Management of Change for Complex Organizationsinteractive.blr.com/Global/FileLib/EHSDA_Campaigns/... · Management of Change for Complex Organizations Management of Change, as applied

Management of Change

for Complex Organizations

Source: Chemical Engineering Transactions (CET) data

80% of all large scale incidents are traced

back to failures in the execution of

Management of Change processes

Essential components of effective

Management of Change

2

3

1

How to manage change across

different departments, business

lines and geographies

Why Management of Change is

a business imperative /

strategic driver

5

4How employee engagement

and alignment are essential to

lasting change

How to measure if changes

are working and successful

The extent to which organizations execute

the Management of Change holistically is

directly correlated to their ability to

achieve reliability in operations by

reducing risk and uncertainty.

©2019 Sphera©2019 Sphera 2

Management of Change for Complex Organizations

“Management of Change is a systematic approach to

organizational changes with the aim of ensuring the

continued safety of the workforce throughout the

process. These systematic processes ensure that the

change is dealt with in a proactive fashion.”

(Safeopedia)

“The systematic approach and application of

knowledge, tools, and resources to deal with change.”

(Society for Human Resource Management -SHRM)

Definition of “Management of Change” Varies According to Experts…

©2019 Sphera 3

“The process, tools and techniques to

manage the people side of change to

achieve a required business outcome.”

(Prosci)

Introducing a change in an

organization will ultimately

impact one or more of the

following:

• Processes

• Systems

• Organizational Structure

• Job Roles“Management of Change (MOC) is a best

practice used to ensure that safety, health

and environmental risks are controlled when

a company makes changes in their facilities,

documentation, personnel or operations.”

(Washington State Department of Labor and Industries)

©2019 Sphera 4

Definition of “Management of Change” Varies According to Experts…

KURT LEWIN

Kurt Lewin, was a German-born American social

psychologist known for his field theory of behavior, which

holds that human behavior is a function of an individuals

psychological environment. 1

Developed an early model for organizational changes in

the 1940s, defined with three phases:2

• “Unfreezing”: create an awareness of how the current

state could be hindering process or even making the

process unsafe

• “Changing”: implementing the change; when the change

becomes real

• “Freezing”: the “new norm”1 Encyclopedia Britannica

2 The Change Management Coach

Management Of Change is Not a Recent Concept

5©2019 Sphera

The original MOC requirement covers five

triggers to review changes that are not

“Replacement-in-kind”:

• Process Chemicals

• Technology

• Equipment

• Procedures

• Facilities

The executive order has now proposed an

additional trigger for Organizational

Changes, such as an organizational

restructure staffing and policies that

affect process chemicals, technology,

equipment or procedures.

Management of Change for Complex Organizations

Management of Change, as applied to PSM-regulated facilities, was enacted in 1992 under

OSHA 29 CFR 1910.119, Process Safety Management of Highly Hazardous Chemicals.

The original MOC process requirement has remained largely unchanged since OHSA 1910.119

was first issued.

OSHA issued a RFI in November 2013 for public input for improvements to the PSM standard,

identifying 17 areas for improvements, including management of organizational change as part

of the MOC process.

OSHA Regulations

Was issued in response to a fatal chemical incident including the ammonium nitrate explosion

at the West Fertilizer Storage Co.

Executive Order (EO) 13650, “Improving Chemical Facility Safety and Security”

©2019 Sphera©2019 Sphera 6

7

Communication must begin at the onset of the MOC

process and maintained throughout the life of the MOC.

Auto-notifications are typically included in an electronic MOC

application; however, the intent of the notifications is not to take

the place of communication but instead is intended to help keep

the process moving from phase to phase and hold stakeholders

accountable.

Communication

All components of Management of

Change share one common component:

©2019 Sphera

Essential Components of

Management of Change

The components of MOC are not related to the size

of an organization but instead are related to the

complexity of the change.

