Project Management Institute

When Change is Not a Change Anymore

Organizational Evolution and Improvement through Stability

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OLIVIER LAZAR, MSC, MBA, PMI-ACP, PMI-PBA, PMI-RMP, PMI-SP, PMP, PGMP, PFMP
The Valense Palatine Group

Organizations change. They must change, or they disappear. But why are they changing, when, how, and what is changing?

Organizations struggle in ensuring that the different changes they implement are really creating value. Often, change is perceived like a goal in itself, organizations implement change for the sake of changing and are stuck within a continuously changing loop, accumulating layers of permanent change that appears to be counter-productive, demotivating, and finally dreadful for the organization itself.

We'll explore how to determine if a change has to occur, and how to ensure it delivers value, that is, through stability, when the change is not a change anymore.

In the project management world, and in the framework defined by PMI® in the A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition, The Standard for Program Management – Third Edition, and The Standard for Portfolio Management – Third Edition, our organizations create the conditions for change (portfolio management), assemble the triggers for change (project management), and finally deliver the change itself (program management) by developing new capabilities. By developing these continuous processes, some might think that change is an ongoing, iterative process, that evolution is a never ending flow of emerging changes.

Actually, it's not. If the flow of change is continuous in the organization, it doesn't have the time to absorb the change and realize the expected benefits.

Keywords: change, program, value, stakeholders

INTRODUCTION

Change is about “modifying an unsatisfactory situation,” said Thiry in 1999. “Change or Die,” said Hazard in 2010.

Change is in fact the way people and organizations use to adapt to the modification and the evolution of their environment. Each time, a parameter of our environment evolves, we have to react in order to adapt ourselves to that so-called change. Then, we also have to change. Change induces change. Change is the only inevitable outcome of life.

When we implement a new process, a new tool, a new methodology, or governance process, we also expect to see the impacted people and organizations react to that change (in a positive manner, it is hoped), meaning changing themselves. Again, change induces change. So, change is good thing, one could say. Yes, as we could say that an organization that doesn't change is doomed to obsolescence and finally to disappear. The Ford Motors Company almost faced this situation, when Henry Ford himself was refusing to think about a new model to replace the T, even after having been a great change actor in American society.

But change can also be a trap. And a dangerous one.

Organizations change. They must change, or they disappear. But why are they changing, when, how, and what is changing? Organizations struggle in ensuring that the different changes they implement are really creating value. Often, change is perceived like a goal in itself. Organizations implement change for the sake of changing and are stuck within a continuous changing loop, accumulating layers of permanent change that appears to be counter-productive, demotivating, and finally dreadful for the organization itself.

Let's explore how to determine if a change has to occur, and how to ensure it delivers value, that is, through stability, when the change is not a change anymore.

In the project management world, and in the framework defined by PMI® in A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition, The Standard for Program Management – Third Edition, and The Standard for Portfolio Management – Third Edition, our organizations create the conditions for change (portfolio management), assemble the triggers for change (project management), and finally deliver the change itself (program management) by developing new capabilities. By developing these continuous processes, some might think that change is an ongoing, iterative process, that evolution is a never ending flow of emerging changes.

Actually, it's not. If the flow of change is continuous in the organization, it doesn't have the time to absorb the change and realize the expected benefits.

To be effective, a change, any kind of change, must be integrated into the organization's daily business—in other words, it is not exactly change anymore. At each step of the implementation of a change, a certain period of stability is required to ensure the organization absorbs the change and creates the expected value.

Each organization has a limited ability to absorb change. This ability, or limit, is defined by the level of inertia of the organization, its culture, its structure even, and has to be identified, quantified, and integrated into the change management program or initiative in order to ensure the value is realized.

Effective and efficient change management is finally the integrated application of agile principles; and project, program, and portfolio Management frameworks, with a focus on risks and stakeholder management.

DETERMINING THE NEED FOR CHANGE IN THE ORGANIZATION

In order to determine when a change has to occur, the organization needs to be able to analyze its environment. Meaning, it must be able to gain a sufficient level of visibility over that environment, internal and external. The first factor to construct this visibility will of course be the proper definition of the organization's strategy, and the foundational strategic vision. Let's be clear, it's not about defining performance objectives. Performance is a consequence of a successfully executed strategy, not the other way around. It's a result. The strategic vision is the aim of the strategic journey (Exhibit 1). We can define it as the desired status of the organization's business environment. The strategy itself becomes the way to reach that aim, or how people will have to use the organizational tools to shape that environment, in other words to change it.

