Change Management in an Engineering Organization (A Case Study)

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1 Change Management in an Engineering Organization (A Case Study) Mohammad Khodadad Kani PMO Department, Mana Company, Iran & Leila Salimi, PMO Department, Mana Company, Iran Abstract: This paper introduces a model aimed at improving the quality factors in an engineering organization. Considering, the most engineering organizations are project oriented, so there is needed to change their conventional approach to propose modern and reliable economic services of good quality in the construction industry. In today s world, it is impossible to imagine static environment with few changes, however, procedure of managing this environment necessarily requires recognition of all aspects. Change management is responses of manager to environment changes. Mainly, purpose of change management is reducing tasks disorder. On the other hand, each change is equal to gain some opportunities development. In order to have successful changes, the change process must be clear which proper leadership and obvious communication are needed. This research provided process of changes in an engineering organization (MANA) as a case study. Necessity of change had been found by its manager whereas there were various objectives to develop organization. To obtain these goals, modern management science and change management theories have been used and some improvement projects were defined. These projects included preparing strategy, promotion of human resources (environmental changes; better qualification; improving capabilities of engineering with employing centralized experts instead of outsourcing), improving coordination procedures by management information systems, managing projects by using project management standards and finally implementing enterprise project management. Based on case study by the authors involving the construction industry, this paper reports on quantitative methods on the efficiency of changes. Keywords: Change Management, Project, Engineering Organization Introduction Organizational renewal is an important issue in strategic management, and this is a basic element to make organizations alive in a competitive market, so for each company, planning renewal programs is always needed to deal with ambiguities and be innovative, however, there might be some challenges to accept changes. Rigidity in organizational structure creates an organizational viscosity (due to vertical layers of management) and conflict of interest (between functional divisions), that affects the organizational renewal [1]. Managing change cycle is a renewal process. The first person who explained Organizational Renewal was Likert [2]. After that, a method of renewal processes interpreted by Lippitt emphasized that renewal needs would be changed periodically, and each of organizations has a life cycle [3]. Change approach in management is systematic approach which based on process. Process first initiates in a particular time then will be finished, so change management is a process with awareness. This research provided process of changes in an engineering organization (MANA) as a case study. The company described in this case is engaged in engineering consultancy which involved in design and build commercial and residential buildings. In this case all activities through change management are explained and quantitative methods on the efficiency of changes explored.

2 What is change management? Change management is a structured and strategic approach to initiate and manage the change process in the organization structure and culture as well as the individuals/teams behavior and attitude towards the change transition in the field of the business processes, technology implementation or any other policies of an enterprise. Change management is about modifying or transforming organizations in order to maintain or improve their effectiveness [4]. Change management models There are several change management models that the enterprises follow while undertaking the change management process depending upon the ground realities and the organizational culture of the enterprise seeking the change process. One of such models popularly known as ADKAR model [5] describes five factors for the change to be realized successfully on an individual level that are as follows: 1. Creating Awareness why the change is needed 2. Inculcating Desire to co-operate and participate in the change process 3. Providing and collating Knowledge to guide the change process 4. Developing Ability and appropriate skills to drive the change process 5. Formulating Reinforcement strategy and plans to sustain the change process The ADKAR model is designed to focus teams on specific activities that will impact results. The benefits to this model include; evaluating employee resistance, help employees transition through the process, create employee specific action plans, and develop a change management plan with employees [5]. Research model Accurate strategy and methodology selection are principally causes of success or failure, this paper will now introduces a model for the change management process which gained from researching change management theories; best practices of successful organizations and function of project oriented engineering organizations. The steps of this model are included in: 1. Change Identification 2. Goal Setting 3. Current State Evaluation 4. Implementation 5. Oppose to Halted Factors 6. Continues Improvement and Control Case study research Since 2000, Mana has been founded as an engineering consultancy company with project oriented function. To take advantage of architecture and civil engineer experts it has done some private or public projects, however, without knowledge of management could pass successfully its childhood. But contemporary with globalization, necessity of change had been found by leadership, so the following stages executed during the last year: 1. Change Identification