• Replacement-in-kind: Like-for-like change

• Doesn’t require an MOC

• Not-in-kind replacement: Could be the same

manufacturer’s part but with a different spec

• Always requires MOC

TYPES OF CHANGE:

• Permanent

• Emergency

• Temporary

TYPES OF MOC WORKFLOWS:

88©2019 Sphera

PRE-APPROVAL

Approval to evaluate, not

approval to make change

EVALUATION

What do we need to consider

when making the change or what

will be affected by the change?

IMPLEMENTATION

Do the work

INITIATION

Identify what will be changed

PRE-STARTUP

SAFETY REVIEWDid we do what we said we

needed to do?

APPROVAL

Approval to start the work

Components of Management of Change are not related to the size of an organization but

instead are related to the complexity of the change.

9 Essential Components of Management of Change

1 2 3 45 6 7

8 9POST-STARTUP CLOSURE

APPROVAL TO

STARTUP

©2019 Sphera 9

10

INITIATION

• Idea from an operator

• May include several questions to determine whether

the change is a “like-in-kind” change or a change that

requires an MOC

• Result of a regularly scheduled MOC meeting in which

changes or improvements to the process are discussed

• Originate from a PHA or HAZOP or result of an incident

or audit

• Required for new construction or change of equipment,

process, procedure or organizational change

• Includes detailed description of change (the what) and

technical basis for the change (the why)

• May include pre-screening checklist to determine who

needs to be involved and what evaluation checklist

questions should be addressed

• Include enough information to “sell” the idea

• Provides a means of identifying additional “affected”

units or business entities

• Notification delivered to pre-approver in electronic MOC

application (pre-approver set up in configuration of

application)

Identify what will be changed

©2019 Sphera 10

11

PRE-APPROVAL

• Optional for some companies if the MOC

process includes a meeting and discussion of

the change prior to the MOC being initiated

• Review of information entered by Initiator

• MOC owner / evaluator identified either by

Initiator or pre-approver

• In many cases, the initiator’s immediate

supervisor

• Options for pre-approver are: approve “as is,”

send the MOC back to the initiator for more

information or cancel the MOC

• Notification delivered to MOC owner / evaluator

and Initiator if approved; notification delivered to

initiator if more information is needed or MOC is

canceled

©2019 Sphera 11

Approve to Evaluate

12

EVALUATION

• Most complex component of an MOC

• Large number of stakeholders are

involved

• Can take an extended period of time

based on the complexity of the change

• Decision is made as to whether or not a

formal risk assessment (What-if, HAZOP,

PHA) is required to thoroughly evaluate

the change and risk associated with

making the change

• Formal risk assessment must be

completed and Recommendations from

risk assessment are incorporated into

the MOC record (as action items)

What do we need to consider

when making the change or

what will be affected by the

change?

©2019 Sphera 12

EVALUATIONCHECKLISTS• Includes evaluation checklists / questions

which are assigned to subject-matter experts

(SMEs) to answer and/or address

• May be configured to be pre-assigned by

Initiator’s response to pre-screening checklist

questions in Initiation phase or assigned by

MOC owner / evaluator in evaluation phase

• Checklists can be configured at site or

corporate level

• Responses to questions could generate

additional checklists and involve additional

SMEs

• Evaluation checklist questions should be

configured to generate Action items based on

SMEs’ response to the question

• Default action items could be created based

on each checklist question and should be

identified as required to be completed in

evaluation, pre-startup or post-startup phase

• SME can create additional action items as an

evaluation checklist question could require

more than one stakeholder’s input

• SME creating any additional action items must

identify when the action item must be closed

VALIDATION

• Validation required at each phase which

prevents MOC from progressing until all

action items assigned to that phase are

addressed

• Approver is notified when formal risk

assessment, if required, is completed,

evaluation checklist questions are

addressed and all action items identified

as evaluation action items are closed

13

APPROVAL

• Approval to start the work, based on the

results of the evaluation phase and budget

• Typically a high-level manager such as Unit

Supervisor or Business Unit Manager

• May require multiple approvers

Approver’s options include:

