focused on results and evolve into an HR
professional that makes a bottom-line difference for the organisation.
After putting into place your new systems and competencies, develop an in-house
marketing campaign that highlights the services HR can provide to the organisation.
Market this within the company and then market it outside of the company to HR
professional organisations in public presentations and on-line company Web sites
dedicated to this vision.
This can result in being asked to ‘sit at the table’ in a consultative role for HR
departments in other companies as well as serve as an add-on competency for the HR
Managing Change Handbook (2010) 87
department. This has a strong potential for generating revenue for the company and thus
increase the value-added function of HR function to the managers within the company.
“In order for the HR professional to be a leader in the 21st century, they will need to
increasingly embrace the challenge of serving in the role of ‘business strategists’ and
‘change agents’ for their organisations,” Abbott says. “What is important is that many
managers in companies are desperate for such help from HR. In response to these
opportunities or demands, the successful HR professional of the 21st century must
emerge their roles along with the identification of new competencies needed to get the
job done.”
2.12 Why Change Management Often Fails
"There is nothing more difficult to take in hand, more perilous to conduct, or more
uncertain in its success than to take the lead in the introduction of a new order of things."
Have you experienced a failed change lately? Been a part of a team or an organisation
that attempted something different...and failed?
We've all seen attempts at change bomb. What happens to scuttle well-intentioned
effort? The following are some of the most common reasons I've identified why
organisational change fails. You can use the list for diagnostic purposes, or to prevent
mistakes in future attempts at change.
1. Misstarts
A misstart occurs when a change is ill-advised, hastily implemented or attempted without
sufficient commitment. This is a leadership credibility killer.
2. Making Change an Option
When leadership commits to a change, the message must be that the change is not an
option. But the message that often comes across is "We'd like you to change, we're
asking you to change, we implore you to change, please change..." Whenever people
have the option not to change, they won't.
Managing Change Handbook (2010) 88
3. A Focus Only on Process
Leaders can get so caught up on planning and managing the process that they don't
notice that no tangible results are being achieved. The activity becomes more important
than the results.
4. A Focus Only on Results
This stems from a belief that the end justifies any means. Organisations tend to fail
miserably in this regard: they downplay or ignore the human pain of change. It is this
insensitivity to people's feelings that not only prevents the change but destroys morale
and loyalty in the process.
5. Not Involving Those Expected to Implement the Change
A great deal of resentment is aroused when management announces a change and then
mandates the specifics of implementation. Employees need to be involved in two ways.
First, their input and suggestions should be solicited when planning the change.
Secondly, after a change has been committed to, they should be involved in determining
the means. Leadership needs to communicate, "Here's what must happen. How do you
think it can best be done?
6. Delegated to "Outsiders"
Change is an inside job. Although outsiders like consultants might provide valuable
ideas and input, people inside the systems must accept responsibility for the change.
Scapegoating and passing the buck is not an option.
7. No Change in Reward System
If you keep rewarding employees for what they've always done, you'll keep getting what
you've always gotten. Make sure that rewards, recognition and compensation are
adjusted for the desired change.
Managing Change Handbook (2010) 89
8. Leadership Doesn't Walk the Talk
For change to happen, everybody involved must buy-in. Leadership, however, must take
the first steps. Change is aborted whenever leadership doesn't demonstrate the same
commitment they expect from others.
9. Wrong Size
In this instance, the change is too massive to be achievable or too small to be
significant. Like a good goal, a change program should be neither too easy nor too
impossible.
10. No Follow-Through
The best planning is worthless if not implemented, monitored and carried out.
Responsibility must be clearly defined for making sure that follow-through is timely and
intense.
There are 4 well know factors for failure - the “four factors for failure” in managing
change can help identify problems more rapidly, and can show where initial action
should be concentrated:
1. Lack of consistent leadership.
2. De-motivated staff kept in the dark.
3. Lack of capacity: budget cuts, no spend-to-save policy, short-term approach to
investment, stressed out staff working hard just to stand still.
4. Lack of initiative to “do something different”.
These four factors for failure then lead to the “treadmill effect”:-
1. No time for reflection, planning and learning.
2. No improvement in design and implementation.
3. Increasing need to do something.
4. Increasing failure and unplanned consequences.
5. Go back to 1. and repeat.
Managing Change Handbook (2010) 90
2.13 Measuring the Impact of Change Processes
What advice would you give a friend or business associate if they said to you, "I just
heard about this great investment and I am really excited about it because it has so
much potential. In order to get involved, I have to put a lot of money down. And the only
negative seems to be that the return on investment (ROI) is zero." Seeing the absurdity
of this potential opportunity, you would probably tell them not to invest. This scenario, as
preposterous as it might seem at first, actually illustrates a common phenomenon or
trend that is happening to companies worldwide.
What is this trend? Companies are spending millions for business improvement projects
whose costs will far out weigh their realized benefits. At first glance this might even
seem difficult to believe—much less be accurate. That is, until you begin to look at the
evidence. In this article the authors look at over ten years of independent studies that
show the average rate of return on all large project implementations is negative. The
review of the studies begins with the McKinsey study, in which the projects of over 40
companies were investigated. From the results of this and the other studies, this article
will begin an inquiry that will help to answer the following questions:
1. Why are so many companies making the same mistake?
2. What could companies who do not want to fall into this trap do differently?
The Common Project Success Denominator
The McKinsey study examined many project variables and in particular, the effect of an
Organisational Change Management (OCM) program on a project's ROI. The study
showed the ROI was:
143 percent when an excellent OCM program was part of the initiative;
35 percent when there was a poor OCM program or no program.
What do those these results mean? A 143 percent ROI means that for every dollar spent
on the project the company is gaining 43 cents. On the other hand, a 35 percent ROI
means that for every dollar spent they are losing 65 cents.
The 11 most unsuccessful companies in the McKinsey study had poor change
management, which showed up as the following:
Lack of commitment and follow through by senior executives;
Managing Change Handbook (2010) 91
Defective project management skills among middle managers;
Lack of training of and confusion among frontline employees.
The 11 most successful companies in the study had excellent OCM programs:
Senior and middle managers and frontline employees were all involved;
Everyone's responsibilities were clear;
Reasons for the project were understood and accepted throughout the
organisation.
Measuring a Project's Return on Investment
For a project to get approved there has to be a compelling business case. A business
case looks at the cost of improvement project and weighs that against the benefits the
company will gain. If the benefits outweigh the costs, the ROI is positive and thus the
project is approved.
