Making change management a competitive advantage
Director, Afrissance Consulting (Founder/CEO Arcadian Consulting)
Change is inevitable and businesses globally have to come to terms with this reality. For companies that are committed to being market leaders, there is continuing talk and matching investment in making change resilience part of their corporate DNA.
Whilst some projects improve an organisation's ability to “run the business” but do not rise to the level of a “strategic initiative,” all of an organisation's strategic initiatives are projects or programs, which inevitably “change the business” (Project Management International, 2014). This paper introduces the challenge of change (especially as corporate change is achieved through employees engaging in the change), highlights the opportunities possible to companies that make change resilience a priority, and sets out a roadmap for achieving this lofty goal within a corporate setting.
“It is not necessary to change. Survival is not mandatory”(Deming, W.E). For those who do want to survive and excel, this paper provides a guideline.
Case for Change Management
Companies all over the world find that they have to continually make changes to the way they work in order to stay ahead of the game, be profitable, and be relevant. Oftentimes, the changes could be externally mandated, internally conceived, or both, but the reality is that companies do have to evolve, change, or die. The global landscape is changing: businesses are moving to take advantage of new markets; organisations are restructuring to operate better, given the current market dynamic; competition is causing companies to radically change the way they do business, and so on.
The point to note is that, the ability of an organisation to deliver business benefits linked to huge portfolio investments is directly proportional to its ability to manage the process of organisational change (i.e. the ability to carry the entire organisation along with all strategic initiatives in a manner where every employee is working together towards a common objective). The extent to which an organisation is able to engage the whole workforce (internally, and sometimes customers) to obtain real commitment to change is the extent to which it has a chance to deliver the intended business benefits. As organisations are usually going through many changes at any given time, the ability to build the ongoing and repeatable capacity to optimally engage with employees, gain their commitment, and ensure profitable and timely delivery is the extent to which the organisation gets better at changing. When such an organisation leverages the attributes of a learning organisation to continue to improve its ability to do this—then the organisation will be better than its competition and gain the much-touted competitive advantage.
Unquestionably, the current turbulent environment demands organisational agility, a trend identified in the Pulse of the Profession™ report, which was based on an annual global study of over 1,000 project, program and portfolio managers. This report identified that successful organisations are applying rigorous change management to better adapt to shifting market conditions. The report indicated that 92% of organisations highly effective at change management report high or moderate agility (PMI, 2012). The reality is that more and more organisations talk about maturity in the areas of portfolio, program and project management and the existence of program management offices (PMO's) in different guises do exist; however, the focus on the intricacies of change is an area which the PMO discipline does not seem to have fully exploited or taken advantage of.
The Complexity of Change
Organisations the world over recognise the need to embrace ‘nimbleness’ and ‘agility’ if they are to survive in the long run. The ever changing landscape, globalisation, global dynamics, etc., make it inevitable that companies have to evolve fast, repeatedly, and in a continuously improving manner in order to comply with regulations, collaborate with customers, and stay ahead of competition. Whilst awareness of the challenges associated with change is prevalent, there is also compelling evidence of the long-term benefit of being great at driving organisational change. Therefore, it is expedient to look at some of the reasons why change is difficult, so that we can deliberately tackle the reasons for change complexity. Some of the areas under consideration in dealing with change are:
Organisation vs. Individual Dynamics – A key fact of successful change is that organisations define change that needs to take place at a corporate level; however, the decision to engage and ‘own’ the change is at the individual (each employee) level. The success of the change is dependent on the extent to which an organisation is able to engage each individual to own the change. This is a very important point that is not lost on change mature organisations, and steps are put in place proactively to speak to each stakeholder in his/her own terms so that a majority of the stakeholders can become owners of the initiative as required.
Leadership & Sponsorship – Leaders are charged with the responsibility of charting the future course of the company and for some time now, leaders have focused on developing strategies for success without paying the same level of attention to implementing strategy. The extent to which leaders begin to sponsor initiatives in an active and visible manner (in order to drive strategy through to successful implementation by being engaged with the officers who are responsible for the implementation of the strategy for the change) is the extent to which success is increased. Active and visible executive sponsorship has been quoted as the number one contributor to change management initiatives in seven different Prosci best practices in change management reports (Prosci, 2014).
