Chapter 1. What is Change Management?

By the end of this chapter, you will be able to:

Define Change Management
List the Pillars of Change
Explain why Change Management is important to project success
Describe how Change Management fits within a project team

There are as many different definitions of Change Management as there are change managers.

In his 2011 article in Forbes, Change Management vs. Change Leadership – What's the Difference?, John Kotter notes:

"Change management…refers to a set of basic tools or structures intended to keep any change effort under control. The goal is often to minimize the distractions and impacts of the change."

Prosci, an organization that focuses on Change Management research, defines Change Management (at https://www.prosci.com/change-management/definition/) as:

"The application of a structured process and tools to enable individuals or groups to transition from a current state to a future state, such that a desired outcome is achieved."

The Change Management Institute, an organization that promotes and develops the practice of Change Management, notes in Organisational Change Management Maturity (February 2012) that Change Management is:

"…more than just 'the people side of projects.' It should be viewed as the approach the whole organization uses to manage change well."

The list goes on. Notice that all of the preceding definitions focus on Change Management as the management of organizational change. This book will help you drive change throughout your company. It is not designed to help you determine which changes should be made to a computer system, such as you would find in ITIL Change Management.

To ensure that we're all working with the same definition, for the purposes of this book, Change Management will be defined as:

"A set of activities, processes, and tools designed to help people successfully adopt change."

You'll notice that in this definition, I don't list every activity and tool. This is because, depending on your project, the set of activities and tools you use may change. I also don't define the type of change. As noted in the Preface, although this book focuses on the implementation of an IT system, Change Management and the basic concepts and activities in this book can be applied to any kind of change your organization faces.

The last word I want to focus on in the definition is "success." For each project, you must define what success looks like in your organization. People can appear to adopt the respective change, but on closer examination, you find that the change actually failed. I've seen cases in companies where the following issues occurred:

The new system is implemented, but it doesn't meet business needs because the end-users were not involved in the project
Everyone uses the new system, but they continue to use the old system as well, effectively doubling their workload
Everyone uses the new system, but they find loopholes and work-arounds that cause them to break government and industry regulations
Everyone uses the new system at first, but days, weeks, or months later, they stop and go back to the old way of doing things

In each of these situations, although the change was superficially adopted, the overall project was a failure.

Exercise – defining success

How has your organization defined "success" for your change project? Remember that this definition should not only describe a project that is successfully implemented, but also a change that is successfully and permanently adopted throughout the organization. Describe what success will look like in two or three bullet points, using a format similar to the one that follows:

1.

2

3

If you are using the case study, you may have defined success as:

All departments are using We Shop to do their purchasing
All departments are using standard business processes to purchase things
The use of We Shop has reduced the amount of wasteful spending in the organization

If you are using your current project and you weren't able to define what success looks like for the change in your organization, put this book down. Before you continue, you need to talk to your leadership team and ensure that there is a mutual understanding of how your organization will define and measure success. Go ahead, I'll be here when you get back.

The Pillars of Change

There are five major components of every Change Management program. They are referred to as the Pillars of Change because they support the adoption of the change. More importantly, they support people throughout the implementation of the change. Every pillar is designed to make it easier for people within the organization to adopt the change, shown as follows:

The Pillars of Change support the successful implementation of change

Although the preceding figure makes it look as though each pillar is independent, they are actually all integrated. The activities you conduct in one pillar impact the activities you need to conduct in all of the other pillars. You'll also notice that the pillars are round. This is because, as we will discuss in later chapters, Change Management activities form a loop of evaluation and continuous improvement. No matter how good you become at creating Change Management plans, you will always need to gather feedback throughout the project and use it to update and improve your scheduled activities.

If you were to view the Pillars of Change from a bird's-eye view, they would look a bit like the following:

The Pillars of Change are integrated and cyclical

Let's take a minute now to briefly define each pillar:

Sponsorship: Sponsorship serves as the foundation of all Change Management activities. It means supporting leaders throughout the organization for the change. Leaders can be members of the organization's leadership team, such as the CEO and department heads, or they can be unofficial leaders. Unofficial leaders are people who have influence among their peer groups and can lead others to adopt the change. We will discuss how to build sponsorship for the change in detail in Chapter 3, Building Sponsorship for the Change.
Organization design: Organization design focuses on how the structure of your organization needs to adapt to support the change you are implementing. It can involve changes to department structures, job activities, or the number of employees who perform a certain task. It can also involve the creation or removal of roles or groups. This is a task that should always be performed in conjunction with Human Resources and business representatives. Many organizations either skip this step entirely or wait to focus on it until after the change is implemented. In the next chapter, we will discuss some important aspects of organization design that should be considered as part of a successful Change Management program.
Stakeholder management: Stakeholder management involves understanding who is impacted by the change and the specific ways, both positive and negative, in which these people are impacted. This understanding will drive your communication and training activities. In Chapter 4, Managing Your Stakeholders, you will complete a number of activities to help you prepare to manage your stakeholders.
Communication: Communication is the process of sending the right message to the right people at the right time using the right channel. It also requires you to receive and understand messages from your stakeholders, and use them to influence your Change Management program. We will do some in-depth work on communicating change in Chapter 5, Communicating the Change.
Training: Training here is the process of enabling your stakeholders to successfully act on the change. Whether this involves correctly following a process, using a new computer system, or behaving in a new way, training is crucial to the success of the change. Because training is a large, complex topic, Chapter 6, Using Training to Prepare Your Stakeholders, will help you create your training strategy. Please note, it will not provide step-by-step details on how to develop and deliver training.