The formula for calculating Return on Investment (ROI) is:
The Benefit of Project is based on the project's purpose. The purpose could range
from increasing sales to reducing the cost of handling customers. One generally
estimates that making certain changes to the business, installing new software, making
processes more efficient, etc., will yield a particular project benefit that has a dollar
amount associated with it.
The Project Cost includes hard costs, such as hardware and software, as well as what
is sometimes termed soft costs. While the paradigm for many accounting systems has
not shifted, the research also shows that these so-called soft costs are actually as—or
more important to—a project's success than the hard costs. As a result, these costs
should no longer be termed soft costs because they have a defined, bottom-line effect.
Managing Change Handbook (2010) 92
Soft costs, for example, can include items such as the salaries for the time period people
are on the improvement project. Salaries are important to include because the time
employees spend on the improvement project should be seen as a cost to the
organisation. The longer the project takes, the longer employees will be away from their
primary job — whether it is sales, marketing or manufacturing. If they are working on an
improvement project, they cannot spend the same amount of time they normally would
on their regular job.
If a project experiences delays due to politics, lack of planning, unforeseen issues, or
other reasons, as is often the case, the overall cost of the project increases because the
time to implement the project has gone beyond the original estimate. As the costs
increase, any potential benefit starts to be chipped away and in some cases more
money is spent on the improvement than the improvement ends up providing. An
organisation that does not consider soft costs as hard costs is putting the organisation at
a huge financial risk because the project's scope, timeline, and therefore budget,
increase (Figure 1). Within this context of project ROI, the following section will examine
more studies that have evaluated the success or failure of project implementations and
their ROIs. Again, in this context ROI is taken to mean that the project provides more
financial benefit than it costs the organisation in a reasonable time period.
Figure above: Increased scope, timeline, and budget put an organisation at risk because
they erode the project's potential benefits.
No Change Management Means Poor Project Results
Disappointing implementation results are being reported in all kinds of projects:
Customer Relationship Management (CRM), Contact Centers, Enterprise Resource
Planning (ERP), Share Services, Supply Chain, mergers and acquisitions, new pricing
Managing Change Handbook (2010) 93
strategies, cost reduction initiatives, and including changes in a university's method of
recording hourly wages. The following examples show the trend that no project is
immune to ROI failure, regardless of who conducts the study.
Results of a study by Boston Consulting Group that examined 100 large companies
found the following:
52 percent reported achieving their business goals
37 percent could point to a tangible financial impact for their projects
A study entitled Six Ways IT Projects Fail published in Darwin (2001) revealed the
reasons were due to the following:
1. Lack of executive sponsorship.
2. Lack of early stakeholder input.
3. Poorly defined or changing specs.
4. Unrealistic expectations.
5. Uncooperative business partners.
6. Poor or dishonest communication.
A study published in DestinationCRM.com (August 2003) entitled Six Barriers to CRM
Project Success showed that the failure of CRM projects was due to the following:
Lack of guidance.
Integration woes.
No long-term strategy.
Dirty data.
Lack of employee buy-in.
No accountability.
In 2004, a study entitled Software Disasters Are Often People Problems was published
on CNN.com. This study showed that at that time serious, preventable errors were
related to poor management of the people part of the project. For example:
Passengers wait at McCarran International Airport in Las Vegas on September
14 for flights delayed by a communications system failure.
Managing Change Handbook (2010) 94
New software at Hewlett-Packard Co. was supposed to get orders in and out the
door faster at the computer giant. Instead, a botched deployment cut into
earnings in a big way in August and executives got fired.
Retailer Ross Stores Inc.'s profits plummeted 40 percent after a merchandise-
tracking system failed.
The study's conclusion was that even as systems grow more complicated, failures are
related less to technical malfunctions and more due to bad management,
communication, or training during project implementation.
Gartner's industry analysts report a staggering 55 to 70 percent of CRM projects fail to
meet their objectives. In Bain and Company's survey of 400 executives, 20 percent of
respondents felt their CRM initiatives actually damaged customer relationships. When
the objective is to build strong relationships with customers, why is this goal eluding so
many companies, especially when they are spending millions and sometimes billions to
reach it?
What Is Failing?
In contrast to these studies about the people part of business, a Forrester Research
study showed that companies implementing, for instance, a new technology like CRM,
are satisfied with the actual software application's functionality and capability.
So, if the technology is not failing, what is? A study done by ProSci, a recognized leader
in change management research, again pointed to the ability of the organisation to
efficiently and effectively manage the changes the project was bringing about in the
organisation. The ProSci results showed that a project's greatest success factors are the
following:
1. Effective and strong executive sponsorship.
2. Buy-in from front line managers and employees.
3. Exceptional teams.
4. Continuous and targeted communication.
5. Planned and organized approach.
The ProSci study results also showed that a project's greatest obstacle factors are:
Managing Change Handbook (2010) 95
1. Employee resistance at all levels (Surprisingly, the effectiveness or correctness
of the actual business solution, process, or system changes was cited only 5
times in over 200 responses).
2. Middle-management resistance.
3. Poor executive sponsorship.
4. Limited time, budget, and resources.
5. Corporate inertia and politics.
Another study by AMR Research, a firm whose analysts focus on independent, leading-
edge research that bridges the gap between business and their technology solutions,
found companies that had successful software implementations spent 10 to 15 percent
of their project budget on OCM (Organisational Change Management). All of the
success criteria found in each of these studies is what comprises an OCM program that
increases a project's ROI.
The Results Chain – Planning for and Measuring Impact of Change Projects
It’s worth focusing on the two foundational principles of results based management
(RBM) before looking at the results chain:
Projects cause results. Results are more important than projects.
We’re going to unpack these a bit here and see how they form the backbone of
ubiquitous RBM charts.
The Simple Results Chain
The results chain expresses the cause-and-effect relationship between a project and
results. It’s a way of representing the statement: “Projects
cause results.”
We use the arrow to show causality; that is, to show that
something causes something else. So whenever you see the
arrow in the results chain, you can insert the word “cause” or
Managing Change Handbook (2010) 96
“lead to.” If you prefer, you can express it using “if / then”: If we do this project, then we’ll
see these results.
The Expanded Results Chain
Of course, if you’ve seen or worked with RBM frameworks, you
know that things get a bit busier than the simple results chain.
