May the force be with you: Successful change management in the age of the customer.

Transcription

1 White Paper Change Management May the force be with you: Successful change management in the age of the customer. The transformation towards customer focus is one of the toughest management challenges a company can undertake. In this paper we share some lessons learned for a successful journey. In fact, change management is not difficult it s just hard work. Authored by Peter Nordström

2 Many companies launch initiatives to become more customer-focused. Such initiatives require a lot of effort, yet often fail to deliver more than a fraction of the envisioned benefits. This is why it is as important to decide how the end state is to be realized, as it is to decide what the end state should be. This paper provides some information and some tips on how companies can transform their organizational capabilities effectively, and how leaders can support the change. its pieces. The vision then becomes the result of the initiatives, rather than the other way around. People make change hard Since change deals with people, who are not always predictable, organization change is like a journey that needs constant navigation. At Differ, we take pride in supporting our clients all the way from direction setting through implementation. Most of our projects are in some way related to a transformation journey aiming to become more customer-focused, which has proved to be a particular challenge from a change management perspective. Over the years, we have found some keys for an effective approach to change management in this area. Companies often spend considerable efforts to develop an attractive but vague picture of the change vision. Based on this wanted future position, they usually derive a high-level, sequential strategy road map. Even though this all makes good sense, much of the effort spent on finding what the to-be-state should look like is better spent on making it realizable. To make it more understandable, the to-be-state can be seen as the complete picture in a puzzle where the tangible change initiatives form People are complex, and true change will only happen if the right mix of rational and emotional elements are in place and if there is enough time to let people pass through the various stages of change. Linear improvement plans, such as the ADKAR model, are simply too naïve. Any successful change is dependent on people being guided and assisted through the journey from the inevitable anxiety to the desired acceptance and performance. Many ways of driving change Change needs to be navigated, not implemented There is not one sole way of driving change. Dependent on the needs, there are many options to shape the change initiative. One can undertake it rapidly or slowly, top-down or bottom-up, visibly or hidden. Any specific change program will be a balanced portfolio of different measures, based on a tailored change strategy for 1 Change management is not difficult it s just hard work.

3 NATURE OF ACTIVITY Hidden Visibly Explosion Argumentation Top -down Manipulation Enablement Bottom-up The Drag for a change effort is a lack of urgency or perceived rationale for change in the current situation. A clear and enticing vision gives the Thrust forward. Top management active sponsorship will help to Lift the initiative and help it withstand the Gravitation of emotional resistance in the organisation. INITIATION/DIRECTION OF ACTIVITY that specific change. It is important to carefully go through the options and decide on the best way of driving the change in question, and not jump into neither standard telling and yelling nor unproductive discussion clubs. The resulting force shapes the change A change initiative can be likened to a flying airplane. Four forces affect the flight and the resulting net force determines the plane s speed and direction. Drag: Lack of urgency No one will change if there is no need to change. The reason for the change is the sense of urgency, however attractive the change goals are. Without this reason for change, other commitments will be prioritized. The major risk of any change is that the old ways prevail. Since people don t automatically like change, or bother to change, organizational nostalgia will always be a winner if there is no sense of urgency. Thrust: Change vision OK, so change is needed, but into what? General vision statements tend to be more LIFT Executive sponsorship DRAG Sense of urgency THRUST To-be situation Analytical dimension GRAVITATION Organizational resistance Figure: Differ s Change Management Govenance Emotional dimension Change management is not difficult it s just hard work. 2

4 taglines than substance. The notion of customer orientation is easy to buy intellectually, but much harder to translate into concrete changes for the individual employee. To be effective in a transformation journey, a vision needs to entail more tangible aspects like desired customer experience, aligned and seamless omni-channel service, customer insight-driven decision making, customer-oriented and cross-functional KPIs, or similar. In short, the vision needs to explain all aspects of what the change is intended to achieve, look like and feel like, to help people act more and more according to the goals. Gravitation: Organizational resistance No change, positive or negative, comes without resistance. It is part of human behaviour to resist change. However, there are ways to deal with this resistance and get through it. We can never hope to avoid it, but we can work to minimize the time it takes to overcome change resistance, if we look at some of the typical drivers behind resistance: Self-interest Culture Non-aligned goals Lack of trust Uncertainty Generally, overt resistance is good, and covert, hidden, resistance is bad. Communication and involvement are key tools to build trust and reduce uncertainty. Listening to the organization and supporting the right behaviour is crucial. Organizational resilience can be built to support the change. Lift: Management sponsorship Management needs to support the change. This always happens in the beginning, just after the decision of the change is taken. However, leadership in a change process is an on-going commitment, which requires stamina. Therefore, activities need to be in place to ensure lasting sponsorship Symbols Decisions Rituals Leadership Heroes Language Stories Figure: Differ s Change Management Framework 3 Change management is not difficult it s just hard work.

