ORGANIZATIONAL CHANGE MANAGEMENT

WHY, WHAT, HOW?

SIMON WALLACE

Almost all people are nervous about There are two related aspects of
change. Many will resist it -- organizational change that are
consciously or subconsciously. often confused. In organizational
Sometimes those fears are well Change Management we are
founded -- the change really will concerned with winning the hearts
have a negative impact for them. In and minds of the participants and
many cases, however, the target the target population to bring about
population for the change will come changed behaviour and culture.
Simon Wallace has 29
years experience of to realize that the change was for The key skills required are founded
project management and the better. in business psychology and require
solutions delivery. He "people" people.
has managed or advised
in the management of Contrast this to organizational
around 50 business Design where the roles, skills, job
solution and IT projects.
The largest programme descriptions and structure of the
had a budget of around workforce may be re-designed.
UK£500 Million. Typically that is a more analytical
In 21 years as a The pace of change is ever and directive activity, suited to
management consultant,
increasing - particularly with the tough-skinned HR professionals. It
Simon has achieved
senior status as Head of advent of the Internet and the rapid is not a topic for the ePMbook.
Management deployment of new technologies, organizational Design may be a
Consultancy for a UK new ways of doing business and
firm, a Director and specific objective of the project, for
Council Member of the new ways of conducting one's life. example where there is to be a
Management organizational Change reduction in the workforce, or it
Consultancies Management seeks to understand
Association, and a may just be a consequence of the
member of the global
the sentiments of the target changed business processes and
management team for a population and work with them to technology.
world-wide consulting promote efficient delivery of the
firm.
change and enthusiastic support organizational Change
Simon had global for its results. Management issues are often under-
responsibility for best- estimated or ignored entirely. In fact,
practice approaches to
technology-driven
people issues collectively account
business change, for the majority of project failures.
including methods,
techniques and tools.
This survey looked at disastrous
projects. One of the questions asked
for the prime cause of the failure.

10 November 2007 NHRD Journal

Although the result did not spell out "people"
as the cause, it is interesting to note that many
of the causes were to do with the behaviour
and skills of the participants. Arguably all but
the "technical issues" were related to the
capabilities, attitudes and behaviour of people.
What Caused The Project To Fail?
Lack of
Inexperience in Communication
Scope and 20%
Complexity
17%
Technical
issues
14%
Project
Management
Problems
32%
A different study examined whether package
implementation projects' benefits had been
achieved. Where they had not been delivered,
the question "why?" was asked. Top of the list
was "organizational resistance to change".
Organization resistance to change
Unstable requirements
Lack of business owner ship
Significant Cost Over-runs
Significant schedule Over-runs
Package did not meet expections
Technical problems
Poor project management
0 2 4 6
Again, several other causes were related to
people, their skills and their behaviour. "Lack
of business ownership" is a major
responsibility of the organizational Change
Management work. Such things as "unstable
requirements", "not meeting expectations", and
"poor project management" would also be
partly due to behaviours and skills.
Organizational Change Management is a vital
aspect of almost any project. It should be seen
as a discrete and specialised work stream. Why
then, you might ask, do we discuss it as part of
the Project Management work. Unfortunately,
it is common to find that the human component
of the project is not recognised as a separate
element of the work. The project management
team frequently have to do their best to ensure
that a technological change is successfully
implanted into the business. In the worst-case
scenario, the project leadership do not see this
as part of their responsibility either and blame
the organization's line management when their
superb new technical solution is not fully
Failure to
successful when put to use.
define
objectives Organizational Change Management at
17%
Project Start-up
Many organizational Change Management
issues need to be clear at the start of the project
Source: KPMG so that appropriate activities can be included
in the plans, and so that appropriate roles and
responsibilities can be established. Here are
some of the key issues:
• Is there a compelling "Case for Change" that
all participants will buy in to?
• Who are the owners and sponsors of this
change? Will they actively promote the
change and apply pressure as needed?
• What are the populations involved, eg the
overall leadership of the organization,
project participants, sub-contractors, end-
users, other departmental managers, other
8 10 12 14 16
Source: KPMG
members of the workforce, suppliers,
customers etc? For each population (or
subset by role, function, etc) what will their
attitude be? Will they resist the change?