Each of the two elements – projects and results – in the chain
above gets expanded, giving us different components to consider.
Even so, the results chain remains a way of expressing the
concept that projects cause results.
Projects: Inputs and Activities
To begin, we expand the “projects” side of the results chain into two components: inputs
and activities.
Inputs are the resources that we will need to carry out the planned activities. They
include things like people, money, goods, materials, infrastructure, and technology.
Activities are the things that we do. Some familiar project activities include digging wells,
conducting training session, distributing seeds and tools, forming savings groups, and
setting up clinics.
In the results chain, and in RBM, projects include inputs and activities. According to the
basic principles of this management approach, the projects cause the results that are
important.
Results: Outputs, Outcomes, and Impact
Now we expand the second half of the results chain: the results side. Results are divided
into three big categories called outputs, outcomes, and impact.
Outputs are the immediate results of activities. For example, the output of digging wells
would be the number of functioning wells in a community. Or the output of a training
session would be the number of trained individuals.
Managing Change Handbook (2010) 97
Outcomes are medium-term results caused by outputs. Examples of outcomes might be
households with access to clean drinking water or the percentage of trainees who start a
business or find a job.
The impact is the long-term, broad societal change that the outcomes lead to. For
example, improved longevity or decreased malnutrition might be the impact of a project.
Putting it all together
Our results chain now reads something like this:
Inputs lead to activities, which cause outputs, which cause outcomes, which cause the
impact.
Another way of reading it would be:
If we have the inputs, then we can do the activities;
If we do the activities, then we will achieve the outputs;
If we achieve the outputs, then we will achieve the outcomes; and
If we achieve the outcomes, then we will contribute to the impact.
Illustrated below are the basic components of a results chain and the indicator / measure
terminology that is used to measure impact through the results chain.
Managing Change Handbook (2010) 98
The basic components of a results chain:
The terminology used in a results chain:
Managing Change Handbook (2010) 99
Section 3: Adapting to Change
3.1 Creating Resilient Organisations
What is a ‘Resilient Organisation’? The term resilience is used in several different fields
of study, and takes on slightly different definitions for each. However, a generic definition
refers to resilience as the ability of a material or system to absorb change gracefully
whilst retaining core properties or functions.
Organisations deal with uncertainties and unexpected events all the time, and managing
these presents both opportunities and risks for the organisation. Above a certain scale
however, crisis events differ from day-to-day management, in that organisations have to
operate out of their comfort zone, interact with organisations they do not normally work
alongside, and have to make and share strategic decisions quickly and effectively. Being
able to respond effectively to crisis events is a real test of what makes an organisation
‘tick’.
The economic implications of organisations being unprepared for crises are significant.
In the September 11th attacks, business interruption losses far exceeded the sum of all
property losses. In our increasingly interconnected business environment,
consequences go well beyond the zone of any physical damage, affecting businesses
right along the supply chain.
An organisation’s ability to survive a major crisis depends on their organisational
structure, the management and operational systems they have in place, and the
resilience of these.
Managing Change Handbook (2010) 100
Resilience is about ensuring that an organisation is still able to achieve its core
objectives in the face of adversity. This means not only reducing the size and frequency
of crises (vulnerability), but also improving the ability and speed of the organisation to
manage crises effectively (adaptive capacity). Awareness is a recent addition to this
definition and reflects a growing appreciation of the need to manage strategic risks as a
process and not an event; by that we mean the ability of the organisation to seek out
new opportunities even in times of crisis. In highly dynamic environments, such as the
business world, an organisation is never a static entity. Some sectors will be more
stable than others, but nevertheless, an organisation that remains exactly the same over
time will eventually erode its potential. This means that to be truly resilient an
organisation should not seek to just recover back to exactly where it was before the
crisis, but have the reserves to continue looking for emerging risks and opportunities on
the horizon. Severity and duration of impact on performance as a measure of an
organisation’s resilience, where resilience is inversely proportional to the area under the
curve.
Whilst risk management is being used more extensively today, there are few
organisations that apply risk management at a strategic level across the organisation.
Uptake of business continuity / emergency planning is increasing, but still only a small
proportion of organisations have any planning in place. Those organisations that do
have plans often lack the depth required to sustain a prolonged response capability. In
our research we are also finding that although many resilience issues cross
organisational boundaries, much of the planning being done is very inward looking. One
of the biggest potentials for forward progress is to get organisations working together to
manage risks across this interface, and developing and practicing strategies for working
Managing Change Handbook (2010) 101
together during crises. This is particularly needed where outsourcing means that
contracted organisations are relied upon to deliver critical services or supplies.
We are also seeing that the key underlying resilience issues are often more about the
softer, less tangible aspects of an organisation that relate to its culture and leadership,
and vision. For example qualities such as good communication and relationships within
the organisation and with key customers and stakeholders, trust, and a shared vision
and priorities across the organisation are all fundamental to enabling different parts of
the organisation to work together to achieve a common objective. This is particularly true
at times of crisis when it is often the informal networks and relationships (who you know
that you can call on for a favour…) that count. Building resilience is therefore also about
reviewing the culture of the organisation and recognising the strengths and weaknesses
that culture brings to the organisation in times of crisis. In order to build resilience, a
broad cross-section of the organisation (and not just the crisis management team) need
to be involved in regular ‘war-game’ type exercises to actually experience what and how
decisions will be made during crises and the role that they can play in facilitating the
response and recovery of the organisation. These crisis simulation exercises are critical
for:
Highlighting vulnerabilities (and creating the motivation for reducing them),
Improving the adaptive capacity of the organisation by gaining experience in working
together to solve unique problems, and
Enhancing awareness of critical dependencies and functions within the organisation,
plus giving the confidence to seek out opportunities even in times of crisis.
Unfortunately, there is no ‘silver bullet’; resilience is something that an organisation must
continually work at. But because it is so intrinsically related to the day-to-day ethos of the
organisation, it can also create significant payback in terms of helping to refocus on what
is important to the organisation and creating a shared understanding of the roles people
play in making those a reality. Most importantly, resilience needs to move from being a
‘back room’ issue to being a strategic one and be regularly debated as part of strategic
planning for any organisation.
