Project Management Institute

Is cultural change important in your project?

by Patrick Brown, Sheila Grove, Richard Kelly, and Satyendra Rana

CULTURAL CHANGE MAY BE an incidental effect of a project, a necessary ingredient for success, or even a deliverable. In any case, cultural change is an increasingly important part of the project manager's job. For example, I/S projects used to merely automate manual activities. But today's I/S projects are more likely to involve alterations to the corporate mission statement, modifications to the business objectives, reshaping of the organizational structure and reengineered business processes. Business Process Reengineering (BPR) projects often depend upon changes in organizational missions and ways of doing business. Transforming a traditional manufacturing line to a “Just In Time” operation involves a fundamental change in the attitudes about how the business is operated.

While a few successful BPR projects have received significant publicity, the majority of projects—some estimates are as high as 70 percent—are not considered successful by management. That's because a reengineering project that redefines processes without altering the values, shared opinions, and beliefs that supported the old processes is likely to fail. These projects significantly impact not only the way people perform their jobs and interact with others, but also fundamental areas of their self-image, the values that direct their actions, and the attitudes that shape the business.

Writing in the Sloan Management Review, D.H. Kim found that these deeply held internal images of how the company works, or “mental models,” are shared by the company population and have a powerful influence on what people do and perceive (“The Link Between Individual and Organizational Learning,” Fall 1993).

Much recent literature has been devoted to analyzing and understanding these corporate mental models, but relatively little has been written about applying the theories from the perspective of the person charged with implementing the desired changes—the project manager. The project manager must have sufficient insights into the structure, procedures, and values of an organization to devise effective techniques for dissolving old habits and value systems and instilling new ones.

An example: We worked with a large financial company that engaged us to redesign their software development processes to improve the efficiency and quality of software maintenance activities. The client perceived that we would change procedures and development standards. In fact, it quickly became apparent to us that no change would be successful unless we also changed some underlying attitudes about maintenance. For many years the company had placed a premium on timeliness—getting changes into the systems (and the marketplace) was of primary importance. In recent years quality had become a growing problem, resulting in our engagement. All of our changes to improve quality and reduce rework were in conflict with the prevailing attitudes about the importance of getting work done quickly. The conflict continued for several maintenance releases until an attitude could be developed that placed importance on quality workmanship and pride of ownership. In this case, the stated deliverable—implementing new procedures and guidelines— would not have been successful without an accompanying widespread change in company values and beliefs.

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Exhibit 1 provides a quick approach to determining if your project has substantial cultural change implications. The shaded areas indicate those projects that may need specific attention to managing cultural changes. If the project is likely to have significant side effects, the project manager may choose to raise it as an issue to be addressed jointly with the customer. If cultural change is critical to the success of the project, as in the financial company example above, the project manager will want to identify specific activities and risks in the project plan.

In his January 1995 PM Network article, Dan H. Cooprider said, “Culture is the key ingredient of a company's success. Discovering, defining, and changing that culture is the business challenge of the ‘90s.” As more attention is placed on corporate culture and more projects are undertaken to change or manipulate that culture, project managers will have a corresponding need to understand and manage aspects of culture pertinent in their project.

The project manager is often an outsider to the client organization, yet is expected to understand the organization, its structure and procedures in sufficient detail to implement dramatic changes. Depending on the circumstances, there may be many variables or a single key element that is important in effecting a cultural change. For example, organizational elements may be crucial to establishing a new way of doing things. In a 1995 article (“OPT: Organization and Process Together”) published by IEEE, C.B. Seaman and V.R. Basili wrote, “The organizational structure within which the process executes has a profound effect on its outcome. The communication and interaction problems associated with human involvement in development cannot be addressed by process improvement alone.” On the other hand, organization is important only if other elements, such as leadership, are adequately handled. In John Maxwell's Developing the Leaders Around You (Thomas Nelson, 1995), the pollster George Barna was quoted as saying, “Great organizations may have great leaders and a poor structure, but I’ve never seen a great organization that had a great structure and a poor leader.”

