Change Management – What you need to know to succeed in 2020
Change Management theory and practice has been around for many years, yet many organizations still struggle with implementing change. While commonly cited that roughly 70% of change programs fail, it is only recently that organisations have started to realise that the successful delivery of programmes is inextricably linked to the implementation of robust change management principles and interventions.
As the leading project management consultancy, MI-GSO | PCUBED is committed to ensuring project delivery success. In doing so, we have helped our clients to shape and deliver their change management strategy for over 25 years. Here is our definitive Organizational Change Management Guide including 5 key change management principles or what you need to know about cultural change management in order to succeed in 2020.
What is Change Management and why do you need it?
To start, let’s begin with a definition of change management. Change Management, also known as organizational change management, is the practice of effectively engaging stakeholders, minimizing risk to efficient adoption and maximizing benefits through a focus on the organizational, cultural and people aspects of business transformations.
To put it simply, change management, is the practice of ensuring that people actually start adopting the new initiative. Some prefer to refer to Change Management as Adoption Management as it is clearer about what the interventions seek to achieve. Only once people start using a new tool or process will you see any benefit from your investment.
Key factors influencing the need for Organizational Change Management
So why now you may ask?
A key focus area for many organizations today is digital transformation. What most are finding is that one of the greatest influencers in digital transformation is not actually the technology, but people’s ability to change. When looking at the three main factors – people, process and tools; it has always been easier to focus on the technology component than what a colleague used to refer to as the problem between the keyboard and the chair, or PEBKAC (problem exists between the keyboard and the chair). We get it change is hard. To use another common phrase – “it’s not that people resist change, it’s that they resist being changed” – Peter Senge.
The second key factor is that the pace of organizational change is continuing to increase. So not only do people need to change, they need to change faster in order to keep up with all the initiatives coming their way. Organizations looking to improve the speed of delivery of new initiatives or products, have turned to new approaches or ways of working including Lean Start Up and Agile methodologies. So while the first factor influencing the need for change management was around technology and its impact on people, the second key focus is around process and the impacts its change has on people.
The final key factor is of course our own capability. In order to be able to respond effectively to change, we need to up our skills.
Change Management Trends
Prosci, founder of the ADKAR® Model for Change Management, recently surveyed over 1,778 change practitioners about the top trends facing the field of change management. ADKAR is an approach for managing change in an organization, covered in more detail in this article.
Their 4 top trends were:
- greater awareness of organizational change management and its benefits
- increased application of change management principles and methodologies
- an increase in the number of positions devoted to change management, and
- a greater need for change management training.
A key trend not mentioned above is the ability to measure and communicate the value of Change Management.
What are the benefits of Change Management?
While there is greater awareness of organizational change management as a profession, quantifiable benefits are often hard to articulate. However, people need to understand the Return on Investment (ROI) of any initiative before they commit. The same goes for investing in additional Change Management resources and capability. The main inhibitor for many organisations when it comes to investing in Change Management is a lack of understanding as to how they are going to get a bang for their Change Management buck.
In Building your Argument for Change Management, we highlighted a survey we conducted with project managers in 120 plus organizations over a 5 year period. “Three out of 10 projects saw increases in performance directly tied to an effective change management approach. Moreover, in large projects, the return on investment (ROI) was 6.5 times higher when an effective change management approach was in place.”
Achieving your project on time, within budget is typically associated with good project management. People actually using the new tool, new process or organizational structure as intended, and sustaining that use – that is where effective change management comes in.
In the remainder of this guide to Change Management we will walk you through the key change management principles that you need to focus on to achieve transformation success. You may be surprised, but we will not specifically touch on leadership in this guide. Yes, while effective leadership is critical, in practice there is so much more to it than that. Our intent is to provide you with a practical guide that can help you craft your change management plan and strategy surrounding your next initiative.
First step – identify your approach to Change Management.
Change Management Approach
Change is constant – in organizations and in our daily lives. Yet, many organizations often have their own different ways of managing change. All Organizational Change should be structured to ensure a smooth transition and maximum adoption for those involved. Let’s keep it simple though. Your change approach will simply define the phases that you as an organization are going to proceed through in transitioning from today’s current state to your defined future state.
You are in luck. There are several approaches or change management models including: Lewin’s Change Management Model, Kotter’s 8 step change theory, Prosci’s ADKAR model (discussed above) and yep, we have one as well.
MI-GSO | PCUBED’s 8E Change Management Model includes and applies best practice elements to ensure an integrated, end-to-end approach. It is fully integrated with our Programme Transformation Model to help change managers understand where the program is and to identify any specific needs and challenges. Using the 8E’s, change practitioners are able to rapidly put in place exactly what the program needs to be successful.
