Although change management is founded on established theories, in too many cases initiatives fail to produce intended outcomes, and go over time and over budget. One study by Gartner Research, for example, found that of the companies surveyed 90% had experienced significant change within the past two years, but only 5% had avoided substantial disruptions and finished on time. Why do problems like these exist? Is there something wrong with change management theory? Or does the problem lie with how people perform?
In this article we examine 10 key competencies for change managers.
1. They must have proven research ability: Change management is a form of problem-solving. The best solutions to the problems are not discovered by guesswork, hunches, a ‘sixth sense’, or past experience. The stakes are far too high to trust unreliable processes. Problem analysis and solutions must be based on scientific evidence, and that means change management must be seen as a social science research exercise. Managers don’t need rigid ‘maps’ of how they work or get overly excited about the tools they have at their disposal. What they really need is a sound knowledge of how to conduct excellent research in social sciences. They need to know how to design research projects to collect sufficient, valid and reliable data; how to analyse data; how to report findings; and how to use the findings to create practical and workable solutions.
2. They must have a clear understanding of the change process: Nobody is going to do a good job if they don’t know what change is, how it works, and the theory and principles of how to manage it. Their understanding must be based on well-established research. It cannot be based on what the person ‘thinks’ change is, or on past personal experience. Change management is on shaky ground without a thorough understanding of the change process and established management principles.
3. They must be able to overcome resistance to change: It is a well-known and often lamented reality that people in organizations resist change. They do so for all kinds of reasons – and the manager must be aware of what those reasons are and how to overcome them. Failure to manage resistance sees most change initiatives ultimately fail in a slow war of attrition.
4. They must be able to identify and work with key change agents: Key change agents are people who are ready for change, and people of influence. People with readiness are unlikely to resist the change (providing it is introduced well) however, they are likely to spread positive stories about it. Those are the kind of stories you want.
5. Change managers must be able to harness the power of narratives: Stories create extremely powerful forces that can make or break change. Change managers must be able to tap into those forces and shape the kinds of stories people are telling within the organization.
6. They must be able to address cultural issues: Organizational culture is a broad concept that includes elements such as belief systems, attitudes, use of language, expectations, management styles, etc. These cultural elements must be examined to see if they are contributing to resistance, or contributing to change. The manager must know how to assess them and how to influence them, as required.
7. They must ensure organizational processes and structures support change: The processes and structures within the organization must support change for it to be successful, and it is essential the manager is aware of how these processes and structures impact the change process.
8. They must be able to use the power of organizational networks: Organizations are networked structures. Certain people are influential, and certain people have power. Change managers need to be skilled at working with different types of people. They need to be able to influence powerful and influential people so they become engaged with the change and contribute positively to the process.
9. They must have commitment for the change: Change can be tedious and exacting – most complex problem-solving exercises are. The manager must be dedicated to continually solve problems as they arise, to change tactics, and to see the process through to completion.
10. They must have realistic expectations: Change managers must be realistic about how difficult the process might be, and how long it might take. They also need to be realistic about how staff might react, and what their challenges could be.
The role of change manager is a complex and demanding one that requires a specialised skillset and extensive knowledge. The list of competencies listed here is by no means exhaustive. If the manager is not up to the task change can become very expensive, very disruptive, and potentially toxic to the organization. Even if you have skilled and experienced internal change managers, there are advantages to securing help from outside. External change managers provide an objective view and not caught up in organizational politics.
Change management is a structured process to help public institutions, private companies and individuals adapt to extensive change of all kinds. For example, if a large military base is closed in an area that depends heavily on the installation for employment and economic health, there will be many extensive changes that are both complicated and difficult to predict in advance. Such attempts to have an organized approach for coping with a changing business, government and financial environment have understandably provided mixed results. Is there a better way to deal with change?
If any attempted solution is not dealing satisfactorily with a specific problem, even change management strategies should realistically be changed in an effort to find workable solutions. Managing change successfully requires a delicate balance of the following elements:
Management (one of only two words in “change management”)
While there are multiple results which are not identical, the lack of effective management and planning is frequently a major contributing factor when change management efforts do not succeed. Some pertinent planning and change management advice from an individual often referred to as “The Man Who Invented Management” is provided in the following Peter Drucker quote:
“Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window. The best way to predict the future is to plan it.”
