A Prescription for Success*

*And Success Requires Change

The Importance of a Well-Designed Agency/Client Relationship in a Change Management Environment

Anthony D’Angelo and Gary GratesInaugural Class, ISDP Communications Management Program

How central to your job is managing change?

What We’ve Learned:

Most organizations fail to realize the benefits expected from a change initiative (Over 70%)

Traditional communications approaches don’t help; they hurt

Change isn’t the problem; clarity, engagement, and accountability are key

There are common traits of winners and losers

Basic principles and best practices

Winners and Losers

Auto Industry

Tech Bubble

Lessons from Jack Welch

PepsiCo

60+ Sources Boiled Down to 5 Motifs

Effective change communications is a strategically integrated management activity

Effective change communication is two-way symmetrical in nature – it begins with changing the conversation

Effective change communication is often promoted through cross-functional teams or other special organizational structures but directed from central leadership source

Effective change communication is linked to organizational and individual performance, and is measured—research is used in formulation and evaluation

Change is difficult, uncertain, costly and takes a long time

Change Management Considerations

Many companies inadvertently limit communication to tactical support in change management, diminishing the effectiveness of enterprise-wide change efforts

Organizations that are successful leading transformation and change take a broader, strategic view of communications – we call this Leadership and Employee Engagement

Leadership and Employee Engagement unifies change management and communications, which should be on parallel paths

What Is Change?

Process/Developmental Change - Improvement of current systems, processes or skills

Transitional Change - Creation / implementation of new products, services, systems, processes, policies or procedures that replace current portfolio or substantially upgrade it

Transformational Change – Current business model is being challenged while a new competitive landscape is still unknown; new environment requires a fundamental shift in mindset, strategy, organizing principles, behavior and/or culture designed to support new business model

The Current Reality: A World in Fast Gear

The Age of Transparency Customers, employees, shareholders, investor community are

privy to higher levels of product information and company knowledge

A New Corporate Ecosystem The lines between stakeholders are blurred; all are integral

parts of one organization

Growing demand for personalized productsCustomers and employees alike have become accustomed to

receiving products, services and information that is custom-tailored to meet their needs

Growing Sense of Distrust for CorporationsRecent events have elevated concern about corporate

governance, lack of trust for executives and boards

A New Balance of Power Balance is shifting away from management to employees,

customers, etc.

Social Media Is Mainstream Media

Sixty-six percent of people on-line blog or network

Exponential growth of Twitter; 600 million on Facebook

120 million visitors to Wikipedia each month; 5.5 million video feeds to YouTube

Diversity continues: Flickr, Digg, Skype, LinkedIn

Why Change Doesn’t Stick

Don’t believe in the rationale

What‘s wrong with the way we do things now?

Perceived loss of control

No relevant metrics

Trust lacking from previous efforts

Lack of clarity on expected outcomes

Threat

Fear of failure

Overwhelming task

Typical Internal Perceptions about Change Management

1. Change = Cost Reductions

2. “It sounds the same.”

3. “I have no idea what you’re talking about.”

4. “Are we winning?”

5. “Why is my manager clueless?”

1. Change = Cost Reductions

Most change efforts go no further than cost reduction exercises

“Change” means fewer resources to achieve better results

There is no “there” there

2. “It sounds the same.”

Overuse of language like “change,” “improve” and “competitive advantage”

“Been there, done that”

One change initiative after another creates a “little boy who cried wolf” syndrome People begin to say: “This too shall pass” They don’t take seriously leadership messages about

the need to change

3. “I have no idea what you’re talking about”

What is it that’s causing this?

Teach me, listen to me, engage me

What should I see that impacts the organization? Communicate how that relates to the organization and

the internal environment

4. “Are we winning?”

How can I know things are moving in the right direction?

While I do my job, what are you doing to assure all the parts are working toward the company’s success?

Is what I’m doing the right thing(s) to be doing?

5. “Why is my manager clueless?”

My most trusted source of information is as out of the loop as I am

Why should I trust anyone (or anything that anyone else tells me)?

Three Difficult Principles

Let the realities of the marketplace drive change

Teach employees that management doesn’t have all the answers – open channels for engagement

Ignore instinct

What Communications Leaders Need to Equip Their Organizations for Successful Change

Defining the Change/End State

Identifying the guideposts

Common Vocabulary/Language

Knowledge of what works and doesn’t work

Knowledge of what they can control and can’t control

Training

Communications Options

Communicators During Change

Journalists at the outset Ask the tough questions

Advocates during the process Catalyst for new conversations

Employees throughout Empathetic

Leveraging the Client/Agency Relationship

The Client brings…

Leadership and direction

Open mind for the task at hand

Insights into the uniqueness of the organization and its people

Open doors to appropriate management people

What success will look like

Partnership oriented

The Agency brings…

Outside perspective on the impact of change on organizations

Fresh thinking/Insights

New approaches to new challenges

New view of old ways of doing things (messages, channels)

Partnership oriented

Pillars to Effect Change

Managem

ent practices

The organization’s

conversation

The implem

entation

apparatus

Respecting the Structure and the System

What do we want people to know, feel and do?

