The "harder" side of change
The What, Why and How of change management
While it is sometimes called the “soft” side of change, managing the
people side of a change is often the most challenging and critical
component of an organizational transformation. Take a merger or
acquisition for example. The technical side of the change – or the
“hard” side, if you will – will most certainly be
complex. Issues
surrounding the financial arrangements of the deal must be worked out.
Development will have to take place to integrate the business system.
Decisions will be made about the physical arrangements of the newly
formed organization.
But, it is getting people on board and participating in the change
that will make the difference. Individuals will have to do their jobs
differently, and it is the degree to which they change their behaviors
and work processes that will make or break the merger or acquisition.
The “soft” side of change is many times actually the
“harder” side of
change. This article provides a foundation for the what, why and how of
managing the people side of change: a structured approach to change
management.
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What
Change management is taking care of the people side of change. It
does little good to create a new organization, design new work processes
or implement new technologies if you leave the people behind. Financial
success of these changes will be more dependent on how
individuals in
the organization embrace the change than how well you draw organization
charts or process diagrams.
Change management is the process, tools and techniques to manage the
people-side of change to achieve the required business outcomes (Prosci’s
definition from the Change Management Learning Center). It is the
systematic management of employee engagement and adoption when the
organization changes how work will be done. Ultimately, change
management focuses on how to help employees embrace, adopt and utilize
a
change in their day-to-day work.
Change management is both a process
and a competency.
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From a process perspective, it is the set of steps
followed by a team member on a particular project or initiative. For
the given transformational effort, it is the strategy and set of
plans focused on moving people through the change. Prosci’s
research-based methodology includes three main phases: Preparing for
change (where readiness assessments help guide the formulation of a
strategy), Managing change (where five change management plans are
created and integrated into the project plan) and Reinforcing change
(where compliance is audited and mechanisms are deployed to cement
the change).
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From a competency perspective, it is a leader or
manager’s ability to “effectively lead my people through change.”
The notion of a leadership competency is universal, but what that
competency entails depends on a person’s relationship to change. For
senior leaders, the competency means being an effective sponsor of
change and demonstrating their own as well as the organization’s commitment
to the change (read
more about the sponsor role and training). For front-line supervisors, the competency is related
to coaching direct reports through their own change journey (read
more about the supervisor role and training). While
the competency varies based on one’s relationship to change,
organizations are more effective and successful when they build
change management competencies throughout their ranks.
Change management is not just communication or training. It is not
just managing hardware or software versions (although it has been used
in this context). It is not just managing resistance. Effective change
management follows a structured process
and uses a holistic set of tools
to drive successful individual and organizational change.
Why
There are numerous reasons to employ effective change management on
both large and small scale efforts. Here, three
main cases for change management are made.
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Organizational change happens one person at a time
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Poorly
managing change has costs
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Effective change management increases the
likelihood of success
1. Organizational change happens one person at a time: It is easy to
fall into the trap of thinking about change exclusively from an
organizational perspective. When one thinks about a merger or
acquisition, for example, the issues that come to mind are financial structuring,
data and system integration and physical location changes. However,
organizational change of any kind actually occurs one person at a time.
Success of an organization effort only occurs when Adam and Betty and
Charles and Deborah (for example) do their jobs differently.
Organizations don’t change – people within organizations change. It is
the cumulative impact of successful individual change
that results in an
organizational change being successful. If individuals don’t make
changes to their day-to-day work, an organizational transformation
effort will not deliver results.
2. Poorly managing change has costs: There are countless consequences
of ignoring the people side of a change. Productivity declines become
much larger and longer in duration than they could have been. Managers
are unwilling to devote the time or resources needed to support the
change. Necessary people do not show up to meetings. Suppliers begin to
feel the impact and see the disruption caused by the change. Customers
are negatively impacted by a change that should have been invisible to
them. Employee morale suffers and divisions between “us” and “them” begin
to emerge in the organization. Stress, confusion and fatigue all
increase. Valued employees leave the organization. Projects also suffer
as deadlines are missed, budgets are overrun and rework is required to
get the effort back on track. In some cases, the project itself is
completely abandoned after large investments of capital and time. All of
these consequences have tangible and real financial impact
on the health
of the organization and the project. And, each of these consequences can
be addressed and mitigated if a structured approach to the people side
of change is utilized.
3. Effective change management increases the likelihood of success:
There is a growing body of data that shows the impact that effective
change management has on the probability that a project
meets its
objectives. Prosci’s longitudinal benchmarking studies show a strong
correlation. Data from the 2007 and 2009 benchmarking studies showed
that 95% of participants with excellent change management met or
exceeded objectives, while only 16% of those with poor change management
met or exceeded objectives. In other words, projects with excellent
change management were six times more likely to meet objectives than
those with poor change management (see
the data). A 2002 McKinsey Quarterly article by LaClair and Rao found that projects with excellent change management
delivered 143% of the expected Return on Investment, while those with
poor change management delivered only 35% of expected ROI. Regardless of
the change at hand – focusing on the people side of change increases the
likelihood of being successful. Additionally, Prosci’s research shows a
direct correlation between effective change management and staying on
schedule and on budget.
How
Effectively managing change requires two perspectives: an
individual
perspective and an organizational perspective.
The individual
perspective is an understanding of how people experience change.
Prosci’s ADKAR® Model describes change as successful, whether at home or
at the office, when an individual has:
- Awareness of the need for
change
- Desire to participate and support the change
- Knowledge on how
to change
- Ability to implement required skills and behaviors
- Reinforcement to sustain the change.
If an individual is missing any of the five building blocks, then the
change will not be successful. The goal, then, in leading the people
side of change is ensuring that individuals have Awareness, Desire,
Knowledge, Ability and Reinforcement (read
more about ADKAR).
The organizational perspective of change management is the process
and activities that project teams utilize to support successful
individual change. If ADKAR describes what an individual needs to make a
change successfully, then organizational change management is the
set of
actions to help build Awareness, Desire, Knowledge, Ability and
Reinforcement across the organization. Based on over a decade of research, Prosci’s
organizational methodology utilizes readiness assessments and strategy
development to support the creation of five targeted plans:
communication plan, sponsor roadmap, coaching plan, training plan and
resistance management plan. Each of the plans has a specific ADKAR
element as its focus (read
more about the Prosci methodology).
While the change management resource on a project can work to develop
the strategy and plans, much of the work of change management is done by
senior leaders, managers and supervisors throughout the organization.
Benchmarking data shows that in times of change, employees have two
preferred senders of change messages: someone at the top of their
organization and the person
they report to. Change management practitioners are enablers of these
employee-facing roles. And, in times of change, it is the effectiveness
of senior leaders as sponsors of change, and of mangers and supervisors
as coaches of change that will determine if a project succeeds or fails.
Conclusion
So what can you do to become a more effective change leader? The
bottom line is this: begin applying change management on your projects
and begin building change management competencies
in your organization.
These are the first steps to ensuring projects deliver their intended
results by taking care of the people side of change.
The people side of change is not the “soft” side of change; in
reality it is the “harder” side of change. Investing the time and energy
to manage the people side of your organizational efforts pays off in the
end – in terms of success of the effort and avoidance of the numerous
costs that plague poorly managed change.
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