Changes in the banking industry provide an illustration of why change management strategies are frequently not the answer to many situations involving extensive change. Few industries have changed more than banks during recent years. Individuals and companies faced with bank services that have been restructured are faced with uncertainty as to what their new financial choices are. In some ways it is a situation that is not so different from the previous example of how a community was impacted when a military base closed. Banks have been a core member of communities for many years, but banks have suddenly changed and there is not an organized change management strategy to help.
In this banking example and many other similar situations involving change without a formal change management process, individuals and businesses of all sizes are left to manage and plan their own strategic response. This uncertain and confusing scenario is almost certain to result in many different paths being followed. Some are likely to do nothing while others will do their best to produce an improved outcome via planning and managing. For example, many small business owners are still having difficulty in obtaining needed commercial loans and working capital from their bank. Some of these small businesses will formulate a plan to solve their financial problem and some will not. Whatever we call change management, alternatives need to be evaluated and choices must be made. As is often the case in many complex situations, individual results may vary.
Most Human Resources Managers can tell you that not everyone responds well to change. Just the talk of change in the workplace can generate feelings of fear, anxiety and resistance amongst staff.
Not only that, workplace change can be very costly when not managed well.
Change initiatives are generally aimed at improving the bottom line. When managed poorly it can end up costing more than the planned savings identified or the increased revenue forecasted.
Workplace change can also result from economic factors, competition pressure, government legislation, technological change, mergers and acquisitions, outsourcing, shifting markets etc. It often starts with the business owner or senior management recognising opportunities for growth and expansion or the CFO or accounting staff raising the alarm to start tightening the belt. The business and its managers in turn need to set objectives to meet the challenges associated with these changes.
Change is inevitable!
Many organisations look nothing like what they did five years ago. When faced with an ever changing environment it is the ability to adapt that sets apart companies that last the distance from those that don’t.
Effective change management requires sponsorship from senior management, employee and key stake holder engagement, continuous and targeted communication, compliance with relevant laws and agreements and a well-planned and organised approach. This involves gaining the commitment of staff, customers and sometimes Unions to ensure that business continues as usual during the change process.
If neglected, poorly managed change can lead to:
loss of clients/shareholders/employees
a waste of money/time and resources
negative organisational culture
loss of market share
loss of credibility, industrial disputes or unrest
For example, one of my multinational customers once under-estimated the cost of a merger and acquisition by more than $2.5M. Unfortunately, they had already signed the terms of agreement before considering the impact of the employees transferring benefits and entitlements applicable under Australian workplace legislation.
Poor communication can result in resistance to planned changes due to a perceived lack of trust and unclear goals. Resistance from employees is one of the most common obstacles experienced within the change management process.
The role of HR
Legislative due diligence and effective people management is HR’s key role with research showing that early Human Resources involvement in the change management process improves the likelihood of a successful change outcome.
During the planning stage it is important to identify and weigh up the potential risks or impacts proposed changes will have on the organisation as a whole. Experienced HR professionals have the ability to assess the change initiatives and the potential impact it may have on:
Existing Employment Contracts, Industrial Awards and Agreements
Current employment practices, policies and culture
‘Duty to Consult’ legislative requirements
‘Transfer of business’ obligations and the cost of employee entitlements
Potential termination/severance costs and legislative actions required
Skill gaps and training needs created by the change
Assessing the impact of change in one area of the organisation and how that directly impacts on other areas.
Throughout the change project and beyond, HR professionals also have a role to ensure:
Long term sustainable change, through effective design incorporating people into the strategies and considerations
The identification of any new learning initiatives
Anticipation of reactions that should be considered during the planning stage
Clear and effective communication to all parties involved
Assisting those involved that may have difficulties cope with change
Continuing performance management and motivation throughout the process.
Utilisation of skills for negotiation and championing change with various stakeholders
A HR professional with the adequate skills and knowledge can be a successful champion of change within your organisation and minimise many of the common issues experienced. To prevent HR falling through the cracks during a change management project it would be prudent to involve your HR professional up front!
Implementation of Information Management solutions necessarily brings change to any organization. Business practices, role and relationships all affect the way in which people work and interact on a day-to-day basis. Whether the driver for implementation is for productivity, compliance or risk reduction there is always the need to consider what impact there will be on user communities.
