Fundamentals of Organizational Change Management
- 1. Fundamentals of Organizational Change Management September 2013 PMI Austin Chapter Meeting Dave Angelow dangelow@gmail.com
- 2. Situation Complications Answer • Projects are a norm in today’s organization • Across industries, complexity continues to grow –Distributed workforce (WFH) –Interwoven business models (outsourcing, supply chain, web-based collaboration, etc.) • Relentless competition and need to improve or lose –Lower barriers to entry – outsourced design, production, support, etc. –Lean start-up, open innovation (Innovators Dilemma) • Project failure rates remain high –Standish Group reports failure rate over 50% • Expectations “do more with less” continue • Project management is implicated (if not held outright accountable) for project failures • What can project managers do to help improve outcomes? • Focus on “people issues” and utilize Organizational Change Management tools and techniques to reduce risk Key Question
- 3. Background and Assumptions • Today’s competitive environment drives organizations to be responsive and nimble – Projects are used to change organizational capabilities • Changing organizational capabilities has a direct impact on people and organizations – Implementing new metrics, deploying a new system, redesigning business processes • Actively managing change delivers better results and reduces risk of project failure
- 4. There’s a correlation between Change Program Effectiveness and Projects that Meet Objectives Source: PROSCI: 2011: The Case For Change: Results and Outcomes 16% 51% 80% 95% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Poor Fair Good Excellent ProjectsthatMetObjectives Change Program Effectiveness What makes a Change Program effective? • People know what is expected of them • People have the information, skills and tools to succeed at what is expected • People are held accountable for meeting expectations
- 5. What do we know about projects? • They are temporary in nature…have defined outcomes…utilize resources that have other jobs (and share time between project and “day job” Resources assigned to a project vary across the lifecycle
- 6. What do we know about how people relate to change? • People prefer certainty and control • Because projects drive change, people will experience some level of uncertainty • With uncertainly, people’s performance level falls
- 7. Why projects need change management • Projects cause stress… – Seldom enough time, resources or budget for optimal completion – Changes to any of the above have a ripple effect throughout the project • Funding was just cut 15% • New requirements have been identified • A key resource found another opportunity and is leaving • Unmanaged change often leads to poor outcomes – The objective of a project is to deliver change
- 8. Change is a journey that people react to differently Fisher’s Process of Personal Change Time Emotion/Reaction
- 9. • 1500 businesses indicated only 30% of their transformational programs were successful (McKinsey) • 92% of transformation program failures are due to people, org and leadership shortfalls (Gartner) People 23% Technology 4% Leadership 42% Org / Cultural 27% Process 4% Total exceeds 100% due to multiple answers of respondents. Resistance to Change Limitations of Existing Systems Lack of Executive Commitment Lack of Executive Champion Unrealistic Expectations Lack of Cross - Functional Team Inadequate Team and User Skills IS Staff and Users Not Involved Project Charter Too Narrow 20% 40% 60% 80% 100% People-related issues Other issues • 7 of the top 9 problems experienced on major projects were people-related. (Infosys) When “people issues” are not addressed, failure rates increase
- 10. The goal of change management is to minimize disruption Minimize the duration of performance loss Minimize the depth of performance loss
- 11. OCM tools to help ease the change journey Business Case – Trigger event driving project and change Burning Platform – Why Change is required Communications and Leadership – What’s Happening and WIIFM Education and Training – Provide new knowledge and skill needed to succeed Recognition and Rewards – Anchor desired behaviors with recognition
- 12. Aligning tools with the project lifecycle Business Case and Burning Platform Communications and Management Involvement (Leadership) Education and Training Recognition and Rewards
- 13. • Focus on the risk of not changing and the negative outcomes resulting from status quo • Describe the need for change in irrefutable terms and communicate it constantly • People are more receptive to change when they understand the motivation and driver – Address the unasked question of “Why do this?” Business Case and Burning Platform Communications and Management Involvement (Leadership) Education and Training Recognition and Rewards Burning Platform and Business Case *Managing at the Speed of Change Daryl Conner, 1992 *
- 14. Communication and LeadershipBusiness Case and Burning Platform Communications and Management Involvement (Leadership) Education and Training Recognition and Rewards • Visible leadership is needed to communicate the importance and criticality of the project – Leaders need to set a vision for the future • As the project progresses, the number of resources assigned increases – Conduct stakeholder assessments to understand readiness/resistance – With the addition of resources, there will be new questions and concerns • Communication should be planned and have a consistent message – don’t ad lib critical info – For large, long-duration projects a communication schedule should be developed (ID message, audience, delivery method, etc.) • Develop a Communications Calendar to ensure consistent messaging
