Managing the People Side of Change

Managing the People Side of Change
Valerie S. McCloud, PMP, CSM, PMI-ACP December 3, 2014 The IIEE Approach INVOLVE ENGAGE EMPOWER IDENTIFY

Presentation Topics Making a Case for Change Management
1 2 3 4 5 Making a Case for Change Management Challenges of Change Management The IIEE Approach to Managing Change New Ways to Think About & Implement Change Resources to Adopt Change Presentation Topics 2 © Copyright Foxfire Consulting, LLC

Making a Case for Change Management
1 Making a Case for Change Management Presentation Topics 3 © Copyright Foxfire Consulting, LLC

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” – Charles Darwin “We now accept the fact that learning is a lifelong process of keeping abreast of change. And the most pressing task is to teach people how to learn.” – Peter Drucker 4 © Copyright Foxfire Consulting, LLC

What is change management? Change management is a structured approach to transitioning individuals, teams and organizations from a current state to a desired future state. 5 © Copyright Foxfire Consulting, LLC

The literature on “change management” is clear: Over 70% of change initiatives fail. John Kotter’s 1995 published research - only 30% of change programs are successful. In 2008, a McKinsey & Company survey – still 30% success rate. The IBM recently published a report: Making change work…while the work keeps changing – only the top 20% of organizations were highly successful. Prosci's 16 years of research - projects are six times more likely to meet objectives when organizations manage the people side of change effectively. IBM recently released an executive report: “Making change work… while the work keeps changing – How change architects lead and manage organizational change.” The report, based on data from their latest “Making Change Work Study” seems a very pertinent one for the times. As a whole, we know that this is a period of significant change for the workforce, we talk about these changes, and how they can and are affecting organizations, but there is significantly less talk around how organizations are successfully managing such change – which is exactly what IBM’s report dives into. As IBM states, “the gap between the magnitude of change and the ability of organizations to manage it continues to widen.” While many organizations are struggling to close this gap, IBM identifies a select few – change architects – that have “found the keys to making change work while the work keeps changing.” IBM’s data is based on survey results from almost 1,400 individuals responsible for designing, creating or implementing change across their respective organizations. In IBM’s study, they consider only the top 20 percent of organizations to be highly successful when it comes to change management. These “Change Architects” are organizations that indicated at least 75% of their projects were a complete success (i.e. a minimum of three-in-four projects met all predefined goals). Myth: A great idea/solution + Effective project management = Project Success 6 © Copyright Foxfire Consulting, LLC

Change Management as a discipline, has grown tremendously. A 2005 Benchmarking study - structured approach to managing change grew from 34% to 55%, and it has continued its growth. Importance of managing change: More and frequent changes – Change happening at incredibly fast pace. Organizations need better way to manage individuals impacted by many changes. Value system of empowerment – Old values of control and predictability given way to new values that push decision-making, authority and responsibility down into the organization. Competitive advantage – Information moves quickly and across the globe in literally seconds! In coming years, speed and agility will be a central differentiator in the marketplace. Incredible pace of change. Quantity of change increasing, and changes happening more frequently and faster that ever before. Over last 50 years, value systems shifted. Top down changes face more resistance due to empowered workforces than before with do as you’re told approach (command and control). Older sources of competitive advantage eroding. Orgs need CM capacity and competence to quickly and effectively manage change – respond quickly to new business conditions. . World is far more uncertain than anyone can remember, and the latest change rocks us before we have even settled down from the last change. This is the world we work in. Companies no longer have luxury of expecting day-to-day operations to fall into static, predictable patterns interrupted only occasionally by short bursts of change. Instead, constant change has become the new normal. 7 © Copyright Foxfire Consulting, LLC

In Prosci's Best Practices in Change Management Edition benchmarking report - 9 top trends expected over the next two years: Greater awareness of the need for change management Broader application of change management Increased leadership support for change management Greater effort to establish a Change Management Office (CMO) or dedicated functional group Increased use of methodologies, tools to manage the people side of change Greater emphasis on training, communications and reinforcement plans Increased focus on impacted individuals Recognition of the need for change portfolio management More engagement and earlier integration with project management Participants noted an increased level of acceptance of change management as a legitimate field and as an organizational practice. This increase was driven by broader recognition of the need for and value of change management. In particular, participants reported a greater organizational understanding that change management increases user adoption, reduces project costs and supports overall project success. Participants observed a broader application of change management across their organizations. Increased internal competency, earlier application of change management and application on more projects were reported. In some cases, change management had become a requirement on projects and initiatives. Participants reported better sponsorship, including more visibility and more involvement throughout project lifecycles. Executives bought into the need for and value of change management sooner and more often than in the past. They were becoming better at building sponsor coalitions. Participants also reported greater recognition of the importance of the role of mid-level managers in leading change. Establishing CMO and decision on where to house it. Greater adoption of CM tools, processes and methodologies. More structured and formal process. More demand for training and knowledge. Growing CM competencies in sr. leadership and front-line management. Orgs better understanding people impact across multiple projects underway. Seeking out CM resources and engaging earlier in project; considering people side issues sooner. Managing portfolio of change, tracking projects, mapping future changes based on change load. Orgs establishing a standard methodology. Partnership, alignment and involvement in the planning process taking place. 8 © Copyright Foxfire Consulting, LLC

