Monthly Archives: September 2011

Building an Organization that Can Change Again and Again

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You don’t need a lot of research to show you that change in organizations is an ever increasing phenomena.  New technologies, new products, new competitors, new regulations, new people with new values and experiences.  Every day, organizations try to stay one step ahead of their competitors by changing to meet the needs of their customers either cheaper or faster or both.

Not too long ago, many started recognizing that change within organizations needed to be proactively managed.  Those that were forward- thinking started working explicitly to help the people in their organizations get ready, willing, and able to work in new ways that were required for future success.

Those that hoped people would just “get with the program” or “do what I said because I said so” have lived (and died) with the results of low productivity, engagement, and performance relative to their more enlightened competitors.

For the organizations that have worked hard to manage the people aspects of change explicitly, the rewards have been forthcoming.  But change is speeding up.  As soon as one change is “complete”, it seems another is starting up.  Just paying attention to managing the people aspects of organizational change will not be good enough as time goes by.  The organizations that thrive in the long
term need to develop an organizational change competency.  Change needs to become part of an organizations culture and DNA.

Given the pace of business change today and in the future, building a change management competency is going to be a clear competitive advantage for organizations of the future.  Organizations that are really good at helping their people move from thinking and acting in existing ways to thinking and acting in new ways that are required for the organization’s success are the ones that are going to beat their competition every time.

For lots of years, organizations have viewed change as an event.  Implementing an ERP system.  Reengineering processes.  Redesigning an organization.  Spinning off a division or merging with another entity.  Some have grinned and bared it just waiting for the pain to stop.  Others have learned to muscle through with less pain, but memories that are less than fond.  And still others have gotten pretty good at managing these kinds of change events.

Organizations range from having no change management focus or skill at all, to complete integration and competence in managing the people side of change.

What does it take to build an internal change management competency?  Some organizations are building change management functions or centers of expertise (such as Motorola).  Having a team of people who are dedicated to focusing only on the human elements of change ensures that it is not forgotten.

Other organizations are developing and adopting common tools and techniques that can be used across an organization to manage change.  For example, Johnson & Johnson has their “Change Integration Process” and General Electric has their “Change Acceleration Process”.  The use of a common language and approach to manage the people aspects of change speeds up the process of managing change and instills a mindset that helping people navigate through change is important.

If you don’t want to create your own model for managing the people aspects of change, then adopt one that’s out there already that fits your organization’s level of sophistication and experience.  Start letting people in the organization know why managing change is important.  The act alone of teaching staff about a change management process and tools sends a powerful signal to employees that
the people part of change is important.  And build the skills, tools, and common language to help people start doing the work.

Change management is the next frontier of business improvement for organizations of all sizes.  Just as Six Sigma and Lean started with big companies and “trickled down” to smaller organizations and became a real competitive advantage for some, effectively managing ongoing change is starting to trickle down.  If you can be ahead of the next guy by building an organization that is capable of managing people during change, you won’t be sorry.

Priority #1 During Change: Leadership Alignment and Sponsorship

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Studies over the years have continued to confirm what you may have already suspected… the greatest contributor to successful organizational change is leadership.  In a studies of hundreds of companies and their change efforts, “Strong Executive Sponsorship” was cited three times more frequently
than any other contributing factor to successful change  by Prosci (Best Practices in Change Management) in both 2005 and 2009.

If your organization is currently undergoing or contemplating a change, the focus should be on leadership.  There are two elements of leadership that should be fully understood and addressed:

  • Alignment – the extent to which leaders are “on the same page” about what the change is, why it is important, what it will mean to the organization
  • Sponsorship – the things that leaders are actually doing to demonstrate their support for a change such as contributing resources, attending key meetings, and encouraging others to work with the project team

Understanding the degree of leadership alignment and sponsorship around the change and identifying and addressing leadership issues will position the change for success.

Collecting information about leadership alignment and sponsorship that you need doesn’t have to be a big deal.  A few candid discussions and well conducted interviews can do the trick.

Managing Change during ERP Implementations

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A friend of mine if the President of a mid-size company.  We were having dinner recently and he mentioned that they were evaluating ERP (Enterprise Resource Planning) vendors.  Put simply, ERP systems are complex computer software programs that integrate all functions and departments across a company onto a single system.

ERP systems bring together most if not all ofthe data used by an organization into one place.  They link up business processes across an organization as they share information.  Not every department of an organization needs to be part of an ERP system (although the more the merrier in the ERP view), but at least a few functions such as finance, the shop floor, the warehouse, or HR are often included.

One integrated software system for people planning manufacturing runs, taking orders, and generating purchase orders for new raw materials is a powerful tool.  It can have a tremendous payback if used well.  No more taking orders for items that are actually out of stock; no more taking orders from customers who are past due on payments; and no more telling customers they have to call someone else to figure out where their order is.

Although ERP systems can be fantastic for organizations when implemented well, they are not always all peaches and cream.  Customization to reflect a specific business can be hard and expensive.  ERP systems are generally not cheap.  And they aren’t simple to use.

Most importantly, ERP systems require people to change how they do their jobs.  If people don’t change the way they work, the value of a the system be minimal, and the organization can even suffer a hit to productivity and effectiveness as people work around the new system to keep doing things the way they have always done them.

The effective use of an ERP system requires a level of discipline and willingness to share information across departments.  Accountability and communication are key cultural attributes in ERP environments.  If an organization is not a cultural fit for ERP at the outset, the amount of change in store is even greater for people.

To overcome some of these limitations of ERP, it helps to focus on how people work.  Make sure you know very clearly what will be different for each person or role in the organization.  What will Mary have to do differently?  What new information will she need?  How specifically will she need to use the new system?  What decisions will she have to make?  Who will she have to interact with?

To make sure that people are ready willing and able to effectively use an ERP system give them specifics about the changes coming as soon as you know them.  Demo the system so that people can see what the ERP looks like.  Let people do some role-play exercises or games in the system to see what happens when they get things right versus make mistakes.  Train people according to their specific roles.  And create training that is based on business processes, not just the system.

When considering an ERP system, think about the total impact on the business – not just the new software.  Consider the process changes that need to go along with the software, the culture of the organization, and the people who work there.

How do they do that? Preparing Employees to Change

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Can your company adapt quickly to change? Successful companies have a repeatable process that helps employees through transitions. They create an environment that prepares employees to think and work in new ways. These companies make sure employees are ready, willing and able to make whatever change is needed to achieve business goals.

How do they do that?  First – communication and involvement. Employees are ready when they understand the status quo is no longer enough. They understand why the change is necessary for the survival of the company. They see it’s a priority by how leaders act. They hear it’s a priority by what leaders say. Benchmarking, sharing data and company goals help make the case for change. Companies good at preparing employees also create temporary work groups and empower employees to make some of the decisions that will affect them.

Second, employees are willing when they are motivated to work in new ways. They’re job has been redesigned and they see how it fits into the new plan. They are recognized and rewarded for adopting the new processes.  They are
willing when they are evaluated based on the new business goals and measures.

Employees are able when they have been educated and trained to support the new way of working. For example, do they know how to measure and track quality? Do they have the tools and skills to work as a team?  Employees are able when the organization structure supports the business goals, whether it’s working in teams or cross functional task forces.

Competition and environmental forces will continue to drive businesses to change. Creating an environment where employees are ready, willing and able is hard work; however, companies that are good at transitioning their employees will adapt quickly and have a competitive advantage.