Built to Transform
Big Business and Big Changes Go Hand in Hand; a Few Key Forces are Driving Today's Change Management Mania
BY KATE ROCKWOOD
The pace of change is unrelenting. It's not just new technologies wreaking havoc on old business models: Organizations are being challenged to adapt to geopolitical and demographic shifts, climate change, mergers and a host of other factors. It's all forcing project professionals to lean on their change management skills to deal with shifting stakeholder, regulatory and financial environments.
“I've never seen the pace of change in my industry as it is right now,” says John Donohoe, PMP, PgMP, PfMP, director of the project management office (PMO) and change management at the global aviation organization Star Alliance, Frankfurt, Germany. “Especially for project managers, there's never been so much change.”
All the flux is about more than just keeping tabs on requirements, guarding against scope creep and keeping the team up to speed. Traditional change management skills remain an essential component of any project professional's toolbox—but a growing number of organizational change initiatives demand complementary skills. Organizations are sponsoring major change initiatives as they pivot their strategy and look to build a leaner, more change-ready operating profile.
Yet any major change initiative is fraught with uncertainty. For example, just 5 percent of companies sponsoring digital transformation efforts say the initiatives achieved expectations, according to a 2017 global survey of 1,000 companies by Bain & Co. Conventional transformations were more than twice as successful, respondents said—12 percent hit the mark.
Executives are well aware of the considerable change management achievement gap—which points to a huge opportunity for project professionals to prove their value. According to PMI's Achieving Greater Agility: The Essential Influence of the C-Suite report, published in November, 92 percent of executives say agility—the ability to pivot quickly to respond to a market opportunity or threat—is critical to business success. But just 27 percent of executives see their organization as highly agile.
To bridge the gap between required and realized change, organizations must be willing to rethink how they approach change management. And project professionals must be ready to strengthen their skills and sharpen their strategic mindsets, says Jen Skrabak, PMP, PfMP, Los Angeles, California, USA. She was head of the strategic portfolio delivery office at Cigna until January and is now vice president of the strategy execution office at Strategy+PM LLC. “In the era of organizational transformation, project managers need to transform themselves by developing skills to challenge an organization's current path,” she says. Traditional project management skills such as developing schedules are table stakes. “Project managers need to realize that the most valuable skills are synthesizing complex information and creating a business vision. And they need to be able to lead large groups of people through the development and execution of plans to translate the vision into reality.”
Sitanshu Dash is a project manager at Standard Chartered Bank in Singapore.
One thing I've learned is that change management looks different depending on the industry and organization. In smaller organizations, the culture tends to be more open to change. Even if people have different roles, they're able to look at the same goal and understand what they need to do. But in a larger organization, implementing change can feel like balancing a thousand plates.
At my current organization, I focus on executing omnichannel marketing projects. The banking industry is very stringent about change management policies versus other industries, because compliance is such a big deal. For a single marketing campaign, I might need to get 100 compliance approvals, including from different countries where there's a different regulatory process in each place. That slows things down.
As a project manager, your role may not be sexy, but it's important to driving successful change. I start by listing key deliverables and stakeholders within the change cycle who need to be accountable. Make sure every part of the change is a deliverable and that people have personal responsibility to deliver. Document the entire process. Success is about following up and getting everybody involved in the change process to be accountable.
Success is about following up and getting everybody involved in the change process to be accountable.
Implementing organizational change can have a domino effect on rules or systems already in place. The challenge is to look at all the downstream and upstream systems from that change and ensure that a proper regression is done. If the change is beneficial to one part of the system, it should not be detrimental to another—you have to step back to prevent negative consequences that prevent change from sticking.
When I was a software engineer at Infosys, I worked to implement campaign management systems at Apple. Change management was very well done at that company. You had to alert every department, downstream and upstream, of any impending changes. It was a very transparent process. Every person had a very clear set of responsibilities that had to be checked off, and there was accountability at each level of the system.
It was cumbersome, and the downside was I couldn't get a change through in a week or two. But there was a clear upside: When I implemented a new system, it had been highly scrutinized by all affected stakeholders. The changes didn't backfire—they became permanent. As a project manager, that's what you want to see.
KEEP UP WITH THE FLUX
Here's a staggering statistic: By 2043, there will be an additional 2.4 billion middle-class consumers in the world, according to McKinsey. If that stat alone weren't enough to send shockwaves through most C-suites, consider the talent challenges that come on the heels of global demographic shifts and rapid technology changes. Finding the right talent for the right projects is only going to get harder; a dearth of IT project talent in many areas might drive an uptick in freelance or contract positions and a surge in virtual or remote teams.
“Especially for project managers, there's never been so much change.”
—John Donohoe, PMP, PgMP, PfMP, Star Alliance, Frankfurt, Germany
But figuring out if an organization has the change-ready culture, PMO support and properly trained talent to master change initiatives is easier than one might think, says Bruno Cabuto, São Paulo, Brazil. A PMO manager at the online comparison shopping service Buscapé until early this year, he is now an agile transformation consultant at Abu Consulting. Project professionals should start by asking the right questions. “Can people articulate what the vision of the PMO is? How do they talk about project managers and what went right or wrong on the last project? Is the person approving the project the same as the one approving decisions throughout it?” In just a few conversations, he says, it is possible to start developing a “heat map of whether or not an environment is really friendly to change.”
5 Categories of Change
Researchers at the business school IMD reviewed dozens of large-scale organizational transformation projects. They found that the initiatives tended to fit into one of five areas.
|Global presence: extending market reach|
|Customer focus: providing enhanced insights or integrated solutions|
|Nimbleness: accelerating or simplifying processes to become more agile|
|Innovation: incorporating fresh ideas and approaches to improve the ability to pounce on opportunities|
|Sustainability: becoming greener and more socially responsible|
Establishing such a heat map isn't just an abstract exercise in defining an organization's culture. Change-readiness can determine whether an enterprise-wide change project is completed on time—which in turn affects revenues, for better or worse. A 2018 MuleSoft survey of 650 IT decision makers showed that 4 out of 5 businesses (81 percent) anticipate an adverse impact on revenue in the next year if their digital transformation initiatives aren't completed as planned.
ANATOMY OF A CHANGE INITIATIVE
So what separates a doomed transformation project from one destined for success? After parsing the intended scope and purpose behind dozens of large-scale change projects, researchers at the business school IMD noted last year that initiatives that delivered intended benefits were approved with an eye on business value. This factor was more important than how well the project was implemented—whether it was delivered on budget and on time.
At a portfolio level, what mattered most for finding the sweet spot of change value was balancing growth with efficiency. Companies that chased only change projects aimed at greater efficiency and streamlining could cut operations to the bone, the researchers found—but they stymied growth. And those that pursued only growth (through, say, a bevy of experimental product-development projects) risked their financial stability.
The starting point for any effective and lasting change is having a vision, says Alejandro Gabriel Aramburu, PMP, co-founder and director, Innova PMO, San Luis, Argentina. “Only then can project professionals really plan to execute the necessary change management steps to fulfill it.” And if a change initiative doesn't deliver expected benefits? “We evaluate and make the necessary portfolio adjustments,” he says. In other words, change again. PM
The starting point for any effective and lasting change is having a vision.
—Alejandro Gabriel Aramburu, PMP, Innova PMO, San Luis, Argentina