Document and records management practices in organizations are not often front-of-mind for most managers and employees and asking them to think about information in a different way or even at all, as a corporate asset requires a fundamental mindset change. This will take many employees out of their comfort zone, impact on their confidence and competence to perform the work and creates a situation where individuals can sense a loss of control in their work context.
It is natural that most people initially react with caution with concerns about their future, security and where they will fit in to a new order of things. In any group there will be 10% who are excited by the prospect of change and at the other end 10% who will resist change regardless. This means that there are 80% who can be influenced one way or the other.
The successful implementation of an information management system extends far beyond the design and implementation. It extends beyond the support and operation. Effective information management requires a fundamental mind-shift by stakeholders and everyone in the organization that relies on information in their work activities. This shift needs to be carefully executed to create a requisite culture in which information is appropriately and thoroughly managed as a key organizational asset.
What is Change Management?
Change management is the art of influencing the majority to positively accept and commit emotionally to the change. Many of the issues arising as a response to change can be real or perceived and are closely related in a cause and effect network. Either way, they need to be addressed to avoid resistance or rejection of the change. This requires a combination of communication, understanding, mentoring, coaching and general support with the aim of building trust. It is from this position of trust that the task of building the work culture required for successful information management begins. The ’4 Cs’ of change management help us think about the change from an effected user point of view.
Comfort People are creatures of habit and develop patterns of working within a comfort zone of daily activities.
Control Changed practices may cause a loss of control over daily routines and activities. This may come through changed reporting lines or responsibilities which can evoke a level of discomfort.
Confidence The introduction of new practices may undermine employee confidence in their ability to perform. Some may see this as challenge, for others it can be stressful. Often the introduction of computer equipment is something that can be discomforting. Some people, particularly older workers may have no experience with computers and can cause self doubt over their abilities to learn the new skills required.
Competence To be able to operate in a changed work environment there is always an element of re-skilling required. This necessarily means that current skills, often developed over an extended period of time will need updating or may become redundant. This uncertainty can impact on an employee’s competence and ability to perform.
The management of the complex web of responses, issues and perceptions requires focused attention. The skills of a change manager are built on an understanding of human behavior and the change manager’s role is to assist people to understand the change and what it means in personal terms and has been proven to be a significant success factor in building Information Management capability.
Why is Change Management important?
As volumes of information inevitably grow and our regulatory obligations increase amid the ongoing business pursuit of productivity, we cannot afford to waste the opportunity to exploit the benefits of information management solutions.
Studies repeatedly show that a key risk in the success or failure of information management solutions is stakeholder resistance to change. Through an investment of time and effort in preparing the user community for the coming change the chances of resistance are lowered. In short without a disciplined approach to managing stakeholders through the change then realization of anticipated benefits is put at risk. This has impact on business productivity, staff moral and the bottom-line. So it would seem logical for us to deploy our information management solutions in the most effective manner.
Some common Change Management pitfalls of an IM solution implementation
We are seeing an ongoing consolidation of the information management vendor community and a subsequent convergence of the underlying technology. There is a growing recognition by organizations that an information management capability is needed. Further, audit activity frequently highlights any shortfalls in performance and organizations react accordingly.
The selection of an information management solution is an important corporate investment and common pitfalls addressed by change management include:
Focus on Technology
Ignoring the emotional needs of users in the rush to get the technology in place can create a real project risk. Many organizations with an information management solution already in place experience a negativity of opinion towards the system. Often the cause of this perception can be traced to an initial technical implementation focus that neglected the needs of those who consequently struggled to apply new functionality in their work activities. An effective change management approach including awareness building and communication can turn this perception around.
Recognition of the Business importance of Information
The low profile that information management has in most employees’ minds can be an issue. We are all busy and in the scheme of things ‘filing’ is not front-of-mind for the majority of employee’s striving to keep pace with everyday work pressures. Document management and filing, can fall down the priority list partly because of work pressures and partly because of limited awareness and can be seen one of the things that ‘should’ be done’ rather than something that ‘must’ be done.
Organizations recognising the business value of information as an asset can then raise awareness of its importance and manage it accordingly. An increased awareness of this importance should also influence the planning of information management system deployments.