• Approve the MOC, signaling the work

required to complete the change can

begin

• Send the MOC back to the MOC owner /

evaluator and requiring additional

evaluation of the change

• Cancel the MOC

Notifications delivered by decision of

Approver

• MOC is approved – MOC owner or

responsible person is notified that work

can begin

• MOC sent back to MOC owner / evaluator

with instructions (based on comments

entered by approver) on what additional

evaluation must be completed

• MOC is canceled – MOC owner / evaluator,

initiator and pre-approver (if required) are

notified of cancelation

©2019 Sphera 13

Approve to start the work

14

IMPLEMENTATIONDo the work

• Phase in which the work required to

complete the change is done

• Includes construction or installation of

equipment, training of employees and

contractors, and publication of a

procedure, if a procedural change or

change to a procedure is required by the

change

• Includes action items from evaluation

phase that must be completed prior to

starting up the equipment / process

• Additional action items can be added by

MOC owner as needed; option to require

pre-startup or post-startup closure

• Any changes to scope must be approved

and appropriate action Items created and

closed if required prior to startup

• Notification is sent to the person

responsible for completing pre-startup

safety review when last pre-startup action

item is closed

©2019 Sphera 14

15

PRE-STARTUP SAFETY REVIEW

• Includes pre-startup walk through activities

• A checklist is used by the person responsible to

complete the walk through activities

• Typically a paper-based checklist completed

while in the unit/area where the change is

made even if an electronic MOC application is

used

• Additional general PSSR checklist can be

incorporated into the pre-startup phase in an

electronic MOC application

• Includes standard tasks such as whether

construction meets the intent of the design and

within regulatory requirements, training,

notification delivered to affected employees,

and validation that related documentation has

been updated

• Checklists can be configured at site or

corporate level

• Notification is delivered to startup approver when

checklists are completed and copy of PSSR walk

through checklist, if required, is uploaded into the

electronic application

Did we do what we said we

needed to do?

©2019 Sphera

1

5

16

• Critical step requiring management

approval

• Point in the process where incidents

happen if stakeholders fail to exercise

due diligence throughout the MOC

• Must review all phases of MOC to

ensure the equipment / process is

ready to start up and all regulatory

requirements have been met

• Must ensure that all employees have

been trained on the change and are

aware the equipment / process is

ready to start up

• Notification is delivered to all affected

employees that equipment is ready to

startup

APPROVAL TO STARTUP

©2019 Sphera

1

6

17

POST-STARTUP

• Final items are addressed prior to closing MOC record

• Includes action items generated from evaluation, approval,

implementation, or PSSR phases which were designated as

post-startup action items

• Additional action items can be created by MOC owner /

PSSR coordinator and must be addressed prior to closing

the MOC

• Includes tasks such as uploading procedures and updated

piping and identification diagrams (P&IDs) to the

appropriate repository, ensuring any household tasks are

completed after startup and MOC is ready for closure

• Notification is delivered to MOC owner or person responsible

for closing MOC

©2019 Sphera 17

18

CLOSURE

• The MOC record in an electronic application is ready to be

closed; in a paper-based system, the MOC is signed-off as

closed

• Review of all phases to ensure record is complete

• Include record of lessons learned

• In an electronic application, MOC is closed and all

appropriate employees have read-only access to the

record in the future

• If the MOC is an MOC with “child” MOCs, the “parent”

MOC will not be closed until last “child” MOC is closed

©2019 Sphera 18

19

• Emergency MOC is initiated after change is made due to

the physical change having to be made in an emergency

situation

• Does not require pre-approval as approval to make the

change is made prior to the MOC being initiated or

entered into an electronic MOC application

• Supervisor or manager’s name who approved the

emergency MOC is recorded in the Initiation phase of an

emergency MOC

• All phases of the MOC must be completed to ensure a

complete record of the change

Emergency MOCs

©2019 Sphera 19

20

• Additional workflow steps are required for

temporary MOCs

• A temporary MOC workflow must provide for change

being extended, removed or made permanent

• If temporary change becomes a permanent change,

the temporary MOC should be closed and a

permanent MOC created

• Electronic MOC applications should provide a field

for identifying permanent MOC numbers in the

temporary workflow for future reference

Temporary MOCs

©2019 Sphera

Communication becomes even more important in managing change that affects multiple

locations due to the number of stakeholders.