The Five Principles of Organisational Resilience
1. Leadership: Resilience begins with enterprise leadership setting the priorities,
allocating the resources and making the commitments to establish organisational
Managing Change Handbook (2010) 102
resilience throughout the enterprise. Leadership achieves a balance between risk taking
and risk containment to ensure ongoing innovation, but in the context of prudent risk
minimization. These two apparently conflicting objectives for leadership are framed in
two.
2. Culture: The second component of organisational resilience is enterprise culture. A
resilient culture is built on principles of organisational empowerment, purpose, trust and
accountability. The RVO (Resilient Virtual Organisation) must evolve systematically into
networks of employees who self-organize into communities of practice for learning and
mentoring, and who are empowered to participate, lead and organize virtual teams (in
which most of an enterprise's productive work is completed). It is those networks of
empowered and connected employees that form the bedrock of the RVO. The resilient
organisational culture has a strong sense of enterprise purpose that cascades down and
across the enterprise. It is that strong sense of purpose that glues the RVO together
and aligns individual, workgroup and enterprise goals as a continuum. A resilient culture
is built on a strong sense of trust between employees, management, suppliers and
partners.
3. People: As mentioned above, the bedrock of organisational resilience is the
enterprise workforce. People who are properly selected, motivated, equipped and led will
overcome almost any obstacle or disruption. There are countless stories that emerged
after Sept. 11 about individual heroism, self-initiative and self-sacrifice. Yet, to harness
people's incredible ability to lead and respond during trying circumstances requires a
systematic enterprise strategy for people selection and people support.
4. Systems: The RVO is built on an infrastructure of extensive enterprise connectivity
and information robustness. That framework is set forth in "Workplace Agility Equals
Workplace Resilience: Here's How.” The premise is that leading global organisations are
achieving agility and flexibility by combining a highly distributed workplace model with a
highly robust and collaborative IT infrastructure. These technology topics are covered in
detail elsewhere in this special report. Also in this Spotlight, we delve into the
technology, systems and management capabilities that must be built into a highly
resilient global enterprise in "Globalization Enables Resilience, Along With Challenges".
5. Settings: The final component is the physical deployment of the workplace.
Workplace resilience is achieved through the distribution of the workplace into multiple,
Managing Change Handbook (2010) 103
dispersed settings. Alternative workplace techniques such as office "hostelling,"
telecommuting and desk sharing provide the level of workplace flexibility and agility that
is essential for mitigating the risk of catastrophic or disruptive incidents at an enterprise
location. Enterprise resilience is the flip side of organisational agility, as explained in
"Workplace Resilience Equals Workplace Agility: Here's How.” However, it's not enough
to create a highly distributed and connected environment. It is essential as well to
undertake a comprehensive assessment of workplace security and safety. This
workplace "triage" is the first step in identifying high-risk locations from people and
operational standpoints.
3.2 Do’s and Don’ts of Change Management
How do you manage change? The honest answer is that you manage it pretty much the
same way you’d manage anything else of a turbulent, messy, chaotic nature, that is, you
don’t really manage it, you grapple with it. It’s more a matter of leadership ability than
management skill.
The first thing to do is jump in. You can’t do anything about it from the outside.
A clear sense of mission or purpose is essential. The simpler the mission statement
the better. “Kick ass in the marketplace” is a whole lot more meaningful than
“Respond to market needs with a range of products and services that have been
carefully designed and developed to compare so favorably in our customers’ eyes
with the products and services offered by our competitors that the majority of buying
decisions will be made in our favor.”
Build a team. “Lone wolves” have their uses, but managing change isn’t one of
them. On the other hand, the right kind of lone wolf makes an excellent temporary
team leader.
Maintain a flat organisational team structure and rely on minimal and informal
reporting requirements.
Pick people with relevant skills and high energy levels. You’ll need both.
Toss out the rulebook. Change, by definition, calls for a configured response, not
adherence to prefigured routines.
Shift to an action-feedback model. Plan and act in short intervals. Do your analysis
on the fly. No lengthy up-front studies, please. Remember the hare and the tortoise.
Managing Change Handbook (2010) 104
Set flexible priorities. You must have the ability to drop what you’re doing and tend to
something more important.
Treat everything as a temporary measure. Don’t “lock in” until the last minute, and
then insist on the right to change your mind.
Ask for volunteers. You’ll be surprised at who shows up. You’ll be pleasantly
surprised by what they can do.
Find a good “straw boss” or team leader and stay out of his or her way.
Give the team members whatever they ask for — except authority. They’ll generally
ask only for what they really need in the way of resources. If they start asking for
authority, that’s a signal they’re headed toward some kind of power-based
confrontation and that spells trouble. Nip it in the bud!
Concentrate dispersed knowledge. Start and maintain an issues logbook. Let anyone
go anywhere and talk to anyone about anything. Keep the communications barriers
low, widely spaced, and easily hurdled. Initially, if things look chaotic, relax — they
are.
Remember, the task of change management is to bring order to a messy situation, not
pretend that it’s already well organized and disciplined.
3.3 Consequences and Mistakes in Change Management
Managers come from different walks of life, possess various characteristics, and have
their own philosophies regarding how to manage a business and employees. In a broad
sense, there are common mistakes made by managers at different levels and in various
types of businesses. The following are 10 of the most common management mistakes.
1. Putting policies ahead of people. The smaller the organisation, the larger the
mistake this is. Policies are made to be followed, within reason. Some flexibility
with employees, particularly in a small company, is important. An even bigger
mistake is standing behind policies at the expense of losing loyal customers.
Weigh the significance of standing behind your policy in each situation. If it is a
matter of physical safety or security, policies must be upheld. However, in many
other instances, there are reasonable solutions that will not alienate the customer
or create a strained relationship with your employee(s).
Managing Change Handbook (2010) 105
2. Lack of communication. In any industry, at any level, communication is key to
being a successful manager. Employees need to know what is expected of them
and when specific projects or tasks need to be completed. Communication needs
to be clear, and any questions that arise need to be answered.
3. Failing to hear what your employees have to say. Managers make the mistake
of listening but not always hearing what their employees are saying. To manage
effectively, you need to understand the needs and concerns of your employees.
4. Not acknowledging that you do not have all the answers. A good manager
does not make the mistake of trying to solve every problem. Seeking help from
individuals with expertise in specific areas is a sign of strength, not weakness. In
addition, a good manager must understand that his or her way is not the only way
to do the job.
5. The glass is always half empty. Managers, who continually focus on the
negatives, without recognizing positive achievements or employee
accomplishments, end up with employees who are not motivated and often have
one foot out the door looking for a more positive work environment.
