CHANGE MANAGEMENT INTRODUCTION

CHANGE MANAGEMENT INTRODUCTION

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TABLE OF CONTENTS Introduction to Change Management... 3 Without change management your project will fail!... 3 So why do change efforts fail?... 4 Change management is a discipline you need for your project to succeed... 7 Sense of Urgency and create coalition... 8 Without sense of urgency no one will follow your change initiative... 8 So how do we raise the urgency level?... 9 Don t do it alone. You need a Guiding Coalition... 10 Create and share a clear vision... 12 Without a vision, no one will follow you.... 12 You need to communicate your vision... 14 Empower people and make short-term wins.... 16 You need many people to assist in your transformation project... 16 Removing barriers to empowerment... 17 Generating short-term wins... 18 Thank you for attending... 19

INTRODUCTION TO CHANGE MANAGEMENT This ebook will introduce you to the methodology of Change Management and how you can use that methodology in your change projects. We will talk about our own experience with Change Management and also use other experts input to change management. This first chapter will introduce you to the topic and why change management is so important. Let us get started. WITHOUT CHANGE MANAGEMENT YOUR PROJECT WILL FAIL! I know that this statement might seem a little overstated. However, to be honest this is my experience that if you do not include some kind of Change Management to your project it will most likely fail. I have seen to many projects that have invested a lot of money, time and energy into a perfect deliverable. However, when it is delivered it slowly fail and is not used by most people in the company. This can be projects at 10-20 million dollars that fail because the change management part was underestimated! In what kind of projects do I need to use change management then? Well I would say all but here are some examples why companies change. Mergers and acquisitions Downsizing

Work process improvement Organizational culture change New IT system or system integration Technology replacement New strategy Relocation Improve quality of products and services Cost reduction initiatives New procedures SO WHY DO CHANGE EFFORTS FAIL? We all know that bringing in new ways to do things can course people to resist the change. It is not because people are not good enough at their job. It is not only other people that do not know how to change. I guess you have tried it yourself that when someone say you need to do things in a new way you are not just doing it right away. You go through the typical emotional curve.

When you first learn about the change you go into schock and your productivity falls dramatically. Then you go into denial where you convince yourself that if you do as you have always done it will go away. When you realize that this change is going to be permanently you go into anger and even depression. Slowly you start accepting the change and after some time it will be an integrated part of the daily work. Change efforts typically fail due to several of these reasons: People leading the change think that announcing the change is the same as implementing it People s concerns with change are not surfaced or addressed

Those being asked to change are not involved in planning the change There is no urgent or compelling reason to change. The business case is not communicated A compelling vision that excites people about the future has not been developed or communicated The change leadership team does not include early adopters, resisters, or informal leaders The change is not piloted so the organization does not learn what is needed to support the change Organizational systems and other initiatives are not aligned with the change Leaders lose focus or fail to prioritize, causing death by 1000 initiatives People are not enabled or encouraged to build new skills Progress is not measured and no one recognizes the changes that people have worked hard to make People are not held accountable for implementing the change

CHANGE MANAGEMENT IS A DISCIPLINE YOU NEED FOR YOUR PROJECT TO SUCCEED There is no doubt that you need to consider change management into your project in order to succeed. Simply in order to get the business benefits out of your project you need to use a lot of effort in Change Management. In the next chapters we will go into more depth on how you can implement a change project in your organization.

SENSE OF URGENCY AND CREATE COALITION In the last chapter, we looked at the overall topic of Change Management to get an idea of what change is and what it does to people and organizations. In this chapter, we will dig deeper into HOW we can make a change. We will continue to focus on specific tools and methods you can use directly in your own change project. WITHOUT SENSE OF URGENCY NO ONE WILL FOLLOW YOUR CHANGE INITIATIVE Since you are taking this introduction course to Change Management, I am sure that you by now are aware how difficult it is to make a change in any organization. In order to make a significant change you need to have a large number of employees (15-20% of employees) to work harder than would normally be expected of them in order to drive any significant change. With this in mind just imagine to convince so many people to work extra hard if there is no real sense of urgency. That is why creating a sense of urgency is the first step to any change project. If there is no sense of urgency people will fight back in order to keep from implementing any new process that they do not think is right for the company. I have seen many companies that acts as if there was no urgency to change things. Even though it from an outside in view looks like the