How can we encourage them to act in a way
which will support the project's objectives?
• What style of participation will work best?
Should we involve a broad section of the
target population or keep everything secret
until the change is forced upon them?
• How can we communicate these messages
to the target population?
November 2007 NHRD Journal 11
The Case for Change
• As part of the project definition, there should
be a compelling "Case for Change" which
can convince all participants and, in due
course, the target population. If everyone
agrees that the project has good and
necessary objectives, they should be far
more supportive of the changes.
This is not the same as the project's main
business benefit case. The business case is
likely to be founded on business strategy and
financial results - often not a compelling
argument for the individuals in the workforce.
In a "Case for Change", it should be clear that
there are better ways of doing things - better for
the organization, better for the workforce, better
for customers and (maybe) better for suppliers.
Sponsorship
The Project Sponsor is usually the person who
saw a need for change and had the authority to
make something happen. There may be several
sponsors who collectively have this role.
The precise ownership of the project is more a
matter for the Project Definition work. What
counts from an organizational Change
Management perspective is not the actual
ownership and rationale for the project so
much as the perceived sponsorship and
purpose. For example, the project might exist
because the Finance Director wants to cut costs,
but it could be a better message that the Chief
Executive wants to build a slick organization
that can beat the competition.
The original Project Sponsor will often have
the power and status to create and deliver the
project and may be able to deliver the change
messages to the areas of the organization
directly involved. In many cases, however, the
change is broader than the immediate influence
of the Project Sponsor. Other supporting
sponsors may be required to promote the project
in other areas of the organization.
12 November 2007 NHRD Journal
Make a Sponsorship Map - initially to show
who is involved and what support they are
offering. Use this to identify who else needs to
participate and what they need to do.
In major change programs many parts of the
organization will be involved, for example:
• The line business unit that houses the
changed process,
• Other departments involved in the process
chain,
• Senior management and general
management of the organization who will
be critical judges of this initiative's success,
• The IT department who build and operate
the technology
• The finance department where the financial
implications will be seen,
• Customer-facing staff who will reflect the
changes when dealing with the clients.
A significant project will require a cascade of
sponsorship, such that all affected parts of the
organization hear strong support from their
leadership. If the message is delivered from the
top and reinforced by the immediate
management, staff are far more likely to believe
in the case for change and to act in support of
the changes.
For critical business change programmes the
message should come from the very top. Get
the Project Sponsor to engage the Chief
Executive as the prime source of sponsorship
messages. (You may find yourself writing the
words for the Project Sponsor to give to the Chief
Executive - but the key thing is that it is then
seen as the Chief Executive's personal message.)
Not everyone listens attentively to their Chief
Executive, so it is important that these messages
are cascaded down to all parts of the
organization, with local management echoing
and supporting the party line.
Case Study
A large, multi-divisional professional services
firm was changing its time sheet system -
affecting every member of the organization.
They recognised the need for acceptance and
compliance from everyone so they built an all-
encompassing sponsorship cascade.
When the team was finalised it was apparent
that the sponsorship team was considerably
larger than the project team building the new
system.
Resistance to Change
By definition, people are affected by change. A
few will comfortably accommodate any degree
of change, but most people have a change
journey to undertake.
Part of the art of organizational Change
Management is to:
understand what journey you want which
populations to take (it may not be the same
for everyone),
assess what their attitude is likely to be, and
use that knowledge to guide them in the
right direction.
Many people will hide their negative feelings.
It is not wise to be openly critical of your bosses
and their new ideas. Some people will not even
be aware of their own resistance which,
nevertheless, affects their behaviour sub-
consciously. Understanding their position
requires more than listening to what they say.
organizational Change Management
specialists use an array of diagnostic tools to
uncover the true characteristics and attitudes
of the target populations.
The most common response to impending
change is a negative response where, initially
at least, the target population sees the change
as a bad or threatening thing. Psychologists
have researched these "bad news" responses
and found that there is a common emotional
response. This chart shows how the
individuals oscillate between inactivity and
high emotion. Assuming the final outcome can
represent a good thing from their perspective,
the goal is to leave them in favour of the change
and highly motivated to make it work.