How does one determine which elements of cultural change are important and pertinent? Exhibit 2 illustrates a technique for identifying the aspects of corporate culture that are relevant to your project.

Here's a quick way to determine the cultural change implications of a project; however, it cannot be used until the full impact of a project on the existing culture has been assesse

Exhibit 1. Here's a quick way to determine the cultural change implications of a project; however, it cannot be used until the full impact of a project on the existing culture has been assessed.

Assessing the depth and breadth of impact on culture requires careful analysis of both the existing culture and the changes that the project will cause

Exhibit 2. Assessing the depth and breadth of impact on culture requires careful analysis of both the existing culture and the changes that the project will cause.

Project scope. To what extent does the scope statement include cultural changes? Some indicators are scope statements that involve multiple organizational entities, deliverables that change existing processes, or significant changes in the body of knowledge needed for employees to perform their jobs.

Stakeholders. In addition to identifying stakeholders, the project manager must ensure that they are appropriately involved in project activities. No one likes to feel excluded from an activity that affects their job. Unless the stakeholders are involved in ongoing activities, the project manager may face some hostile participants when it is time to introduce new ways of doing things. Our own experience is that emotional response is more severe with line managers and staff than with middle or senior managers. Therefore, if the project is dependent upon line staff approval, it is imperative to gain their participation and buy-in during the planning of the new processes.

Schedule. Iterative or continuing change presents scheduling problems that require different approaches than one-time changes. A one-time change can be addressed with a transition plan, proper training, and monitoring of activity. Change that is iterative, continuing, or evolutionary creates an unstable work environment and political structure that can be very frustrating. Project managers who introduce continuous change must be prepared to work closely with all levels of management to manage expectations and responses to the changes.

Organizational infrastructure (how the company goes about performing its operations). Project managers can learn some lessons about changing corporate culture from recent activities in quality management. Quality management models such as the Software Engineering Institute Capability Maturity Model (SEI CMM), the Macolm Baldrige model, and the ISO 9000 model are relevant because they measure many of the elements involved in an organization's ability to change. It is not our purpose to advocate the use of any particular model, but rather to suggest that organizations with a higher quality management maturity assessment are better positioned to handle cultural changes than those with lower maturity assessments. High-scoring organizations have already made strides toward reshaping their organizations, values, and processes to achieve a quantifiable goal.

Changes limited to parts of a decentralized organization are localized and may not have any significant cultural implication. Changes that are pervasive across a distributed organization may include modifications to underlying values. The project manager may wish to take some precautions to ensure that the expected changes are occurring as planned.

Changes in power bases can be very dramatic—for example, “empowering” rank-and-file workers to stop expensive production lines when they discover a serious problem. In our software company example, a line manager in a test organization was directed to halt the installation of the work product of 600 programmers if she found an error in acceptance testing. The first incident involved hours of agonizing deliberation on her part and careful encouragement on our part. When she did make the decision to stop work, it marked the advent of a new attitude in the organization and a new perception of her role.

Seaman and Basili speak of responsibility in terms of commitment, meaning the derived benefit or recognition, the type of responsibility, which may be shared, sole, or managing, and the diversity of responsibilities an individual assumes. Severe changes in responsibility definitions can create confusion or miscom-munication in an organization.

Communications. Are the current communication methods likely to be effective in the proposed environment? For example, a programming department may be accustomed to weekly face-to-face status meetings. If the department becomes a “remote” organization that communicates by e-mail, then an alternate form of information distribution must be considered.

Values, or mental models, represent a person's view of the world, including explicit or implicit understandings. As stated before, mental models are the shared visions, values, and assumptions that shape and guide behavior in an organization. They provide the context or framework in which information is analyzed. Changing culture involves changing the mental models held by the company members—in other words, learning new values or models. It is important to change the foundational beliefs (the value systems or understanding of why a thing is done) as well as the behavioral systems (the understanding of what must be done).

