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Change Management 601 (Not 101)

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Change Management 601 (Not 101)

Ric Willmot ExecutivecWisdomm www. eoonline.co

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Author Profile
Peter Gooch from ABC-Radio best summed up Ric when he described him as: The Contrarian Strategic Thinker for Successful Australian Executives.

Ric Willmot Executive Wisdom

Ric Willmot, known as The Strategist assists organisations to improve performance, productivity and profit. He is one of those rare people who can call himself a global consultant and trusted adviser to some of the worlds leading businesses, governments and institutions, and REALLY mean it! Ric and his company, Executive Wisdom Consulting Group, help leaders make distinctive, lasting and substantial improvements to the performance of their organisations; partnering with clients to tackle their most difficult issues and serious challenges. Just a few of his active and current clients include; Australian Legal Practice Management Association, CPA Australia and Commonwealth Bank. Ric Willmots intent is not just to improve your business, but to build firms which create wisdom and wealth. Rics background is accounting, financial planning, and organisational psychology. Rics Private Clients Mentoring Program was created in 2005 and has already had over 200 executives from 12 countries graduate through the 6-month program. Late 2010, Rics Forums was launched. An international online business forum where people from around the world can come together 24-hours-a-day, 7-days-a-week to discuss strategy, leadership, marketing, technology, best practices, ethics and anything else which presents itself. Within one month, over 100 professionals from 13 countries had bought lifetime membership. Ric is interviewed and quoted frequently in the media; he writes regular business columns for 4 Australian magazines, 3 Asian magazines and is the feature writer for Svoy Business: Russias leading corporate magazine with a readership in excess of 55,000. Phone: Fax: Email: Website: +61 7 3395 1050 +61 7 3395 1805 info@executivewisdom.com www.executivewisdom.com

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Learning Module

Change Management 601 (Not 101)

2 Introduction 3 What Is Change? 8 The Change-Adept Organisation 12 Why People Resist - And What To Do About It 19 Popular Change Mistakes 20 Summary

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Introduction
Its a myth that people are reluctant to change. The truth is, they change every day that there is a traffic jam, a new customer request, a computer malfunction or personal crisis. People are quite resilient and quite adept at change. What people do tend to resist, is ambiguity. One of the most elemental aspects of change management is to remove ambiguity effectively. That applies more to managers and executives than anyone else ... If management tells its employees that quality customer service is top priority, but rewards people based on the number of calls taken per hour, the organisation is saying one thing and doing another. Call rates will go up, but service will deteriorate. Change comes in three flavours: 1. Change that is thrust upon the organisation by competitors, consumers, government, economic and business climate, technology, new knowledge, perception, etc. 2. Change that is experimented with to escape the doldrums 3. Change that is deliberately wrought to magnificently raise the bar to a still higher championship altitude There is a distinction among the treatment of reactive and proactive changes - but change is change, usually no matter what the driver. In any of the above scenarios, there will be employees who will need to change behaviours, work habits, feedback loops, interactions, accountabilities, and so on. Effective change management skills drive all successful organisations. When you have completed this Learning Module, you will have learned skills that enable you to define the key concepts associated with change that will improve your outcomes and results successfully, time and again.

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What Is Change?
Change is the only constant that we can rely on in the business world. It is critical for organisations to: 1. Understand change 2. Promote change 3. Cope with change 4. Value change Although it seems obvious, the differences in how people perceive change is quite amazing. The easiest way to understand what change represents is shown in the diagram to the right. In other words, you know where you are and where you want to be - all you have to do now is get there.

Here Today

Want to be Here Tomorrow

Simple, right! Perhaps ... however, you and I both know that theres a bit more to it than that. The change situation Change hasnt changed Change upsets our understanding of the reality of things Change requires risks Change unhinges us - it requires new behaviours Change threatens us on all levels

Change is a process, not an event. Its made by individuals first - and then organisations. The saying, Its not personal, just business, doesnt hold true, because change is a highly personal experience for those involved and involves a gradual growth in feelings and skills. Pressure for change There has to be a clear shared vision and pressure for change. If there is no pressure for change then prioritisation is low and there is little action. If there is no clear shared vision then the change process is unsustainable. Most people will stay within their comfort zone until forced to move. The ability to see and understand where the change will bring the organisation is vital. What is pushing your organisation to change? Change Management 601 (Not 101)

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Drivers for change The drivers for change can come from multiple sources, both internal and external: Customers Internal processes Employees Economic conditions Competitors Suppliers Technology Culture

Organisations have to understand these drivers for change and their impact - both actual and potential - on the various activities that allow business to be transacted.