6. Not accepting responsibility. A common mistake made by managers is to either
delegate blame or simply not accept responsibility for that which happens under
their guidance. Eventually, avoiding responsibility will catch up with a manager and
usually not bode well for his or her future. Being in charge means taking
responsibility for whatever happens.
7. Favoritism. Once a manager has obvious favorites, he or she loses credibility and
the respect of the rest of the team.
8. Just do it. The Nike slogan does not work when employees are trying to gain an
understanding of the process or project. Rather than expecting your team to simply
work blindly on tasks they do not understand, a good manager takes the time to
explain what the project is all about and how the team's work is incorporated into
the plan. Remember, the more the team is invested in a project, the better the
results will be.
9. Too much technology. New breeds of managers are more tech-savvy than they
are comfortable handling and managing people. Embracing technology is a key to
success in the modern office environment, but not at the risk of embracing people
skills. Do not hide behind e-mails and other technology.
Managing Change Handbook (2010) 106
10. Never change. In a rapidly changing business environment, not being open to
change can be a major mistake. While you may stick to tried-and-true methods in
some areas, you should consider and weigh the value of change in others. Above
all, be flexible.
Change Management, Process Improvement, New Directions – call it what you wish, but
avoid these common mistakes:
1. Fanfare
"Here we go again." "Another program to weather." "This too shall pass!" Sound
familiar?
All too often organisations announce big changes and new programs with big events and
fanfare, but then very little actually happens. The initial energy and enthusiasm fades,
specific changes are never identified let alone implemented, results aren’t realized,
managers don’t adjust, or maybe something even better comes along leading to a new
"launch" with new fanfare.
The easy part is the announcement. And the fanfare is fun and contagious. But if your
staff isn’t capable of the details, the follow-through, the implementation, then your
program will die and the cynics will reign supreme, ever bolder in their determination to
out-last any new program.
Furthermore, while ostensibly trying to generate energy, the fanfare simply signals big
change and thus, raises anxiety. An impoverished understanding of the program
purpose, path or impact will leave most people uneasy.
2. Controlled Messages
If it tastes like manipulation, smells like manipulation and sounds like manipulation, it is
manipulation! Respect your employees enough to know they will recognize manipulation
when they are the victims of it.
I’ve seen organisations so determined to control messages that they plan every
communication, ration information, create concentric rings of need-to-know circles, and
Managing Change Handbook (2010) 107
pretty much eliminate all honest, straightforward, two-way communication. I can’t think of
a better way to widen the Us vs. Them gap within a company. Nor a better way to erode
trust. Never mind the productivity sacrificed to scheming and whispering on one side,
guessing and fuming on the other.
3. Closed Door Planning
Who are you kidding? Do you really think you can mastermind a new way without
involving the people who know the situation best? Trying to "Do It To Them" is both
arrogant and misguided.
4. Extensive Training
Extensive training is a cornerstone of many change programs. But many people return to
their old habits the minute they get back to their desks despite the excitement exhibited
during training. And if the training is filled with new acronyms, complicated techniques,
and secret decoder rings, people will either give up or become distracted by the means
at the expense of the goal.
5. Big Hairy Audacious Change
More likely, Big Hairy Audacious Embarrassment. Part and parcel of the others – the
boisterous fanfare, dramatic unveiling of goal and plan, and massive training – add huge
expectations. Everything big. More "big" than substance. Almost like announcing that
you intend to win Wimbledon when you’ve yet to hit your first tennis ball.
The purpose of change management is to make change successful. The largest
component of many change management programs often involves managing people’s
reactions. Unfortunately, as the above list suggests, many change management efforts
actually create anxiety, the exact opposite of their intentions.
For a better chance of success, consider the flip side of each mistake:
1. Save the fanfare for celebrations of genuine success
Managing Change Handbook (2010) 108
Celebrate genuine success, even small steps, in order to build momentum. Success
increases energy, enthusiasm and the appetite for more success. It’s contagious. Start
small and others will line up to join the improvement process.
2. Think in terms of increasing communication rather than controlling it
First, be sincere. Maintaining trust is as important as ever. People can handle a lot if
they trust they are being treated honestly and fairly.
Help people understand the current situation, why improvement is important, and the
reasons for focusing on a particular area. Be clear about desired outcomes; be open to
discussion about methods of achieving those outcomes. Listen to concerns and try to
understand how they see things so that you can help them gain a greater understanding
of the situation and implications. Appeal to their self-interests by clarifying their
contribution to and dependence on company success. Tell employees what you know
and admit what you don’t know. Express the desire to work together to achieve the
desired outcomes.
3. Open the doors
Change is most alarming when it is done to you and the destination is unknown. Be clear
about the destination and then involve employees in determining how to get there.
Reveal the current state fully, float alternatives or provide tools for developing
alternatives, reiterate the goals, particularly the reason they need to care, and let the
improvement opportunities speak for themselves.
Most of the time, you won’t make good choices without the help of your employees. You
certainly can’t succeed without the help of your employees. Partnership is critical when
trying to make substantial improvements.
4. Use Just-In-Time Training
Provide tools and techniques as they are needed so that employees are motivated to
learn and have immediate opportunities to apply what they have learned. Also, appeal to
common principles and familiar thought processes in order to leverage existing
strengths. Cryptic techniques and jargon intimidate. The most successful approaches
are usually the simplest.
Managing Change Handbook (2010) 109
5. Leverage Success
You can and should leverage success every step of the way to significant improvement.
1. First of all, target specific, important, but manageable, areas that are ripe for
improvement.
2. Develop a systematic, repeatable approach to improvement. One advantage of
starting small is that you have an opportunity to test drive an approach and tweak it
to match your company’s culture and skill level.
3. Build interest and commitment through a series of small successes.
4. 'Spread' the systematic approach to new projects, primarily to those eager to
participate in the success they have witnessed.
This leveraged approach lets your organisation learn how to change and helps to
develop a culture that seeks opportunities to improve.
Change Management, in capital letters, seems to have become a goal in and of itself,
rather than a means for achieving other goals. People can get so preoccupied with
"Doing Change Management" that they have become distracted from the real goals. Be
clear about your reasons and your destination. Then listen and you will know what to do.
3.4 Innovation Practices to Enhance Change Management Sustainability
Innovation and organisational change play an important role in the business landscape.