Communication Models and History – Tightly linked to leadership, this addresses how the organization has communicated traditionally and how this way of communicating may impact new change initiatives.
Value Systems – The value systems of an organisation represent the platform or organisational mindset that enables or hinders change. Leadership of the organisation can purposefully engineer an enabling value system in order to increase the agility of the company. However, this requires the united and unwavering commitment of each leader to live the desired values and drive them through the organisation without compromise.
Type of Change – a one-size fits all approach is not advisable for all change initiatives. It is this understanding that causes organisations to assess the scale of the impact of an impending change, and the nature of the change, before deciding how best to introduce new changes. This purposeful evaluation of the type of change followed by the right change implementation strategy is a sign of a mature environment that increases the chance of success.
Change Saturation – it is important also to know how many changes are happening simultaneously within an organisation at any given time, in order to gauge whether this is the optimal time to introduce additional change(s), or whether there is sponsor availability (bandwidth) to champion another change. This evaluation could result in the deferment of a planned change if the timing is not right or if there is no right sponsor to champion the change.
Change is a Process – sometimes organisations fail to see that change is not an event but rather a process of moving from the current state through a transitional state to the future state. Organisations need to understand that the characteristics of each state are unique and different; therefore the extent to which these characteristics are understood is the extent to which a smooth transition from one to the other can be designed and implemented.
All of the factors listed above and more combine to affect the ability of program, portfolio and project management (PPPM, or strategic initiative management) efforts to deliver promised business benefits in a consistent manner. This does not mean that it is impossible to do—it just requires some effort. The understanding of the impact of the listed factors in the ongoing framework of an organisation's strategic initiative delivery framework is essential to success.
Why Change Management
By now it is obvious that change does not come natural, either in our personal or corporate lives. In fact, resistance to change is the norm. Our corporate change efforts are successful to the extent that the persons affected (employees, customers, or other stakeholders) become engaged in the change.
There are some distinct areas of focus when working on affecting an organisation's ability to be great at change management, they include:
Building Change Leadership as a Leadership Competency
The leadership needs to have a mindset that although change ability (agility, resilience) is essential for the survival and growth of many companies, there needs to be a concerted effort to build capacity to lead change effectively, and to purposefully build a change friendly culture in a systemic manner. This means that change leadership or sponsorship becomes a leadership competency that is recruited for and developed in leaders in the same way that it is done for other competencies such as decision-making, etc.
A desired outcome of developing this change leadership competency would be that leaders would begin to associate the realities in the boxes on the right shown in Exhibit 1 over the realities displayed on the left side. For example, leaders would themselves begin to believe that in our current states we need to be committed to innovation and perhaps avoid the mindset that this is where we have been successful so we should not try to change (typical of a change resistant organisation). This desired outcome is not easy to accomplish, but it is possible. After the leaders themselves have begun to associate and espouse the realities on the right, then, and only then, can the process of living out, speaking, and championing those realities happen, so that the rest of the organisation can believe and absorb them (with support of course).
Exhibit 1 – Change paradigm
Coach Managers to lead Change
As the leadership ensures that the mindset, processes, and reward systems in the organisation allow employees to see the three different states of every change through the lens of the boxes on the right, managers need to be equipped to carry on the torch amongst the other employees of the company, as they are very important in the change process and can reach more employees than the leadership team can. Managers and supervisors are a critical part of driving successful organisational change, as they have been identified to perform critical roles that serve to increase the effectiveness and success of change initiatives.
Managers need to demonstrate buy-in and support for the change and they also essentially coach employees through the change process. One of the most important possibilities and privileges that managers also have in the delivery of change initiatives is that they best identify and manage resistance to change amongst the workforce.
Organisations that are committed to change understand the critical role that managers and supervisors play and actively engage them in delivery of change initiatives.
Manage Employee Resistance to Change
Although the case for change is a case for survival and growth, which is ultimately what one would assume every employee wants, we need to understand the consequences of introducing change to the workforce and proactively design tactics to help enable change proficiency, whilst balancing the need to deliver business results.
