Prosci s Enterprise Change Management benchmarking

Transcription

1 ECM Lab Pre-reading Prosci s Enterprise Change Management benchmarking Includes the original 2005 ECM benchmarking study and excerpts from Prosci s 2009 benchmarking study Prosci All rights reserved. Used with permission in conjunction with the ECM Lab. Reproduction and distribution prohibited ecm@prosci.com

2 2005 Enterprise Change Management benchmarking report In the second half of 2005, Prosci launched a research project looking at how organizations are deploying change management across the enterprise. The research included an online study with 65 participants from across the globe as well as telephone interviews with over a dozen leaders working to deploy change management into the organization. The name Enterprise Change Management was selected for several reasons. First, the phrase Enterprise has been attached to other business initiatives (such as Architecture or Project Management) to denote common perspectives and application across the organization. Second, the focus of the research is on the area of deploying change management across multiple levels and functions of the organization, beyond just the application of the process and tools on a particular change effort. This report includes findings from the Enterprise Change Management research project. Contact Tim Creasey at or tcreasey@prosci.com with questions Prosci 1

3 Lessons learned What motivated your organization to deploy change management? 19% Market forces, competitor issues, maintain a competitive advantage 15% Poor performance and negative results and reactions to past changes 11% Significant change in strategy and direction of the organization 8% ERP/SAP implementation 8% Post-M&A integration 8% Ensure current change efforts are successful, benefits that are expected are fully realized 8% IT/Systems changes 8% Profitability cost or revenue pressures 7% Need to rapidly and effectively implement change in response to client or customer issues 6% A lot of change now or on horizon Note: organizations are counted in each group that they specified as a motivation if they specified more than one Where did you start deployment? Executives Senior managers Project teams Front-line employees Supervisors Mid-level managers Where did you start deployment? 0% 10% 20% 30% 40% 50% 60% 70% Over half of study participants started deployment at the executive level, with over three quarters starting with executives or senior managers. What is working on your deployment? Secured effective and engaged sponsor; providing guidance and support to deployment Effective communications that get people on board to building change management skills; demonstrate why it is important to the employee Involvement by employees; hands-on; participation in the design and solution; practice Common approach, process, methodology; easy to use; common language Tools to support the application of change management; easy to use and well-organized for users What is not working? What obstacles are you facing? Not consistent application across the organization and on different projects, no view about all the change that is going on Poor leadership, sponsor not following through and creating coalition, communicating Change management is being introduced in the midst of too much change Time constraints of the different groups involved in building change management competency Resistance to the bigger organizational change that change management is being attached to Outline the approach and steps you are using to deploy change management enterprise-wide: Change management initiation 9% cited how change management was initiated as a specific step in organizational deployment. Initiation strategies include o Deployment on selected pilot projects o Building of a business case and presentation to executive staff o Change management as part of a new company vision o o A top down company directive or charter A grass roots effort within a dedicated change practitioner community Most common steps to deploy CM enterprise wide Training on change management Of those that trained on change management: o 33% trained change practitioners o 25% trained employees o 24% trained executive leadership and top managers o 16% trained front-line managers and supervisors o 2% trained project leaders o Note: organizations are counted in each group if they specified more than one area of training Communications Communications includes a communication strategy, plans, awareness on why the change is happening and the benefits, status updates, and feedback channels Measure, review and monitor the process Followup with adjustments and tailor the process Form change management teams 56% of this group formed separate and dedicated change management teams Coach and build buy-in with sponsors Choose and implement a common change management methodology across all projects Form a change management strategy Including assessments, gap analysis, SWOT analysis, cultural factors Editor s note: the most common steps are in rank order, not the order they would occur in a deployment strategy 2005 Prosci 2

