Consulting Highlights & Studies

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1 Consulting Highlights & Studies Master the change change management during project execution By Shula Hadi Introduction Today s business environment is characterized by one factor above all others: the incredible pace of change. Changes in the marketplace, such as growing competitive threats, new markets, increasing globalization, and new technologies, quickly enforce changes within each of the market players. Change has become the only constant at companies life. Quickly adapting to changes whether they come from outside or within is a must. While there are many potential, company-internal reasons for change, the following are the most common ones: New vision and strategies Growth initiatives Restructuring / reorganization Realignment of existing portfolios Cost cutting programs? Mergers and acquisitions / post-merger integration /divestments IT innovations / new technologies. No doubt that changes are needed to achieve success. The major question is how to ensure a sustainable change and thus success. As companies are complex systems, change in one area is likely to have impact on other areas. Resistance to change is common, as overcoming old patterns and behaviors both for the organization and its individuals is hard. It is difficult to move from the safe old habits to the uncertain. Many studies indicate that only about a fifth of employees embrace change, while most of them are inactive, hesitant, if not negative and openly rejecting. Change management is required along the entire process when projects which almost always result in change occur: from the analysis and design phase over to implementation phase. The real transformation happens, however, during implementation. A number of independent studies performed over the past few years indicated that 85% of the sustainable success depends on implementation, and only 15% depends on the strategy itself. Implementation is a challenge because managers and executives are trained to plan and very often do not see themselves responsible for execution, and because it takes long time and involves many people. Consequently, most projects do not fail due to bad concepts, poor technology or inapt systems or processes, but because employees resist the change and potential side effects are ignored, indicating an insufficient change management. With this article, Shiloh Advisors invites you to: Get to know the benefits of change management Learn more about how to develop a change management concept with activities that promote employees buy-in and ensuring project s success Shiloh Advisors AG Page 1 of 6

2 Find out how to define the required level of employees involvement based on clearly understanding the project s drivers. Benefits of change management Change management helps to ease the change process and ensures employees engagement and buyin during and after the project. It promotes the understanding of why change is happening while accompanying and supporting employees via strengthening the promoters of change, mobilizing the hesitant, and neutralizing the resistors. Shiloh Advisors recommends to start with change management measures accompanying the project as early as possible, preferably already during the project s analysis and design phase. Doing so, change management is a core enabler for proper execution which is a great challenge and key to sustainable success and brings about very visible benefits: Faster realization of objectives e.g. cost savings, revenue gains, efficiency and effectiveness improvements, etc. Reduced cost of implementation by achieving the buy-in before and during implementation Less negative effects on daily business, e.g. decreased motivation due to uncertainty of the upcoming implementation and results Opportunity for development of leadership and team as well as of best practices More knowledge sharing and collaborative accomplishments Decreased risk of unsuccessful change Building a successful history of change which may serve as basis for future changes. How to develop a change management concept? In general, five major elements must be integrated in the change process: A clear framework to communicate and understand the change process A tool to track the progress of the change process and of required tangible results A program that reinforces and rewards the desired mindsets and the changed behaviors of the involved employees Continual communication, reinforcement and support in the most intensive / challenging areas of change Professional coaching, if needed. Sustainable change requires leadership commitment at every level of the organization. It is very important that executives are strongly involved in the project by visible support and by taking the role of sponsorship. Their explanation of why change is needed, articulating the vision of the goals, how to reach them, and their appeal for employees cooperation are crucial for success. The change management concept is developed jointly w/ selected employees, according to the desired and required degree of employees involvement. It describes in detail per stakeholder the objectives, required activities and frequency / points in time to achieve results. Understanding the stakeholders needs and defining the suitable measures based upon them are keys for success. Shiloh Advisors AG Page 2 of 6

3 Stakeholder analysis is the basis for every change management concept. The first step of such analysis aims at identifying and clustering all persons / groups that are affected by change. Typical internal stakeholders are top management, middle management, workers council and other employees. All stakeholders can be further segmented, e.g. by business units or functions. Secondly, the impact that the change has on the different stakeholders must be properly understood. Four dimensions organization, processes, people and IT are assessed to determine the nature and degree of changes. If desired, every dimension can be further detailed and examined, e.g. for the dimension organization one can think of organizational structure, reporting lines, etc. Additionally, the stakeholders can be differentiated based on two questions: 1. How high / low is their commitment to implement the required changes? 2. How important are they for implementing the required changes? Accordingly, stakeholders are positioned in a stakeholder matrix, as shown in picture 1: Picture 1: Stakeholder matrix (illustrative) Commitment of stakeholder to change implementation HIGH Stakeholder 1 Stakeholder 3 Agreers Multipliers LOW Stakeholder 2 Stakeholder 4 Importance of stakeholder for change implementation HIGH Critics Show stoppers Stakeholder 5 Substantial change management is only possible if stakeholders, especially the multipliers and show stoppers, are really actively mobilized, involved and enabled through a multitude of measures. The types of activities are to be aligned with the objectives per stakeholder. Table 1 provides an example of change management objective and corresponding activities for the different stakeholders (agreers, multipliers, critics, show stoppers). Table 1: Change management objectives and activities per stakeholder (illustrative) LOW Shiloh Advisors AG Page 3 of 6

