Change Management - What is it and Why it Matters?

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When introducing anything new in our individual life, in an organization or society at large, we intuitively recognize that that introduction of change must be managed or we will not achieve what we have set out to do.   Same applies when we introduce new technology including BPM automation.   Very often we establish a change management team.  We go through the mechanics of managing change.   Why then the implementation of new technology such as BPM often does not deliver the expected benefits?  Why the adoption and internalization of the change is slow or nonexistent?  Is it because we are trying to manage what we really do not understand?  Is it because we forget that change involves people?

People have to embrace the change, believe that the change is for the better, and trust those who introduce the change.  To make change stick people have to change their behaviour and their mindset.  Often, when the change is significant, people have to learn how to think differently, make the paradigm shift, start behave differently and develop new habits.  To accomplish such transformation people need to be inspired rather than manipulated to embrace the change.

So what is Change Management? According to Wikipedia, 'change management' is a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state. It is an organizational process aimed at helping employees to accept and embrace changes in their current business environment.’Such definition of Change Management is often called Organization Change Management to differentiate from the software change management that refers to software configuration management or project change control that refers to managing the project scope, timeline, and budget.

When we talk about the Organization Change Management we need to understand who needs to change and who are all the stakeholders that will be affected.

Any change in the organization involves to various degrees following stakeholders:

  • Customers – they experience change in customer service at all touch points, unless change is completely internal (hard to imagine such changes these days!)
  • Executive team – they need to formulate the strategy and embrace the change first so they can ‘walk the talk’ and inspire the organization to internalize the change
  • Line management  (within an organization and within partner organizations) – they need to interpret the strategy, define the ‘how to’ plan, and then embrace the change so that they can become effective mentors and coaches and continue to inspire ‘by example’
  • Line workers (within an organization and within a partner organizations) – they make the change happen or not; when they are inspired and identify with the change the organization achieves true transformation

Given the wide reach of change on all levels of stakeholders internally and externally to the organization, the program that has to be put in place needs to define correctly the scope of the change being introduced and the areas being impacted. 

Organization Change Management (OCM) should target the following potentially impacted areas:

  • Organization – i.e. its culture, processes, policies, procedures, and its structure
  • People – i.e. their roles and responsibilities, skills, behaviours, and mindsets
  • People Systems – i.e.  HR policies, procedures, measurements, rewards & compensatio

Any transformational change will have significant impact on all three areas and will require changes in all aspects of the given area.   For example, when the organization wants to introduce and get acceptance for such values as collaboration, team work, transparency, or customer service excellence the organization’s culture and its structures needs to tangibly change. People mindsets and behaviours should be changing as well.  Finally, the measurements and compensation should be aligned with the behaviours and mindsets that are being promoted. Such transformational change will require that all levels of the organization adopt the new values and act according to them.  It means that the Executive team, middle management, and the line workers all act in alignment with the new values.

Unfortunately, many times the Change Management Program is focused only on getting the Line Workers to accept the change and the attention is given primarily to their skills.   Communication and training are the tools that get a lot of attention, but very rarely the changes in the culture are tackled or different measurements and rewards are proposed.

Having spent the past 30 years of my career introducing new information technology in the organizations and for the Call Centres in particular I observed that the primary focus was getting users more technology and more information so that their average handling time is continually reduced.   Furthermore, we continually push more self serve technology so that the customer does not even need to talk with the call centre representative. This measurable objective is often introduced in the name of the improved customer experience.  Is it then a surprise that customers have longer wait time, their problems are not being solved, and eventually, the customer loyalty is eroding? 

The call centre representative who is exclusively measured and compensated based on how quickly he will finish the call with the customer will try to cut the call short.  He will not always strive to either document everything important for the next interaction with the customer or seek the final resolution to the customer’s problem. 

To successfully introduce change and achieve the expected benefits, the OCM program must, therefore, cover in parallel two aspects of change introduction:

  • Analysis & definition of the Organization, People, and People Systems impacts
  • Formulation and rollout of the Organization & People change acceptanc

The analysis and definition of the impacts must include answers to the following questions:

  • What aspects of the culture will need to change to enable the desired transformation?
  • What changing organizational structures are needed to institutionalize the change?
  • What processes and policies need to be introduced or need to change?
  • Which roles and responsibilities based on the changes in the processes will be changing?
  • Who will be impacted by these changes?
  • What roles will an executive team and the line management team play in this transformation?
  • What skills are being introduced and which skills are becoming irrelevant?
  • What new behaviours, habits and mindsets need to be developed and nurtured for the change to be internalized and willingly embraced?
  • What people systems will be needed to encourage the changing skills, habits, behaviours, and mindsets (at all levels of the organization)?
  • Are new recruitment guidelines required?
  • Which measurements continue to serve us vs. which once should be retired and which ones should be introduced?
  • What behaviours should be rewarded and which should be discourage

The detailed analysis and definition of all the transformational impacts is performed by the dedicated project change management team, but requires an organization wide engagement of the stakeholders from the impacted departments.   

The formulation of the Organization & People Change Acceptance requires an in depth understanding of the stakeholders who will be affected, their needs and concerns, and their motivations.   Based on the full understanding of the stakeholders’ conditions, the engagement program can be defined. Recognizing that the acceptance of change is a process that starts with awareness of the upcoming change that overtime reaches commitment or compliance, it is essential that an appropriate time is allocated to that journey and that appropriate acceptance programs are put in place according to the organizational level targeted. 

The greater the magnitude of the expected transformation (e.g. move from product centric to customer centric business model, introduction of new values, mergers and acquisitions, Lean philosophy adoption) the more important is the introduction of the Acceptance Program at the executive level first immediately followed with the middle management level.  The inspiring leadership and full transparency are the critical success factors for the organization wide adoption of the change.

Very often these groups of stakeholders are overlooked and the organization hears misaligned messages.  The core executives’ team and middle management team ‘walks and talks’ as before, even though the mission, the strategies, and the values being communicated are new.   This oversight is one of the key contributing factors to suboptimal results of the transformation.   The transformational initiative becomes yet ‘another fad, flavour of the month that will also pass’.  The individuals in the organization are able to recognize what core team ‘really wants’ vs. what they say they want.  People will act according to what the core team ‘really wants’.    The transformation initiative results in failure even though may be declared a success.  There are many examples of past initiatives that cost millions such as Total Quality Management, Process Reengineering, Six Sigma, or Lean that in the end did not deliver what they promised.    The damage is even greater, because any new initiative will meet with the scepticism and the barrier to getting change implemented is even greater.

In summary, the OCM program is always a very complex and interrelated undertaking that requires involvement at all levels of the organization and deals with the complex psychology of all people being impacted.   It not only requires communication and training of the line workers, but mandates an in depth focus on behaviours and mindsets as well as the measurements and rewards for all levels of the organization including the core leadership team.   Finally, it requires time for all people impacted to complete the journey from an awareness of upcoming change to reaching commitment and, a second best, compliance with the new order.   

The empowering leadership, collaborative strategy and OCM program development, detailed knowledge of the change impacts, and engagement of the ‘critical mass’ representing all levels of the organization throughout the change initiative are all critical success factors to realizing the desired benefits of the transformation being undertaken.     

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