The Prosci Flight Risk Model as shown below in Exhibits 2, 3, 4 & 5 (Prosci, 2012) is a good model to highlight what happens during the change process and can help show the benefits or consequences of level of change management efforts. Typically, at the announcement of an impending change, employees start to question the motive for the change and assess whether this is a good or a bad change. This process of assessing causes them to emotionally move from a position of comfort to anxiety about the transition and the future states. To minimise disruption to business operations or even loss of valued staff, a change able organisation purposefully manages the emotional journeys that their staff may go through using several options. Less change able organisations are unaware of the emotional turmoil or choose not to address it until they have to.
Exhibits 2 and 3 – Prosci flight risk model
The reality of the corporate world is that organisations are usually going through multiple changes at the same time, therefore if the interaction of employees with change initiatives is not properly and proactively managed, it is possible to damage morale, lose staff, and definitely not meet business objectives.
Exhibits 4 and 5 – Prosci flight risk model (degree of impact)
Characteristics of a Nimble Organisation
Increasingly the terms nimble, agile (agility), resilience, and a host of others are being used to describe organisations that thrive on their readiness, skill, and ability to constantly reform and take advantage of new opportunities or respond to dramatic changes in market conditions. These organisations are admired because they seem to have in their DNA the ability to surf waves of change and come out better and stronger over time.
The DNA of Nimble
Regardless of the name by which you choose to identify organisations that seem to change effortlessly, such organisations have an identity that is similar across countries and different cultures. Some of the attributes that are similar across board include:
Culture of High Performing Cross Functional Teams: Over and over again, there is a high performing, cross functional, and sometimes collegial nature to team work in these environments. A high level of trust amongst the team members underpins this culture. This level of trust allows the team members to engage in uninhibited dialogue, straightforward feedback, and open constructive conflict resolution.
Deep Sense of Shared Purpose: These organisations have a deep sense of shared purpose that is beyond a poster on the wall. This purpose is clear to all, and this helps to create an organisation where there is clarity about the priorities of the company, based on the unwavering commitment to the espoused shared purpose across the organisation. This quality helps buy engagement to initiatives deemed a priority by the leadership team. This means that every time the leadership team makes decisions on where to go, people are ready to jump aboard and need very little convincing.
Agile Workforce: These organisations have a purposefully engineered workforce (or have systems in place to engineer one) that supports and encourages a culture of innovation and challenges them to outperform themselves every time. Flexibility and adaptability are typical attributes of this workforce.
Congruent Leadership: The leadership of these organisations is committed to being high performing cohesive teams with an emphasis on leveraging personal strengths, weaknesses, and diversity etc. The leadership team holds themselves as a group to the highest standard of accountability and commitment to results, which is evident to their staff. This leadership team strives to always make the best decision for the organization—decisions for personal ego gains or similar reasons are nonexistent or minimal, and this approach drives a wholesome commitment from the rest of the organisation. This leadership team is committed to regular communication and engagement with staff, often setting up standards that are transparent and that allow staff to make decisions within guidelines—staff feel empowered to make decisions.
Exhibit 6 – Building a nimble organization
In making a decision to purposefully change an organisation from being a change resistant organisation to a nimble organization, there are certain levers that can be targeted to make this transition a reality, as shown in Exhibit 6 above and further explained below.
Leadership: Referring back to the characteristics of a nimble organisation, the importance of a cohesive leadership team was stressed, and in order to create a cohesive team to drive an organisational change of this magnitude, the model below (Exhibits 7 and 8) can be used to speed up this process of change.
Exhibits 7 and 8 – Organisational health
The above model (Lencioni, 2012) introduces a way to speed up the building of cohesive teams with enough clarity to create a truly nimble organisation that is capable of delivering the benefits of successful change in a targeted way.