4 Where is the organization going from here? Continue building and improving resources o Building a team to drive CM o Expanded and improved CM training including executives and senior management o Build in accountability o Conduct best practices Extend the reach of change management o To more of the organization and through new initiatives o Develop a CM community of practice o Build CM competency Continue through implementation of the changes Implement one common change management methodology organization wide Deliver measurable success tied to change management Editor s note: no one mentioned reinforcing the use of change management, rewards, or celebrating successes Do differently if you could start over Build active and visible executive sponsorship o Be a strong coach for sponsor and create a relationship with that sponsor, especially their role on building awareness o Prepare them for the resistance that will be present o Build the sponsor s awareness of the importance of a supportive executive coalition and coach them through building one Engage all frontline staff in the process o Build their awareness o Follow up on their feedback Create a permanent CM team with the following attributes: o Dedicated resources from each business unit and each level in the organization o Internal to the organization not external o Reporting to the executive staff and CEO not to HR or another functional group Common CM methodology Exactly one half of participants were deploying a common change management methodology. The most frequently cited methodologies are shown below. Participant cited the following criteria when asked to outline the approach for selecting the methodology: Review methodology and interview provider and past customers look for successful track record; easy to use and understand; including best practices Experience, knowledge, past experience of the internal employees implementing the enterprise change management program Provided by the consultant Already being used in part of the company Editor s disclaimer: the sample for the study was drawn from Prosci s Change Management Learning Center. ECM roles (mentioned once) 24% Conner 4% IMA 8% Internal 'best of'/mind meld; multiple sources 14% Prosci 28% Kotter 22% Who (which department/group/function) is overseeing the deployment of change management across the organization? OD 4% IT 7% Operations manager 7% PMO 4% Change mgmt dept/office 7% 10% Org effectiveness group 9% HR 21% Business transformation group 12% Senior leaders 19% Senior leaders (19%) o CEO, Directors, Functional executive, Senior leadership team/steering committee, Administration team Business transformation group (12%) o Corp Strategy/Planning, Business Development, Capital Project Development, VP Transformation, VP Leadership and OD Org effectiveness group (9%) o Corporate performance improvement manager, Organizational assurance, Business operations analysis, Process Excellence, Org Capabilities and Services 2005 Prosci 3

5 Who (where in the organization) is the executive sponsorship coming from? Board of Director 7% Division Head 4% General Manager 6% 7% HR 9% Director of Ops/Strategy 11% CIO 4% Managing Director 11% Senior management/ leadership team 24% CEO 17% Nearly three quarters (73%) of participants viewed their sponsors as active and visible in the deployment of change management. Do you have a dedicated CM resource team? Sixty three percent (63%) of participants reported having a dedicated change management resource team. The role of the team, in rank order, was: Implementing change management plans, activities and organization programs Internal consultant to project teams introducing change Developing communications for specific projects and the organization Deploy common methodology across organization and into projects Report, track progress of projects Facilitators of change management meetings Support managers in their change management implementation Teach others in the organization about managing change Advising senior leaders on their role in change management Did you use external resources to support deployment? Over one half or participants (55%) were using external resources to support their deployment. The most common role of the external resource was: 34% used an external group for consulting A mentor and guide with specialized expertise on the change process 30% brought in an external group to provide and facilitate change management training 11% had an external group bring in or develop and customize a change management methodology Including the tools, materials and research to go with the methodology What role has the project management group played? Over three quarters of participants (77%) indicated that there has been integration of change management activities into project management groups. Participants were also asked to indicate the role that the project management group has played in the deployment. Active/heavily involved (63%) o CM integrated into PM methodology o Accountable for results o Design and execution o Define CM strategy and plans Provided oversight/guidance (20%) o Quality assurance o Time and resource management o Report progress of action items Not involved or no PM group (13%) Not sure (4%) Building awareness and knowledge How have you made people aware of or stimulated interest related to change management as a needed competency in the organization? Internal communications through multiple channels focused on the need for change and the benefits of change management. Channels include: o Intranet o o Newsletters o Posters o Focus groups o One-on-one briefs o Weekly/monthly meetings Change management training and workshops including leadership engagement sessions Build awareness, buy-in, engagement, and visible support among senior leaders. Enable this group to adopt and cascade awareness down in the organization Place a change management staff on as many projects as possible Describe the training program associated with your deployment (audience, duration of course, main topic): Groups that were given training o Executives, senior managers, front-line managers, employees impacted by the change, people directly overseeing change (business leaders, project teams) Spectrum of detail o General information and concepts o Specific steps and details 2005 Prosci 4

