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To: Examine what makes an organisation good at managing
change Introduce the key models and tools in the Change Equation
methodology Develop the concepts of:
Change Readiness and Capability for Change Show how the Change Equation can be incorporated into your
standard practices:• at project level - to deliver consistently improved project outcomes• at programme level – to deliver Capability for Change into the
The Harvard Business School tracked the impact of change efforts among the Fortune 100 and found that only 30% produced a positive bottom-line improvement…
A survey of change programmes in 400 European organisations quoted by Prof. John Oakland, Emeritus Professor, Leeds University Business School found that:• 90% of change programmes faced major implementation problems• Only 30% delivered measurable business improvements
A CIPD survey of 800 executives found that reorganisations failed to deliver real improvement in performance in 40% of cases
The world’s private and public sector leaders have reported to IBM that a rapid escalation of “complexity” is the biggest challenge confronting them (IBM Global CEO Study 2010)
Events, threats and opportunities aren’t just coming at us faster or with less predictability; they are converging and influencing each other to create entirely unique situations
They expect this to continue - indeed, to accelerate - in the coming years: “The complexity our organization will have to master over the next five
years is off the charts — a 100 on your scale from 1 to 5.” (Edward Lonergan, President and CEO, Diversey, Inc)
They are equally clear that their enterprises today are not equipped to cope effectively with this complexity in the global environment
David Snowden, CEO of Cognitive Edge, sees this as as shift: “from a world where we can predict probable risks and use risk
management systems to make our plans robust, to one where we need to accept that complex and interdependent risks
will occur, and find new ways to cope, building ‘resilience’ into our organisations”
A resilient system accepts that failure is inevitable and focuses instead on early discovery and fast recovery from failure
This places greater reliance on skilled managers being able to spot, analyse and respond to an emerging and fast-moving situation - and to turn it to the organisation’s advantage
They need to operate within a fast-reacting and resilient organisation – one that is good at managing change
“Stock of capability”(Rebecca Henderson, Harvard Business School)
“Attention and resources focused on people and processes, developing the organisation’s capability and resilience”• Crucial if you want to respond to the accelerating pace of change
and rising levels of business complexity• But erodes through natural entropy and neglect, so requires
continual investment and maintenance
Any Change / Transformation Programme needs this to be part of its core deliverables, but many don’t
The Change Readiness Assessment (CRA) comprises: • Stakeholder interviews, review of project documentation, analysis,
senior management team workshop, report & recommendations
It allows us to:• identify the underlying causes of low and negative ROI on projects• quantify the barriers to success• predict the success or failure of projects• deliver a Route Map and Action Plan to help clients gain ownership of
the risks and improve performance
Undertaking a CRA at the planning stage will improve a project’s outcomes
Integrating CRA into your standard project planning process will deliver consistently improved project outcomes
“A conventional ’command & control’ approach to management of complex change projects will not achieve consistently successful outcomes”
Conventional change management interventions attempt to impose change…so people give up, fall back on ‘what’s in it for me’ and the change project fails
In a complex project, newly emergent ways of working and new forms of organisation need to be recognised, nurtured and embedded
You need to employ project and programme managers with the right skill-sets to achieve this
In 2004, HP's project managers knew all of the things that could go wrong with their ERP centralisation programme. But they just didn't plan for so many of them to happen at once.
The project eventually cost HP $160 million in order backlogs and lost revenue—more than five times the project's estimated cost.
Gilles Bouchard, then-CIO of HP's global operations, says: "We had a series of small problems, none of which individually would have been too much to handle. But together they created the perfect storm.”
”We live in a world that can change exponentially – but we have brains that are hardwired to plot things out linearly - the software in our brains compels us to think about progressions as being simple arithmetic ones
So as a species, and a society, we deal poorly with uncertainty in non-linear domains.” Prof Albert Bartlett, University of Colorado
That’s one good reason why management typically under-estimates the complexity of projects!
The lack of information-sharing, alignment and empowerment will jeopardise the success of the project. At the very least it will mean poor take-up and a lower than planned level of benefits.
A programme of interaction and dialogue across the organisation is urgently needed to improve the management culture. This needs to include increasing trust, see below.
ProcessCapability
The organisation’s process capability is poor. This means that any projects which seek to standardise and improve processes to achieve greater efficiency will be very difficult to achieve.
Consider carrying out a programme to raise the levels of process capability ahead of implementing the project or using the project itself to inject the necessary disciplines. In this case it is crucial for the Board to make compliance to the new processes mandatory.
The Change Equation methodology is designed to be integrated into standard practice:
• at Project level – CRA ensures Change Readiness and deliver consistent improvement in change project outcomes
• at Programme level – Change Equation principles, Route Maps and Action Plans provides framework and content to deliver organisational Capability for Change as a key outcome
Only with both of these in place can an organisation respond to the challenges it faces with the speed and resilience it needs to survive