DRIVERS FOR CHANGE

What are the main drivers for change in your organisation?

What have been some of the actual impacts on your business as a result of change?

What do you think could be some of the potential impacts on your business as a result of change in the future?

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Dimensions of change Change occurs along several dimensions: Leader driven change Process driven change Improvement driven change Organisational renewal

Leader driven change may be seen where: An organisation gets a new leader who brings with them new ideas and approaches to the business. The leader of the organisation realises that change is crucial to survival and pushes it through the organisation.

In both of these cases it is vital that the leader walks the talk in relation to the change. Process driven change is focused primarily on the processes where: Innovation is required to upgrade the process and efficiency requirements are increased. Customer requirements mean that current processes are no longer capable. Best practice has emerged and needs to be introduced to the process.

Improvement driven change has an emphasis to improve areas within the organisation such as: Development of new skills in the workforce through cross-training. Implementation of findings from benchmarking activity. Implementation of best practice. Implementation of findings from continuous improvement activity.

Organisational renewal is the most radical in that it looks at the whole organisation in terms of: Maximising benefits from synergistic activity. Business process re engineering. Adjustment of business activity due to market forces.

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Types of change There are several types of change, each with its own set of characteristics and effects that impact on the organisation.

TYPES OF CHANGE
Incremental Change Mostly happening Evolutionary Can be planned Can be imperceptible Can be insidious May be culturally driven Transformational Change Seldom happens Rarely planned Difficult to control Can be overpowering Can be unavoidable May be necessary to survive Planned Change Focus is on structures and systems Focus is on implementation and planning The emphasis is on people involved, as organisations dont change - people change!

What is the type of change most often seen in your organisation?

Is one dimension of change favoured in your organisation over others?

How successful is this type of change in introducing and sustaining the required change?

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Use this tool to assess how your current reward structure, group norms and attitudes, and management style support change and creativity.

ASSESSING THE PSYCHOLOGICAL ENVIRONmENT FOR CHANGE

Question
Are group guidelines already in place? Are they articulated and disseminated? Do you, as the manager, encourage risk taking? Are people allowed to take intelligent risks, and fail, without being penalised? When someone fails, do you help them and the group find the learning in the failure? Do you distinguish between intelligent failures (something risky, but promising) and mistakes (something clearly avoidable)? Do your current rewards motivate group members to be creative? Do you currently have rewards for creative ideas/ suggestions? Do you have both extrinsic (eg, money) and intrinsic (eg, providing a sense of accomplishment) rewards in your current reward system? Do you recognise members who successfully work outside their preferred area of expertise? Do you support intellectual conflict within your group? Do you encourage people to point out unacknowledged and taboo subjects that are holding the group back? Do you reward collaboration? Do individuals have freedom to choose their projects or to determine how they reach their agreed-upon goals? Are you alert to people who may be burning out? Do you celebrate small successes? Do you encourage the group to stop and review how much progress it has made?
Adequate A Strength Needs Improvement

Ideas for Improvement: Based on your answers, what refinements would you make to your groups norms? To your reward structure? To your own management style?

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The Change-Adept Organisation

Organisations that are adept at change meet three prerequisites and utilise three assets that allow behavioural aspects to be used for change. These assets are required no matter what type or intensity of change occurs: Concepts Producing positive and successful change incorporates 70% of leadership and 30% management: The imagination to innovate (Concepts) Professionalism to perform (Competence) The climate to collaborate (Connections)

LEADERSHIP
Establishing direction Aligning people Motivating and enthusing the individuals needed to implement the change Inspiring others who are impacted one way or another by the change

mANAGEmENT
Planning of the change Assigning resources, roles, and responsibilities Budgeting Organising Critical problem solving