MI-GSO | PCUBED’s 8E Change Management Model
1 – Build Change Foundation
ENGAGE change leadership to identify and define a clear case for change, EXCITING the wider change team to build commitment and engagement around an ENVISIONED future state, preparing the organization for change.
2 – Manage The Change
ENABLE incremental change by removing barriers and inefficient ways of working, ESTABLISHING aligned structures, performance and behaviors to successfully EXECUTE, responding and adapting as appropriate to deliver early and often wins.
3 – Sustain The Change
EVALUATE effectiveness of change tactics, making adjustments to evolve stakeholder learning to reinforce and EMBED desired behaviors, ensuring ongoing independent delivery.
Okay so we now understand what change management is, why we need it, what some benefits are. In addition, we now have a simple phased approach to managing change; Build, Manage, Sustain. However, until the change is well-accepted and the outcomes of change are adopted within the organization, it is not possible to fully realise the benefits of a programme. Let’s continue and quickly define some of the key change activities or change principles that you will need as you manage your change programme.
Here are five key Change Management Principles that you need to focus on in 2020:
1. Define the ROI or change benefit
In order for any change to be a success there must be a detailed account of what needs to change. All people involved need to have a strong understanding of the endgame… and why they need to change. The why is often described as the burning platform or the compelling reason for changing. Only with the “what” and the “why” defined, can you start to craft the message.
But as we highlighted above in trends, one key piece that we tend to miss, is identifying the measurable value of the change. This is not the message on “What’s in it for me”, the WIIFM, though that needs to be clarified as well. More to come on that one. Moreover, how do you know you have arrived? What is the measurable change benefit or expected return?
Your first step in defining the change benefit is to look at the Business Case that is driving the change. We hope you have one. Within it should be a detailed description of the reasons for change and the benefits the organisation hopes to achieve through the successful delivery of the change in question.
The proposed benefits invariably have two properties. As discussed above on building the case for change management, the first key point is that the proposed benefits are quantifiable. Typically this includes that the proposed change will improve the organisation’s bottom line whether it be through efficiencies or increased sales. Second, the proposed benefits will be based on a percentage adoption of the new changes by the organization.
Calculating the Change Benefit
Change Management’s central tenet – winning hearts and minds – is all about driving adoption of change. Once the anticipated adoption levels and the business case benefit numbers are known then it is a straightforward task to quantify the financial benefit, or dis-benefit of increased/reduced levels of adoption.
Not to scare you off but let’s do some simple math. For instance, if we take an example of a change that is described by its business case as delivering $5M of efficiencies based on 80% adoption. First off, huge congrats to the team for calculating the business case on more realistic expectation of 80% adoption versus 100%. However what if only 60% adoption is achieved?
In that case, your change benefit has just decreased by 20%. Now your new ways of working can only be expected to deliver $3.75M worth of efficiencies – quick equation of 5 x 0.8. Again, this assumes that the programme is delivered on time, which it will be thanks to your improved change management capabilities, and that none of the original benefits case has been eroded by other factors. But it’s a good place to start when you are proving ROI. As there is no better way to get management on board than to link poor adoption to missing target savings. Next up, time to build a coalition for change.
2. Build a coalition for change
Just because it’s a great idea does not mean it will easily navigate the murky waters of organisational politics and governance.
So you have a fantastic change initiative, fool proof even, and yet your presentation to the programme governance board has met with significant push back from some key senior stakeholders. Its almost like they are suspicious of the proposed benefits…what is the issue?
The second key change management principle is to build a coalition for change. In John Kotter’s 8 Step model for leading change, originally published in 1988, he highlights the need for “an army of individuals to guide, coordinate and communicate about the change”. It is no different today.
Engaging at the steering group level, there will be a number of senior executives around the table you want on your side. You will need to spend time upfront, earning their support by explaining the change to them on a one to one basis first. Some refer to this as walking the floor. It is always a good idea to give people a chance to warm to a new proposition before seeing things as a group.
This means sitting down, explaining the nature of what is changing and actively listening to any concerns they might have, even reassuring where appropriate. Any negativity that would have aired in public can be dealt with on a one to one basis. When this job is done well then inevitably it builds engagement from influential people and will ensure advocacy at steering group level. More importantly it builds top down advocacy within their functional areas. Do it well enough times and you have built a coalition that will enable your governance presentations to run smoothly and receive the necessary sign offs.
Key steps to effectively build that coalition are therefore:
- Effective stakeholder mapping
- Organisational awareness
- Reading the political situation
- Individual stakeholder strategies for key individuals, and
- Making sure all players around the table know exactly what you are going to say in advance and are comfortable with the content.
3. Assess organizations’ readiness
Are you ready for change? How do you know that? A poorly prepared change initiative creates issues that are often intractable.