Exhibit 7 refers to the features of a high performing team. A team where there is trust is able to engage in productive conflict, ensuring that the best ideas evolve from dispassionate consideration of issues, such that when decisions are made there is a wholesome commitment to accomplishing agreed objectives by everyone around the table. Furthermore, a high level of self, and peer-to-peer accountability guides this team, and helps it achieve desired results almost always. If the leadership team can become like this, then it is possible to drive even the most difficult changes across an organisation. Exhibit 8 takes this a step further in helping to establish that where you have been able to assemble or “make” such teams, they can be trusted to come up with incredible focus to direct the organisational priorities, which can be cascaded through the organisation with one voice. Therefore, the issue of making changes and realising the anticipated benefits repeatedly becomes a reality. Furthermore, the existence of a system that reinforces and rewards the values of the organisation ensures that the end results can be guaranteed repeatedly.
These types of teams may seem too idealistic, however; there is a proven way to fast track the building of such teams.
Structure: As the stakes get higher in portfolio investments, there is increasing demand on executives to ensure benefits realisation for approved strategic initiatives. There is an increase in the number of Project Management Offices (PMO) and some organisations are beginning to create a role to oversee the realisation of business benefits by providing change management function at a strategic rather than per project level. A report by Economic Intelligence Unit cited lack of change management skills as the number one barrier to successful strategy implementation (EIU, 2013).
This underpins the fact that most organisations recognise the need for a role to develop and oversee the increase in change management skills and to help them increase the level of success in implementing strategy.
The question is where does this function sit? There are historical places where this function has been in the past (including HR and OD functions), increasingly the role is being seen as an essential partner to strategy implementation and is now more prominent in PMO's, strategy and planning, and in some organisations, is being recognised as a direct reporting role to the CEO. Wherever it sits in an organisation, it is important that the responsibility and the mandate are both clear.
Training, Capacity Building and Coaching: As an organisation purposefully sets out to entrench and focus on making change management a competitive advantage, it is useful to select a common approach to ensure that every initiative in the organisation is clear about its impact on the people and that the right considerations are put in place to ensure success. There are many methodologies that describe a way to do change management across an enterprise, but it is recommended to standardize on one common approach where possible, to get everybody singing from the same hymn sheet.
Regardless of the approach preferred, there are three distinct roles recognised in organisational change and they are Sponsorship/Leadership, Managers and Supervisors, and Employees. These roles have distinct responsibilities and competencies that each must master. The essence of the appropriate training program is to ensure that the competencies of each group are customised for the organisation and delivered to all staff, so that engagement for initiatives is much easier across the organisation.
Change Management Tools: As part of a commitment to building a learning organisation and also applying change management interventions in a systemic environment, there is an increasing need to capture learning and to manage knowledge in the organisation, concerning the evolution of change management across the enterprise. Tools that enable this abound in the marketplace— a word of caution—introduction of such tools is advised to be in a ‘fit for purpose’ context and should underpin, not overshadow, the change management initiative.
Senior executives recognise that in order to compete optimally in the current and future landscapes, their companies will be expected to do more for less in a more dynamic landscape with issues of globalization, new market opportunities, and new ways of doing business. There is a recognition that the changes are going to increase and the demands for business benefits realisation will also increase. It is therefore no longer optional for leaders to increase their ability to successfully implement strategies by increasing their ability to manage change and in fact leveraging this change management skill to become a competitive advantage.
This paper has discussed some steps and the table below validates the important points raised in this paper with regards to the areas to focus on.
Table 1 below shows the ranking of contributors to change management success throughout the last eight benchmarking studies carried out by Prosci globally (Prosci 2014).
Exhibit 9 – Change Management Success
Clearly the role of leaders cannot be undermined, as organisations commit to building change management skills to gain a competitive advantage and implement strategy better, faster, and cheaper in the long run. It is important to point out that any company can start from where they are, by initiating a project to purposefully build this competency in a disciplined manner. At initiation, it is recommended that you spend time to build a compelling and shared vision, clearly setting out why this is important to your company, and creating a clear list of benefits that keep you going. The essence of building a competitive advantage should not be lost during the implementation process.
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Prosci. (2014). Best practices in change management. Retrieved Feb 27, 2014 from http://www.change-management.com/Prosci-2014-Report-Expanded-TOC.pdf
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© 2014, Deji Ishmael
Originally published as a part of the 2014 PMI Global Congress Proceedings – Dubai, UAE