- 15. Sample Vision Communication 15 Positioning We want to improve the way we process expenses claims. Tagline • Faster • Disciplined • Accurate Elevator Speech eExpenses provides an enhanced online end-to-end capability allowing faster processing, faster reimbursement and better control.. Audiences(WIFFM) End users: • Intuitive • Fast Managers: • Enhanced control Prague SC: • Efficiency • Enhanced control Auditors/Authorities: • Accuracy of records Benefits and Attributes Speedy processing of expenses claims; tracing of expenses records Better cost tracking and forecasting through better visibility of expenses claims Solely online processing with no dependency on physical receipts Easier archive management Features/What’s Changing Web-based input and automatic routing for approval Automatic workflow Processing only; no administrative dependency N/A
- 16. Sample Audience Analysis “heat map” Project Information Audience Breakdown
- 17. Stakeholder Assessment showstopper value proposition - understanding the business needs and the decisions that derives the project vision focus – clear understanding of the future state of Client X after phase 2a transition plan – understanding the steps that will be taken to move from Client X from current state to phase 2a completion sponsorship – level of mgmt support stakeholder resistance – willingness and capability to accept fusion phase 2a technical and non technical skills – employees are equipped with skills to move into the new environment organization and infrastructure – implications of Fusion on processes and HR structures that support the new work environment competing initiatives – effective coordination with other Client X initiatives minimal impact to project success ready for change
- 18. Education and TrainingBusiness Case and Burning Platform Communications and Management Involvement (Leadership) Education and Training Recognition and Rewards • Using education and training in addition to communication can reduce fear/resistance – Education helps people understand what’s expected in the future – Training helps build confidence in their capabilities to perform in the new environment (post-project) • Change creates uncertainty which often results in fear – In a state of fear, performance falls and people cling to known methods, processes and tools and resist change
- 19. Education and Training January Workshop Calendar Sun Mon Tues Wed Thurs Fri Sat 30 31 1 2 3 4 5 New Year’s Day • Change Management Game Planning • Retailer Segmentation Deep Dive • January Activity Readiness Checkpoint • Deliverable Template Draft 6 7 8 9 10 11 12 • Deliverable Template Final 13 14 15 16 17 18 19 • Stage-Gate #1 Readiness check 20 21 22 23 24 25 26 • CSE Steering Committee Meeting • Confirm Readiness to Socialize Stage-Gate #1 Message 27 28 29 30 31 1 2 • Stage-Gate #1 Confirmation Stage-Gate #1 Proposed Scheduled Completed Rescheduled Workshop / Interview Milestone Review session C- New Solutions Analysis, C - Customer Type Analysis, P – CP CPML Review, V - Customer Value Interviews C - New Solutions Analysis, P - Seeds BPML Review, and V - Customer Value Interviews C – Customer Type Analysis C – Customer Segment Profile Definition, C – Product Characteristic Analysis C – Customer Segment Profile Definition, C – Product Characteristic Analysis , P – BPML Review Contingency, V – Value Interview Review/Follow-up C – Customer Segment Profile Definition Contingency
- 20. Calendar - Session Details Session New Solutions Analysis Customer Type Analysis Customer Segment Profile Definition BPML Review # and Duration 3 – 1 hour 4 – 2 hours 13 – 1 hour To be determined by Casey and Vivek Objective Understand the GTM strategies for US Ops, implications on sales channel Gather inputs to build a standard customer type profile Gather inputs to understand the differing characteristic New across each customer segment by customer type Conduct as-is meetings to develop and confirm as-is BPML Required Participants US Ops – David NewCo – Chris Dealer – Colin, Jeff, Lori, Jon Retailer – Tracy, Quinn Distributor - Tracy, Quinn Dealer – Colin, Jeff, Lori, Jon Retailer – Tracy, Quinn Distributor - Tracy, Quinn To be determined by Casey and Vivek Inputs Solution documentation Customer Type Documentation (Dealer, Retailer, Distributor, Grower) Customer Segment Documentation (Dealer, Retailer, Distributor, Grower) Existing BPML documentation Outcomes Understand how the New solution go-to- market and the customer targeting and treatments strategies Development of the standard customer profile by customer type ( Development of the customer segment profiles As-Is CP BPML
- 21. Recognition and RewardsBusiness Case and Burning Platform Communications and Management Involvement (Leadership) Education and Training Recognition and Rewards • People will respond to change differently – Rewarding those who model desired outcomes sets expectations for others – Rewarding positive behaviors reduces the potential need for reprimands to dissuade negative performance • “What’s rewarded is repeated” – Rewarding positive outcomes helps anchor and reinforce the benefits of producing desired outcomes • Effective use of recognition and rewards reduces the risk that people do not “climb out” of the J- Curve model
- 22. The goal of change management is to minimize disruption Minimize the duration of performance loss Minimize the depth of performance loss
- 23. Summary and Recap • For many organizations change is a constant with the rate continually increasing • Actively managing change leads to improved outcomes • Appropriate use of tools and techniques through-out a project reduces risk of failures