Our next key change management principle is to assess your organizations’ readiness for change. Thorough organisational preparation for change is of paramount importance to the success of any proposed change. Especially in today’s business climate. As we highlighted above in the key factors influencing the need for change, there is an ever increasing pace of change. We have so much being thrown at us today that we often become change saturated or resistant to change.
Additional reading: Overcoming the noise in Change Saturated Environments
Fail to understand what the organisational and cultural repercussions of your change are and your lack of understanding will create roadblocks at every turn.
Three ways in which you can prepare for the change, before you start implementing the change include:
- Change Readiness Assessments
- Behavioral and Cultural Readiness Assessments
- Change Impact Assessments
Change Readiness Assessment
A Change Readiness Assessment is an assessment of the willingness and ability of people within an organisation to adopt to a change. Through engagement with those affected, you can uncover a number of findings which point to root causes which can ultimately mean the difference between success and failure. Addressing these root causes can then become an integral part of your change management strategy.
The benefits of well run Change Readiness Assessments include:
- Safeguarding the delivery of expected benefits from change initiatives of any type
- Improving employee satisfaction by engaging them throughout the business transition
- Identifying and addressing sources of resistance and apathy surrounding the change
- Uncovering risks early-on enabling more cost-effective remedies, and
- Providing insight for improvement in other areas of the business
Cultural Readiness Assessments
Cultural assessments focus on creating an understanding of the employee’s perception of their organisational culture. An assessment will seek to understand whether the organization sees the change as aligned with the existing corporate culture and ways of working. Perception of company culture can vary widely from stakeholder to stakeholder. A well run assessment will tease out and isolate any of these different perceptions.
Without proper attention to the environment in which your stakeholders operate in, you may not have the insight needed to combat low adoption. Without a good understanding of the underlying culture, you may not be as effective in anticipating key pain points and managing resistance.
The benefits of this process will be a detailed understanding of the cultural and change readiness issues that are inherent in the organization. The results of a survey will be fed into an analysis template and discussed with key sponsors. The team will then determine necessary tactics or change management activities to be used during the Manage the Change phase to address blockers for cultural change. This in turn will help make any proposed interventions as accurate as possible.
Change Impact Assessments
Finally, your organisation is likely a large multi-faceted beast, full of a number of different moving parts each with their own culture, hierarchy and priorities. It can therefore be quite hard to identify the impact of organisational, people, system, process and technological changes on the overall business. However, as with Cultural Assessments, the potential effect of not identifying all of those impacted parties are roadblocks further down the change continuum.
As these parties belatedly realise how the change impacts them, they typically raise painful issues that delay and even sometimes derail your intended change. Change Impact Assessments give an early insight to these unrecognized risks both with the change program and the desired future state.
The benefits of well run Change Impact Assessments include:
- Highlighting areas which require focused leadership effort
- Independently validating the level of change being implemented
- Surfacing the specific impacts to people and organisations and their implications
- Delivering a tailored and configured Change Impact Report comprised of a thorough review of the characteristics of the change, and
- Displaying the overall results in the form of a heat map to easily highlight pain points.
Only when an organisation has used its change management capability to ensure that it is cognizant of and has planned for cultural and organisational reaction to the change across every single impacted function and team, can they start to roll things out.
4. Making change relevant to every individual affected
One size never fits all and never will. The size and complexity of most organisations will inevitably make any major change initiative challenging to make stick. Corporate ecosystems are underpinned by a variety of different functions with their own cultural tropes and idiosyncrasies. All change journeys, very much including those of a cultural nature, are highly personal to individuals and their teams. The key measure of success for cultural change will be the extent to which they buy into the new culture on a personal basis.
The fourth change management principle is to make change relevant to every individual affected. With this in mind, each employee needs to feel a keen engagement with the personal benefits that change will bring (both in terms of well being and efficiency) as well as see them as being desirable from an organisational perspective.
It is therefore critical that every change intervention is crafted in such a way that it reaches out to individual teams and employees and makes them aware of the fact that the effect of the change on their role has been carefully considered. Remember WIIFM? What’s in it for me? Now is when it comes into play.
Key considerations for making change personal
The change manager needs to consider the following aspects when looking to understand how functions, teams and individuals prefer to consume change:
- The predisposition to change
- The history of previous change attempts
- The middle management support / resistance to change
- The organisational influencers (non hierarchical)
- Role based differences
- Function based differences
- Neuro-diverse differences
- Site based differences, and
- Hierarchical differences
Let’s take neurodiversity as an example. Neurodiversity reflects the combination of “neurological” and “diversity” highlighting the many variances amongst people in an organization with regards to our sociability, moods, behaviors and many other functions.