Business Case and Budget
The business case for information management is focused on risk, mitigation, and productivity. However; many benefits are intangible and have an indirect impact on the bottom line. Unfortunately associated costs are very tangible and visible.
Consequently, there are challenges in the development of the business case as it can fail to excite the financial fundamentalists who view the whole undertaking in terms of an unavoidable cost that must be minimized. For the uninformed, change management activities can be seen as non-essential and result in budgets being set to minimise cost adding to the risk of failure.
Although not unique to Information management implementations these above factors can create significant project risk. Change Management techniques are designed to address the human behavioral issues that can adversely impact on project success and as such, are a necessary inclusion in any deployment activity.
What are some Change Management best practices for an IM solution implementation?
When it is apparent users are not participating in Information Management practices an objective assessment can identify a way forward that is usually cost effective and will meet organizational needs within a much shorter timeframe. This assessment must take an independent and holistic view of the situation from multiple perspectives.
This assessment must identify the root causes of any associated issues and develop a clear strategy to build the information management capability required. There are a number of common elements that have emerged as issues with information management implementations that have nothing to do with the incumbent technological tool and the strategy developed must consider how these are to be addressed.
The capability assessment framework enables organizations to holistically assess information management practices and to identify improvement opportunities that will build capability. This is achieved by benchmarking current organizational practice against best practice in each of the dimensions of the framework. The best practice benchmark criteria in the framework have been identified through experience with multiple organizations across industry sectors and geographies, and are augmented through industry collaboration and global academic research outcomes.
The dimensions of information management identified in the framework are defined as follows.
Best practice organization’s should have a clear strategy relating to its management and use of information The strategy clearly defines the content and structure of the information, how it is to be governed and applied to support the primary business strategy.
We can assume that most organizations have the information content that is required to manage their business. If this is not the case then it is difficult to envisage the organization operating successfully or at all. However, most organizations suffer from an ad-hoc approach to the management of this important asset. Best practices relating to managing this content start by having an inventory of the content, a consistent architecture governing naming conventions, taxonomy, where content is held, how content is held, i.e. hard copy soft copy formats and who can access what categories of information.
Due process governing how information is created, stored, accessed and communicated is fundamental to the governance of enterprise information.
Governance is the combination of processes and structures implemented at management level to inform, direct, manage, and monitor the information management activities of the organization. This consists of clear policy, procedure and business rules guiding information management practices. These must be developed in context of the organization’s business activity and be clearly communicated to stakeholders.
Information management governance also includes the development of business classification schemes, taxonomy, naming conventions and rules governing the creation, storage, protection, communication, sensitivities, use and appropriate destruction of information.
The manner in which information is treated and perceived in an organization is reflective of organizational culture. Best practice organizations have clear understandings and norms recognising the importance of information as an asset. This mindset needs to be pervasive across the organizational culture and is fundamental to induction and staff development initiatives.
Change management during information systems implementations is a clear best practice aimed at creating the cultural awareness and mindset required.
Organizations operate within a network of relationships with stakeholders. These stakeholders include customers, suppliers, regulators and industry bodies. Best practice organizations have clear understanding and service level agreements with other stakeholders in order that corporate record keeping obligations are met and to ensure information is shared appropriately and to the level required to maximize efficiency.
The application of Information as an asset is fundamental to the services or products offered to the market place. Best practice organizations embed value-adding knowledge and information into services to maximize attractiveness and utility. Corporate discipline ensuring the validity of information shared is necessary to mitigate risk of non-compliance and avoid potential litigation.
Information technology is fundamental to the management of the information asset. Clear and consistent architectures, data and information structures, security and operational tools indicate a mature approach to information management. Best practice organizations have clearly defined architectures.
Change Management Best Practice
The capability assessment framework facilitates benchmarking against specific best practice indicators. The absence of any of these indicators provides an opportunity for the organization to improve. Over and above these specific indicators the following themes have emerged as overarching best practice in change management as information management capability is developed.
As discussed above governance is the combination of processes and structures to inform, direct, manage, and monitor information management activities. This includes effective record keeping practices. It is important that organizations develop governance practices as early as possible in implementation projects. This often means putting governance in place prior to specification, selection and deployment of a technology solution. This has a double benefit. Firstly: stakeholder’s become familiar with information management expectations and the requisite culture begins to develop; and secondly; the organization gains the opportunity to refine its governance structures prior to full deployment.