4 Stakeholder Change management objective Characteristics of activities Example of activity Agreers Information: ensure constant communication to maintain agreers positive / neutral attitude Mostly written and one-way communication Newsletter, intranet, s Multipliers Multiplication: enable them being a multiplier and make them positive opinion leaders Meetings / events / calls w/ smaller audience and opportunity for dialogue and feedback Workshops Critics Commitment: overcome resistance they might have and promote their commitment, also incorporating their feedback Written and personal communication providing additional background information esp. on benefits of change s, meetings Show stoppers Integration / activation: overcome resistance they might have and get their support Meetings w/ bigger audience and opportunity for dialogue, also incorporating emotional aspects Info fair, change agent network Each activity is described in detail according to the objective, content, detailed measures, responsibilities, and timing / frequency. The result a change management plan can be seen in picture 2. Possible change management activities, which often are recommended by Shiloh Advisors, are: Visioning session: this session aims at supporting the realization of future projections and ideas. Participants develop a common understanding of the future. They are encouraged to generate and share ground breaking ideas, concepts and innovative thoughts. Different elements can be discussed and detailed during visioning, e.g. infrastructure and operations, customer, product and service portfolio, organization, etc. Participants thoughts of the present and future are concretely demonstrated by painting or even building a model of the future. Master the change session: this session aims at supporting employees in understanding and accepting the changes they are being experiencing in the company. Shiloh Advisors often executed this session in post-merger integration projects and in restructuring projects. Employees are informed what happens in the change process along the different stages, have Shiloh Advisors AG Page 4 of 6

5 the ability to express the fears and issues they are going through, and jointly discuss possible solutions. Information fair: the information fair aims at giving detailed information on the project s status, results, next steps, and upcoming changes to the employees. During the fair, the information is conveyed via info booths and short presentations by project team members. By providing opportunities for discussion and giving feedback, via dialogue and exchange between the project team and the employees, employees are mobilized for change. Workshop with break-out groups: the workshop s objective is to strongly involve employees, get their buy-in and develop detailed ideas / solutions for specific topics. The participants are split into several small break-out groups to discuss and gather ideas / solutions. Afterwards, every group presents their output and discusses it with the others. In the end, all results are consolidated. Picture 2: Change management plan (illustrative) Stakeholder: Corporate Public (Agreer) Global intranet page Global newsletter Global flyer Stakeholder: Workers Council (Agreer) Updates (dates to be discussed) Stakeholder: employees (Agreer) Local intranet page Local newsletter Local flyer Article in xxx Info point Site meeting (dates to be discussed) Stakeholder: IT (Show stopper) Update call Stakeholder: employees departm. X (Show stopper) Key User poster End User poster Info fair Shift meeting Stakeholder: Change agents (Show stopper) Update on releases Local meeting Regional meeting (date to be discussed) Stakeholder: management (Multiplier) Site info Call of management and Program Manager Stakeholder: BPOs (Multiplier) Onboarding BPOs BPO call Stakeholder: Local rollout team (Multiplier) Onboarding local rollout team Local rollout team kick-off Rollout Jour Fixe Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 only on demand = written communication = meeting/workshop/call Employees involvement as a vehicle to change management success Shiloh Advisors regularly incorporates change management activities as a supporting measure in all projects. The level of employees involvement varies, however, in the different project s stages: analysis, design and implementation. We differentiate between a top-down or bottom-up approach which must be tailored to each project s situation in accordance with the reasons for change. For example: Shiloh Advisors AG Page 5 of 6

6 Crisis (e.g. resulting in a massive cost cutting program): a top-down approach, with involving mostly top management and only few (or no) employees during the design phase, especially if lay-offs are planned, is recommended. Once the design is finalized, intense change management activities should take place to ensure employees understanding and reduce their resistance despite potential negative effects on their own situation. Performance improvements (e.g. growth initiatives, continuous improvement program): a bottom-up approach is feasible, as employees strong involvement is a prerequisite in order to get their input and ideas on how to achieve objectives, and thus to get their buy-in for executing it. Renewing / repositioning (e.g. restructuring, post-merger integration, new strategy): a balance between top-down and bottom-up approaches needed, with a tendency to top-down approach, in case of a restructuring project. In a post-merger integration project on the other hand, a bottom-up approach which strongly involves the employees in many of the processed areas is beneficial. Shiloh Advisors recommends the execution of Master the change session to help employees mastering the ongoing change. Conclusions Change management and thus changing habits and behaviors are a matter of discipline. It s about learning new patterns that have purpose and impact. It is about attitude, persistence and long-term gain. It s about continual motivation to do the right things right, measuring continuously the progress towards the goals, and also being accountable for oneself and others. To get the desired results during implementation, change management activities are a must. They should be carefully designed with project sponsors in line with project objectives and incorporating the different stakeholders needs. As opposed to the past, we observe an improving attitude towards the execution of change management programs during the entire project and increasing willingness to allocate required resources. Executives better understand that the lack of change management measures delays the realization of both quantitative and qualitative benefits. The Shiloh Advisors team can help you to find the right approach to manage change. Please contact us at or info@shilohadvisors.com. ABOUT Shiloh Advisors Shiloh Advisors is an international consulting firm with full service capabilities. Whether your business requires strategy, innovation or transformation our mission is to develop advanced, value-driven, grounded and pragmatic customized solutions with an emphasis on knowledge creation and transfer. You are left able to better manage your challenges and achieve your goals, increasing power, competence and energy, resulting in brilliant sustainable business results. Shiloh Advisors AG Page 6 of 6