Additional reading – check out HBR’s article on Neurodiversity
Our team was working in central government a couple of years ago, in a technical space. A trainer used the in house social media space to ask: “Running a course next week, anyone got any cool new icebreakers I can use”. The space melted down under the torrent of replies, with very few constructive icebreaker suggestions. It turns out that for many people, just the prospect of an icebreaker was enough to spoil the training session. It had upset them, making them withdraw to the extent that they are unable to contribute effectively.
The fact is that people prefer to ingest change in very different ways and understanding their neurological profile is a big deal in terms of working out how to communicate and explain the change in question. Just look at the amount of personality tests in Leadership and Communication Training. Whoops didn’t mean to mention leadership and communications…
This then begs the question that in a large organisation – “Is it practical to be so granular in the way in which change is delivered?”. To which the answer is “its not as hard as you think if you have a decent change agent network”.
Change Agent Network
A critical component of any organisation that is looking to genuinely achieve across the board adoption of change is a robust Change Agent Network. Typically change managers would work closely with sponsors and senior stakeholders to create a Change Agent network that operates at three levels within the organisation: Sponsors/Leaders; Team Leaders/Middle Management; and Key or Super Users.
The Change Agent network would then receive specific briefing and training that would enable them to be the agent of key communications to a wide audience. A well run Change Agent network facilitates organization-wide stakeholder engagement and briefing throughout the change life cycle.
Recipients of change are often most receptive to new ideas and ways of working when the changes are advocated and communicated to them by their direct line management.
One of the key benefits of a robust Change Agent network centers around the cultural benefits of having advocates at all levels of the business. In addition this supports the mitigation of risk middle management presents in its opposition to change.
But having Change Agents in the mid and lower tiers of the business also ensures that people are receiving the change message from a source that they respect and who they feel understands their situation with regards to the change. Critically the middle management change agents will really know the idiosyncrasies of each of the team members for whom they are responsible so messages can be tailored for the individual. More than anyone these people will know the right “neuro” note to strike.
We highlighted the use of our Behavioral and Culture Assessment tool above in Change Management Principle #3. Another way MI-GSO | PCUBED change practitioners have used our Behavioral and Cultural Assessment, is to help ensure organisations pick the most appropriate people as Change Agents.
The benefits of focusing efforts in this way is to make change really personal to the individual. But don’t feel that you have to do this alone.
5. Measure to sustain performance of change
Our final change management principle is focused around sustaining stakeholder awareness around the change. Most of us have a knee-jerk reaction to change. We will try out the new change initiative and struggle through any emotional resistance. Then when we have a deadline looming and pressure mounts, we revert to our previous behavior. Then your change success rate starts to suffer.
Remember change management principle #3? Assessing the organizations’ readiness. Well unfortunately its not a one and done type of thing. You need to keep taking the temperature during large transformational programs in order to plan actions to sustain the change.
MI-GSO | PCUBED is often asked to help provide change management capability for programmes that have already been up and running for a while. In these situations it is important at the outset to measure the performance of the change and how well it is being delivered and received. In these instances we would introduce the Stakeholder Assurance Assessment. The result, a change dashboard that accurately identifies the pain points in change programmes allowing senior management and the change team to accurately plan future change interventions.
Additional reading – check out our case study on Next Generation Technology Program Delivery
Stakeholder Assurance Assessment
As we said before, the Stakeholder Assurance Assessment is used to take the temperature of the organization with regards to an ongoing change initiative. Through stakeholder questionnaires and interviews it reviews programme effectiveness against the following areas:
The tool provides a dashboard that immediately shows senior sponsors where pain points are in key programmes, allowing them to agree and execute on remedial actions. Sub dashboards segment the feedback so you can see what separate functions and stakeholder groups think across each of the seven programme areas. So senior executives can look at one slide that shows red, green and amber for each of the seven component parts of a change from the perspective of the whole programme and a second slide showing the ratings broken down by function, geography or perhaps seniority.
Highlighting the paint points in this way is very attractive to time-poor executives who need straight-forward analysis. Once the areas that require attention have been highlighted its time to work collaboratively through the identified challenges and develop robust solutions. The key benefit here is the promotion of a culture that drives a repeatable and robust analysis of where pain points are in a programme, followed by a proven methodology for fixing the problems you identify in order to drive significant efficiencies.
As a final point in this section, a key detail that must be articulated in any change dashboard is the status against the intended value of the change. This is the ROI or change benefit that was calculated at the onset of the program.
In Summary, change is hard. We are not trying to dispute that. However with a greater awareness of organizational change management and its benefits, a change model integrated with programme delivery and a few key principles for change management introduced through this guide, we believe that you have a strong chance of improving your success from the historical statistic of 30%.
This article was written by James Lewis.
For more reading on change management topics, including Agile Change Management please check out our other articles :