6 Topics o High level concepts of change, specifics on details on the actual change or transformation, organization selected methodology, change models, stages of the change process, leadership skills, effective communications, team building, problem solving Length of training two main groupings o Short 1-4 hours general o Long 2-3 days specifics Timing/delivery o One-on-one o Workshops with natural groups o Spaced out iterative o On an as needed basis o On large company scale Groups that were mentioned o People impacted by the change right now Just In Time (JIT) o People who were interested in the topic or skill Business case for ECM Eighty one percent (81%) of participants reported preparing a business case. Of those who did, 53% presented hard numbers. Editor s note: Many participants rolled out change management a larger enterprise-wide transformation. Because of this, the business case numbers may include cases for the larger change, not just change management aspects. Who was the business case presented to: Group/Division Presidents 5% CEO 7% All employees 8% 15% Board of Directors 10% Managing Director 14% Team of top executives 24% Senior managers 17% Who (position/role in the organization) gave final approval for the deployment of change management across the organization? (in rank order) Resistance to ECM Where is the greatest source of resistance? All groups 9% Executives 9% Older, more experienced workers 9% Project managers 11% 4% Senior managers 17% Front-line employees 22% Mid-level managers 19% Three quarters (75%) of participants were experiencing resistance to the deployment. The following reasons for resistance were cited: Among front-line employees: o Job insecurity o Lack of understanding of why change is happening Among mid-level managers: o Loss of power o No reward for complying with change o History of failed changes o Lack of trust in top management Among senior managers: o Too much change at once o Lack of knowledge/understanding of CM o Set in old way of doing things Among project managers: o CM takes too much time o Lack of knowledge/understanding of CM o Something new/not part of PMI PMP certification Among executives: o Continuing to commit additional resources o Loss of power or perceived power o Results will be difficult to measure Among all groups: o Waiting for natural leaders to become champions o Perception that CM slows down processes o Lack of personal and professional accountability CEO Managing Director General Manager President EVP of Operations Board of Director CIO Senior Leadership Team EVP of Strategy Head of HR 2005 Prosci 5

7 End state of ECM How long have your efforts been underway? over 5 years between 2 years and 5 years between 1 year and 2 years between 6 and 12 months under 6 mos 0% 10% 20% 30% 40% 50% To what degree is your deployment complete? 35% 30% 25% 20% 15% 10% 5% 0% 20% and less between 20% and 40% between 40% and 60% between 60% and 80% over 80% Only slightly over one half of participants had defined an end-point for deploying change management (52%). When asked to describe the end state, the following themes emerged: Culture view of organization, new energy, enthusiasm, approach to change, perspective on change Normal way we do things repeated process on all new endeavors Project(s) being fully implement measured by the hard numbers associated with project implementation 2005 Prosci 6

8 Best Practices in Change Management Enterprise Change Management Change Management Maturity Model As in the 2007 study, participants in the 2009 study indicated their organization s level on the Prosci Change Management Maturity Model. The levels of the Change Management Maturity Model rank the overall deployment and maturity of change management within an organization: Level 5: Organizational competency Level 4: Organizational standards Level 3: Multiple projects Level 2: Isolated projects Level 1: Absent or ad hoc Percentage of projects using change management Participants were asked to estimate the percentage of projects in their organization that were using change management (Figure 43). More than half of the reporting organizations were applying change management on less than 25% of their change projects. Only 5% indicated that no projects were applying change management, while 4% stated that all of the projects in the organization were applying change management. 50% Overall, the distribution of maturity levels was fairly similar to the findings in the 2007 study (Figure 42). 85% of participants in the 2009 study indicated Level 1, Level 2 or Level 3, compared to 86% in the 2007 study. Again, Level 2 was the most cited maturity model level with almost half of all participants (47%) indicating that change management took place on isolated projects throughout the organization. Percent of respondents 40% 30% 20% 10% 0% None 1 to 25% 26 to 50% 51 to 75% 76 to 99% All Level 5 Level 4 Level Figure 43 Percentage of projects within a given organization applying change management Level 2 Level 1 0% 10% 20% 30% 40% 50% Percent of respondents Figure 42 Level in the Prosci Change Management Maturity Model 2009 Prosci. All rights reserved. 83

9 Prosci Change management requirement on new projects Just under one third of participants indicated that change management was a requirement for new projects (Figure 44). Figure 44 Change management requirement on new projects Standard change management methodology In the 2009 study, 43% of participants indicated they had a standard organizational methodology, up from 29% in the 2007 study (Figure 45). No 52% Don't know 9% No 60% Don't know 5% Yes 31% Yes 43% Figure 45 Adopted standard change management methodology Top ten steps for deploying change management across an organization Participants reported on the steps they were taking to deploy change management. Below are the most frequently cited activities for deploying change management across the organization. Responses are listed in rank order, not chronologically. 1. Train people in the organization 2. Create a change management group 3. Integrate change management into project management 4. Select a common approach for the organization 5. Assign change management resources to projects 6. Implement measurement mechanisms 7. Initiate change management at project launch 8. Mandate the use of change management 9. Enlist senior leadership support 10. Attach change management to particular projects 1. Train people in the organization Overwhelmingly, participants cited training as the top deployment approach, with special programs developed for senior leaders, project teams and supervisors. Change management was also included as a core leadership competency for the organization. Developing a change management core curriculum for every level of the enterprise. 2. Create a change management group The change management group was a structure where change practitioners could meet and work together. There were a variety of names used including: Group of Practice, Center of Excellence, Community of Practice, Change Champions and Change Management Team. The group typically Prosci. All rights reserved.