vs Making a Case for Change Management Why Change Management? 1
When change is NOT managed… When change is effectively managed… Productivity declines – people more concerned with change Passive resistance festers; active resistance emerges & sabotages efforts Valued employees leave the organization People confused about change and why it’s happening Increased absenteeism, use of sick days People find work-arounds to avoid implementing new way Changes not fully implemented or cancelled altogether Divides created – ‘us’ vs. ‘them’ Sensitivity to change creating increased resistance Loss of goodwill; increased customer dissatisfaction due to service decline/delivery Lack of confidence in management’s capabilities and decisions Employees have a solid understanding of why change is happening Employees engage in both the solution and the change Resistance decreases & is dealt with earlier in the process Leadership commitment, participation and interaction will motivate employees to support the process Communications are segmented to specific audiences answering questions cared about most Momentum is built throughout organization Changes are less painful Increased probability of meeting objectives Once change is properly managed, productivity will boom vs 9 © Copyright Foxfire Consulting, LLC

The Nature of Change Planned Change Moving from one state to another using a structured set of steps. Organization’s environment known Facilitate one condition to another Emergent Change Fluid and emerging; it’s all pervasive and continuous. Naturally occurring. Need to be responsive and adaptive Change is constant Implications for recognizing change from differing perspectives: Different approaches may be better suited to different kinds of change situations. Managing change is about managing a process, using appropriate approaches based on the nature of the change. Change models should be applied selectively, with thought to best fit for context in which change is occurring. 10 © Copyright Foxfire Consulting, LLC

At 10,000 feet, change program management and regular ol’ garden variety program management look pretty much the same: move from the current state to some desired future state without leaving a big mess. For example, if our program was to upgrade behind-the-scenes technology, behavior may not be expected to change and change management would be unnecessary. However, if our project was to upgrade our ERP system and operating procedures for end users were expected to change, change management should be part of the program plan. Finally, if the objective of the program is to increase job satisfaction, the entire program purpose would be attitude and behavior changes and change management would be of paramount importance. The more the word “change” grows in importance, the more that the the desired future state includes enduring changes in human behavior and attitudes. 11 © Copyright Foxfire Consulting, LLC

IBM Institute of Business Value: Making change work…while the work keeps changing: How Change Architects lead and manage organizational change 12 © Copyright Foxfire Consulting, LLC

IBM Institute of Business Value: Making change work…while the work keeps changing: How Change Architects lead and manage organizational change 13 © Copyright Foxfire Consulting, LLC

Challenges of Change Management
2 Challenges of Change Management Presentation Topics 14 © Copyright Foxfire Consulting, LLC

Two Views of Change: “We have to change because…and look at all the benefits we’ll achieve!” Organizational Change Management From top looking down into the organization Senders Business issues and need to change “I may not have a job. The company’s in trouble! What’s happening to me…?” Receivers Perspective of business leadership from the top looking down into the organization with emphasis on communications, training and overall culture of the organization. The focus is around the tools and techniques to help employees through the transition. Employees need coaching to help understand their roles and responsibilities in the change process. Personal implications and risk Individual Change Management Perspective of change from the employees 15 © Copyright Foxfire Consulting, LLC

3 major reasons why change fails: The gap between the strategic vision and implementation; The "hidden and built in resistance to change" from organizational cultures; Failure to take full account of the impact of the changes on those people who are most affected by them. need change management models and tools to bridge the gap. lack of processes and change management methodologies to address this. i.e. the absence of good strategies for managing change. 16 © Copyright Foxfire Consulting, LLC

Only about one-third of organizational change initiatives survive beyond the initial implementation. Two-thirds of change initiatives fail. PERCEPTION: If the problem addressed or the solution offered doesn't resonate, then the program will not work. TOP MANAGEMENT: The program doesn't have the support of top management. TOP MANAGEMENT: Conversely, if the program is merely a top-down, packaged program that doesn't adequately engage people throughout the organization it will fail. REALITY: The program doesn't address “real” problems facing the organization. FEAR: A culture of trust is not fostered so fear persists. RESOURCES: They are not properly resourced with time, money, and/or people. TRAINING: Training is not provided. RESISTANCE: For the above reasons, the change initiative is resisted by managers, supervisors, adversary groups. EFFICACY: The program doesn't work. SUSTAINABILITY: The problem for many innovations is not that they don't work, but that the organization cannot figure out how to implement and sustain the innovations as an organizational change. Only about one-third of organizational change initiatives survive beyond the initial implementation. Two-thirds of change initiatives fail. PERCEPTION: If the problem addressed or the solution offered doesn't resonate, then the program will not work. TOP MANAGEMENT: The program doesn't have the support of top management. TOP MANAGEMENT: Conversely, if the program is merely a top-down, packaged program that doesn't adequately engage people throughout the organization it will fail. REALITY: The program doesn't address “real” problems facing the organization. FEAR: A culture of trust is not fostered so fear persists. RESOURCES: They are not properly resourced with time, money, and/or people. TRAINING: Training is not provided. RESISTANCE: For the above reasons, the change initiative is resisted by managers, supervisors, adversary groups. EFFICACY: The program doesn't work. SUSTAINABILITY: The problem for many innovations is not that they don't work, but that the organization cannot figure out how to implement and sustain the innovations as an organizational change. Only about one-third of organizational change initiatives survive beyond the initial implementation. Two-thirds of change initiatives fail. PERCEPTION: If the problem addressed or the solution offered doesn't resonate, then the program will not work. TOP MANAGEMENT: The program doesn't have the support of top management. TOP MANAGEMENT: Conversely, if the program is merely a top-down, packaged program that doesn't adequately engage people throughout the organization it will fail. REALITY: The program doesn't address “real” problems facing the organization. FEAR: A culture of trust is not fostered so fear persists. RESOURCES: They are not properly resourced with time, money, and/or people. TRAINING: Training is not provided. RESISTANCE: For the above reasons, the change initiative is resisted by managers, supervisors, adversary groups. EFFICACY: The program doesn't work. SUSTAINABILITY: The problem for many innovations is not that they don't work, but that the organization cannot figure out how to implement and sustain the innovations as an organizational change. Challenges of Change Management More reasons why change initiatives fail: PERCEPTION: Solution offered doesn't resonate with people MANAGMENT: Program doesn't have the support of top management or, conversely, the program is top-down, packaged program ENGAGEMENT: People not adequately engaged in the organization COMMUNICATION: Lack of communication REALITY: The solution doesn't address the “real” problems FEAR: A culture of trust is not fostered, so fear persists RESOURCES: Not properly resourced with time, money, and/or people TRAINING: Not provided or is inadequate RESISTANCE: Change initiative is resisted by managers, supervisors, others EFFICACY: The program doesn't work SUSTAINABILITY: Innovation works, but organization cannot figure out how to implement and sustain it as an organizational change 17 © Copyright Foxfire Consulting, LLC