Organizational change is becoming a necessary ingredient in business and project managers are often looked upon as the implementers of change. In recent literature organizational change is often connected with organizational learning and the mental models that are present in organizations. In Robert Fulmer's 1994 article in Planning Review (“A Model for Changing the Way Organizations Learn,” May/June), he quotes Argyris and Schon's proposed two levels of change. The first deals with behavioral or procedural change. Another type of learning deals with modifications to an organization's underlying norms, policies, and objectives. Similarly, Peter Senge speaks of “waves” or modes of behavior in an evolving organization. The first wave of change deals with improving work processes. The second wave shifts focus from work processes to improving ways of thinking and interacting—managing how we work. The third wave involves adopting a learning attitude about our work. (See Senge's article, “The Message of the Quality Movement,” in Executive Excellence, July 1995.)

Once the elements of change are identified, the next question is how to motivate people to implement the change. Adjusting the reward system to the new values and behavioral expectations is a crucial aspect of change. Few things are more confusing than announcing a change in values or expected behaviors while leaving the old reward system in place. Sales organizations are particularly adept at changing behavior and value perceptions by changing the rewards systems (commission plans).

Recent trends toward flatter organizational structures, increased process controls, and an increased reliance on contractual work relationships make the project manager more vital than ever before. In a changing business environment, the ability to assess and manage cultural change issues are essential skills for successful project management.

Problems? Here's What to Do. The problems encountered when instituting cultural changes may be very different from those associated with more traditional projects. Traditional project management focuses on planning and monitoring activities and events that represent completion of tasks. In managing cultural change, activities and events are important because they demonstrate to what extent people have accepted and implemented changes in values, roles, and responsibilities. Therefore while the problems may fall into the same general categories, they are rooted in people issues rather than in technical issues. In the January/February 1996 issue of the Journal of Systems Management (“Managing Human Issues in Reengineering Projects”), May and Kettelhut state that the leading causes of failure in reengineering projects are driven by human issues; among the key factors: resistance to change, unrealistic expectations, the lack of champions, narrow project scope, lack of consensus. Exhibit 3 illustrates problems that may be encountered during reengineering and possible preventive actions for the human issues.

Two of the most common questions deal with task ownership and task definition. For example, in an organization that is trying to become “flatter” and more empowered, scope issues may be concerned with who is authorized to resolve a question rather than (or in addition to) disagreement about project scope. Similarly, changing procedures or job roles may result in many employees, both managers and workers, who were highly skilled at the old way of doing business but lack the skills to perform their new roles. Infrastructure systems (payroll, time reporting, budgets, business measurements, etc.) may reinforce doing things the old way.

The problems that arise during reengineering projects are generally rooted in people issues. Early preventive action can make implementation smoother

Exhibit 3. The problems that arise during reengineering projects are generally rooted in people issues. Early preventive action can make implementation smoother.

Perhaps the most important question for employees is “why.” As stakeholders, employees must fully understand and accept the why of cultural change. May and Kettelhut say that a major contributor to failure for reengineering projects is lack of positive incentives for employees and lack of employee influence in decisions that affect them. Management support for change should be highly visible. A well-conceived education and communication plan is essential for success. Employees should be made to feel that they individually benefit from the change. ■

 

Patrick Brown, PMP, a project manager with ISSC, the services subsidiary of IBM, has 19 years of experience in software development. He is currently managing a cultural change project.

Sheila Connors Grove, an executive management consultant with the IBM Consulting Group in New England, assists clients in solving business problems through participative methodologies.

Richard Kelly, after a 31-year career at IBM in information systems development, co-founded ISIS, an information systems services company located in Oakland, N.J.

Satyendra Rana, Ph.D., is currently with ISSC’s distributed systems management technology group in Austin, Texas. He has published over 50 research articles.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM Network • January 1997

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