10 Best Practices in Change Management supported both the rollout and application of change management. 3. Integrate change management into project management A number of participants provided approaches for integrating change management and project management. Some interwove the methodologies, while others sequenced change management to the standard project life cycle. The Project Management Office (PMO) was sometimes seen as a resource for change management deployment. 4. Select a common approach for the organization Participants identified or developed a standard approach for change management to be used on projects across the organization. This approach was communicated to project teams. 5. Assign change management resources to projects A number of participants reported that they created a more consultative function for change management in the organization, including training internal change management consultants to support particular projects. 6. Implement measurement mechanisms Measurement of change management efforts served to reinforce change management usage and provided results, success stories and feedback that could be shared across the organization. In addition, measurement was seen as a way to ensure compliance when applying the change management approach. 7. Initiate change management at project launch Participants provided a number of suggestions for ensuring that change management was started at the launch of a project. Some made a change management plan a qualifier in the approval process (required for sign-off by project sponsors). s took a less forward approach, working stakeholder analysis and change impact analysis into early project work and meetings. 8. Mandate the use of change management A number of participants cited an executive mandate that change management must be applied and all projects must have a change management plan. 9. Enlist senior leadership support Some participants used senior leaders as sponsors for implementing change management. While this was number nine on the list of approaches, it was number one on the list of what teams would do differently. 10. Attach change management to particular projects Suggestions for attaching change management to particular projects included starting with large, visible, enterprise-wide changes or determining specific pilot projects for the initial application of change management. Source date: 2007 Most important or highest impact deployment activities Participants identified the most important or highest impact activities for deploying change management in their organization. As with the section on steps for deployment, training was cited as the most critical deployment step. The five most effective deployment activities were: 1. Train people in change management This recommendation included providing training to all levels in the organization. 2. Enable project teams and managers to experience change management Actually applying the methodology helped organizations and individuals adopt and support it. Mandating change management on all projects helped increase the number of individuals exposed to change management. 3. Demonstrate senior leader commitment Senior leader commitment to change management had to come from both the person leading the deployment effort and other leaders from across the different business units and functions Prosci. All rights reserved. 85

11 Prosci 4. Show the need for change management Part of showing the need for change management was surfacing and acknowledging the gaps in current performance. Additionally, participants suggested clearly communicating the value of managing change effectively and how it benefited projects and the organization. 5. Select a common methodology or approach Having a common approach to change management showed the organization s commitment to managing change. It also ensured greater consistency in application. Several participants cited the importance of having a methodology that was easy to use and accessible. activities mentioned by participants included creating the change management team or group, sharing success stories, coaching and reinforcing successful efforts. Source date: 2007 What would you do differently the next time on a change management deployment? Participants also provided a number of suggestions for what they would do differently on their next change management deployment effort. While many ideas were provided, four main themes emerged: 1. Effective sponsorship The change management deployment initiative needed to have a designated and appropriate sponsor. Additional sponsorship should come from across the organization and from the business. Sponsors were key in showing that the organization was committed to change management. 2. Structure for deployment initiative There were many suggestions for bringing more structure to the deployment initiative. Structure included a systematic plan developed ahead of the rollout, a more strategic approach and formal assessments of the size of the effort and the current gaps (where are we today with change management compared to where we want to be). 3. Appropriate resources and budget The change management effort needed appropriate resources to be effective including appropriate budget, time and team members to work on the initiative. 4. More effective training More training was needed, and the training program should be formalized and reach across the entire organization. Several participants suggested making change management part of the existing supervisory skills and training program. Source date: 2007 Group dedicated to change management deployment Two thirds of study participants indicated they were working to deploy change management throughout the organization. Figure 46 shows the percentage of this subset that had a group or individual dedicated to deploying change management across the organization. Nearly two thirds of participants actively working to deploy change management had an individual or group dedicated to this effort. No 33% Don't know 3% Yes 64% Figure 46 Participants with group dedicated to change management deployment Prosci. All rights reserved.