Losses Confusion New Vision The “Gap” Defines who we are, our success Is comfortable Is predictable Personal and professional plans based on “Grey space” “No man’s land” “In limbo” “Between two trapezes” “Nothing to hold on to” Not fully defined Lots of uncertainty Starting something new Is worrisome May not match personal and professional goals According to Bridges, people don’t have trouble with change – they have trouble with transition. 18 © Copyright Foxfire Consulting, LLC

“It’s not so much that we’re afraid of change or so in love with the old ways, but it’s that place in between that we fear… It’s like being between trapezes. It’s Linus when his blanket is in the dryer. There’s nothing to hold on to.” - Marilyn Ferguson 19 © Copyright Foxfire Consulting, LLC

Understanding Resistance We react to change based on our view of the current state and the future state. Our analytical reaction is based in the future state. Our emotional reaction is rooted in the current state. Dissatisfied, or opposed to the current state Neutral or objective toward the current state Supportive or comfortable with current state Opposed to the current state: is dissatisfied with the way things are done today Supportive of the current state: has time and energy invested in how things are done today Is neutral toward the current state: Is new to the organization or is indifferent to how things are done today 20 © Copyright Foxfire Consulting, LLC

Organizational Context
Challenges of Change Management Understanding Resistance Personal Context Organizational Context Positive and negative factors are evaluated by employees: Employee’s personal and family situation (health, finances, stability, mobility, relationships, etc.) Employee’s professional career history and plans (success vs. failure, promotions, aspirations, pending retirement, etc.) Degree that the change will affect them personally (some large changes may have minimal impact and vice versa) These positive and negative motivating factors also evaluated: Organization’s history with change (past change successes or failures, likelihood of change actually happening, consequences for employees that have resisted change in the past) Organization’s values and culture (how the organization treats employees and how employees treat each other) Degree of trust that exists between managers and employees 21 © Copyright Foxfire Consulting, LLC

Reasons for Resistance
Challenges of Change Management Reasons for Resistance Employees: Lack of awareness of why change is needed Uncertainty (creating stress…fear) Impact on current job role Lack of visible support and commitment from managers, leaders Fear of job loss Organization’s past performance with change Managers: Lack of awareness about and involvement in the change Loss of control or negative impact on job role Increased work load (lack of time) Culture of change resistance and past failures 22 © Copyright Foxfire Consulting, LLC

Change Concepts Resistance is a natural human reaction to change. You should expect resistance and not be surprised by it. Resistance should not be considered as initially “bad”. Resistance may be leveraged. 23 © Copyright Foxfire Consulting, LLC

Stage 3: Chaos Group enters the unknown. Old expectations no longer be valid; old reactions may cease to be effective; and old behaviors may not be possible. Satir Change Model Stage 4: Integration Members discover a transforming idea that shows how the foreign element can benefit them. The performance pattern is consistent. Stable relationships equal sense of belonging and identity. Brings members whose opinions count the most face to face with a crucial issue. Relationships shatter: Members may behave uncharacteristically as they revert to childhood survival rules. This stage is crucial to the transformation process. The group becomes excited. New relationships emerge that offer the opportunity for identity and belonging. With practice, performance improves rapidly. A sense of accomplishment and possibility permeates the atmosphere. Stage 1: Late Status Quo Group at familiar place. Members know what to expect, how to react, and how to behave. Stage 2: Resistance Group confronts a foreign element (that threatens stability). Resistance by denying its validity, avoiding the issue, or blaming someone for causing the problem. Stage 5: New Status Quo If the change is well conceived and assimilated, the group and its environment are in better accord and performance stabilizes at a higher level than in the Late Status Quo. 24 © Copyright Foxfire Consulting, LLC