Here are some thoughts that might be expressed
by someone passing through the "bad news"
curve:
Oh no!
It can't be true!
You cannot be serious!!!
Can we sort this out some other way?
That's it - after 20 years of service they want me
to...
Am I going to be part of this?
Yes, I can live with this - it's not bad really.
The "Good News" Curve
A different emotional curve may occur where
individuals are initially in favour of the change.
November 2007 NHRD Journal 13
In the "good news" curve, the risk is that they
will be disappointed by the reality of the change
or the effort it will take to achieve it.
In these cases, you should recognise the
likelihood of disappointment during the
change process. Be ready to lift them out of the
trough in time to benefit from their enthusiasm.
Resistance to change is normal. The Project
Manager should expect to encounter it and deal
with it. The worst time to encounter resistance
is during the cut over to the new solution.
Transition is usually a busy, critical, high-risk
period when the last thing you need is a lack of
co-operation from the target population.
Try to surface issues and resistance earlier in
the project so that there is time to get the target
population engaged before any damage is
caused. Some organizational Change
Management experts suggest that you should
deliberately upset the target population early
in the project so that you can guide them
through the emotional curve and change their
14 November 2007 NHRD Journal
attitude. That may be taking the principle too
far - but, if there is going to be resistance, try to
deal with it early.
Using the Right Change Style
The design of the project's approach should
take into account the optimum style of
addressing organizational change issues. In
general, the target population will be more
supportive of the changes if they have been part
of the change process. The cynical view is that
you should make them feel part of the process
even if you prefer to ignore what they have to
say. In fact, their active participation is likely
to add to the quality of the solution - it should
be taken seriously. Conversely, if they feel their
views were sought then ignored they are likely
to become more resistant.
Working with a broad selection of the target
population adds time and cost to the project.
The degree to which you involve them will
depend on the magnitude of the change. A
straightforward non-controversial change may
require no previous contact. If, for example, you
are simply introducing a new set of expense
codes you can publish the message "with effect
from 1st April, new codes must be used as per
the attached book". Conversely, if you are
making huge changes to the job and lifestyle of
the target population you will need to work
with them to gain their co-operation, for
example, if you wish them to re-locate
voluntarily and re-train for substantially altered
jobs.
Here are some change styles that may be
appropriate:
• Collaborative - The target population are
engaged in the change process, typically
through cascading workshops or meetings.
They will be kept up to date on the issues.
Their views will be actively sought and
acted upon. Feedback will demonstrate how
their input has been acted upon.
• Consultative - The target population is
informed about the changes and their views
are sought.
• Directive - The workforce is informed about
the changes and why those changes are
important.
• Coercive - The workforce is told that they
must obey the new instructions.
Case Study
A computer hardware and services supplier
needed to restructure the workforce to achieve
dramatic cost savings. They decided upon a
fully collaborative approach where all
employees were invited to a series of
workshops to examine the case for change,
analyse the problems and define solutions.
By the end of the process, not only were the
employees fully backing the restructuring, but
individuals were even recognising that they
themselves would be redundant and
volunteering to leave.
Case Study
An organizational Change Management expert
was addressing an audience at a conference.
After some time, a senior member of the armed
forces was feeling highly frustrated. He stood
up and asked for an explanation. "I don't see
the point of all this", he said. "I give an order
and my people carry it out."
Who was right? Why should the workforce
not just do as they are told?
Communication
One of the main tools for promoting change is
communication. Early in the project an initial
approach to communication will be formulated.
It has two main purposes:
• to convey important information that the
audience needs to know, and
• to promote organizational change.
Messages supporting the project's change
objectives should be carefully constructed. The
best media should be identified to convey the
right messages to the right people at the right
time. During the project, these messages and
methods will be refined based upon
achievements, feedback and the changing
circumstances of the project.
Organizational Change Management at
Phase Start
For each phase the change management plan
will be prepared in detail. Input and feedback
from previous phases will inevitably lead to
modifications to the overall approach.
Update the Sponsorship Map to show who is
involved at this stage and what is required of
them. As part of the launch activities for the
new phase, sponsors should be informed,
briefed and reanimated. Their continuing
support should be ensured.
Often a new phase means new team members
and new participants from the business. Make
sure there is a good process to capture their
support and enthusiasm.