Even the most simple change may involve multiple departments or

business units. In the case of large corporations, this may include

various business units at the same site, departments or business units

that are common in multiple sites, departments or business units at

sites in different countries, departments at the corporate level, or even

different entities of the parent company.

Managing Change Across Business Units or Locations

©2019 Sphera 21

• Financial

• Maintenance

• Environmental Health & Safety

• Regulatory agencies

• Affected business units

Change Across

Business Units

Management of Change Across Business Units or Locations

©2019 Sphera 22

• Change in like-in-kind process

units

• Financial

• Maintenance

• Environmental Health & Safety

• Regulatory Agencies

(state or country)

Change Across

Business Locations

• Financial

• Environmental Health & Safety

• Business plan or roadmap

• Employee buy-in at site level

• Acquisitions / mergers

Corporate Driven

Change

Factors to be considered when proposing change across Business Units, Locations or at the

Corporate level include:

23

Regardless of where change is initiated, if additional

business units or locations are involved:

• Ensure that stakeholders of all departments, business lines or

locations are all involved in all phases of managing the

change, beginning at the initiation phase

• Understand that an even bigger challenge is to involve all

affected employees

• How that additional regulatory agencies may be involved

• Recognize that it will be more difficult for companies using a

paper-based system to manage change since it would require a

collaborative effort to ensure all stakeholders are involved in

decisions and notified of tasks requiring their input

Managing Change Across

Business Units or Locations

©2019 Sphera 23

24

• Easier to manage than paper-based system

• Hierarchical structure used in electronic MOC applications can be set

up to reflect all departments, locations, and business lines

• MOCs can be associated with any level in the hierarchy, including the

corporate location, business line or unit levels

• Ability to identify and link entities affected by the change

• Ability to include all stakeholder names in one database, providing

ability to assign tasks to appropriate stakeholders

• Ability to create “parent” / “child” MOCs, used extensively in large

construction projects

Managing change across different business units or

locations when using a robust electronic MOC application:

©2019 Sphera

Managing Change Across

Business Units or Locations

“a major change or goal a

business undertakes”

Business

Imperative is defined as

• Mitigates risk: the MOC process requires some level of hazard analysis to identify risk

when proposing a change. Risk not previously identified in the evaluation phase may

require modifications to the MOC in order to mitigate the risk.

• Safety: ensures that changes to processes, equipment or procedures are made in a

safe manner.

• Reliability: ensures that processes and equipment are updated or upgraded in a

manner that ensures reliable operation which could affect not only the unit / area in

that the change is made but the entire facility.

• Organizational: ensures that the appropriate employees are involved in MOC,

especially when mergers or acquisitions result in major personnel changes.

• Financial: the management of change process provides a method to look at the cost of

a project in its entirety.

• Additional tasks required to complete the change may surface during the MOC

process. These changes may be outside of the initial budget and have an affect on

units / areas where finances are controlled by another budget.

• MOCs are required when new units are constructed in a process safety management

regulated facility. The MOCs are typically broken down by one “parent” MOC with

multiple “child” MOCs. Each child MOC requires evaluation of the budget required to

make the change, then rolls up to the total budget of the project. Any deviation from

the budget is recorded in the appropriate child MOC but also rolls up to the parent

MOC.

• Reputation: a company’s reputation in the surrounding community and in some

instances throughout the world, can be severely damaged if a robust MOC process is

not in place, resulting in an incident.