Emotional Stages of Change People move through the emotional stages of change at different rates. When people are in denial, or are angry or resistant, productivity will be low. Commitment Design and plan strategy to recognize and support the transition phase and gain commitment. Reluctant acceptance Anger and blame 1. Disbelief and denial Initially the change is met with disbelief and denial. "It won't happen to me." "No, they won't close the plant - they'll find a way through the problems, they always have." "If I just keep my head down, it's be business as usual soon." 1. During Denial Do everything you can to minimize the shock. Plan ahead. Give them plenty of information - let them know what the changes will be, who will be affected by them and how. Give them your best estimate of the likely timeframe - remembering that these things always take longer than originally planned.. Give them chance to prepare themselves and let the changes sink in. You cannot over-communicate now. 2. Anger and blame Next, it is common to see anger and blame. In workplace change at this time some employees will actively resist the changes saying things like: "Why should I change? Is this how they treat us after we've worked our butts off?" What is more risky is withdrawal and lack of concentration. In this high risk period, watch out for an increase in accidents, drop off in quality, absenteeism, corruption or fraud. 2. During Resistance Listen to what people have to say. Empathize. Don't tell them to snap out of it or pull themselves together. People don't want your solutions, they just want their responses and reactions acknowledged. Denying their feelings will only drive the resistance deeper and make it last longer. 3. Reluctant Acceptance As people work through their anger, they move to the third stage where they reluctantly begin to accept the changes and start to explore their role in it. You'll hear things like: "There's just too much to do now - how am I going to get it all done?" "OK let's try it but who's doing what now?" " I'll never learn this new system - I need training." 3. During Exploration Now people need practical encouragement and support. Provide training. Involve them in planning and setting goals. Focus on some short term wins to get early runs on the board -show the benefit of the changes. People will respond well if they can see the positive impact of the change. Watch out if the changes do not provide any immediate observable benefit. Then there is a real likelihood that people will sink back into resistance and may even undermine your change strategy completely. 4. The final stage When employees commit to the change, they start focusing on the future instead of dwelling on the past. They have a clear sense of their roles and where they are going. What are the implications of these emotions when we are planning and implementing organizational change? 4. During Commitment Now that you are through the transition, set about consolidating the change. Implement an appropriate cultural change program. Recognize and reward people who are responding well to the change. Be careful to not inadvertently reward any behavior that is inconsistent with what you're aiming for. People move through the emotional stages of change at different rates. That's why these transitions can be hard and counter-productive. Sometimes it is impossible to tell people too much ahead of the change because of market forces. But if people are in denial, or are angry or resistant, productivity will be low. You might see a short term spike in response to the change but it is likely to be short lived until these stages are worked through. Design and plan your change management strategy to recognize and support the transition phase. Do this and you will reduce the impact of the inevitable drop in productivity. More importantly you will gain the on-going commitment of your people. Disbelief and denial 25 © Copyright Foxfire Consulting, LLC

Change Management Methodologies
George Box, a statistician, famously wrote that "essentially, all models are wrong, but some are useful” . The field of change management continues to prove him right. Organizational change management (OCM) is a structured approach to ensure that changes are smoothly and successfully implemented, and that the lasting benefits of change are achieved. That is easier said than done. Management consultants, clinical psychologists and social scientists have done extensive research on the dynamics of change and proposed models and frameworks to understand the same. By no means is this list complete. The complexity and unpredictability of human behavior will ensure that the field of change management will continuously produce more frameworks to study and more models to adopt. Following is a comparison of five popular models. 26 © Copyright Foxfire Consulting, LLC

Kotter’s Eights Steps to Change
John Kotter’s (1996) - highlighted eight key lessons which he converted into a practical eight-step model. Establish a Sense of Urgency Form a powerful, guiding coalition Develop a vision & strategy Communicate the vision Remove obstacles & empower action Plan and create short-term wins Consolidate gains Anchor in the culture John Kotter’s (1996) eight steps to transforming organizations are based upon analysis of 100 different organizations going through change. His research highlighted eight key lessons which he converted into a practical eight-step model. Although represented by Kotter in a linear fashion, experience suggests that it is better to think of the steps as a continuous cycle to ensure that the momentum of the change is maintained. Benefits Focus on buy-in of employees as the focus for success Clear steps which can give guidance for the process Fits well into the culture of classical hierarchies Limitations Top-down approach, it gives no room for co-creation or other forms of true participation Can lead to frustrations among employees if the stages of grief and individual needs are not considered 27 © Copyright Foxfire Consulting, LLC

Prosci’s ADKAR Model Developed in 1998 by Prosci. ADKAR is a goal-oriented change management model that allows change management teams to focus their activities on specific business results. Benefits It covers the organizational dimension of change and the individual dimension of change Provides a clear management checklist to manage change Developed in 1998 by Prosci, after research with more than 300 companies undergoing major change projects. ADKAR is a goal-oriented change management model that allows change management teams to focus their activities on specific business results. The model was initially used as a tool for determining if change management activities like communications and training were having the desired results during organizational change. Limitations Ignores the need for leadership to address the emotional dimension 28 © Copyright Foxfire Consulting, LLC