Information Management System
The selection of an enabling information management technology to meet performance and functional requirements should follow a diligent approach. It is best practice for selection criteria to consider wider information management architectural needs. The functional richness of available solutions can allow the retirement of duplicative products providing islands of functionality. Workflow or WebPages are common examples of these islands where products have been acquired for a single one-off purpose and are unable to integrate with core applications. Once configured and deployed the new infrastructure can provide the opportunity to create an integrated technology architecture thereby reducing support cost.
There are many examples of high cost, high-profile failures in the information technology industry. Often this can be traced to over-ambition and a big-bang approach to deployment.
Implementation of Information Management capability within well defined scope delivered in incremental steps provides many benefits. Primarily incremental implementation through a series of pilot deployments allows adaptation of the solution based on real experience before attempting to conquer the world. Many organizations are benefiting from the adoption of this approach.
The inclusion of change management activities focused on preparing stakeholders to take on the reformed work practices mitigate against risk of stakeholder resistance. This involves considering the emotional needs of all stakeholders to ensure that they feel in control, are comfortable and have the confidence and competence to execute new work practices. For many stakeholders the learning of new skills and changed role and responsibility provides enhanced career opportunity.
Most of the solutions available in the marketplace offer rich functionality to manage documents and content in a web-based environment. Full use of the functionality on offer can simplify the technical architecture and realize savings in licence and administrative cost further justifying investment.
Change Management Roles and Responsibilities
The change manager works very closely with stakeholders and it is important that relationships based on trust are established. The personal attributes of a successful change manager are empathy and patience. The role and responsibility of the change manager is focused on understanding stakeholder needs, building an awareness of the need for change and supporting these stakeholders as they transition to new work practices.
Some key responsibilities for the change manager include communications, setting up reporting and communication channels, participating in business process reform, workshop facilitation, staff training, mentoring and awareness building. In short, any activity that interacts and prepares the user community to participate in reformed work practices.
Regardless of the scale of undertaking information management projects require a change management capability. In large scale projects there may be dedicated change management resources. For smaller scale projects this role may be a part-time or shared responsibility. The change management role can in many instances be a shared role across the development. Sometimes this can be provided through a corporate change management function. Regardless of how the role is resourced it is essential that it is included.
Many routinely conducted project activities such as workshops, interviews, training and presentations are in fact change management opportunities as these events they are interactions with stakeholders. They therefore present the ideal opportunity to develop the relationship of trust between the project team members and stakeholders.
It is important to avoid the situation where contributing stakeholders feel as though they have been sucked dry for information by technical people. This can be avoided through the development of awareness of the importance of the project team/stakeholder relationship thereby maximizing the value of this contact time.
Further, ‘champions’ can be identified from within the stakeholder community. This provides a critical change management input. As these champions are representatives drawn from the stakeholder community their roles can be a very influential and positive contributor to project success.
Research shows proves that higher levels of user acceptance and greater use of installed solutions are achieved when deliberate change management activities are included in the implementation work plan and life cycle. Best practice in change management is focused on the early involvement of stakeholders and on building a trusting relationship. Accordingly, leading organizations have recognized its importance and routinely allocate resources as projects are planned
For most organizations there is the opportunity improve information management performance. A place to start is through a benchmarking assessment of information management capability against best practice to identify how to realize available benefits by learning from the success of others.
This paper has emphasized change management and the resultant outcomes and opportunities as best practice. The selection of an information management solution is an important corporate investment. For those organizations considering implementation and for those that have current infrastructure in place, there is the real opportunity to maximize return on investment and to create a work culture that displays the requisite information management behaviours.
Dr. Rod Dilnutt
Rod is the Managing Director of William Bethwey & Associates and a Senior Research Fellow of The University of Melbourne. He has wide experience as a consultant in the private sector and at all levels of the public sector gained in Australia, Europe and the Asia Pacific region. This experience includes ten years in a ‘Big Six’ consultancy firm where he led the Knowledge Based Business Service Line for Asia Pacific.
Rod applies his practical knowledge and expertise to his consulting assignments and is retained in an advisory capacity by many leading organisations. He is also a frequent presenter at industry and academic conferences.