Low economic growth, changing global market conditions, innovation, and cost pressure lead to a complex and dynamic company environment. To be competitive companies must live and manage the constant change.
There are permanent changes within a company: implementation of new strategies, organizations, systems, culture, and processes. In all of these endeavors change management is crucial for success and acceptance of the results. Unfortunately change projects fail often! Why?
What are the success factors of change management? What is necessary to realize and sustain the change? Are the companies and the people ready and competent to run changes successfully and to realize the important requirement regarding “organizational agility”?
Change Management – Definitions and Models
Change Management is an organized, systematic application of the knowledge, tools, and resources of change that provides organizations with a key process to achieve their business strategy.
Change management is a systematic approach to dealing with change, both from the perspective of an organization and on the individual level. A somewhat ambiguous term, change management has at least three different aspects, including, adapting to change, controlling change, and effecting change. A proactive approach to dealing with change is at the core of all three aspects.
John Kotter's Eight Step Approach to Change
John Kotter (1996) created a very popular change management approach. The desired change is conducted in eight steps. Exhibit 1 shows these eight steps in detail and how they are linked with the four phases of the “integrated change management” approach (Wanner, 2012).
Exhibit 1 – Kotter´s Change Management Model
On an individual level, we see different stages that a person experiences when going through change. A common model that describes these stages has been developed by Elisabeth Kübler-Ross (1969).
This model (Exhibit 2) has been widely adapted to many situations where someone suffers a loss or change in social identity. When applying the model to a business context an organizational change curve can be used to describe the stages.
Exhibit 2 – Kübler-Ross Model
Change Management – As-is and Target State
The most of the companies are far away from their target state regarding successful changes. A strategy and benefit-oriented change management is not established.
One reason is the wrong assumption that change management is a “soft issue” only. Change management is not in the focus of the top management with dramatic consequences particularly for strategic initiatives. The role of the top management is crucial within a transformation process. A sponsor should lead by clear vision and targets. Active and visible sponsorship is needed in the difficult phases of a change (“valley of tears”).
Exhibit 3 – Change Management: As Is Situation and Target State
Overview: Integrated Change Management
Integrated Organizational and Individual Change Process
Change projects take place on an organizational and on an individual level. Both levels are considered within the model of “integrated change management.”
The two processes “organizational change process” (projects) and “individual change process” (people) are to be integrated to achieve the desired business results.
Exhibit 4 – Integrated Organizational and Individual Change Process
Integration of Project and Change Management
The scope is always in the focus of a project particularly if a change project should be executed. But the supporting processes “project management” and “change management” are crucial to be successful. Integrated professional project and change management will enable a project manager as “temporary leader” to manage a change project and to achieve the expected results.
Project management, the scope (functional content of the change), and change management are to be integrated.
The change management of the single project must start before project start in the period of project initiation and continue after project closure. Reinforcement and measurement will take place in the application phase.
Exhibit 5 – Integration of Project and Change Management
Four phases of Integrated Change Management
A structured change management approach with four phases (Prosci, 2012) (with their 3-phases-model) linked with the Project Management Institute process groups (PMI, 2013) are necessary to manage a change successfully.
Exhibit 6 – Structured Change Management Process
Phase 1 – Prepare for the change
The first phase – the preparation for change – focuses on the following topics:
- Clarify objectives for the change in “people” terms and ensure a “compelling case for the change.”
- Assess stakeholders (i.e., those impacted by the change) for their readiness and support.
- Obtain necessary resources and organize to manage the change.
- Align executive sponsors to build a network (coalition) of sponsors.
- Conduct an analysis to define the specific impact of the change on each stakeholder.
Clarify vision and objectives
The beginning of every successful change is a “compelling change story.” This convincing “shackling story” creates the desire for a future situation. Without this motivation it is hard to transform a system from state “A” (today) to state Z, which means the target situation.
Stakeholders are any individual or groups of individuals who are impacted by the change or are critical to the successful implementation of the change. This could be inside or outside of the organization. To get a better understanding who to focus on you can conduct a stakeholder assessment and define actions needed to improve the level of support for the most critical stakeholder groups.
An effective stakeholder management process is composed of four steps, which should be started by the project manager during project initiation and should be updated regularly throughout project execution.
Exhibit 7 – Assess Stakeholders
Change impact analysis
The impact analysis reflects the coherences between future events and the impact of the change concerning the different stakeholder groups. It should be worked out how the stakeholders can be prepared to the changes.
For each single stakeholder group the effects of a change and the readiness to change should be analyzed. To conduct a detailed analysis on the specific impact of the change on each stakeholder the following questions along the A-Z-model should be answered.