Those leading the change initiative need to remain flexible enough to allow for individual initiative as well as adjustments for changing situations, issues, problems that may arise during implementation. Competence There must be a capacity for change, otherwise, there may be frustrations and anxiety. Aspects of capacity that you may need to address include:

CAPACITY TO CHANGE
Appropriate resource allocation Implementing communication and control systems Up-skilling where necessary Motivation and reward activities

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Connections Change is most effective when the people involved clearly understand: Why the changes are necessary What that will mean to their role and activities, and Where the change will bring the organisation as a whole

The change may be situational (re-locate to new premises or a re-organisation of the roles within a department) but the transition is psychological (emotional component and the feeling component). People need to believe in the change to give their full support and commitment, so a clear vision of what the changes are about is paramount. It is helpful if the vision for change is appealing to the long-term interests of your people, consisting of realistic and attainable goals that are clear enough to guide any and all decision-making at all levels within the organisation. The first step is to take action; aim for quick, small successes that immediately register early success. This makes the change seem possible and real by allowing initial progress. The participative approach Participation is not a universal panacea. The attraction of participation is that it can deliver comprehensive solutions quickly - cutting traditional change cycles by 50-80%. The drawback, however, is that it requires key people to come together and resolve issues together within a compressed time scale. The resistance to participation generally diminishes rapidly once the first such event takes place and the results become visible. The participative approach is generally adopted by organisations who are feeling a sense of frustration with traditional approaches that deliver great ideas but little practical change. It also requires a willingness and/or need to speed up the change process. Participative approaches start with the premise that however compelling the case for change, however radical and potentially beneficial the proposed solutions, the actual implementation of change rarely succeeds unless it is owned and delivered by the frontline managers and staff. People generally feel ownership for that which they create, hence if we want front-line staff to understand and own the design for change they must be involved in the design process. The more we engage the frontline in the design process, the more likely we are to identify and address the real issues that traditional analytical approaches may not surface or challenge. Change Management 601 (Not 101)

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Once we have understanding, ownership and participation we have the conditions in which trust is created and empowerment can succeed. Bringing different parts of the organisation together to view issues from multiple perspectives, and then experiment with new ideas and approaches, helps to unleash and harness the latent intellectual, physical, emotional and spiritual energy that lies unused in many organisations.

5 CRITICAL SuCCESS FACTORS FOR CHANGE ADOPTION

Success Factor Sponsorship Alignment Value to the Initiative Creates and sustains project momentum post-go-live Drives support for and commitment to the project Tracks positive productivity and business impact on the user Identifies the degree to which the project is a priority (competing priorities within business units is a top reason for slow adoption) Ensure understanding of business case and value proposition Stakeholders understand: Who, What, When, Why, How Ensures that impacted stakeholders are equipped with the capabilities required for the new way of working Ensures timely support to sustain changes User experience and satisfaction with new tools Identifies the degree of alignment between the solution and business process execution Positively impacts user productivity and quality of work

Change Communications Training

Solution Effectiveness

Typically, a change initiative will fail because of one or some of these causes: Lack of clarity on need, goals and outcomes, or the reasons for the change are wrong Its the wrong idea, or perhaps, the right idea at the wrong time No leadership, drive or ownership, or a lack of authenticity Insufficient involvement, participation and ownership Poor planning and communications Failure to empower the change agents Inappropriate time scales, training and resources Failure to learn from past mistakes The change did not address real issues for the front-line staff

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CHECkLIST FOR SuCCESSFuL CHANGE
Identify the behaviours desired What is the change you specifically want to see, feel, hear, and experience? Dont accept simply a more congenial workplace, which could mean anything from cartoons on the walls to laughing at the boss jokes. Better: We want to establish a workplace in which people voluntarily come in early and or stay late to help colleagues complete important projects without management intervention. Establish the exact indicators of success Ill know it when I see it will not work for change management projects. Better: Ill observe people taking ownership of customer problems, even if its not their fault, to guarantee customer expectations are swiftly met. There will be fewer demands for help directed at me since people are helping each other. Determine what the current encouragers and discouragers are Support and reinforce what is already in place and build more encouragers, as needed. This could range from managements public recognition of people helping colleagues, to flex-time, which allows people to take compensatory time after theyve stayed until 9 pm to get out a key proposal. If the managers themselves are only working a 35 hour week, then that has to stop and they have to set the example. Remove the dampeners that frustrate the behaviour you seek. Involve the employees in the change No one likes arbitrary change, and ownership of change heightens commitment more than any other single factor. Tell people whats desired, ask them how best to achieve it, and make appropriate interventions. If employees tell you that security is needed for the car park for those who work late, or that private conference rooms are needed for group meetings that cannot be conducted in cubicles, then implement those changes. Monitor and refine Nothing ever works exactly as planned. The flex-time might mean that clients in a different time zone are not going to be able to reach a live person at certain times, so schedules will have to be adjusted to compensate. Make the necessary mid-course corrections.