Organizational Change Management During
the Project
Organizational Change Management
techniques fall into two main types:
• input - analysing the problem, and
• output - inducing organizational change.
It may also be appropriate to couple these
organizational issues and needs with the
November 2007 NHRD Journal 15
mainstream design work of the project, so that
certain issues could be solved by the way the
solution is designed. It may be easier to make
the solution fit the people rather than the
people fit the solution.
The input activities are essentially forms of fact-
finding and analysis. Organizational Change
Management experts have many specialised
tools to:
• identify a population,
• assess that population's capabilities,
attitude, behavior, culture,
• define the change goals, and
• determine what is required to bring about
that change.
In the absence of an expert you would fall back
on basic fact finding and analysis, coupled
with common sense and experience.
Output activities tend to be various forms of
communication, for example:
• communicating messages
• coaching
• setting up sponsorship cascades
• collaborative workshops.
Although the change management analysis,
design and planning may be specialist tasks,
much of the change output can be applied by
other project team members. All team members
will have opportunities to spread the right
message. In many cases, the way they
approach a given activity might have a
significant affect on the target population -
increasing or decreasing resistance.
Non-specialist team members should be given
the basic skills and understanding to promote
organizational change. They should also be
guided by the specialists (if any) and by the
project's change management approach and
planning.
16 November 2007 NHRD Journal
Case Study
A Project Management expert was hired to
coach the IT project managers of
telecommunications service provider. In a
"collaborative" style, he led a conversation
about the relationship with the business,
trying to draw out a consensus that the
business and its end users were essential
players in building a successful IT solution.
But the project managers were unanimous.
One summed it up - "what we need is a big
brick wall to keep the users away from us".
That is a problem with a collaborative
approach - what do you do when the
population turns in the wrong direction?
Organizational Change Management at
Phase End
The end of a phase is always a good time to
review progress. Many organizational change
activities are imprecise in their effect. It can be
hard to measure whether the target population
has now become sufficiently supportive for the
project to succeed.
Take a fresh look at the organizational issues:
• did we really understand the barriers?
• how effective were the actions taken?
• what more do we need to achieve?
The conclusions will be fed into the planning
for the next phase of work.
Organizational Change Management at
Project End
The test of change management is whether the
new business solution can be launched
successfully in as efficient and pain-free a
manner as possible. The lead up to the
transition is often the most intense period. In
many cases it is the first time the affected
populations really become aware of the
changes (although, as you saw above, it is not
wise to tackle change issues late in the project).
Now they are confronted with changed jobs,
new procedures, new skill requirements,
training courses, and maybe even physical re-
location.
In some projects not all the current workforce
will be required for the new solution. Dealing
with the painful process of redundancy is
normally left to the HR and line management
functions.
There are, however, two big issues for the Project
Manager:
• The redundant staff will be required to
operate the current systems and processes
until the new solution is ready - and maybe
for some period of parallel running. Since it
is a legal or contractual requirement in most
countries to announce potential
redundancies well in advance and to give
individuals notice before their departure
date, the question is how to ensure they give
good service and do no damage to the
organization or the new systems.
• There may also be implications for the
survivors - those people who you are relying
upon to deliver the new solution. They may
be affected by the bad news concerning their
Reprinted with permission from the author.
• http://www.epmbook.com/orgchange.htm
colleagues. They may even go through a
period of uncertainty when they do not
know whether or not they themselves will
be retained. What needs to be done to
maintain their support and enthusiasm?
Bear in mind that the same issues could
confront project team members as well as
the target population.
By this stage in a major change, there needs to
be a substantial support mechanism for the
target population. As the key messages are
communicated, the project team needs to be
ready to help and prepared for the inevitable
issues. By this time, the sponsorship cascade
should be complete and solid - often extending
down to local champions carefully placed in
the users' teams. Support mechanisms will ease
the users' troubles, for example with
appropriate training at the right time, desk-side
coaching, good help desk/call center support.
Organizational Change Management should
not stop with the end of the project. During the
Benefit Realisation stage of the life cycle,
continuing emphasis will be needed to
encourage the community to adapt to the new
ways of working and get the most from the
change.
November 2007 NHRD Journal 17