Roger’s Technology Adoption Curve
Based on Everett Roger’s theory of diffusion of innovation (1962), describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The technology adoption lifecycle model, based on his theory of diffusion of innovation (1962), describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The process of adoption over time is typically illustrated as a classical normal distribution or "bell curve." The model indicates that the first group of people to use a new product is called "innovators," followed by "early adopters." Next come the early and late majority, and the last group to eventually adopt a product are called "laggards.” The curve creates the foundation of 5 step process of technology adoption - Knowledge, Persuasion, Decision, Implementation, Confirmation. Benefits Helps in creating an understanding of the audience for change. Provides inputs to identify opinion makers and influencers. Limitations People need not fall into one Change Adoption Category; they drift from category to category depending on the specific change/innovation. The adoption terms are accurate only in hindsight; they tell you nothing about how a population might respond to a change/innovation. 29 © Copyright Foxfire Consulting, LLC

Bridge’s Transition Model
Bridges (1991) - differentiates between change and transition. Change is situational and happens without people transitioning and transition is psychological and is a three phase process where people gradually accept the details of the new situation. ENDING NEUTRAL ZONE NEW BEGINNING End what ‘used to be’; identify who is losing what, openly acknowledge the loss, mark the endings and continuously repeat information about what is changing and why. Individuals within the organization feel disoriented with falling motivation and increasing anxiety. Ensure that people recognize the neutral zone and treat it as part of the organization's change process. Gain acceptance of the purpose; Communicate a picture of how the new organization will look and feel ; Communicate and gain a step-by-step understanding of how the organization will change The ideas of Bridges(1991) on transition provide a good understanding of what is going on when an organizational change takes place. He differentiates between change and transition, according to him Change is a situational and happens without people transitioning and transition is psychological and is a three phase process where people gradually accept the details of the new situation and the changes that come with it. Limitations While the model is useful for implementing change, it's not a substitute for other change management approaches. It can’t be used as an independent change management model. Benefits You can use the model to understand how people feel as you guide them through change. It clarifies the psychological effect of change. 30 © Copyright Foxfire Consulting, LLC

McKinsey 7S Model Tom Peters and Robert Waterman (early 1980s) - seven internal, interdependent aspects of an organization that need to be aligned if it is to be successful. The company's structure, strategy, systems, style, staff and skills all stem from why the organization was originally created, and what it stands for. As the values change, so do all the other elements. Developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm, the basic premise of the model is that there are seven internal, interdependent aspects of an organization that need to be aligned if it is to be successful. The 7S model can be used in a wide variety of situations where an alignment perspective is useful, i.e., to improve company performance, examine effects of future changes, align departments/processes during a merger, and determine how to best implement proposed strategy. Placing Shared Values in the middle of the model emphasizes that these values are central to the development of all the other critical elements. The company's structure, strategy, systems, style, staff and skills all stem from why the organization was originally created, and what it stands for. As the values change, so do all the other elements. Benefits Effective method to diagnose and understand organization Provides guidance in organizational change Combines rational and emotion components All parts are integral and must be addressed in unified manner Limitations When one part changes, they all change because they are all interrelated The model is complex Can lead to higher incidence of failure due to complexity 31 © Copyright Foxfire Consulting, LLC

The IIEE Approach to Managing Change
Presentation Topics 3 The IIEE Approach to Managing Change 32 © Copyright Foxfire Consulting, LLC

Change Readiness “Creating readiness involves proactive attempts by a change agent to influence the beliefs, attitudes, intentions and, ultimately, the behavior of a change target. At its core, the creation of readiness for change involves changing individual cognitions across a set of employees…it is a precursor to either resistance or support for change.” - Achilles A Armenakis, Stanley G. Harris and Kevin W. Mossholder, Chapter 28, Organizational Development and Transformation 33 © Copyright Foxfire Consulting, LLC

Questions to Ask Before Change What do we need to achieve? Why? How? When? Who will be affected? How will they react? How do we support them? Do we have the resources to manage the change? How do we communicate the change and get buy-in? How do we deal with resistance? What part of the change do we need help with? How do we know what success is and how will we measure it? After the change, what next? 34 © Copyright Foxfire Consulting, LLC

IIEE Approach to Managing People Side of Change
Identify Involve Engage Empower 35 © Copyright Foxfire Consulting, LLC

Identify IIEE Approach to Managing People Side of Change
Stakeholders are people who have some form of interest in the change, whether they are the targets of the change, managers or other interested parties. A lack of stakeholder management is one of the key reasons why change projects fail, so understanding them and ensuring they are addressed in all plans and activities is a critical activity. It is important to manage stakeholders in change. In doing so, one of the things you will do is segment them according to their needs, their importance and how you will treat them. 36 © Copyright Foxfire Consulting, LLC