Whether it is the formulation of a new product, the introduction of a new service, a
technological invention that changes business processes or a new administrative
practice, innovation and organisational change helps to shape a companies strategy and
structure. Some industries spend a higher percentage of their budget on innovation
strategy than others. This can depend on the structural factors that influence the industry
and the degree of influence changing consumer preferences and tastes can have on a
company.
Industries and companies allocate funds for innovation and organisational change in
response to competitive pressures and the likely duration of the product life cycle. The
software, health and pharmaceutical industry typically invest a higher percentage into
research and development for new product creation. Competitive pressures to develop
new solutions to meet the needs of changing consumer preferences and the intense
Managing Change Handbook (2010) 110
nature of the competition forces companies to stay highly responsive to market needs or
risk losing market share to competitors who differentiate their products or offer superior
solutions.
The automobile and airline industry are two industries that spend heavily on
organisational innovation research. This is to facilitate product and process
improvement. Technological advancements that contribute to product development also
play an important part in innovation and organisational change within a companies
manufacturing division. Changes to companies’ production processes to increase
productivity are a prime example of this. As automation replaces manually skilled
workers, companies respond by reducing the workforce or retraining existing employees.
The challenge companies face with innovation and organisational change lies in the
implementation and workplace response to new initiatives. When new technology enters
the scene, companies are forced to evaluate and plan how to best implement it. This
often involves a high degree of anticipatory style planning because a lack of comparison
studies exists. Operating in 'unchartered waters' requires careful consideration of the
likely effects on an organisations strategy, structure and corresponding workplace
implications.
Mandating, communicating and effectively managing innovative organisational change
requires strong leadership to embrace and implement the initiatives. This is best
achieved by unifying company resources and involving personnel who are most affected
by the change. A consultative approach encourages participation in the process and
minimizes the chance that alienation, anxiety and resistance will occur within company
ranks. Having the vision to implement and responding to practical real life feedback are
important factors for the success of organisational change and innovation.
3.5 Managing Risks in the Change Management Process
Risk is inevitable in all change management processes. There may be commonplace
risks that are almost inevitable, for example, the risk that a member of the team is sick
for part of the project. There may be some unlikely but high impact risks, for example,
the risk that the solution could cause the destruction of the organisation.
The good Change Manager will constantly assess the risks and take action as needed.
There are three possible outcomes for each risk:
Managing Change Handbook (2010) 111
Take action now to avoid the risk, to reduce its likelihood, or to reduce its impact,
Make contingency plans so that the team is ready to deal with the impact and
mitigate the risk should it occur,
Agree that it is an acceptable business risk to take no action and hope that the risk
does not occur.
The process for managing risks is:
Identify all realistic risks.
Analyse their probability and potential impact.
Decide whether action should be taken now to avoid or reduce the risk and to reduce
the impact if it does occur.
Where appropriate, make plans now so that the organisation is prepared to deal with
the risk should it occur.
Constantly monitor the situation to watch for risks occurring, new risks emerging, or
changes in the assessment of existing risks.
Assessing Risks at the Start of the Project
During the planning of the change management process, the headline risks should be
considered as part of the overall benefit model. At this stage, you will not be dealing with
a full catalogue of risks, consequences and actions. You will focus on the main areas
that affect either the justification of the project or the manner in which it will be carried
out.
Managing Change Handbook (2010) 112
It is unwise to rely solely on your own judgement. You would normally include some
questions about risk when talking to the various participants about the project's scope
and objectives. You might also instigate some specific activities to examine risk, for
example additional interviews, workshops and brainstorming sessions. Where there is a
specialist area involved, you should consult with an appropriate expert, e.g. web-server
sizing, change management, etc.
A good technique for presenting these issues is to use a risk matrix showing the
probability of different headline risks in comparison with their relative impact on the
project's goals.
This focuses attention on the areas where the project plan will need to address key
issues and where specific actions and techniques may be required. Note how this
example suggests that the biggest area of concern tends to be with the "people issues".
The human element of a solution is often the most overlooked aspect.
Managing Change Handbook (2010) 113
The other thing you should do early on in any change process is to decide upon the
procedures and technology for managing risk. The procedures should make it easy for
all participants to submit their thoughts and concerns. Always capture the thought. You
may dismiss it later if appropriate, but you should always consider and assess the input.
3.6 Managing Resistance to Change
When in your efforts to implement strategies and plans you experience resistance, the
most popular assumption is that you have a communication problem and the need is for
greater clarity regarding the vision or change management strategy. Perhaps you have
not defined the problem in dramatic enough terms, built a hot enough fire for the
platform. Maybe you assume that you have not been clear enough about the vision, or
that that the strategy doesn’t go into enough detail.
However when dealing with polarities, the clearer the communication, the greater the
resistance generated. Some people, seen as resisters, are unwilling to sacrifice the
benefits of current ways of doing business and only too clearly see the downside of the
proposed strategy.
It’s not that people don’t understand your interests – it’s that every time you try
explaining them again, you confirm that you don’t understand theirs. And paradoxically,
what you thought was your best solution becomes your greatest problem.
Employee Resistance Case Study
Here’s an example: A global oil company was committed to redesigning its entire
assessment process to better assess and reward managers for promoting a culture that
supported diversity. Two key new measures in the assessment were that:
The manager demonstrates flexibility in working with people different from
themselves, and
The manager shows respect toward those people.
At face value, these appear to be solid diversity-related criteria. However, the solution
was met with resistance from some managers who were willing to be politically incorrect.
They wanted to make sure that they could still be directive and clear when warranted,
and were afraid that everything would become participative and flexible in deference to
diversity.
Managing Change Handbook (2010) 114
They were concerned that too much flexibility was going to lead to inconsistencies and
unclear direction in the company. Finally they worried that it would be unacceptable to
address poor performance as this would be interpreted as lack of respect for diversity.
The polarities at play in this situation are:
Direction and participation,
Clear and flexible, and
Conditional and unconditional respect.
The paradoxical nature of polarities means that over-focusing on one pole will eventually
result in experiencing the downside of that same pole.
Over-focusing on participation, especially to the neglect of direction, results in slow
decision-making and unclear roles.
Over-focusing on direction, especially to the neglect of participation, leads to limited
options and low levels of ownership for decisions made.
Effective management means achieving more of the positive dimensions of direction and
participation, while minimizing their negative aspects. Similarly, over-emphasizing
decentralization to the exclusion of centralization leads to inefficiencies and lack of
integration.
