Archive for June, 2008

A 2006 study from the European Users’ Group and the University of Mannheim provides some insight into spending on Organizational Change Management during SAP implementations. The big takeaway: half the respondents are spending more than 5% on people-related topics.

In our experience, as organizations grow in size, people-related issues expand even more quickly. Although the study did not provide specifics, it would be fair to assume smaller businesses are spending less than 5%. To get the necessary people and technical alignment, larger businesses spend more than 5%.   

It is safe to say that companies are constantly changing their ways of working to find better ways of going to market. Strategies are changing, processes and technology are being upgraded, functions are being reorganized all while quality improvement and cost reduction programs abound. Change has become the status quo.

It also is safe to say relatively few employees are actively engaged in their work. Recent surveys from Gallup place the level of active engagement at 26% and Blessing & White place the figure at 29%.

The disconnect between strategic actions and employee engagement, particularly at the middle management level, is of significant worry to CEOs. In PriceWaterhouseCoopers’ 2008 CEO Survey, 50% of CEOs stated a lack of engagement or motivation of middle managers to drive change represented a critical barrier to effective change. It isn’t too hard to imagine the CEO turning the helm of a battleship wondering, “When is this thing going to move?”

So what can be done to move the battleship? In our work, we have found five strategies to be helpful:

1. Awareness – Put simply, communicate, communicate, communicate. Nobody has ever over-communicated during periods of change.
2. Understanding – One-way communication can generate understanding on simple topics. “Submit your forms by Tuesday,” doesn’t need a conversation to ensure understanding. More substantive change – such as changing a job’s responsibilities – does. Unfortunately, change sends most managers in the opposite direction of conversation. They do not want to confront change’s unpleasant aspects, and wind up having less dialogue with their teams than they would during “normal” times. Working around this tendency comes in strategies 3-5.
3. Participation – Employees who shape their own future will have a vested interest in the success of that future. Draw people into the could-be vision, enable project teams to design their own future state, provide education and training. Do anything and everything to get people involved. What they build will usually far exceed what the leader would design. Sometimes, however, what they build will fall short of the leader’s potential design. Shortcomings in design will be more than made up for in execution. They own it, and they will make it work.
4. Measurement – There is a concept in quantum mechanics saying it is impossible to measure something without affecting its attributes. (Explaining quantum mechanics is for another blog, however!) Measurement calls out performance – both the good and the bad. How measurements should be used depends on the organization’s culture.
5. Leverage – When in doubt, use a lever. Why spend three hours explaining a concept to five managers? Spend two hours explaining the concept to one director. Let the director drive the concept with the managers. People want to hear about change from their supervisors – not a project team. Invest heavily in the top of the organization chart and the battleship will move much faster.

Last week was a busy week. We began work with a new client and I was battling a mini-depression over an assessment that my profession might add no value to society.

My battle started with an article I read about Wall Street wizards, hedge funds and derivatives. The author, an Andy Rooney-type, claimed if a person couldn’t explain what they did for a living in two sentences, they weren’t adding value to society. Farmers, doctors, plumbers and janitors were all on the good list. “Liquidity tranche default analysts” were definitely on the bad list.

So if I can’t define “organizational change management consultant” in two sentences, does this mean I am not adding value to society? Does my mother-in-law have any idea what I do when I say I:

“Help clients’ managers lead their people quickly through organizational changes. I help by being a project manager, strategist, writer, teacher, coach, scorecard keeper, presenter, analyst, tactician, assessor, trainer, and graphic artist.”

The answer is no. Those two sentences, although accurate, really don’t get the meaning across. I’m afraid I have failed the author’s test. I need more than two sentences.

If unbound by the two sentence definition constraint, I frame a conversation about the work to be done with questions about an organization’s relative potential for success:

1. Does it have the right goals and plans? Are the right goals established for the situation? Will the plans enable the organization to reach the goals?
2. Do people understand what they are to do? Great plans that aren’t understood have no value. How does the leader ensure people understand the plan? Are they organized to succeed and have all the enablers necessary to achieve the goals.
3. How engaged are people to achieve the goals and work the plans? The right plans, even if well understood, will not be successful if people don’t want to make the necessary effort.

Depending on the answers, the organizational change management consultant’s job changes greatly. At the most general, the consultant’s job is to help the organization answer yes to all these questions. The specific work changes based on the nature of the challenge, the scope of services being retained, and the tactics required.

Regardless of the author’s perspective on whether certain jobs add value to society, there is value to an organization in moving past change and returning to its mission. The faster the move, the more value is created. If a consultant can speed that move, the consultant helps create value.

As an aside, I decided on Sunday the author was wrong – which just happened to be Father’s Day. Sometimes more than two sentences are needed. To prove the point – try defining “father” in two sentences. Or – obviously – “mother.”  

Stefan Stern has written a great piece in Financial Times on transformational change and uses two examples to buttress his claims. The success story is the opening of a new terminal for the cross-Channel Eurostar train service. The failure story is the opening of the new British Airways terminal at Heathrow airport. The highlights of the Heathrow story are provided below:

“consider the horrors of the launch of Heathrow’s T5 in March. Sure, as far as the construction of the site was concerned, it was a triumph, a £4.3bn project completed on budget, on time and in full. But in spite of BA running a three-year change programme, called “Fit for 5″, we all know what happened come opening day.