company s products are outdated, sales are doing bad and the stock price is decreasing. You would expect seeing people working 24 hours a day with special taskforce set up in order to change the company FAST before it is too late. However, when you look around the company, people are moving slowly and no one seems to know that there is a crises. All they talk about is that this is just a temporary setback and they will as always come out on top. When someone in the management team suggest any changes, it is quickly disregarded and some other insignificant subject is debated instead. Yes, I know, you think this sound as stupid people running the company. You would be surprised how many companies run like this. SO HOW DO WE RAISE THE URGENCY LEVEL? Bold moves are necessary to make any significant change. John Kotter suggest following ways to raise the urgency level: Create a crisis by allowing a financial loss, exposing managers to major weaknesses vis-á-vis competitors, or allowing errors to blow up instead of being corrected at the last minute. Eliminate obvious examples of excess (e.g. company-owned country club facilities, a large air force, gourmet executive dining rooms). Set revenue, income, productivity, customer satisfaction, and cycletime targets so high that they can t be reached by conducting business as usual. Stop measuring subunit performance based only on narrow functional goals. Insist that more people be held accountable for

broader measures of business performance. Send more data about customer satisfaction and financial performance to more employees, especially information that demonstrates weaknesses visa-vis the competition. Insist that people talk regularly to unsatisfied customers, unhappy suppliers, and disgruntled shareholders. Use consultants and other means to force more relevant data and honest discussion into management meetings. Put more honest discussions of the firm s problems in company newspapers and senior management speeches. Stop senior management happy talk. Bombard people with information on future opportunities, on the wonderful rewards for capitalizing on those opportunities, and on the organization s current inability to pursue those opportunities. DON T DO IT ALONE. YOU NEED A GUIDING COALITION Often when you hear about big company turnarounds, you hear about one person (often the CEO) that made that change happen and saved the company from bankruptcy. This is not the case. It is very dangerous to believe you can manage the change only by yourself. A strong guiding coalition is always needed one with the right composition, level of trust, and shared objective.

If you set up the wrong team you will fail. I have seen this many times. Teams are put together (from different organizations) to create a change project but they are not committed and do not have the right characteristics to make a strong change coalition. There are four characteristics that are essentials when you put together your change team: Position power: Are enough key players on board, especially the main line managers, so that those left out cannot easily block progress? Expertise: Are the various points of view in terms of discipline, work experience, nationality, etc. relevant to the task at hand adequately represented so that informed, intelligent decisions will be made? Credibility: Does the group have enough people with good reputations in the firm so that its pronouncements will be taken seriously by other employees? Leadership: Does the group include enough proven leaders to be able to drive the change process? After finding the right people, you need to lead this team by creating trust through team building. You also need to create a common goal that this team can work towards.

CREATE AND SHARE A CLEAR VISION In the last chapter, we looked at how to make a Sense of Urgency and how important it is to create a Guiding Coalition. In this chapter, we will focus on creating a change vision and how to communicate that vision. WITHOUT A VISION, NO ONE WILL FOLLOW YOU. There are many ways to try to get people to follow you. Well actually, you can narrow it down to three management styles. You have the manager that tells you do it because I say so. Most people will resist following that person. Some few might follow out of fear but there will be no passion and the result will be a disaster. Then you have the leader that tells you exactly what to do in every detail and when to do it. Furthermore, the leader will then monitor every single step. The leader that uses micromanagement might have better success than the authoritarian leader above. However, there are two crucial things not working with this methodology. First thing is that the change is going to take too long if the manager need to create and communicate every single step of the detailed change plan. Second issue is that by telling people exactly what to do they do not think for themselves anymore. So in order to have self-driven individuals who are passionate about the change initiative this is not the way. The third management style is the best way to lead a change initiative. This is through creation of a vision that people will follow.

Vision refers to a description of the future. It have a very strong impact on a change initiative. It serves three purposes to a change project: Clarifying the direction for change, We need to make apples instead of oranges that we do today. It simplifies what would else have been thousands of detailed decisions. It motivates to move people in the right direction. Even though some of the first steps might be seen as a personal pain for individuals. It helps coordinate the actions of people in a fast and efficient way. To clarify the direction of where you want the company to be, it kills a lot of discussions and people disagreeing on direction wondering if the change is necessary. How do you then create an effective vision for your change initiative? The characteristics of an effective vision is: Imaginable: Conveys a picture of what the future will look like Desirable: Appeals to the long-term interests of employees, customers, stockholders, and others who have a stake in the