- What will change in the world of each stakeholder group?
- What do the people need to do differently in “Z”?
- What do the people need to be able to change?
- How do we prepare them for the desired change?
Answering the last question will lead to a detailed change management plan.
Exhibit 8 – A-Z Model to Obtain a Change Management Plan
Align executive sponsors
The greatest success factor for managing the people side of change is active and visible executive sponsorship throughout the project. The “Executive Sponsor” is a supporter of the change out of the top management. This person explains the necessity of change and shows the risks which can appear without the change.
It is important to focus on key required activities for the executive sponsor:
- Participate actively and visibly throughout the project.
- Clarify the vision for the change and be able to communicate the compelling case for change in clear understandable terms.
- Build a coalition of sponsorship with peers and managers.
- Communicate directly with managers and employees (and listen to them).
- Ensure adequate resources to achieve and sustain the change.
- Manages any resistance at senior levels.
Besides executive sponsors, there is a team of individuals with a vested interest in having the largest impact of the change – the coalition.
What is meant by sponsorship coalition?
- Identified key leaders who will help drive the change
- Champions / visible supporters of the change
- Often follows the organizational lines of management
Exhibit 9 – Sponsor Coalition Map
Phase 2 – Plan the change
In the second phase, main emphasis is on the development of formal plans (change management plan) and the integration of those into the overall project management plan. The defined strategy of the initiation phase must be verified and detailed.
- Executive sponsor activities
- Communications and training
- Resistance management
- Events and Interventions
The main subject of the communication plan is the description of the importance of change and the risks in case of no change. The messages should be distributed by different medias /channels and 5-7 times repeated.
When planning the communication concept a project manager should take into account that
- He needs to answer the WIIFM question (What is in it for me?).
- He needs to adapt to your different audiences (stakeholder groups).
- He needs to refer to your change impact analysis (How will you prepare each stakeholder group).
- He needs to identify the key messages.
- He should consider the timing as to when it will be best to communicate what.
- He should consider the need for communicating the message (5 – 7 times).
- He should consider using multiple channels / media for your communication.
- He should consider who is the most appropriate “sender.”
Phase 3 – Manage the change
In the third phase main emphasis is on the management of implementation of the change based on the defined change management plan.
- Execute Change Management Plan
- Realize actions
- Perform change controlling
- Manage resistance
Resistance is natural. Therefore always keep in mind:
- Resistance does not reflect that an employee is problematic
- Expect resistance
- Good change management practices not only reduce resistance, but can turn some of the most resistant employees into some of the biggest supporters.
Main reasons for resistance at employee level can be seen in the lack of awareness, perceived negative impact on their current job role, the history of organization's change failures, the lack of visible support and sponsorship. On the management level the main resistance issues are lack of awareness and involvement in the change, perceived negative impact on current job role (e.g., fear of losing control and authority), and workload.
In order to react on that a project manager of a change project needs to take proactive steps such as:
- Provide clear, honest and open two way communications (and listen).
- Manage expectations and clarify the personal impact (what specifically will change and what is expected).
- Involve end users (those directly impacted) early and throughout the project.
- Engage Managers and supervisors early and establish their role as coaches and change agents.
Phase 4 – Reinforce and sustain the change
To ensure a sustainable change, the last phase of the structured change management process deals with the task of reinforcement.
- Collect feedback to measure results and the adoption of the desired change.
- Take corrective action to close any gaps.
- Embed the change into systems, processes and policies, and deliver consequences to sustain the change.
To be able to measure the desired change you need to establish metrics to track desired changes /results (or noncompliance). Thereby the desired final status Z should always be used as the main reference point.
An appropriate integration of desired change into existing systems (such as HR systems, policies, or scorecard metrics) could support and reduce complexity by not inventing a new separate approach.
Conclusion: Need for Integrated Change Management and Organizational Agility
A change has high impact to a company. It could be managed successfully by applying “integrated change management.” The most important success factor is the involvement of an active sponsor.
A project manager of a change project should integrate the organizational and the people side of a change. He should integrate professional change management processes methods, tools and techniques to his professional project management: 1. Initiate, 2. Plan, 3. Manage, 4. Reinforce & Sustain a change.
The PMI 2012 Pulse of the Profession In-Depth Report: Organizational Agility (PMI, 2012) proofs: greater organizational agility leads to better performance—providing organizations with a powerful edge on the competition.
The probability to run successful strategic initiatives is in agile organizations two times higher as in companies with low agility.
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©2013 Markus F. Wanner
Originally published as a part of 2013 PMI Global Congress Proceedings – New Orleans, Louisiana