Highlighting quality targets "at any cost" can price you right out of your market. What
Polarity Management provides is tools for recognizing, understanding and managing
these complexities all the way from company strategy level right through to dealing with
daily line issues.
Managing polarities, as well as solving problems, is a key to effective organisational
change. Real Time Strategic Change (RTSC) is a principle-based approach to achieving
rapid, sustainable, organisation-wide change that also helps manage polarities. 'Rapid'
means thinking and acting as if the future were now. 'Sustainable' means that an
organisation is able to adapt and continue to be successful as new realities emerge over
time. The stability and consistency of the RTSC principles provide a solid platform and
a blueprint for an organisation’s change journey. Each of the six RTSC principles
supports organisations in better understanding the nature of key polarities involved in
any change management effort, and how to manage them effectively.
Managing Change Handbook (2010) 115
Change is Natural and Good. Reaction to Change is Unpredictable, but Manageable
Managing change means managing people's fear. Change is natural and good, but
people's reaction to change is unpredictable and irrational. It can be managed if done
right.
Nothing is as upsetting to your people as change. Nothing has greater potential to cause
failures, loss of production, or falling quality. Yet nothing is as important to the survival of
your organisation as change. History is full of examples of organisations that failed to
change and that are now extinct. The secret to successfully managing change, from the
perspective of the employees, is definition and understanding.
Resistance to change comes from a fear of the unknown or an expectation of loss. The
front-end of an individual's resistance to change is how they perceive the change. The
back-end is how well they are equipped to deal with the change they expect.
An individual's degree of resistance to change is determined by whether they perceive
the change as good or bad, and how severe they expect the impact of the change to be
on them. Their ultimate acceptance of the change is a function of how much resistance
the person has and the quality of their coping skills and their support system.
Your job as a leader is to address their resistance from both ends to help the individual
reduce it to a minimal, manageable level. Your job is not to bulldoze their resistance so
you can move ahead.
Perception Does Matter
If you move an employee's desk six inches, they may not notice or care. Yet if the
reason you moved it those six inches was to fit in another worker in an adjacent desk,
there may be high resistance to the change. It depends on whether the original
employee feels the hiring of an additional employee is a threat to his job, or perceives
the hiring as bringing in some needed assistance.
A promotion is usually considered a good change. However an employee who
doubts their ability to handle the new job may strongly resist the promotion. They will
give you all kinds of reasons for not wanting the promotion, just not the real one.
You might expect a higher-level employee to be less concerned about being laid off,
because they have savings and investments to support them during a job search.
However, the individual may feel they are over extended and that a job search will be
Managing Change Handbook (2010) 116
long and complicated. Conversely, your concern for a low-income employee being
laid off may be unfounded if they have stashed a nest egg in anticipation of the cut.
Your best salesperson may balk at taking on a new, high potential account because
they have an irrational feeling that they don't dress well enough.
If you try and bulldoze this resistance, you will fail. The employee whose desk you had to
move will develop production problems. The top worker who keeps declining the
promotion may quit rather than have to continue making up excuses for turning you
down. And the top salesperson's sales may drop to the point that you stop considering
them for the new account. Instead, you overcome the resistance by defining the change
and by getting mutual understanding.
Definition
On the front end, you need to define the change for the employee in as much detail and
as early as you can. Provide updates as things develop and become clearer. In the
case of the desk that has to be moved, tell the employee what's going on. "We need to
bring in more workers. Our sales have increased by 40% and we can't meet that
demand, even with lots of overtime. To make room for them, we'll have to rearrange
things a little." You could even ask the employees how they think the space should be
rearranged. You don't have to accept their suggestions, but it's a start toward
understanding.
Definition is a two-way street. In addition to defining the problem, you need to get the
employees to define the reasons behind their resistance.
Understanding
Understanding is also a two-way street. You want people to understand what is
changing and why. You also need to understand their reluctance.
You have to help your people understand. They want to know what the change will
be and when it will happen, but they also want to know why. Why is it happening
now? Why can't things stay like they have always been? Why is it happening to me?
It is also important that they understand what is not changing. Not only does this
give them one less thing to stress about, it also gives them an anchor, something to
hold on to as they face the winds of uncertainty and change.
Managing Change Handbook (2010) 117
You need to understand their specific fears. What are they concerned about? How
strongly do they feel about it? Do they perceive it as a good or a bad thing?
Manage This Issue
Don't try to rationalize things. Don't waste time wishing people were more predictable.
Instead, focus on opening and maintaining clear channels of communication with your
employees so they understand what is coming and what it means to them. They will
appreciate you for it and will be more productive both before and after the change.
Managing Change Handbook (2010) 118
References
The Planning of Change (2nd Edition). Warren G. Bennis, Kenneth D. Benne, and Robert Chin (Eds.). Holt, Rinehart and Winston, New York: 1969.
Human Problem Solving. Allen Newell and Herbert A. Simon. Prentice-Hall, Englewood Cliffs: 1972.
Organizations in Action. James D. Thompson. McGraw-Hill, New York: 1967.
The Power of Appreciative Inquiry defines AI as "the study and exploration of what gives life to human systems, at their best" (Whitney and Trosten-Bloom, 2003)
Theodore Kinni, "The Art of Appreciative Inquiry", The Harvard Business School Working Knowledge for Business Leaders Newsletter, September 22, 2003.
"Appreciative Inquiry" http://www.new-paradigm.co.uk/Appreciative.htm. Retrieved from "http://en.wikipedia.org/wiki/Appreciative_inquiry"
Lewin, K. (1951). Field theory in social science. Chicago: Univ. of Chicago Pr.. ISBN 0226476502. OCLC 2185305.
Schön, D. (1974). Beyond the Stable State. Public and private learning in a changing society. Penguin.
Schön, D. (1983). The reflective practitioner. New York: Basic Books. ISBN 046506874X. OCLC 223087924.
Clampitt,P. & Williams, M.(2007)Decision Downloading, MIT Sloan Management Review, Jan 1
Rowley, Robin; Joseph Roevens (2007). Organize with chaos. Cirencester: Management Books 2000. ISBN 1852525614. OCLC 170042193.
Senge, Peter; C. Otto Scharmer, Joseph Jaworski, Betty Sue Flowers (March 2004). Presence. Cambridge, MA: SoL. ISBN 0974239011. OCLC 231987197.
