1 Change Management Overview

2 Below are some facts based on research conducted on managing the resistance to change: 500 executives said that resistance was the primary reason changes failed in their organizations. In a similar study, 80% of CIO's surveyed said that resistance was the main reason why technology projects failed - not lack of skills or resources, but that touchy-feely human reaction of resistance and a lack of engagement. –Resistance to change is only part of the problem... management's reaction to resistance also contributes to failure. If management resists or ignores employee resistance (or lack of engagement) - there is a higher propensity for failure. In the 2005 Best Practices Report put out by Procsi (a change management research firm), they identified the top five reasons front line employees resist change: –Employees were not aware of the underlying business need for the change –Lay-offs were announced or feared as part of the change –Employees were unsure if they had the needed skills for success in the future state –Individuals were comfortable with the current state; they wanted to maintain the personal rewards and sense of accomplishment and fulfillment provided by the status quo –Employees felt they were being required to do more with less, or do more for the same pay Bureau of Labor Statistics: –During times of major change, gossip goes from 19% of our day to 40% –We drop from being 60% efficient to 15% efficient –Organizations loose, on average, 2 hours of productivity per employee per day

3 Clear, compelling case for change Demonstrated leadership commitment Clear WIIFM for all Clear WIIFM for all Concrete implementation plan Skills, knowledge & tools in place Skills, knowledge & tools in place Reinforcement “See It” “Own It” “Do It” Demonstrated leadership commitment Clear WIIFM for all Clear WIIFM for all Concrete implementation plan Skills, knowledge & tools in place Skills, knowledge & tools in place Reinforcement “It’s not urgent.” Clear WIIFM for all Clear WIIFM for all Clear, compelling case for change Concrete implementation plan Skills, knowledge & tools in place Skills, knowledge & tools in place Reinforcement “It’s not real.” Clear, compelling case for change Demonstrated leadership commitment Concrete implementation plan Skills, knowledge & tools in place Skills, knowledge & tools in place Reinforcement “It’s not worth it.” Clear, compelling case for change Demonstrated leadership commitment Clear WIIFM for all Clear WIIFM for all Skills, knowledge & tools in place Skills, knowledge & tools in place Reinforcement “It’s not going anywhere.” Clear, compelling case for change Demonstrated leadership commitment Clear WIIFM for all Clear WIIFM for all Concrete implementation plan Reinforcement “It’s not possible.” Adopted from Strategy to Results Through People © 1999 AchieveGlobal “It’s working!” Demonstrated leadership commitment Clear, compelling case for change Clear WIIFM for all Clear WIIFM for all Concrete implementation plan “It’s not for long.” Skills, knowledge & tools in place Skills, knowledge & tools in place Elements of Change

4 Change Levers (What do we have to manage…). 1. Communication – Articulating vision & business case. Building an understanding of new capabilities and expectations; inviting dialogue and feedback. 2. Learning – Development of new, sustainable skills and capabilities. 3. Leadership & Ownership – Building the alignment of leaders and team members to own program outcomes. Business ownership for the “what and how” 4. Work Design & Talent Management - The architecture of teams; alignment of roles with new capabilities and expectations. Proactive alignment of talent management efforts to the changing business requirements. 5. Business Readiness & Measurement - Understanding organizational impacts, enabling readiness, measuring progress and risks. Help ensure benefits are realized and sustained. Transformation Agenda: “Ready” the environment for changes. Creates individual engagement & personal accountability for change. Partner with Business Units, PMO,HR, Corporate Communications, Finance, etc. to build conscious competence for leading change.

5 If you are successful: This is what you should you see and hear… Time AWARENESS UNDERSTANDING ACCEPTANCE ADOPTION Commitment to change GO-LIVE SUSTAIN

6 If you are not successful: This is what you will see and hear… Time UNAWARE CONFUSION NEGATIVE PERCEPTION SUPPORT WITHDRAWN Commitment to change GO-LIVE CAPABILITY TERMINATED Stakeholders are unaware of the scope, impact, and outcomes, etc, for capability Stakeholders believe capability may present a negative impact to them (loss of control, capabilities, etc) Stakeholders allow the project to progress but do not provide additional resources or assistance Support (time/resources /involvement) that was previously allocated to the project is now retracted by stakeholders Stakeholders commit to termination of the project – either openly or covertly Misunder- standing of objectives, outcomes, impacts of capability

7 Managing the gap… Time Commitment to change UNAWARE CONFUSION NEGATIVE PERCEPTION SUPPORT WITHDRAWN GO-LIVE CAPABILITY TERMINATED GO-LIVE AWARENESS UNDERSTANDING ACCEPTANCE ADOPTION SUSTAIN $$$ Gap Project Rework Sub-Optimized Delivery Lack of Leadership Alignment Business Team Capability Gaps Delay/No Adoption Missing Accountability Minimized/Missed Benefit Realization Lost Investment Opportunity Wall Street Impacts Project Rework Sub-Optimized Delivery Lack of Leadership Alignment Business Team Capability Gaps Delay/No Adoption Missing Accountability Minimized/Missed Benefit Realization Lost Investment Opportunity Wall Street Impacts

8 Successful Change Management Integrates Change Levers Time AWARENESS UNDERSTANDING ACCEPTANCE ADOPTION Commitment to change GO-LIVE SUSTAIN Change Management Scorecard Benefits Scorecards Leadership & Ownership Communications Business Readiness & Measurement Org Design & Talent Management Training

9 Change Connection to Project Management Change Management activities are integrated into the overall project plans of each capability to ensure an integrated deployment solution. This approach starts with broad impact assessments and becomes more focused over the course of the implementation eventually creating individualized sustain plans for each impacted audience group. Deploy & SustainBuild & TestDesignPlan/Analyze Broad impact analysis Organization preparation Strategic planning of change management solutions Build Leader awareness Design user-specific solutions Refine messaging and target leadership involvement Build solutions Refine with targeted inputs Develop deployment plans by user group Deploy user- centric training and performance support Communicate to the individuals Measure the results

10 Change Model