Types of Stakeholder Sponsors People with power who have a direct interest in the project. Targets People who will intentionally be affected by the change. Others Other people who may be unintentionally affected by the change, e.g., process change impacts everyone connected with its inputs & outputs. Partners Internal and external partners you work with to effect the change, from the IT Department to external consultants and trainers. Types of Stakeholder Disciplines > Change Management > Stakeholders in Change > Types of Stakeholder Sponsors | Targets | Others affected | Partners | See also It is important to manage stakeholders in change. In doing so, one of the things you will do is segment them according to their needs, their importance and how you will treat them. Sponsors Sponsors are people with power who have a direct interest in the project. As described elsewhere, you need to carefully manage your sponsors to gain support and avoid opposition, especially where they are also Targets. There are four types of sponsor: Initiating sponsor: who kicks off the project. Key sponsor: who provides ultimate authority. Primary sponsor: who must be centrally engaged. Secondary sponsor: who needs to be kept informed. Targets These are people who will intentionally be affected by the change. You many want them to change what they do and think, or even what they feel and believe. Deeper change, is, of course more difficult. Others affected It is easy to focus on sponsors and targets and forget that there may be many other people who may unintentionally be affected by the change. For example when a process is changed, everyone who is connected with the inputs and outputs of the process may be affected. Partner You may work with a wide range of internal and external partners to effect the change, from the IT Department to external consultants and trainers. These people need to be fully on board. In particular, if they will require any significant level of resourcing to be effective in the change, they must be allowed and encouraged to estimate what they will need to be successful and supported in their bids to acquire this resource. Interested party There are often a wide range of people who might have some more distant interest. For example if there are going to be job losses, then government and the media may have an interest. Interested Party People who might have some more distant interest, e.g., if there are going to be job losses, then government and the media may have an interest. 37 © Copyright Foxfire Consulting, LLC

Researching Stakeholders An important part of making change successful is to understand the stakeholders, who can range from a janitor at the bottom of the tree to a CEO of a multinational company. Here are a few ways you can find out more about these people. One-on-one interviews Surveys Focus Groups Things others say about them… Direct one-to-one interviews One of the simplest things you can do is to go and talk with them. Ideally, this would a long series of discussions over a period of time in which you could delve into their psyche and gain a deep and full understanding of them. Unfortunately, you may well be limited to one short snatch of their time, and so you must prepare very carefully for this. Interviews should start with a brief overview of the purpose of the interview and can also support relaxing the interviewee. A little light humor here can be very helpful. The body of the interview can vary in its level of structure from working through a carefully planned set of questions to a relatively unstructured conversation, guided only by a broad set of themes. Interviews are best done face-to-face, but if your stakeholders are scattered far and wide then telephone interviews are a practical alternative. Communication is cut down significantly when you use the telephone: you lose non-verbal communication and the voice is noticeably distorted. This requires that you take care to ensure you speak clearly. Questionnaires If you need to get a broad understanding of a larger number of people, then interviews are impractical. Questionnaires give you a long reach, although at the cost of the ability to probe in detail. Questionnaires that use closed and multiple-choice questions allow you to do statistical analysis afterwards, allowing you to say things like '53.7 % of the population prefer Zonked'. A classic form is to use a 'Liker scale' such as: Please tick one box for each statement to show your level of agreement Strongly Agree Agree Neither agree nor disagree Disagree Strongly Disagree I enjoy a new challenge I like working with people Focus groups When you have a large group of stakeholders and where you are able to get a representative sample of these in a room, then focus groups can be a useful tool. In focus groups, the principle is to ask the group of people some triggering questions and then listen to their responses and observe their interaction. Thus in change, you could ask questions like: What are your main concerns about this change? Have the communications so far been clear? Things they have said, written and done A useful source of information about stakeholders is the trail of evidence that they leave behind in their writings and actions. Particularly for senior managers (who may be difficult to meet for long), there is often much information in the speeches they have made (which companies often keep), company newsletters, etc. Other people may well have written papers, sent s, commented in meeting minutes, and so on. All, if they may be legitimately accessed, are useful sources which you can analyze for their values, beliefs, etc. In particular, if you can find their actions and words around previous change initiatives, then this may show relevant and useful information. Things others say about them And finally, you can just go ask other people about them. Be careful about this as you do not want to appear to be snooping, but legitimate conversation and careful questioning can give you very useful insights. A useful framing during such conversations is one of concern, for example how the person in question will be able to cope with the change. Just listening to the grapevine and other gossip can be another useful source, although beware of biased discussions based on a dislike of a person which stereotypes them. 38 © Copyright Foxfire Consulting, LLC

This Influence/Interest Grid is a useful map to help understand the need for communication and potential resistance to change. 'Interest' indicates their likely concern about change, whilst 'Influence' indicates their ability to resist or champion the change. Keep Satisfied Actively Engage Occasionally Contact Keep Informed High Influence Low interest, low influence These are relatively unimportant people, but keeping in touch with them is a good idea, just in case their status changes. High interest, low influence These people can be difficult in that it is easy to ignore them as they apparently cannot derail the change, although if sufficiently upset they may gain influence by low-level blocking and other techniques of resistance to change. Do remember that minorities can be very powerful, particularly if they band together or if they get powerful allies. Low interest, high influence People with a low interest in the change will not be particularly worried about what you are doing, so are are not too much of a problem in the actual change. A problem can appear when they are persuaded to act for those who oppose the change. It is thus important to keep them onside, for example with regular meetings that explain the truth of what is happening. High interest, high influence These people are both significantly affected by the change and most able to do something about it, either supporting or opposing changes. It is particularly important to engage these people in the change, ensuring both that they understand what is going on and also creating buy-in as they feel a sense of ownership of what is being done. Low Low High Interest 39 © Copyright Foxfire Consulting, LLC

