CHANGE MANAGEMENTTom Etter and Bin Yu

Change Management Most change efforts fail Two thirds fail because of failure to reach

intended results Efforts at “reengineering” experience a

70% failure rate Companies who fail to sustain significant

change end up facing crises John Kotter – 8 phases of driving

successful change

8 Steps to Managing Change

1. Establish a Sense of Urgency2. Form a Powerful Guiding Coalition3. Create a Vision4. Communicate the Vision5. Empower Others to Act on the Vision6. Plan for and Create Short-Term Wins7. Consolidate Improvements and Produce

More Change8. Institutionalize New Approaches

1. Establish a Sense of Urgency

Exhibit Vulnerability in Organization Examine market and competitive

realities Identify and discuss crises, potential

crises, or major opportunities

1. Establish a Sense of Urgency

Over 50% of organizations fail to create a sense of urgency Underestimate the difficulty in moving

people from their comfort zone. Lack of patience Complacency

1. Establish a Sense of Urgency

Sources of Complacency Too much happy talk from senior management The absence of a major and visible crisis Too many visible resources Low overall performance standards Organizational structures that focus employees on narrow

functional goals Internal measurement systems that focus on the wrong

performance indexes A lack of sufficient performance feedback from external

sources A kill-the-messenger, low-candor, low-confrontation culture Human nature, with its capacity for denial, especially if already

busy/stressed ?

1. Establish a Sense of Urgency

When is the level of urgency high enough? When 75% of leadership honestly believes a

change is necessary.

1. Establish a Sense of Urgency

Ways to raise urgency level Create a crisis

Allowing financial loss Exposing managers to weaknesses Allowing for error

Eliminate obvious examples of excess Company jet, country club, etc.

Set performance targets so high they can’t be reached by conducting business as usual

Insist on more productivity and broader measures of performance

2. Form A Powerful Guiding Coalition

Assemble group with enough power to lead change effort

Encourage the group to work together as a team Regardless of size, needs at least 3-5 people Grow team to 20-50 range in large companies Failures due to:

No history of teamwork at top Undervalue importance Strong sense of urgency not established Selecting wrong leadership

2. Form A Powerful Guiding Coalition

Building the coalition Find the right people

Strong position power Broad expertise High credibility

Create trust Carefully planned off-site events Lots of talk and joint activities

Develop common goal Sensible to the head Appealing to the heart

3. Create A Vision Create vision for directing change effort Develop strategies for achieving that

vision A vision says something that clarifies

direction The vision pulls the organization toward

the change

3. Creating A Vision Characteristics of an effective vision

Imaginable Desirable Feasible Focused Flexible Communicable

3. Vision ExampleThe University of New Hampshire (UNH) is nationally recognized as a Sustainable Learning Community* -- a land grant, sea grant, and space grant university that unites the spirit of discovery with the challenge of sustainability across its Curriculum, Operations, Research and Engagement:

• Curriculum: Educating citizen-professionals to advance sustainability in their civic and professional lives• Operations: Embodying first principles and best practices of sustainability• Research: Serving society with scholarship that responds to the most pressing issues of sustainability • Engagement: Collaborating locally to globally with extension and outreach

-- through four initiatives designed around four foundational systems of sustainability – biodiversity, climate, food, and culture.

3. Create A Vision Example

University of New Hampshire

Sustainable Learning Community Land grant, sea grant

and space grant university

Unites the spirit of discovery with the challenge of sustainability across its 4 initiatives....

Curriculum Operations Research Engagement

....designed around 4 foundational systems of sustainability....

Biodiversity Climate Food Culture

4. Communicate the Vision Management must decide how much

communication of the vision is needed Do not limit it to one communication Use deeds along with words Will fail unless most members....