Baggage handlers tried to warn their bosses about the problems they could foresee. The site is huge. Employees, who had not had enough training, simply did not know where they were supposed to go. More time had to be allowed to get staff from their locker rooms to the arrival and departure gates. And, as for the lockers – the new ones were not big enough to hold all the baggage-handlers’ clothing and belongings, including bulky wet-weather gear. Parking space, also far from the terminal building, was inadequate.

Managers were told about all these things. And BA chief executive Willie Walsh did not appear to know how grave the problems were. (He later told MPs that he had taken a “calculated risk” pressing ahead with the launch date.) But the clock ticking down to the March 27 opening had kept ticking, and apparently it could on no account be stopped.

Managers sometimes complain that their people “hate change”. That is just not true. People hate stupid change, change that they have no influence over, change that is simply imposed on them.
To err is human. We all do it, even – you will just have to believe me here – journalists. But looking back at the T5 fiasco, it seems clear that a bit of honest, straight talk (and action) at the right time could have helped avoid much of the subsequent aggro.

How hard is it really for managers to recognise these basic truths: that staff (including managers) need to be trained properly to do their jobs well, that employees on the ground may have useful things to tell you about the reality of the work they are doing, and that large-scale, difficult changes need to be prepared for thoroughly?

So much in the world of management seems ultimately to be a matter of common sense, of basic human decency, in fact. You could almost believe that most management foul-ups would be avoided if only people did a bit of serious thinking first. Employees could then get on with their work calmly and productively. Life would go serenely on. And, in this blissful world of efficiency and success, there would certainly be no need for management columnists.”

There would be a whole lot less need for management consultants as well!

The social scientist, Kurt Lewin, once stated, “If you want to truly understand something, try to change it.”

There are many reasons for and against every decision. Knowing what those reasons are and how to properly weigh them to make the right decision can be more art than science. However, Lewin’s concept of force field analysis is a technique change leaders can use for evaluating the variables present in their change management program before making the decision to go ahead.

Within the idea of force field analysis there are driving forces – those things helping you achieve change – and restraining forces – those that would prevent change from occurring. By listing those forces, as shown below, force field analysis offers you a clearer picture of the strategies needed for successful change. Specifically, force field analysis helps you:

• Decide if you have the right support for the change initiative
• Identify what obstacles are standing in your way
• Find ways to reduce or marginalize those obstacles

Change leaders who take the time to weigh the pros and cons in this way will have the information they need to weaken the negative forces and strengthen and leverage the positive ones. For the pictoral learner, placing concepts into a picture yields an immediate grasp of what to minimize, and what to augment.  Even for those who aren’t pictoral by nature can gain the understanding and engagement of those who are by depicting the situation as simply as is done below.

In an earlier posting, I briefly mentioned Elizabeth Kübler-Ross’s grief cycle. Her cycle defines the rollercoaster we all ride during times of loss, and includes the five stages:

• Denial (this isn’t happening )
• Anger (why me?)
• Bargaining (I’ll … if …)
• Depression (I no longer care)
• Acceptance (it is what it is)

This cycle is often what employees experience during times of change. The instability from the unknown future state causes employees to feel they’ve lost their power or control over the work lives. The instability causes undue fear and doubt in themselves and their futures, causing them to get stuck somewhere between immobilization and depression.

Helping employees to move through these stages toward acceptance can be difficult, but not impossible, especially if we employ the strategies of awareness, understanding and participation to help them through it.

By creating awareness of the change to come, we help employees move through the denial phase and make the change a reality for them. Likewise, helping employees move to an understanding of the need for change helps them to deal with the anger they feel. Finally, using participatory methods helps employees to move through the depression and past just simple acceptance to a level of engagement in the change.

One place to look for a different take on creating awareness, understanding and participation is Weight Watchers. Weight Watchers helps individuals seeking weight loss through their Four Pillars. The Four Pillars are behavior, exercise, food and support that make up a comprehensive program of support, education, and encouragement.

These pillars take members through an awareness of their weight issues – why they are overweight – to understanding the best ways to address their issues -the right food choices and exercise – to engagement through participating in meetings or an online community.

Alcoholics Anonymous is another good example of personal change programs that address the need for awareness, understanding and participation. Through fellowship meetings and their 12-step program, members are encouraged to participate in their own healing. This is done by helping members acknowledge their situation and then finding ways to live with it.

Perhaps with a little effort, companies can work to apply these participatory and supportive means to their change efforts. 

In the May 30, 2008 edition of The Wall Street Journal, there was an article on Campbell’s Soup Company and innovation.  A callout box provided five tips on leading a transformation from their CEO, Douglas Conant.  They are worth reprinting:

1. Bring an “all things are possible” attitude to the work.
2. Confront the brutal facts and be clear-eyed about the situation.
3. Set high standards and make expectations clear, as the ability to mobilize people is the key to success.
4. Give the organization time to do things right.
5. Do what you say you will; this is about performance, not intentions.