The past few years have turned up the pace of change for business, beginning with the Internet revolution and the vast array of services we can now use to implement new business practices. Economic issues, including the wide scale deregulation of several industries, have also put pressures on businesses to react quickly in order to survive.
Collectively, we are now faced with a multitude of new opportunities at our feet and new competitive pressures at our back. In response to competitive and market pressures, we are seeing organizations change their core business models, and within their models, their focus. They are faced with a need to both grow and specialize, and to do so at a time when revenues are flat at best.
Cost management has increasingly become the key business driver, which means all of an organization's efforts to respond to change must be undertaken under the duress of no new net expenditures.
To add even more dimensions to the landscape, companies are recognizing that their supply chain partners are also changing, resulting in even more change for themselves. Furthermore, they know survival depends on wise choices and prudent investment in making changes.
With rapid-fire change becoming a constant reality for most companies, the time has come to take a higher level look at the change management process and what is needed to succeed.
Present For The Future
Change management is the proactive execution of change in a planned, systematic fashion. Within an organization, this might include changes to operations delivery, organizational structure, resources, plans, metrics, or the systems and processes that drive business results. Change can be the result of an internal adjustment to business strategy, or it can comes as a reaction to outside forces and events.
The goal of managing change is to move the business from present state to future state while:
Producing business results
Keeping all costs (resources, goodwill, reputation, morale) to a minimum
Negotiating conflicts of priority with operational projects
Dust Off Your
A change management process cannot be successful without certain preconditions. The company must already have a clear mission and strategic plan, as well as annual objectives. These are the blueprints that validate and guide the ideas emerging from the change management process. They are also the top-down metrics that lead to the measurable objectives of any change management plan.
Detailed and outward-looking research into a company's industry and market, as well as larger economic, demographic, political and social trends, is also key. Most companies are used to looking inward. Very few keep up with emerging trends and case studies at the level of rigor that would benefit the important decisions at hand. A change management process must have as much thoroughness as a new business start up.
Is the business delivering on its performance targets? Is the company also moving on its projects to change the business they do? Change is a parallel universe that cannot interrupt day-to-day business yet must smoothly run alongside it. It is easy to see the complexity of wearing both hats. That's why change management needs to be a function and process of its own, with its own unique focus. It's also why change management is an area that calls for the judicious use of consultants.
As one of the first steps in any change management undertaking, an outside facilitator should be assigned responsibility for the change program and for representing the change initiatives at the board level. The pace of business today means executives and managers can no longer handle change management and their regular jobs too. A formal, parallel change management function keeps the business both focused on results and nimble and responsive to market pressures.
Even more than in a strategic project, change projects need champions. In this case, both a non-invested champion and an invested champion are required. The former is needed to provide wisdom and neutrality, and most importantly, to make the tough decisions without fear of their own future in the company. We all know that one needs to shake up the existing order to accomplish change so someone who has a vested interest in that order cannot be the most effective champion. The non-invested champion should therefore be a board member or independent consultant.
The invested champion provides the "skin in the game" element and is someone who will "wear" the result of their work. They must be a senior executive in power, someone who has real clout.
A program manager, also an outside consultant, provides critical mentoring, guidance and advice to the project managers tasked with the actual implementation of the various initiatives.
In developing the change management team, you must also consider change in the context of your business partners and supply chain partners. Ideally your changes produce good results for your partners, or at the very least align with their plans for change. Involving your partners with your change management may also uncover opportunities for them to help you.
So at the outset, a change management program needs:
A non-invested champion
An invested champion
An outside program manager
Representatives from supply chain partners
Representatives from internal staff with detailed knowledge of current products and operations
A customer representative
What's To Change?
Knowing what needs to change is the first step in marshalling a response. Most change management processes get off on the wrong foot right from the start by assuming that management knows what changes are needed. In today's business climate, this simply cannot be assumed. Any change management tools and services must therefore include a discovery process called an impact analysis.
All the members of your internal and external stakeholder groups will have a different view on the pressures you are facing and what must be done to address them. The impact analysis will help you collect and see this variety of perspectives.
The impact analysis also provides information that will assist in setting project priorities. As you discuss the impact of change with internal and external stakeholders, many other benefits are gained from the interaction. You learn about your business from their point of view, and the discussion itself can strengthen relationships, loyalty and morale.