enterprise. Feasible: Comprises realistic, attainable goals Focused: Is clear enough to provide guidance in decision making. Flexible: Is general enough to allow individual initiative and alternative responses in light of changing conditions Communicable: Is easy to communicate, can be successfully explained within five minutes. YOU NEED TO COMMUNICATE YOUR VISION Creating the vision is only the very beginning of your journey. The biggest task is getting that vision communicated. If you have made the Sense of Urgency big enough people will listen to your vision if it is clearly communicated. There are so many examples of vision statements with good intentions that have just been send out via email to employees, communicated ones in the company newspaper and mentioned ones at a company meeting. The biggest mistake is to think you have communicated enough. Today the total amount of communication going to an employee is massive. If you have just done as above example you would probably have used only 0,5% of the total communication the employee gets in the same period. The time and energy required for effective vision communication are directly related to the clarity and simplicity of the message. Here are some key elements in the effective communication of a vision:

Simplicity: All jargon and technobabble must be eliminated Metaphor, analogy and example: A verbal picture is worth a thousand words Multiple forums: Big meetings and small, memos and newspapers, formal and informal interaction all are effective for spreading the word. Repetition: Ideas sink in deeply only after they have been heard many times. Leadership by example: Behavior from important people that is inconsistent with the vision overwhelms other forms of communication

EMPOWER PEOPLE AND MAKE SHORT-TERM WINS. Last chapter we focused on creating a vision for the change and how to communicate that vision. In this chapter we will focus on how to empower people and the importance of making short-term wins. YOU NEED MANY PEOPLE TO ASSIST IN YOUR TRANSFORMATION PROJECT Empowerment is really a management word that has been used a little too often. But nevertheless it is still very relevant to change a company. Big transformation programs do not succeed unless many people assist. But if the employees feel powerless they won t or can t help in the transformation. So how do we empower people at this stage. Well it is really all about getting people to take action by removing as many barriers to the implementation of the change vision as possible.

Kotter made this model to show what barriers there is to empowerment in change projects: REMOVING BARRIERS TO EMPOWERMENT It is not always we see that there is structural barriers to a change project. However in many cases there are simply an organizational structure that simply do not align with the change vision. Let us imagine that we have created the sense of urgency, created a change coalition, made the vision and communicated that vision clearly. The front line employees are fired up to make the change. In order to do so they need to work in cross-functional teams (sometimes from 4 or 5 different teams). The strong structural silos undermined the teams in many ways. With so many structural barriers, the employees at the end just gave up and went back to their normal way of working.

If people are asked to change but they are not educated in the new skills they need it will fail. Education can be very important and should not be underestimated. It does not always require millions of dollars investments. It really depends on how many employees jobs are changing. It is not only the technical skills but also often the soft attitudinal skills that is needed. Also aligning systems to the vision is important. One example could be that the HR system is not aligned with the vision. It is not in peoples best interest to change because Performance Appraisal, compensation, promotions and succession planning are not aligned with the change vision. There is also the barrier of dealing with troublesome supervisors. You know the type. He or she is reluctant to change no matter what. They might have a lot of power and a lot of employees might be under this persons leadership. If this person is not confronted in the early stage with what is needed from them, they can stop the whole change effort if they are powerful enough. By confronting them early on with a plan it also gets obvious if that person need to be replaced. GENERATING SHORT-TERM WINS History has shown that a company can make great gains on transforming the organization towards the big vision. But if they do not pay attention to generating short-term wins the transformation is at risk. Why is it like this. Well you need to build credibility in the change effort both towards top management and stakeholders but also towards the employees. A lot of the nonbelievers will only change if they see hard evidence that it is helping the company. If everyone is only focusing on the big vision

goal but are not showing any results along the way, it might get stopped before it ever reaches its goal. The role of short-term wins are: Provide evidence that sacrifices are worth it: Wins greatly help justify the short-term costs involved. Reward change agents with a pat on the back: After a lot of hard work, positive feedback builds morale and motivation. Help fine-tune vision and strategies: Short-term wins give the guiding coalition concrete data on the viability of their ideas. Undermine cynics and self-serving resisters: Clear improvements in performance make it difficult for people to block needed change. Keep bosses on board: Provides those higher in the hierarchy with evidence that the transformation is on track. Build momentum: Turns neutrals into supporters, reluctant supporters into active helpers etc. THANK YOU FOR ATTENDING This is the end of this introduction e-book on Change Management. Hope you have enjoyed it. What is next. Well if you want to have the tools to get started on your change project we recommend that you become a member of the Tools4management Members Club. Here you have all the great accelerators that you need to get started.