Organisational Change Management

Appendix 11.1

Organisational change management

Organisational change management has been mentioned a number of times throughout this text and particularly so in this chapter. However, what exactly is organisational change management? Change management can be underrated by some organisations and as such, project managers may not be fully informed about current theories of change management. Having a good working knowledge of change management enables changes to be better understood at the outset and this, in turn, means changes can be embedded with greater success and with minimum loss of 'faith' during the change-over time. Organisations are subject to change on a regular basis and whether this is presented as 'progress' or just 'to remain in business', the underpinning requirement is for employees and the way business is currently conducted to change.

Types of change

D Anderson and LA Anderson (2010, p. 2) discuss how change is 'happening everywhere; its speed and complexity are increasing; and the future success of our organisations depend on how successful leaders are at leading change'. Anderson et al. (2010, p. 60) contextualise three types of change: developmental, transitional and transformational.

Developmental change

Figure A11.1 A line graph of developmental change

This is the most common type of change a project manager will encounter. The focus is on the improvement of skills, knowledge, practice and performance. Change usually occurs through training, skill development, communications and process improvements. Examples include conflict resolution, increasing sales or embedding changes to a process.

Transitional change

FIGURE A11.2A diagram showing transitional change

Transitional change is more significant than development change, with the triggering factors representing significant shifts, such as in the environment or market place. Transitional change is a change from one state (the ‘as-is’) to an often completely new state (the ‘to-be’). Examples include reorganisations, mergers and new product development to stay in a market. These types of change represent more complex projects and will require a focused effort by the project team to achieve desired outcomes.

Transformational change

Figure A11.3A diagram illustrating transformational change

Transformational change involves a more extreme, complex, radical shift from one state to another state of being. Transformational change often requires a shift in the workplace culture, and certain behaviours and mindsets (often over a short period of time). An example might be a technological shift. For example, record companies and distributors had to make a transformational change after Apple® introduced the iPod® and the iTunes® online service. For Apple, the development of the iPod and iTunes online service presented (exciting, but) huge challenges.

Change behaviours

The project manager should be aware of thetype of change the project is dealing with, as this could influence not only the project's sponsorship, but also the pace of change required in order for the project to be a success. As change often involves dealing with behaviours, the project manager should be aware of two particular sequences of behaviour they may see in individuals who may feel that they are on 'the receiving end' of the change. These sequences are referred to as the 'good news' effect and the 'bad news' effect.

The ‘good news’ effect is typically identified in those individuals who are actually in favour of the change. These employees provide narrative in support of the change occurring. If nurtured in a productive manner, they can become 'good' change agents, spreading a positive message out into the working environment. Their response is typified in Figure A11.4.

Figure A11.4 Positive change curve

Source: Various, Organisational Change Management. March 9, 2011

The ‘bad news’ effect is evidenced in employees who are averse to the change from the outset—and they often make it known! They will resist the change at all cost; ‘digging their heels in’ is a typical behaviour exhibited by these employees/groups of employees. Whether this attitude arises out of fear of the unknown or from pure disagreement will only become apparent as the change progresses. The behaviours these people typically exhibit are illustrated in Figure 11.5.

Figure A11.5Negative change curve

Change models

Two particularly useful sources of information about change are often cited by experienced project managers. The first is The Change Leader's Roadmap: How to Navigate Your Organisation’s Transformation(LA Anderson & D Anderson 2010). The Change Leader’s Roadmap, 'outlines a full-stream roadmap for getting an organisation from where it is to where it wants to be; from its current state, to its desired future' (LA Anderson & D Anderson 2010, p. 22). The roadmap is broken into a number of stages: upstream, midstream and downstream and each stage in turn is then broken down into phases. Figure 11.6 illustrates the high-level components of this model.

As a practising project manager with Oracle Corporation, the author was 'issued' with a copy of this text to be used as the change management model for a large global consolidation. As you can imagine, the text was well-used.

Figure A11.6Change leaders roadmap

Adapted from The Change Leader's Roadmap: How to Navigate Your Organization’s Transformation

( L A Anderson & D Anderson, 2010)

The second of these theories is Kotter’s eight principles. In Leading Change: Why Transformation Efforts Fail, Kotter(2007) sets the scene for change by listing a number of companies, both large and small, that have undergone change in order to survive. Kotter states that 'These efforts… [go] under many banners: Total Quality Management, re-engineering, rightsizing, restructuring, cultural change and turnaround. But, in almost every case, the basic goal has been the same: to make fundamental changes in how business is conducted in order to help cope with a new, more challenging market environment' (Kotter 2005, p. 1). Kotter’s model is particularly useful in the context of transformational change. The steps, in summary, are listed below.

Step 1 Establish a sense of urgency

•Examine market and competitive realities

•Identify and discuss crises, potential crisis or major opportunities

The sense of urgency does not necessarily have to be built around a reaction to an event in the environment; the most lucrative opportunities are the identification of a gap and the filling of that gap, before competitors can. The urgency could be around getting a new product to market first.

Error 1: Not establishing a great enough sense of urgency

Most successful change efforts begin when an individual or a group starts to look hard at a company’s competitive situation, market position, technological trends, or financial performance. They may focus on the potential of a revenue drop occurring when an important patent expires, or perhaps they wish to address a five-year trend in declining margins in a core business service, or to become involved in an emerging market that everyone seems to be ignoring.

If so, they will need to find ways to communicate this information, broadly and dramatically; especially with respect to crises, potential crises, or great opportunities where time is of the essence. Notifying and motivating the right personnel to take action is essential: Getting a transformation program started requires insistence and persistence. Without motivation, people won’t help and the effort goes nowhere.