What will they experience that’s different?

Communications in a Change Environment…

Provides clarity around business direction, strategy, priorities

Gives external/internal context

Ensures people understand rationale for decisions

Instills a sense of urgency

Enables relationships between leadership, management, supervisors and employees to evolve–the right things are being said, heard and done

People understand where the business is and how they fit in

What we measure – outcomes

It’s About Setting Expectations…

For managers and employees:

Acknowledging everyone makes a difference; a contribution

Tell me how I’m doing?

Acting like owners of the businessTreat me with respect.

Never being satisfied with current performanceHelp me set stretch targets.

Being focused on outdoing our competitionLet me see the marketplace.

Grasping the Strategy: The Strategic Roadmap

Vision

A brief, graphic and focused metaphor that characterizes the bond between your key customers and primary product, i.e... your core business. The core of what you’re striving to become.

Mission

An organization’s purpose, what and where it is today, and how it will achieve its vision.

Key Measures

• Reputation• Sales• Market share• Margins• Rate of return• Productivity• Customer satisfaction index• Employee satisfaction index

Market Strategy

Key customers you are targeting and the special needs you fill.

Product/Services Strategy

The distinctive trait that will differentiate your products and services as you fill the market’s special need.

Operations Strategy

The specific operational approach that will help you meet your market’s special needs most profitably and consistently.

Values

The four or five uncompromising beliefs you’ll recognize, reward and develop to ensure consistent behavior.

Initiatives for 2011 (examples)

• Strengthen customer management processes

• New information systems

• Acquisitions

• New product development and introduction processes

• Customer satisfaction programs

• Leadership development

• New marketing structure

In Practice: A Change Strategy

DISCOVER[Segmented target

audiences]

First priority: management comprehension - hold strategy development sessions with managers detailing marketplace realities, competitive issues, etc.

Created a narrative describing the strategy in story form

Established an employee worldview based on current feedback from cultural survey on employee attitudes, issues, behaviors factored into planning

Raised the volume on key inputs of the strategy – customers, competition, products, delivery, societal concerns

Synchronized leadership’s messaging across all divisions and BUs

SELL[Homogeneous audience]

Brochure produced

Theme adapted

Coffee mugs, mouse pads, posters

CEO e-mail to all employees

Article in newsletter and on Intranet announcing new strategy via theme

One-way leadership messaging via net – CEO blog

Information “packets” given to all managers telling them what to say

Cascading of information begins

Sell vs. Discover: Campaign vs. Coherence

SELL DISCOVERLeadership briefing with

managers, supervisors

Four key business unit presidents conducted road shows with their staffs –webcast on portal for all employees

All-employee jam with five conversation streams reflecting

key elements of the strategy

Facebook page where people can opt-in the discussion

Leadership directive to department heads to prioritize plans, budgets against the strategy

Refresh the message based on the narrative to keep it relevant

Measuring the Right Things…

Outputs vs. Outcomes

Brochures

Newsletters

Press Releases

Town Halls

Portal/Intranet

Videos

Events

Posters

Bulletin Boards

Relationships…

Behavior

Discretionary Effort

Trust

Collaboration

Innovation

Make Human Resources a Significant Part of the Process

This function is as critical as communications is to the success of the change effort simply because human resources professionals are needed to develop the new policy procedures, job specs and performance criteria that give meaning to the change effort.

HR professionals have proven themselves to be a strategic resource with valuable potential for influencing management decisions on talent, training and development–a critical advantage when it comes to managing change.

Six Principles To Shape Change CommunicationsMove communications beyond process updates – incorporate

messaging on desired results, vision and the effect or benefit of changes to customers and other external stakeholders

Determine what the marketplace will see as a result of organizational changes – to mitigate negative impact, plan for likely scenarios and align efforts to ensure One Face to the Customer

Create a central narrative with elements that stay consistent, evolve with internal and external realities of the business and are supported by examples

Shore up the global change and communications network, including all consultants – infuse with central narrative and leadership engagement model, in addition to protocol, tools, templates

Challenge and test assumptions about the culture, employee mindset, resistance to change and communication preferences

Treat gaining leadership and management buy-in on change strategies as a process, rather than a one-time event

The Right Questions (to answer for yourself) What is the specific assignment that communications is

being directed towards?

How is the organization defining success?

How will measurement be integrated into the process?

What is the delineation of activities and responsibilities between the agency and the client?

What types of resources/skills set will be needed to carry out the assignment?

What’s the protocol for interaction, decision making, project management?

What do you really need from your outside partner; what is your value proposition to the client?

“The real act of discovery is not in finding new lands but in seeing with new eyes.”

Marcel Proust