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Why People Resist - And What To Do About It

Resistance can be caused by a number of factors, including: Lack of trust Misunderstanding of the purpose Peer pressure Differing assessments of the situation Previous bad experiences Inertia Change weariness Fear Ego

Change requires strong support. We must understand why people resist change and take positive steps to address it. Why people resist The natural human reaction to change goes something like this:

THE HumAN REACTION TO CHANGE

PHASE 1 - Endings Every transition begins with an ending, a loss When things change, people leave behind the way things were Letting go; identify and acknowledge the loss They may be left searching for a new way to define themselves PHASE 2 - Neutral Zone The neutral zone is a confusing in-between state, when people are no longer who and where they were, but are not yet who and where theyre going to be Although the neutral zone can be distressing, it also provides many opportunities for creative transformation PHASE 3 - New Beginnings A new beginning can only happen after people have let go of the past and spent some time in the neutral zone In this phase, people accept the reality of the change and start to identify with the new situation

There are three positions - that correspond with the human reaction to change - that people will take at the commencement of any change initiative. How you respond to each of these stances will make the difference in whether or not the change initiative is successful.

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3 POSITIONS PEOPLE TAkE TO CHANGE
Resistor Neutral Supporter

How to Recognise Them The resistor will demonstrate their position through critical incidents such as delays, pulling resources, and lowering the business priority of the project. People within the organisation may take a neutral position. These will demonstrate their position through non-action and lack of visible communications or support. Common Language We cant afford to miss the numbers while we learn new software - it hasnt even been tested thoroughly. I dont see much difference between entering data into this new tool, or doing it the old way. How to Respond Tips Identify the resistance points Address and identify their concerns Focus on how solutions that you have established address business goals Translate the solution into recognisable value Establish a sense of urgency to move forward and support the change Dons take the supporter for granted Leverage their support to assist in the organisational adoption of the change Utilise the supporter to sponsor and champion the change initiative This is a great tool. It may take some effort to get it running, but in the long run it will increase our success. The third position is that of supporter. They will demonstrate their position by setting direction, actively communicating, approving resources, and holding their managers accountable.

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Leading through resistance To counteract resistance, leaders can act pro-actively to: 1. Focus the effort 2. Set direction 3. Develop belief Focus the effort Change is an uncomfortable activity for many, so it is critical that you have Champion Employees who: Provide feedback in real time to maximise the focus Accurately direct the energy Focus on main requirements Have open, two-way communication Have access to management

Setting direction There are many ways that a leader can set direction - here are two:

SETTING DIRECTION
motivating during change Commitment to a better way Courage to challenge existing power bases and norms within the organisation Personal initiative to go beyond defined boundaries Motivation of other employees Caring about and enabling people to perform A sense of humour about their situations Coaching staff Manage risk for themselves Emphasise out-innovating the competition Responsive in every direction by every individual Walk the talk - Exemplars Communication is key Learn and evolve beyond the change Have fun page 14

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What are other ways you can set direction that work for your organisation?