Those with higher power are likely to be your most useful supporters or most dangerous opponents -- thus power analysis helps you prioritize your focus on stakeholders. IIEE Approach to Managing People Side of Change Stakeholder Power Stakeholders all have power, whether it is the formal power invested in a position of authority or it is social power of being able to persuade others to support or oppose the change. Those with higher power are likely to be your most useful supporters or most dangerous opponents -- thus stakeholder analysis helps you prioritize your focus on stakeholders and map out strategy to influence. Stakeholder power Stakeholders all have power, whether it is the formal power invested in a position of authority or it is social power of being able to persuade others to support or oppose the change. Those with higher power are likely to be your most useful supporters or most dangerous opponents -- thus power analysis helps you prioritize your focus on stakeholders. Active and passive support and resistance Some people will actively support the change, putting their necks on the line and working long hours to help it succeed. Others will work the other way, vociferously seeking to scupper your efforts. These active people are where much focus often happens. However, there is often a silent majority who are more difficult to classify. These may be in gatekeeper positions, where rather than taking positive action, they can subtly support or oppose the change by allowing things to happen or quietly blocking and hindering progress. Fence-sitters (Neutrals) in the middle In the middle are the fence-sitters who neither support nor oppose the change. They are often playing a waiting game, looking out for who is going to win the game. Once they have made this decision, then they will act. Other fence-sitters are simply undecided. Some people decide quickly whilst others need more reflection or persuasion. Either way, one of the most important things about fence-sitters (neutrals) are their numbers, which can be very significant. Work hard to convert them and you may well win the game. The dynamics of change The question after you have identified the current positions of people is how to use and move them. Usually this means moving them on the chart. However, this movement usually has a cost, at least in terms of your time and effort. You thus need to seek what movement you can create at what cost and hence find the best alternatives for action. 40 © Copyright Foxfire Consulting, LLC

Involve IIEE Approach to Managing People Side of Change
Involving employees and managers means communicating – messaging and relating. What employees want to know about about the change initiative. How will I be impacted? Why is the change happening? What is changing? How does it impact the organization? And what I do? How can I prepare for the change? How will I be supported during the change and beyond? 41 © Copyright Foxfire Consulting, LLC

Communication Relate: To form a new emotional relationship with a person or group Repeat: How the new relationship helps you learn and practice and master new habits and skills Reframe: Learn new ways of thinking about the specific change situation Communicate, Communicate, Communicate Most change processes are under-communicated by a factor of ten Many media/channels, same message Many spokespersons, same message Many formulations, same message Be sure to provide employees ways to give feedback and ask questions. 42 © Copyright Foxfire Consulting, LLC

Target Frontline Supervisors for Message Delivery 83% of employees rank their supervisor as their most believed source. – U.S.: General Motors 96% of frontline employees believe their supervisor is normally or always telling the truth. – Australia: Dennis Taylor Employees say their immediate boss is their most effective communication source. – Europe: International Research 43 © Copyright Foxfire Consulting, LLC

Engage IIEE Approach to Managing People Side of Change
Employee Needs for Engagement When you are working to engage employees and encourage participation, you must begin building Awareness of the need for change so your employees are in the right place to engage and participate. Make a clear and compelling case for the need for change Create deliberate opportunities for employees to engage in the change, early and often Define and measure engagement and adoption 44 © Copyright Foxfire Consulting, LLC

Employee Needs for Engagement Control (involvement and empowerment), Career (understanding of one’s path), Capability (training and development)—are important Employees undergoing change appear to have significantly more need for a fourth ingredient, connection:  Connection with leaders—Employees want more two-way dialogue with organizational leaders  Connection with co-workers—Employees need to see their co-workers pulling together, providing reliable support and making personal sacrifices during uncertain times 1. Make a clear and compelling case for the need for change Whether the change is happening in our personal lives, in our community or at work, successful change begins with having the answers to several key questions: Why is the change happening? What are the risks of not changing? Why is the change happening now? In order to engage in a change, any change, we as individuals need the answers to these key Awareness questions. So, if you are working to engage employees and encourage participation, you must begin building Awareness of the need for change so your employees are in the right place to engage and participate. 2. Create deliberate opportunities for employees to engage in the change, early and often Employee engagement doesn't just happen. Most employees are already taxed with the demands of their day-to-day job and with the many other changes likely going on. As a change management professional, you need to be structured and deliberate in creating opportunities for employees to engage and participate. There are many vehicles to encourage engagement and participation - from focus groups to workshops, town hall meetings to individual discussions. Regardless of the channels you pick, you need to be deliberate and create specific opportunities for employees to engage in and participate in the change. Engaging employees early in the project lifecycle and creating productive avenues for participation and sharing feedback is critical. Early involvement helps build commitment and ownership, making for smoother transitions as the project nears implementation. It also enables the team to collect the type of input resulting from "good resistance" that can improve the development of the solution. Creating deliberate opportunities for engagement and participation during the project implementation is also important. Since employees are the ones embracing and adopting the new technology or process, they are in the best position to provide feedback and identify issues. However, if not given an appropriate channel, this "feedback" can turn into resistance and negative messages shared with others. Be intentional, planned and proactive, creating deliberate opportunities for engagement and participation. 3. Define and measure engagement and adoption The final implication presented here is actually an important starting point for change management professionals supporting a project or initiative. Many projects move forward without ever defining how employees will be impacted. The team thinks about the change from an exclusively organizational perspective - "we are implementing an Enterprise Resource Planning application" - and fails to uncover or define the change from the individual perspective - "Andy used to do his job this way, now he has to do his job that way." Since organizational change requires individual change, and depends on individual change, it is critical to define what those individual changes are. When you begin thinking about and planning for employee engagement in a change, be sure to clearly define what "to engage" means, and take it a step further to define what "to adopt the change" means. These are essential jumping off points for engagement and inputs for creating measurement systems to understand if the change is actually taking place at the individual level. 45 © Copyright Foxfire Consulting, LLC