12 Best Practices in Change Management Two thirds of participants reported having teams of five or fewer people working on change management deployment. Location of change management group Participants who were working to deploy change management throughout the organization were asked to comment on where in the organization they were currently located, and where they may be better positioned going forward. Figure 47 shows the results for where change management resided in the organization. As in the 2007 study, Human Resources was the most common response for where the change management group was placed, again with nearly one quarter of responses. Information Technology was sixth on the list in 2007 but moved up to second on the list in The Project Management Office, an independent office or group, and Organization Development filled out the top five locations. Human Resources (HR) Information Technology (IT) Project Management Office (PMO) Independent office or group Organization Development Group dedicated to Strategy or Transformation Distributed Within the business units and operations Process management or improvement group Internal consulting group Training, learning, leadership development Shared services 0% 5% 10% 15% 20% 25% 30% Percent of respondents Figure 47 Where does the change management group reside in the organization? For the first time, the 2009 study also included questions on where the change management group should reside in the organization and why. Figure 48 shows the top eight responses to this question. The Project Management Office was identified as the best location for the change management group. Project Management Office (PMO) Human Resources (HR) Independent office Reporting to highest level in organization Within the business Cross functional, multiple owners Strategy or planning group Organization Development (OD) 0% 5% 10% 15% 20% 25% Percent of respondents Figure 48 Where should the change management group reside? Participants offered up a number of reasons why the Project Management Office was the best place for change management. The most commonly cited reasons included: Alignment with and visibility into a majority of the change efforts underway Change management could be easily integrated into the project activities and the project methodology The group was already familiar with using methodologies and processes in relation to change efforts The PMO had clout, credibility and influence in the organization Change management could be more easily engaged early in the project life cycle The PMO offered some independence from the operational issues that may divert focus from the given change The second most frequently cited location for change management was in Human Resources for the following reasons: HR and change management both focus on the people side of the organization 2009 Prosci. All rights reserved. 87

13 Prosci Typically, HR touched the entire enterprise and reached across multiple divisions or business units activities and knowledge that closely aligned with change management resided in HR, including Organization Development, training and communications Staff were more easily influenced by HR HR already had a good pulse of the workforce The third most frequently cited location for change management was an independent office or group, sometimes referred to as the Change Management Office. Participants cited the following benefits: No biases to particular changes, departments or divisions Effort on change management was focused Executive buy-in and commitment was demonstrated by having an independent office More easily took an enterprise view of the changes underway Enabled application to both project and nonproject changes Many participants who indicated an independent office did comment on the importance of staying connected with other groups working on change, including HR, the PMO and the IT organization. Number four on the list was reporting directly to the highest level in the organization. The reasons for this location included: Visible sponsorship and commitment to change management Built-in access to sponsors on key initiatives Not being bogged down by operational issues and departmental resistance Ability to connect to strategy Some participants suggested a cross-functional model or multiple owners. They commented on the importance of a network dedicated to change management throughout the organization. Typically, the owners included some combination of: HR, the PMO, OD and IT. Participants who indicated a strategy or planning group, such as Strategic Planning or Corporate Strategy, felt that this location provided the change management group with the best access to the most important projects in the organization. This group also typically reported to a very senior manager. The participants that indicated Organization Development (OD) said that this group had broad visibility across much of the organization and had credibility and history working with large scale changes. responses included: Internal consulting group Information Technology (IT) Centralized core team with representation in the business Operations Groups dedicated to performance improvement Training or Leadership Development Messages from executives about the need for change management Participants were asked to share the messages their leaders had delivered to their organizations about the need for change management, including: Messages about change in general o Change is necessary and needed o The organization must respond faster o Change is required to remain competitive o Change will happen continually o Change is here to stay o Change is healthy and means progress Prosci. All rights reserved.

14 Best Practices in Change Management o Be ready for constant changes Advantages of change management o Change management is vital to the success and survival of the organization o Change management means growth and achieving goals in the future o Change management is an important element of projects and helps them be successful o Change management drives project outcomes o Change management has been successful and delivered results o Change management is needed to serve customers and the marketplace Expectations of future behaviors o Projects will need a change management plan developed at the beginning of the project o Everyone needs to take part o Change management is everyone s job o The organization is adopting a common approach to change management o Change management takes time and resources, but is worth it Source date: Prosci. All rights reserved. 89