The objective of the impact analysis is to develop a set of well-defined problems and the areas of the organization that are affected, in other words, what elements of your operation need to change. At a high-level, the impact analysis will help you define:
What is already being done
What new things must be done
Who the new players will be
What relationships will form or disappear
What core processes will be affected
How success is defined
How you need to structure and operate your organization
What knowledge, skills and experience will be required
A good rule of thumb when trying to prioritize change projects is to perform a customer test. What change would make the most difference to them? Can you find a win-win where the customer gets what they want while you meet your objectives? Where is the most good to be gained at the least cost? Where is the leverage? Are your supply chain partners changing an interface that you can build on? Is an industry organization delivering standards you can use? What work is already in progress within your organization that can be adapted to meet new goals?
Now is the time to be creative in accomplishing goals. As maintaining costs is one of your key objectives, a change program must be opportunistic. A good tip is to focus on operations that have already achieved their ROI. Chances are they are outdated and inefficient by now and there will be a double benefit from the new project.
That Get Results
To create the actual plans that will be implemented, the change management program team takes the results of the impact analysis and considers them within the context of overarching business objectives and priorities. They then create a set of projects, with each project addressing a specific threat or opportunity. Involving supply chain partners in creating the project solutions is highly recommended.
Don't proceed in any direction that cannot be changed quickly. As we know, the world is largely unpredictable and change is accelerating. No one has a crystal ball, so build flexibility into all solution strategies and projects.
Keep in mind that all projects need to deliver complete results incrementally. Now more than ever, short projects with visible early benefits are a must. Structuring your projects for incremental achievements will help you gain an early and on-going return on your investment in the project, and will also help you learn from emerging results and mistakes so that you can refine you strategies accordingly.
What is the role of a manager in taking change and operationalizing it? A manager has the biggest challenge because she must be canny. She must be reactive when necessary and proactive when possible, while still addressing the needs of her staff. Managers also need to keep their eye on the company's strategic objectives and make sure all projects are producing results tied to those objectives. As Peter Drucker says, managers need to "maintain the balance between change and continuity."
Perhaps the biggest change for managers will be the orientation to process rather than task. Boundaries between businesses are shrinking and increasingly what matters is the value of the process not that the task gets done.
Where is the senior executive team in all this? While the change management program moves forward their most critical role is keep the organization as a whole focused on targets and mission.
There is also another very important role they can play. As the "wise elders" of the company, they can work outside the organization to build in the future areas where change is leading them. For instance, they can establish partnerships to underpin or advance change projects, lobby organizations and governments for the regulatory changes the company needs, or represent the company's changing directions within their own industry and between related industries. Such activities demonstrate high intellectual leadership and are critical to success within the shrinking borders of our global economy.
Finally, executives should remember that change does not happen overnight. By the time plans are set and conceptual problems are solved, it can take months or even years for the full effects to be felt throughout the organization. Strong and consistent leadership all the way through the process must come from the top.
The Future Is
In the past, experts discussed organizational change in terms of three phases: an initial period of stasis that flowed into a finite instance of change, and then back into another period of stasis.
stasis → change → stasis
Today, these periods of stasis or stability are not only unlikely to occur, but are probably not desirable anyway. In a business world that moves at lightning speed, those who stand still are soon left behind. Today's reality is a steady stream of small transformations, such that change is a constant state.
change → change → change
Change should soon become an integral and institutionalized function within every organization. Change management will occur through formal projects and such projects will form part of each manager and supervisor's operating plan and budget. Indeed, change may quickly become management's primary task. Are you ready for it?
About Andree Ryckman:
For 20 years, Andrée Ryckman has been helping organizations fully exploit the opportunities presented by emerging technologies and process methods. Practice in Action, her change management practice, uses a variety of tools and services to assess the pressures of change on a company and to make sure they make the most of each opportunity. Andrée has dealt with Avaya products and services on numerous engagements.
About CMC - Customer Management Center:
Having been established in 2000, CMC (Customer Management Center) has been dedicated to provide quality contact center services for both Turkish and European markets. Today, with almost 5000 employees in 6 locations, CMC provides services to more than 100 corporate clients, both multinational and local industry providers. CMC is a part of Mid Europe Partners, a multinational company leading buyout investor focused on the growth markets of Central and South Eastern Europe.
Published: Tuesday, December 17, 2002