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Exhibit 1: From vision to strategy and governance.

The first trigger for change will be then the distance between the current status of the business environment and that desired status. That's the type of change, which will be called “strategic change,” “strategic initiative,” Strategic whatsoever—putting the organization in motion, and launching programs and projects to develop the necessary capabilities to execute the strategy.

But while the organization will sail on the seas of its business environment, using the different outcomes of its capability development initiatives to propel itself toward the strategic goal or vision, that environment will change. As a sea, it's moving. Also, many threats will appear on the horizon, and the organization will need to be ready to adjust its trajectory to be able to avoid these icebergs. This is the second sort of change the organization will have to face: incremental adjustments.

Incremental adjustment is the ability to anticipate, as it will face a countering force, a factor of resistance to change: inertia.

Organizational inertia is inherent to any organization; it means that everything takes time, that any organization has a limited capability to absorb a certain level of change. If you try to go beyond that level and force beyond the level of inertia, you'll generate resistance and potential hit the iceberg.

To avoid the icebergs in the sea of your business environment, despite the level of inertia, you have to adapt your speed (meaning the pace of changes) and look forward further than the level of inertia.

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Exhibit 2: Level of organizational inertia.

COUNTERING INERTIA, EXPANDING THE HORIZON

The level of inertia in an organization is determined by the number of layers within this organization (Exhibit 2). Be it the number of process layers, or the number of decision-making layers, or even the number of interfaces between these layers. The more layers, the higher the level of inertia is. It's a physical phenomenon. There are two ways of optimizing this and leveling resistance to change:

- Optimizing the organization

- Enlarging the strategic horizon

If you want to avoid icebergs, the best way is to see them coming. Depending on the level of the organizational inertia, the strategic horizon (how far in the future you're operationally planning your strategy) has to be pushed as much as a minimum of twice that level of inertia plus your time to market. If the level of inertia in your organization (the time it takes for an executive decision to be made, cascaded down, implemented, and the feedback on that implementation is escalated up) is 12 months, and your environment is changing every six months (new products, regulations, etc., basically your time to market), then your strategic horizon should be at least 36 months ((12 + 6) x 2)—meaning looking ahead three years with a visibility over resources and initiatives.

These optimizations will be achieved by putting in place a clear definition of the strategic vision, along with simple and aligned portfolio management processes.

ALIGNING THE ORGANIZATION, INVOLVING STAKEHOLDERS…THE FIRST STEPS TO PREVENTING RESISTANCE

Starting from a formulation of the strategic vision as describing the aim of the organization and not its performance objectives, it will be possible to build an opportunity chain. This opportunity chain will describe the backbone of the strategy. Starting from the vision, we'll analyze the impacted market stakeholders impacted by the realization of that vision, and then classify them along the “3i's”: influence, interest, and intent. That first level of analysis will allow us to identify where the potential forces of resistance are.

Aggressive resistance is caused by a simple factor: fear. With these affected stakeholders, our aim in dealing with resistance will be to overcome that fear, to reassure, to secure, to preach, and convince. And the best tool to do so is involvement. You can't be opposed to something you have contributed to define. That's why we will involve our market stakeholders into the definition of our strategy. It's the next step into the construction of this opportunity chain: expressing stakeholders’ expectations. Of all stakeholders, wherever they are positioned on the 3i's model.

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Exhibit 3: Stakeholders mapping: The 3i's model.

Of course, not all of these expectations will have to be covered. We have a strategic vision; we'll integrate into our strategy the expectations fitting with our vision. Incidentally, it's the first good indicator of the reliability of our strategic vision; if none of our market stakeholders’ expectations seem to match with our vision, it could be a good idea to revise it.

We'll then identify the market needs. It's the following step in the construction of our opportunity chain—needs that we should cover in our strategy to ensure our successful achievement and fulfill the very rationale behind the existence of our organization! Yes, but…of course, there is a “but.” But, resources are limited, scarce, rare, and precious. We just can't afford to do everything we wish. We need to prioritize according to the contribution of each of these needs to the realization of our strategic vision, and based on the level of resources available. Which element will generate the most value? This is about our third step in the construction of the opportunity chain—formalizing the strategic objectives. An objective is a need, no difference. But an objective is a need, which we will cover.