Understand Appreciate Commit Try to make happen effort happen

Use every existing communication channel and opportunity

4. Communicate the Vision Key Elements in Effective

Communication of a Vision: Simplicity Metaphor, analogy and example Multiple forms Repetition Leadership by example Explanation of seeming inconsistencies Give-and-take

5. Empower Others to Act on Vision

Eliminate obstacles to change Change systems or structures that

seriously undermine the mission Encourage risk taking and

nontraditional ideas, activities and actions

Make tough decisions in removing people who don’t ascribe to the vision

5. Empower Others to Act on Vision

Barriers to Empowerment Employees understand the vision & want to

make it a reality but are boxed in by.... Formal structures making it difficult to act A lack of needed skills undermines action Personnel & information systems make it

difficult to act Bosses discourage actions aimed at

implementing the new vision

5. Empower Others to Act on Vision

Empowering people to effect change Communicate a sensible vision to

employees Make structures compatible with the vision Provide the training employees needed Align information & personnel systems to

the vision Confront supervisors who undercut needed

change

6. Planning for & Creating Short-Term Wins Create and plan for visible performance

improvements Recognize and reward employees

involved in the improvements

6. Planning for & Creating Short-Term Wins The Value of Short-Term Wins

Provide evidence that sacrifices are worth it Reward change agents with pat on the back Help fine-tune vision and strategies Undermine cynics and self-serving resisters Keep bosses on board Build momentum

7. Consolidate Improvements & Sustain Momentum For Change Use increased credibility to change

systems, structures and polices that don’t fit the vision.

Hire, promote & develop employees who can implement the vision.

Reinvigorate the process with new projects, themes and change agents.

Confront even bigger issues and problems.

Change Management >Project Management

Project vs. Change Management

Adopted from Prosci Research

Project Managemen

t

Change Manageme

nt

Project Management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements (i.e. to affect change).

Change Management is the process, tools and techniques to manage the people-side of change to achieve the required business outcome (i.e. to assure the change is accepted; not rejected).

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Change vs. Project Management

Change Management

Project Management

Current State

Transition Period

Future State

Existing:• Processes• Systems• Org Structure• Job Roles

New:• Processes• Systems• Org

Structure• Job Roles

ContinousImprovement

Person affected by existing:• Processes• Systems• Org Structure• Job Roles

Person successfully transitions / accepts new:• Processes• Systems• Org Structure• Job Roles

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Change Management Processes/ Tools

Provides situational awareness. Helps us “Get Ready”

•Output examples:•Change characteristic profile•Organizational attributes profile•CM Strategy•CM Team Structure•Sponsor assessment; roles

Create Plans, then execute them. Five “should’s”:

•Communication Plan•Sponsor Roadmap•Training Plan•Coaching Plan•Resistance Management Plan

Ensure the change is Sustained.

Output examples:•Reinforcement mechanisms•Compliance audit reports•Corrective action plans•Recognition approaches•Success celebrations•After action review

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Change Management Competency Organizations must change faster than was previously required in

response to a rapidly changing world; managing the people-side of change is essential to successful change.

CM competency can be measured via Prosci’s Maturity Model:

Level 1 Ad hoc or Absent Little or no CM applied People-dependent; no formal practices / plans

Highest rate of project failure, productivity

loss

Level 2 Isolated Projects Some elements of CM are applied in some individual projects

Many different tactics used inconsistently

Level 3 Multiple Projects Comprehensive approach for CM applied in multiple projects

Some examples of best practice are evident

Level 4 Organizational Standards

Organization-wide standards and methods are broadly deployed for

managing / leading change

Selection of common approach, which is

normally used by most areas of the firm

Level 5 Organizational Competency

CM competency is evident in all levels of the org and is part of the

org’s IP and competitive edge

Continuous process improvement in place

Highest probability and responsiveness

Tips for Successful Change Management

Involve staff from all

levels in the change

Constantly assess

strategies

Be conscious of ripple effects

Distinguish between

urgent and important

Show strong, united

leadership

Consider emotional

and behavioral

issues

Confront the brutal facts but keep the faith

From Barbara Johnson, PhD

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