Develop belief People need to believe in the change to give it their full support and commitment. A clear vision of what the change is about is vital. The vision will be dependent upon the following organisational factors: Purpose Culture Values Mission

The vision is central and is dependent upon: Conveying an imaginable picture of the future Appealing to the long-term interests of your people Consisting of realistic and attainable goals Being clear enough to guide decision-making Being flexible enough to allow individual initiative as well as adjustments for changing situations Being easy to explain and understand

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Simple strategies to negotiating obstacles Stakeholder mapping Create a stakeholder map to identify your potential allies (supporters), neutrals, and challengers (resistors) in advance (use the template on the next page). Dont run the risk of mistaking an individuals enthusiasm, for ability to support the change initiative. Stakeholders may begin as allies (supporters), neutrals and challengers (resistors), but may shift positions over time. Make sure that you monitor support for you, your change initiative, and your leadership as the process evolves. Performance management and rewards Minimise the obstacles to change by using performance management programs and metrics to drive the change process. Performance management programs can create a negative punishment culture when over-applied. Attempt to use positive reinforcement and the carrot approach rather than the stick. Reward systems must also be used in conjunction with other tools to generate the high-performance you require both during and post change. Use your influencers Use influential allies to maximise and help drive the change effort throughout the organisation. Often the influence of key people - irrelevant of title, status or position within the organisation - is far more effective and efficient to quickly achieve binding commitment within the ranks, then senior executives attempt to rally the troops through speeches and meetings. You must also appreciate that you need to add meat when it is no longer possible or advisable to continue with attempts to convert resisters to supporters. Neutralise the enemy Finally, however unpleasant, you must neutralise, transfer, reassign or remove (including severing employment) personnel who actively resist the change programme beyond what is reasonably expected. The elimination of staff who are strident resistors (in spite of the education as to why the change is necessary and valuable), can sometimes create a negative tone and feeling in organisations when over applied, and can be perceived as an overreaction. But be clear - strong action is sometimes necessary to demonstrate your determination to proceed with the change initiative.

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Stakeholder map Barriers to Change Best means Ideas for Participation

Change Management 601 (Not 101)

Stakeholder

Needs & Wants

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Other ways to respond

DEALING WITH RESISTANCE

Reason for Resistance Feel they will suffer Organisation does not communicate clearly Perceive more work with few opportunities Required to give up ingrained habits Organisation lacks adequate rewards Organisation lacks sufficient resources Loss of job security Employees harbour unresolved resentments Change has poor introduction Organisation has poor internal communication What to Do About it Solicit employee input Script a clear, logical message Provide rewards and incentives Identify new behaviours to support the change Develop rewards aligned with the change Prioritise work based on available resources Communicate how employees and the organisation will benefit from renewed relevance Allow employees to express their grief Acknowledge missteps; reaffirm commitment and clarify expectations and time line Delegate communication tasks to one person or team

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Popular Change Mistakes

Change would be easy if it wasnt for people! Here are the four most popular mistakes 1. Writing an e-mail instead of lighting a fire Change efforts fail at the first critical step, that is, establishing a sense of urgency. Too many leaders launch their initiatives by calling a meeting; then expect people to buy in. 2. Talking too much and saying too little If there is inconsistent managerial behaviour being displayed there will be cynicism infatuation by the staff. Most leaders under-communicate the vision of the change process. You must lead by example. The vision that you have must include new, aligned behaviours - like all of your senior executives and managers. People watch their bosses closely, especially during the tumultuous period of change. 3. Declaring victory before the war is over Its important to celebrate results, but underestimating the difficulty and duration of organisational transformation can be catastrophic. If you settle for too little, too soon, you will probably lose it all. Far better to celebrate incremental improvements. Its good to mark progress and sustain the commitment by celebrating the small wins on the journey to the ultimate prize. However, never forget how much work is still needed to achieve the final outcome. 4. Looking for villains in all the wrong places The perception that organisations are filled with managers who resist all change is not only unfair - but untrue. Its crucial to build a guiding coalition that represents all levels of the organisation. People at every level are engaged in change processes, constantly.

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Summary
Unfortunately, change cannot always be planned and may be caused by internal or external factors. However, change is a positive driver for business - even if the cause has not been. No matter what, change requires a strong leader who is fully involved, leads by example, and communicates clearly. Successful change efforts require planning, organisation, resources and most importantly - action. Your role is key: recognise and overcome the known obstacles, iterate your vision with clarity, and dont try to do it all by yourself: elicit the support of the entire organisation. Successful change is more likely to occur when a team is given responsibility for managing the implementation. Change takes time and persistence. Remember that the people in your organisation will go through stages in the change process and they will have different needs during these stages. Change is a fact of life and a fact of business, and change is required for the long-term success of any organisation. Given change is not optional - are you ready for it?

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