Change Management: The X Factor in a Successful BPO Transformation Gwendolyn Moody Renovo The Transformation Consultants Copyright © 2011 GM Solutions Group. All Rights Reserved. The Outsourcing Institute Atlanta Chapter Outsourcing 2011 Wednesday, March 2, 2011 Atlanta, Georgia

1 Copyright © 2011 GM Solutions Group. All Rights Reserved. Introduction What is change management? Change management is the process, tools and techniques to manage the people-side of change to achieve the required business outcome. * People ProcessTechnology * Prosci Inc. Definition of Change Management Organizational Structure Roles and responsibilities

2 Copyright © 2011 GM Solutions Group. All Rights Reserved. Introduction Why is change management so important? * General Electric’s Change Acceleration Program (CAP) Q x A = Effectiveness Quality of technical, transition, transformation, growth, etc. strategy Q = Acceptance and/or AdoptionA = Change Effectiveness Equation*

3 Copyright © 2011 GM Solutions Group. All Rights Reserved. Contents Adoption Killers Unique BPO adoption challenges Four necessary conditions for adoption Change management adoption strategies

4 Copyright © 2011 GM Solutions Group. All Rights Reserved. Adoption Killers  Resistance is a natural part of any change, even if it is viewed as positive Anticipate resistance, acknowledge it and overcome resistance; ignoring it or suppressing it is not an effective strategy  Lack of trust and skepticism Open and respectful communications (sharing the information that is available) can help to facilitate trust You can address skepticism by (giving space) letting people accept that the change is a reality (inevitable) and acknowledging that people might have emotional ambivalence; they will need time to work through  Lack of clarity and relevance surrounding benefits and the rationale for change Recognize that one size does not fit all. Individuals need to hear the rationale for change as it relates to their daily lives from a leader in their organization, not senior executives

5 Copyright © 2011 GM Solutions Group. All Rights Reserved. BPO Adoption Challenges  Emphasizing company benefits when there are no clear personal benefits (WIFM) The reasons for the change might be clear; but do not have a personal benefit for resources that are involved in the transition People ultimately recognize that decisions are not always made with priority to individual benefit  Keeping transitional employees engaged in the knowledge transfer phase Providing a daily motivation boosters (not morale) to transitional employees is critical and can be achieved through monetary incentives, resume builders and reference agreements  Maintaining focus for retained employees Communicating their value Letting them process survivor’s guilt Incentives to act as role models

6 Copyright © 2011 GM Solutions Group. All Rights Reserved. Four conditions for adoption*  A compelling story Affected employees need to see the point of change and agree with it, at least enough to give it a try  Role modeling Employees need to see colleagues they admire modeling the desired behavior  Reinforcement systems All of the supporting structures, systems, processes and incentives must be in tune with the new behavior  Skills required for change Affected stakeholders need to have the skills to do what is required of them * “The Psychology of Change Management,” The McKinsey Quarterly, 2003, Number 2

7 Copyright © 2011 GM Solutions Group. All Rights Reserved. Change management strategies for BPO  Design and execute a thoughtful change management strategy that focuses on the four necessary conditions for change adoption: Implementing & Sustaining New Ways Enabling & Engaging the Organization Setting the Climate for Change Change Leadership Leadership Alignment Communication Strategies Organization /HR Organization Design Workforce Transition Learning Learning Requirements Capability Transfer Strategy Implement Transfer Plan Evaluate and Control Strategy Talent Requirements & Plan Evaluate and Control Strategy Assess Change & People impact Mitigate Risks Deploy Change Agents

8 Copyright © 2011 GM Solutions Group. All Rights Reserved. About Renovo Renovo is a management consultancy that helps clients achieve sustainable value in their business transformations. Supporting clients in numerous industries, we have functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. Renovo helps clients achieve their business case value with internal transformations such as ERP implementations, shared services, M&A integration and outsourcing solutions. Key Contact Gwen Moody Managing Principal