5 from all levels of management. It is when management has moved on to the next topic, half way through the process, that change typically begins to fail. Specifically, and thus throughout the entire change process, managers need to ensure that the organizational culture is promoting change, and not preserving the status quo. The desired change needs to be manifested in all seven aspects of a corporate culture. Do the symbols and artefacts of the corporate culture need to be replaced or updated? What rituals are needed in the future are there any new things we need to celebrate? What do the future heroes, role models, look like? Can we establish some new stories, myths, to emphasise some aspects of the desired change? Are there any words that we should avoid or expressions we should start promoting? Can we redefine leadership practices? Is there perhaps a new process or new criteria in decisions? Change is multidimensional There are many different change management models available to evaluate the current state of the organization as well as the desired to-be state. Regardless of the model used, the envisioned benefits will not be reached if the different dimensions are treated and managed stand-alone. All four change forces (Lift, Drag, Thrust and Gravitation) need to be managed continuously throughout the whole journey, although the emphasis will shift over time. A central change office should be in charge of navigating the organisation through the journey, by monitoring, analysing and acting on the four forces. The office will be the multidimensional enabler of the change process. Transformation distortion Major strategic shifts like customer-orientation generally involve quite a number of people and almost always require a certain amount of negotiation between departments. This can deteriorate the change effort by distorting pieces of the puzzle. For instance, if some parts of the organization are able to tailor processes entirely as they please, this could result in other departments, critical to achieve the goal of the change, not functioning in the most effective way. This development causes this particular piece of the puzzle to lose its envisioned shape and affects the fit with other pieces. Any major change initiative, involving large changes to the ways employees are accustomed to work, naturally brings a great deal of internal turbulence. In turbulent times it is essential that the transition does not affect the customers in any adverse fashion. A transformation that brings about delivery or service disruptions causing the customers experience of their supplier to deteriorate might have severe long-term consequences to existing customer relationships. Previously loyal customers who turn to competitors to fulfil their needs during the change might be hard to win back. This is why the change office must also monitor how the customer experience is affected during the change effort and act quickly if needed. Securing momentum The best way of ensuring change progress is to leverage both internal and external forces of change. The external pressure that is applied by customer commitment or market forces is a critical and highly effective tool to manage change. This can be done in various ways, all aiming at communicating some kind of promise to the customers, focusing on the change vision. The internal communication around the change is often less powerful, but more informative, as it focuses more on the sense of urgency and the organizational resistance. The key is to use both, to capture both the employees who are loyal to their management, and those who are committed to their customers. Change management is not difficult it s just hard work. 4

6 White Paper Change Management Conclusion: When the critical pieces of the organizational puzzle are identified and the order in which they should be dealt with is set, the change management effort begins, and people will start to go through various stages of emotions and need support throughout the change. It is about selecting the right change journey, and constantly managing all aspects of change. Successful change is about putting together a puzzle, not planning a sequence of activities. Doing this in the right way, ensuring that people understand why they need to change and where they need to go, involving the organization and activating management will make change happen. Add to that a little customer promise, and the change will be a success. It does not need to be difficult, but it will take a lot of hard work. It will be a big jigsaw puzzle to put together. It will be worth it. Author Peter Nordström Senior Partner, Differ peter.nordstrom@differ.com Differ is a consulting firm focused on demand side strategy. Our service offering covers the entire revenue generating process. Differ s 20 year history includes management consultancy Xlent Strategy and brand consultancy Differ. We are part of Xlent Consulting Group. Please find more information at No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means - electronic, mechanical, photocopying, recording, or otherwise - without the permission of Differ. Differ Regeringsgatan Stockholm Tel: Mail: info@differ.com