And there's a very common tool to make this prioritization between needs and to formalize the objectives: portfolio management. Portfolio management will tell us how many resources and what kind of resources we have, and how many we need in the future, up to the strategic horizon, to deliver up to our promises.

This is where the opportunity chain starts to become operational. These objectives we have formalized, are in fact nothing else than the different capabilities we'll have to create, capabilities defined through programs, capabilities delivered through the realization of projects that will produce the triggers to generate these capabilities. It is hoped. And hoped only.

INCREMENTAL CHANGES AND ORGANIZATIONAL AGILITY

To develop this anticipative capability, the organization will need to put in place an integrated portfolio management framework, mainly focused on four items:

- A strong and comprehensive definition of its strategic vision, used as a reference baseline to construct the strategic alignment indicators.

- A predictive performance measurement system, based on simple and consolidated relevant indicators, mainly derived from earned value metrics.

- An anticipative risk and contingency management model properly constructed to provide a realistic overview of uncertainties and the unexpected, and allowing deriving evolutionary trends in terms of achievability and exposure to risk of the different components of the portfolio.

- An analytical framework, integrating business, strategic, and performance based and risk indicators to gain the necessary long-term visibility up to an acceptable and reasonable strategic horizon.

The objectives of the implementation of such a framework are to give to the organization the ability to anticipate soon enough the emergence of a potential threat, by making small but significant adjustments to the course of its strategic implementation without deviating too far from its initial strategic vision, and so achieving organizational agility.

Organizational agility is the capacity of an organization to adjust its strategic plan frequently by small increments, while delivering a continuum of business benefits and performance realization, and at the same time, keeping an aim on the strategic vision.

CONCLUSION

We can see that we need to develop an integrated opportunity chain allowing to align the parameters corresponding to risks, benefits, and performance of the various components of the portfolios, and to secure the sustainability of the strategic vision long enough to realize it or to be able to make it evolve along with the evolution of the organization's environment in a controlled manner, which will be anticipative instead of reactive.

ABOUT THE AUTHOR

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Olivier Lazar, is an organizational governance expert, coach, and trainer. He graduated with a master's degree and an executive master's degree in business administration, in strategy, project, and program management from the Lille Graduate School of Management and from the PMI Leadership Institute Master Class 2013. Committed to the advancement of the profession, he's managing partner at the Valense Palatine Group, a former President of the PMI Switzerland Chapter, and currently sitting on the Chapter Members Advisory Group (CMAG) at PMI.

With more than 15 years of project, program, and portfolio management experience, both on the operational and consulting perspective, Olivier has worked in a large scope of industries, from corporate finance to aerospace, and from e-business to pharmaceutical and energy. He has been published in the professional press and has presented in several project management conferences around the world, including PMI® Global Congresses in EMEA and North America, and is also a seminar leader for PMI SeminarsWorld®.

He's also one of the very few to hold seven credentials from PMI: PMI-ACP, PMI-PBA, PMI-RMP, PMI-SP, PMP, PgMP, PfMP.

Olivier's leitmotiv lies in his conviction that sharing knowledge is a major factor for global performance and common development, organizational and personal, as such, Olivier is also a member of the PMI Educational Foundation Leadership Society, promoting project management as a skill for life.

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Lazar, O. (2015). Delivering benefits. PMI Global Congress Proceedings, Dubai, UAE.

Lazar, O. (2015). Open your strategic horizon and gain organizational agility, Or how to overcome organizational inertia. PMI Global Congress Proceedings, Orlando, Florida, USA.

Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK®guide) – Fifth edition. Newtown Square, PA: Author.

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Thiry, M. (2015). A Framework for value management practice (2nd ed.). Newtown Square, PA: Project Management Institute.

Thiry, M. (2015). Program management (2nd ed.). Burlington, VT: Gower Publishing Company.

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 or any listed author.

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© 2016, Olivier Lazar
Originally published as part of the 2016 PMI® Global Congress Proceedings – Barcelona, Spain

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