“business goal, object or target

with the highest priority”

Strategic

Imperative is defined as

Management of Change Is a Business Imperative & Strategic Driver

©2019 Sphera 25

26

Module focuses on transition, not change

• Change is something that happens to people, regardless of

whether they agree on the change

• Transition is what happens in people’s mind as they go

through change

• Change can occur quickly; transition occurs more slowly

• Three stages of transition:

• Ending, losing and letting go

• Neutral zone

• New beginning

ESSENTIAL TO LASTING CHANGE

EMPLOYEE ENGAGEMENT

William Bridges, an American author and organizational

consultant, wrote the book Transitions, in which he

describes his “Transition” model.

©2019 Sphera

First stage of transition: Ending

Employee Engagement:

Essential to Lasting Change

©2019 Sphera 27

• Occurs when employees are first presented with change

• Causes uncertainty--not doing the same process that has

been done for years

• Causes a sense of loss--employees who were part of process

and ensured the process worked are losing a process or

equipment they know well (identify)

• Causes frustration--especially if employees are not involved

with the decision to make the change

Second stage of transition: Neutral Zone

Employee Engagement:

Essential to Lasting Change

©2019 Sphera 28

• Bridge between old process and change being implemented

• Users cling to “they way we have done it for years”

• Users may be resentful if they didn’t initiate the change or don’t

feel they were included in the decision

Third stage of transition: New Beginning

Employee Engagement:

Essential to Lasting Change

• Time of acceptance

• Affected employees are provided training

• Strive for opening to learning

©2019 Sphera 29

To help employees stay engaged from

the inception of the change:

Employee Engagement:

Essential to Lasting Change

• Ensure communication lines are open between employees and

management

• Understand why there is resistance

• Emphasize need for employees to stay engaged as they have

knowledge and experience

• Assist workers in guiding them through the change via

communication

©2019 Sphera 30

Employee engagement within MOC process:

Employee Engagement:

Essential to Lasting Change

• Who can initiate MOC?

• When are employees engaged in the evaluation process?

• How are tasks assigned to the employees?

• Who is involved in the pre-startup safety review?

• What is done to ensure employees are trained and how is the acknowledgement of the training captured?

• How are employees notified of startup?

• Who is responsible for capturing lessons learned?

• Where is the MOC data stored, and how do employees access this records?

©2019 Sphera 31

Measuring Successful Changes

Measuring the quality of

changes at the

organizational level

Effects on the

environment

• New equipment =

more energy

efficient, reducing

carbon footprint

• New process =

less emissions

Benefit realization and ROI

Accountability

KPIs – easier to track in an

electronic MOC application

• Tasks within the MOC

are assigned and

completed within the

schedule

• Action Items are

completed on a timely

basis

• Supervisors have access

to real-time information

via dashboards and

reports

Performance

improvement

Changes are within

schedule and budget

©2019 Sphera 32©2019 Sphera 32

33

Measuring Successful ChangesMeasuring the quality of changes at the employee / contractor Level

EMPLOYEE /

CONTRACTOR

ENGAGEMENT

©2019 Sphera

EMPLOYEE /

CONTRACTOR

FEEDBACK

EMPLOYEE /

CONTRACTOR

OBSERVATIONS

AWARENESS AND

UNDERSTANDING

OF THE CHANGE

COMPLIANCE AND

ADHERENCE

REPORTS

ACCOUNTABILITY

About Sphera

Sphera is the largest global provider of Integrated Risk Management

software and information services with a focus on Environmental

Health & Safety (EHS), Operational Risk, and Product Stewardship.

For more than 30 years, Sphera has advanced Operational

Excellence by serving more than 3,000 customers and over 1 million

individual users across 70-plus countries to create a safer, more

sustainable and productive world.

www.sphera.comFor more information, contact us at: sphera.com/contact-us/

©2019 Sphera. All Rights Reserved.