Kotter, 2007

Step 2 Forming a powerful guiding coalition

•Assembling a group with enough power to lead the change effort

•Encouraging the group to work together as a team

Once the change event has been identified, it is imperative to expediently gather a group of people together who have the necessary experience and expertise to work together effectively and efficiently to drive the required change. The team and the presence of the team can have a great effect on the success of the change and how well this is embedded within the organisation.

Error 2: Not creating a powerful enough guiding coalition

Major renewal programs often start with just one or two people. In cases of successful transformation efforts, the leadership coalition grows and grows over time. But whenever some minimum mass is not achieved early in the effort, nothing much worthwhile happens.

Kotter, 2007

Step 3 Creating a vision

•Creating a vision to help direct the change effort

•Developing strategies for achieving that vision

This refers to having the ability to create the end-state; to visualise and define it in a number of ways so that its presence can be tangibly felt and seen.

Error 3: Lacking a vision

In every successful transformation effort that I have seen, the guiding coalition develops a picture of the future that is relatively easy to communicate and appeals to customers, stockholders, and employees. A vision always goes beyond the numbers that are typically found in five-year plans.

A vision says something that helps clarify the direction in which an organisation needs to move. Sometimes the first draft comes mostly from a single individual. It is usually a bit blurry, at least initially. But after the coalition works at it for three or five or even 12 months, something much better emerges through their tough analytical thinking and a little dreaming. Eventually, a strategy for achieving that vision is also developed.

Kotter, 2007.

Step 4 Communicating a vision

•Using every vehicle possible to communicate the new vision and strategies

•Teaching new behaviours; lead by the example of the guiding coalition

Having an all-important story about how ‘things’ will happen in the future ensures that all share the vision. The story should be accessible to all levels within the organisation and indicate the desired state and how it will operate.

Error 4: Under communicating the vision by a factor of ten

I’ve seen three patterns with respect to communication, all very common. In the first, a group actually does develop a pretty good transformation vision and then proceeds to communicate it by holding a single meeting or sending out a single communication. Having used about 0.0001% of the yearly intra-company communication, the group is startled when few people seem to understand the new approach.

In the second pattern, the head of the organisation spends a considerable amount of time making speeches to employee groups, but most people still don’t get it (not surprising, since vision captures only 0.0005% of the total yearly communication). In the third pattern, much more effort goes into newsletters and speeches, but some very visible senior executives still behave in ways that are antithetical to the vision. The net result is that cynicism among the troops goes up, while belief in the communication goes down.

Kotter, 2007

Step 5 Empowering others to act on the vision

•Getting rid of obstacles to change

•Changing systems or structures that seriously undermine the vision

•Encouraging risk taking and non-traditional ideas, activities and actions

Ownership and empowerment are key here. If people are involved and feel like they have ownership of a part of the shared vision, then their perceived stake in the proceedings helps to gain their commitment to the cause/vision.

Just as some areas will be built-up, other areas and tasks might conversely have to be dismantled to achieve the vision.

Error 5: Not removing obstacles to the new vision

Successful transformations begin to involve large numbers of people as the process progresses. Employees are emboldened to try new approaches, to develop new ideas, and to provide leadership. The only constraint is that the actions fit within the broad parameters of the overall vision. The more people involved, the better the outcome.

Kotter, 2007

Step 6 Planning and creating short-term wins

•Planning for visible performance improvements

•Creating those improvements

•Recognising and rewarding employees involved in the improvements

‘Quick wins’ or getting some ‘runs on the board’ is important, especially in the early stages. This not only builds momentum and shows commitment but also displays that the change is taking place.

Error 6: Not systematically planning for, and creating, short-term wins

Real transformation takes time, and a renewal effort risks losing momentum if there are no short-term goals to meet and celebrate. Most people won’t go on the long march unless they see compelling evidence in 12 to 24 months that the journey is producing expected results. Without short-term wins, too many people give up or actively join the ranks of those people who have been resisting change.

Kotter, 2007

Step 7 Consolidating improvements and producing still more change

•Using increased credibility to change systems, structures and policies that do not fit the vision

•Hiring, promoting and developing employees who can implement the vision

•Reinvigorating the process with new projects, themes and change-agents

Don’t ‘pull the plug’ too early and remove resources from the change project until the process of embedding the changes is in progress. Celebrate when the users/management celebrate and confirm that the change was a good thing after all.

Error 7: Declaring victory too soon

After a few years of hard work, managers may be tempted to declare victory with the first clear performance improvement. While celebrating a win is fine, declaring the war won can be catastrophic. Until changes sink deeply into a company’s culture, a process that can take five to ten years, new approaches are fragile and subject to regression.

Kotter, 2007

Step 8 Institutionalising new approaches

•Articulating the connection between the new behaviours and corporate success

•Developing the means to ensure leadership development and succession

Support any celebrations by clearly stating any ‘hard facts’ in all communications issued. For example, units produced, overheads saved, sales achieved. Focus on the operational embedding of the change and draw on the skills and abilities of the operational manager and their staff.

Error 8: Not anchoring changes in the corporation’s culture

In the final analysis, change sticks when it becomes 'the way we do things around here,' when it seeps into the bloodstream of the corporate body. Until new behaviours are rooted in social norms and shared values, they are subject to degradation as soon as the pressure for change is removed.

Kotter, 2007

The modern project manager must be able to identify the type of change being dealt with by the project, understand its impact on the business and be able to include the relevant stakeholders, observing their patterns of behaviours, in order to manage the change successfully.

Appendix t/a Project Management in Practice by N Pearson, EW Larson, CF Gray Copyright