Why Change Management is important to project success

In 2008, IBM Global Business Services published the results of their Global Change Management Study in a presentation called Making Change Work. With input from over 1,500 project practitioners from 15 countries and 21 industries, Making Change Work provides valuable insights into how Change Management contributes to the success of projects.

One of the most troubling findings of the survey was that only 41 percent of projects fully met their objectives. This means that the project you are currently working on potentially has less than a 50 percent chance of being successful. That's a scary number. The following figure is an illustration to these statistics:

Less than half of all projects are successful (IBM Global Business Services, Making Change Work, 2008)

A McKinsey study conducted in the same year surveyed over 3,000 executives from various countries and industries (The McKinsey Quarterly, McKinsey Global Survey Results: Creating organizational transformations, July 2008). Their results were even worse. Only a third of executives surveyed said that their organizations successfully achieved change.

When the IBM study's participants were asked about the major challenges they faced in implementing change, the overwhelming response was that "soft" factors such as employee attitudes and corporate culture posed more of a challenge than "hard" factors such as processing change and technical barriers Refer to the following figure for an illustration of these statistics:

Many of the barriers to successful change are "soft" factors (IBM Global Business Services, Making Change Work, 2008)

Luckily, they also found that there were ways to mitigate these challenges. Ten critical factors to successfully bring about change were identified. All of them form part of a good Change Management program, shown as follows:

Most of the critical factors for successful change are part of a good Change Management program (IBM Global Business Services, Making Change Work, 2008)

The Pillars of Change we just reviewed cover seven of the ten critical success factors. The following list shows which success factors are included in each pillar:

Sponsorship:
- Top management sponsorship
- Change agents (pioneers of change)
Organization design:
- Efficient organization structure
- Monetary and non-monetary incentives
Stakeholder management:
- Employee involvement
Communication:
- Honest and timely communication
Training:
- Efficient training programs

Furthermore, the top 20 percent of organizations as defined by project success rate reported an 80 percent project success rate. These organizations were deemed "Change Masters", and had a significantly higher rate of success than the average company, shown as follows:

Organizations that excel at change have a much higher rate of project success (IBM Global Business Services, Making Change Work, 2008)

If these facts and figures have energized you to build a strong Change Management program and strive for the success of your project in your organization, but have left you feeling a bit overwhelmed about how to start, consider this conclusion from the McKinsey study (7):

"One implication is that companies should use a range of tactics in conjunction to engage their employees as early as possible. They ought to base their tactics on the type of transformation they are planning and the methods to which their employees will respond best."

That is exactly what this book is designed to help you achieve.

Change Management and the project team

Change Management is an important driver of project success, but the Change Management team does not operate in a box on its own.

Most IT projects have four main teams:

The Project Management team, who focus on running the project
The Functional teams, who work on the business side of the project
The Technical team, who work on the technical aspects of the computer system
The Change Management team, who work with the people side of the project

For the project to be successful, all four teams must work together. No team can function as a silo. Many projects will show the relationship between the teams in the following way:

The traditional view of project teams has the sub-teams working in silos

The preceding figure suggests that the functional and technical teams are in their own silos, with the Change Management and project management teams working separately across them.

However, I believe that the project team is more accurately represented like the following

All of the sub-teams on a project team should be integrated to deliver success

The preceding figure shows integration among all four teams. Each one influences the activities of the others and none can successfully work on their own.

Exercise – team integration

For each box in the following chart, list at least one way that the project team on the left can influence the activities of the project team listed at the top.

	How Change Management influences project teams	How project teams influence Change Management
Project management
Functional
Technical

Sample solution

	How Change Management influences project teams	How project teams influence Change Management
Project management	Change Management can help ensure that "people" activities are built into the project plan. It can also help to remind the team to include stakeholders in appropriate activities. This is to give stakeholders a voice in the development of the change.	Project management helps ensure that Change Management activities fit with the overall project timeline. It also helps to build in time from other teams to help with activities such as providing training input.
Functional	Change Management can help run workshops to help the functional teams understand current business processes. Later, functional teams can run workshops to help end-users understand the new business processes created by the project team.	The functional teams provide important input to activities, such as implementing training and ensuring good communication. They also help to identify ways that the change will impact their segment of the organization, and provide ideas on how to best address these impacts. The timing of many Change Management activities is reliant upon the timing of functional activities.
Technical	Change Management can help gather and report end-user input about the usability of the new system. If end-users find a system too difficult to navigate, they are less likely to use it.	The technical team helps the Change Management team understand the most efficient way to use the system, to ensure that end users are trained properly.

Exercise – supporting Change Management

The best way to prepare for the arguments against Change Management that your colleagues may raise is to practice your responses. Before moving on to the next chapter, read the following questions that I often receive from clients. Think about how you will respond if someone in your organization asks something similar. Remember to make your answers specific to your organization and project.

What is Change Management?
Do we really need Change Management? Will it help to ensure that our project is a success?
How will Change Management be integrated into the project team? Will the Change Management team need to work with all of the other teams?

Summary

People who do not understand Change Management often question whether it is truly necessary to dedicate time, money, and staff to developing and executing a good Change Management program. By now, you should be able to meet their objections with confidence by providing the following:

A clear definition of Change Management
Research-based statistics that explain how Change Management drives project success
An explanation that Change Management needs to integrate with the other project teams
Now that you know what Change Management is and why it is important to the success of your project, we will begin to dive into some strategies to help you develop your Change Management program.