Six Actions to Create More Engagement Communicating a clear vision of the future Building trust in the organization Involving employees in decisions that affect them Demonstrating commitment to the company’s values Being seen to respond to feedback Demonstrating genuine commitment to employees’ well being 47 © Copyright Foxfire Consulting, LLC

Personnel and information systems make it difficult to act
IIEE Approach to Managing People Side of Change Barriers to Empowerment Formal structures make it difficult to act Employees understand the vision and want to make it a reality, but are boxed in Bosses discourage actions aimed at implementing the new vision A lack of needed skills undermines action Personnel and information systems make it difficult to act 50 © Copyright Foxfire Consulting, LLC

Empowered employees are change-ready employees Apply these strategies and guidelines to empower your employees: Encourage and demonstrate innovative thinking Show respect for others’ perspectives and ideas Delegate; don’t micromanage Extend trust and assume that others have the company’s best interests at heart and genuinely want to help Be flexible, and encourage flexibility in others Demonstrate and encourage risk-taking, and look for lessons learned Accept change yourself Invite people to participate in change development and implementation Track and report progress on change initiatives Empower employees to take responsibility for adapting to change! 51 © Copyright Foxfire Consulting, LLC

New Ways to Think About & Implement Change
Presentation Topics 4 New Ways to Think About & Implement Change 52 © Copyright Foxfire Consulting, LLC

Discontinuous versus Continuous Incremental Change Discontinuous change takes place through major, widely separated initiatives. Continuous incremental change is made through a series of small but more frequent improvements. Advantages of continuous change: Small changes are easier to manage Enjoy greater probability of success Disruption is short-term and confined to small units People remain in constant state of competitiveness and change-readiness Small ongoing changes strengthen the company’s ability to fine-tune its strategy and are less costly and damaging than large-scale, crisis-related change “We are moving from episodic to continuous change. With this shift, urgency will move from being an important issue every few years to being a powerful asset all the time.” - Kotter 53 © Copyright Foxfire Consulting, LLC

Connecting Change Management to Project/Organizational Outcomes The Prosci ROI of Change Management Model presents three people side factors that impact the return a project or initiative delivers: Speed of adoption - how quickly employees adopt a change Ultimate utilization - how many employees eventually adopt the change to how they do their jobs Proficiency - how effective employees are once they've adopted the change The speed of adoption for a group of employees impacted by a change - or how quickly they adopt the change - has a direct and measurable impact on the return a project delivers. Were the expected benefits of the project predicated on 100% of employees adopting the change? 95%? 85%? 80%? Each employee that does not make the change chips away at the improvement the project or initiative set out to achieve. The ultimate utilization (or conversely the opt-out rate) for a group of employees has a direct and measurable impact on project ROI. An alternative view… 54 © Copyright Foxfire Consulting, LLC

Lean & Agile Applied to Change Management Combining a collection of lean and agile practices to more effectively manage organizational change that is relevant in today’s fast-paced, digital work. Includes: “Lean Coffee” Creating and Using Information Radiators Culture Hacking Agile Retrospectives Lewin’s Force Field Analysis 55 © Copyright Foxfire Consulting, LLC

Enterprise Change Management Below are some of the most cited activities for deploying change management across the organization (in rank order): 1 Train people in the organization 2 Create a change management group 3 Integrate change management with 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 56 © Copyright Foxfire Consulting, LLC

Resources Harvard Business Review Magazine – Winter 2014: Leading Change: What Works & What Doesn’t Change Management: The People Side of Change – Jeffrey Hiatt & Timothy Creasy, 2013 Change Management: The New Way : Easy To Understand; Powerful To Use – Dutch Holland, PhD Making Sense of Change Management: A Complete Guide to the Models Tools and Techniques of Organizational Change... - Esther Cameron and Mike Green Prosci Benchmarking Report & Online Tutorials Leading Change – John P. Kotter, 1996 Influencer: The New Science of Leading Change – Joseph Grenny, Kerry Patterson, David Maxfield, Ron McMillan, Al Switzler, 2013 IBM’s Report: Making change work…while the work keeps changing: How Change Architects lead and manage organizational change – September 2014 Lean Change Management – Jason Little, 2014 ADKAR: A Model for Change in Business, Government and Our Community – Jeffrey Hiatt, 2006 59 © Copyright Foxfire Consulting, LLC

THANK YOU Valerie McCloud, PMP, CSM, PMI-ACP
President, Emergent Change Agent Foxfire Consulting, LLC Connect with me on LinkedIn!

The Process of Transition

Managing the People Side of Change

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