Argyris, Chris (Autumn 1982). (PDF)Organizational Dynamics,. http://www.monitor.com/binary-data/MONITOR_ARTICLES/object/92.pdf. Retrieved 2006-12-29.
Tucker, Kate. "The Milan Approach To Family Therapy: A Critique". Psychiatry On-line (Priory Lodge Education Ltd.).
Gibson, E., & Billings, A. (2003). Big Change at Best Buy, Davies-Black, Palo Alto, CA.
Worren, N. A. M.; Ruddle, K.; and K. Moore. 1999. "From Organizational Development to Change Management: The Emergence of a New Profession," The Journal of Applied Behavioral Science. 35 (3): 273-286.
Beckhard, R. 1969. Organization Development: Strategies and Models, Addison-Wesley, Reading, MA.
Managing Change Handbook (2010) 119
Hiatt, J. 2006. ADKAR: A Model for Change in Business, Government and the Community, Learning Center Publications, Loveland, CO.
Kubler-Ross, E. 1970. On Death and Dying, Macmillan Company, England.
LaMarsh, J; Potts, R. 2004. Master Change, Maximize Success, Duncan Baird
Schön, D. A. (1973) Beyond the Stable State. Public and private learning in a changing society, Harmondsworth: Penguin
Beitler, Michael 2006. "Strategic Organizational Change, Second Edition." Practitioner Press International.
Carter, L. & Goldsmith, M. (2001) Best Practices in Organization Development and Change, San Francisco: Jossey Bass.
Rogers, E. M., (2003). Diffusion Of Innovation, New York: Free Press
Tabrizi, N. B., (2007). Rapid Transformation, Harvard Business School Press.
Nelson, K and Aaron, S (2005). The Change Management Pocket Guide, Change Guides LLC.
Hiatt, J. 2003. Change Management: the people side of change. Learning Center Publications, Loveland, CO.
Greenfield, A 2008. The 5 Forces of Change - A Blueprint for Leading Successful Change, Management Books 2000, England.
Clampitt,P. & Williams, M.(2007)Decision Downloading, MIT Sloan Management Review, Jan 1 Retrieved from "http://en.wikipedia.org/wiki/Change_management_(people)"
Beckhard, R.F., and R.T. Harris. Organizational Transitions: Managing Complex Change. Reading, MA: Addison-Wesley, 1987.
Bridges, W. Managing Transitions. Reading, MA: Perseus, 1991.
Bridges, W., and S. Mitchell. "Leading Transition: A New Model for Change." In On Leading Change. F. Hesselbein and R. Johnston, eds. New York: Jossey-Bass, 2002.
Bullock, R.J., and D. Batten. "It's Just a Phase We're Going Through." Group and Organizational Studies 10 (1985): 383–412.
Cameron, Esther, and Mike Green. Making Sense of Change Management: A Complete Guide to the Models, Tools, & Techniques of Organizational Change. Sterling, VA: Kogan Page, 2004.
Carnall, C.A. Managing Change in Organizations. London: Prentice Hall, 1990.
DuBrin, Andrew J. Essentials of Management. 7th ed. Cincinnati: Thomson South-Western, 2004.
Kotter, John P. Leading Change. Boston: Harvard Business School Press, 1996.
Lewin, Kurt. Field Theory in Social Science. New York: Harper and Row, 1951.
Managing Change Handbook (2010) 120
Luecke, Richard. Managing Change and Transition. Boston: Harvard Business School Press, 2003.
Nadler, David, Michael L. Tushman, and Mark B. Nadler. Competing by Design: The Power of Organizational Architecture. New York: Oxford University Press, 1997.
Ristino, Robert J. The Agile Manager's Guide to Managing Change. Bristol, VT: Velocity Business Publishing, 2000.
Senge, Peter. The Fifth Discipline. London: Century Business, 1993.
Senge, Peter M., et al. The Dance of Change: The Challenges to Sustaining Momentum in Learning Organizations. New York: Doubleday, 1999.
Sims, Ronald R. Changing the Way We Manage Change. Westport, CT: Praeger, 2002.
Stacey, Ralph D. Strategic Management and Organisational Dynamics: The Challenge of Complexity. London: Pitman Publishing, 1993.
Complex Responsive Processes in Organizations: Learning and Knowledge Creation. London: Routledge, 2001.
Williams, Chuck. Management. 3rd ed. Mason, Ohio: Thomson/South-Western, 2005.
Change Management That Pays," McKinsey Quarterly, 2002.
Integrating, People, Process and Technology. by Anton, Petouhoff and Schwartz, Santa Maria, CA: The Anton Press, 2003.
Boston Consulting Group. (2003). Research study. In Integrating, People, Process and Technology. by Anton, Petouhoff and Schwartz, Santa Maria, CA: The Anton Press, 2003.
Ulfelder, Steve. (2001). "Six Ways I.T. Projects Fail - And How You Can Avoid Them." Darwin magazine. http://www.darwinmag.com/read/060101/dirty.html.
Myron, David. (2003). "6 Barriers to CRM Success And How to Overcome Them." DestinationCRM.com, August. http://www.destinationcrm.com/articles/default.asp?articleid=3316.
"Software Disasters Are Often People Problems." Retrieved Tuesday, October 5th, 2004, CNN.com.Research study by Bain Consulting Group.Integrating, People, Process and Technology. by Anton, Petouhoff and Schwartz, Santa Maria, CA: The Anton Press.
ProSci. (2003). "Best Practices in Change Management." AMR Research Report, 2003.
Change Management Case Studies, Hitachi Consulting http://www.hitachiconsulting.com/page.cfm?SID=2&ID=searchresults&searchString=change+management
Managing Change Handbook (2010) 121
Handy Resources
www.fasset.org.za
www.change-management-toolbook.com
http://www.businessballs.com/
http://www.changedesigns.co.za/
http://www.youtube.com/watch?v=bG5na7JD7rE (video)
http://www.youtube.com/watch?v=fpuHUiy_xog (video)
http://www.bin95.com/change_management_plan.htm
Useful links
http://en.wikipedia.org/wiki/Appreciative_inquiry
http://en.wikipedia.org/wiki/Change_management_(people)
http://www.organizational-change-management.com
http://www.change-management.com/
http://www.facilitation.co.za/case_studies.html
http://resources.bnet.com/topic/change+management.html
Managing Change Handbook (2010) 122