3 Awareness of necessity for organizational renewal created in the life cycle of company to preserve local competitive market and being capable to take global market in future. 2. Goal Setting Positive consequences of change process were listed to make better sense about changes. This list components including: a) Better quality of services to client b) Achieve much more income c) Go ahead of rivals d) Prepare modern engineering standards in the construction industry e) Better management for referred projects 3. Current State Evaluation In the Mana Company there are some potentialities such as skills, knowledge, financial resources and human resources which are elements to support change process, but these were not utilized with management methods. In addition, considering capability of company and its target it was needed to engage some new specialties and also there was not any procedure for communication between employees. 4. Implementation In a change process, the most important points to start up are those which have maximum problems, so in order to solve these problems some improvement projects were defined as below: a) Promotion of human resources (prepare and modify organization structure to modern matrix structure instead of hierarchy structure; execute evaluation systems based on 360 degree evaluation; employing centralized experts instead of outsourcing) b) Improving coordination procedures by management information systems: In the Current State Evaluation stage it was recognized that the most problematic thing is method of communication between different departments, so responsibility matrix and information flow diagram prepared for design and build units. After that, by utilizing information systems to integrate activities in each unit, employees could simply share their needs or basic data and also managers could extract reports from reliable and integrated system. c) Managing projects by using project management standards and finally implementing enterprise project management: First of all project charter was created for each project, then responsibilities matrix applied, after it scheduling and checklists prepared for both phases design and construction. This led to control quality by filling out the checklists and clarify inspection points through every process. According to defined information systems, all of the members of project team could use their own required information by online accessible project charter. Finally, project book as a document which has characteristic of lessons learned prepared for projects. 5. Oppose to Halted Factors The most problem which will be occurred during the implementing change process is resistance, so for an organization which wants to prevent problems it is extensively important to response to employees (internal customer). In order to oppose to negative factors and reduce resistance, below activities performed: a) Interior design with suitable work environment ergonomics b) Training self management, appropriate communications and teamwork to employees which lead to increase professional capability of personnel

4 c) Arranging coordination meetings and clarify management strategies to middle managers and also to employees d) Encouraging employees to cooperate in improvement projects e) Exactly making known for employees the whole processes in the field of their own 6. Continues Improvement and Control At this point in the project, we know the actual performance of the change management process and what the process is capable of doing if it is operated according to established procedures. A system measurement of the performance is actually needed during the all steps of implementation change management in order to being capable to compare achievements and the objectives. This helps leadership to manage change process with systematic well-timed feedbacks. Although the feedbacks might be positive or negative but in the negative cases some efforts will be used to understand what the mistake is. For instance in the Mana Company there are some evaluation forms which must fill out by clients to modify or complete execution experiments and all of that will be used to improve processes of the project execution team. A method to measure performance The purpose of this paper is to develop a method that will help companies recognize weak points in their change management process and improve it. To measure quantity of success in the change management process, a procedure was defined in Mana Company which has 5 criteria effectiveness. The first three of them are involved in leading to predetermined quality and time, including: client satisfaction, improving engineering standards, and information systems. The last two criteria are employees satisfaction, and cost reduction. With applying this procedure it will be recognized that how much of the objectives are occurred by implementing change management, so a questionnaire has been prepared to evaluate the results of implementing change management (see Appendix 1). The questions in this questionnaire refer to all phases of the change management process and require answers that are in fact assessments ranging between 1 and 10. Assessments are entered for all points marked with a bullet. Each column from 1 5 refers to one of the criteria: 1. Client Satisfaction, 2. Employees Satisfaction, 3. Improving Engineering Standards, 4. Information Systems and 5. Cost Reduction Assessments for each of the criteria are obtained by calculating the average value for each column. A graphical example of assessments based on the stated criteria is shown in Fig. 1. Analysis of the questionnaire shows that the greatest influence of change implementation is Information systems.

5 Cost Reduction Client Satisfaction Employees Satisfaction Series1 Information Systems Improving Engineering Standards Fig.1. Criteria for efficiency of change management process Conclusion Most of the organizations don t have a special procedure to manage their change plans, so it leads to failure and also takes worth cost. Gaining success in an organization needs appropriate strategy which adapted to organization and its functional structure. In this paper, we suggested a model to eliminate probable problems thorough the change management. According to this model we defined the change management process to 6 sequenced phases: 1. Change Identification 2. Setting Goals 3. Current State Evaluation 4. Implementation 5. Oppose to Halted Factors and 6. Continues Improvement and Control. In addition we outlined a method for analyzing change management effectiveness in a project oriented engineering organization. This approach indicates that how it can be possible to manage changes and measure performance of execution change process. Appendix 1. Questionnaire for evaluation the change management process. Questions Criteria 1 Change Identification There is organizational support for change management. 1-2 The organization places incentives to implement changes. 1-3 There are quick responses to the market. 1-4 Employees know organization strategies definitely. 2 Goal Setting 2-1 The goal setting is in the way of market requirements.

6 2-2 In the goal setting noticed to organization capabilities. 3 Current State Evaluation 3-1 Required resources are prepared. 3-2 The organizational opportunities are used in the best way. 3-3 The expert knowledge of employees is used optimally. 3-4 The required potentialities are available. 4 Implementation 4-1 Priorities have been identified. 4-2 Specific procedure has been prepared for internal and external communications. 4-3 Checklists of process control have been prepared. 4-4 There is a procedure to evaluate employees. 4-5 There is adequate and suitable training for adaptation employees to the changes. 4-6 The conditions of environmental work is appropriate. 4-7 The efforts of management and employees combined to achieve a desired change. 5 Oppose to Halted Factors 5-1 There are adequate incentives to make employees cooperate with changes. 5-2 Meetings between different departments are continuously. 5-3 Employees understood their own process exactly. 6 Continues Improvement and Control 6-1 Continues improvement of processes applied by all who are involved. 6-2 Changes in documentation would not make process to be harder. 6-3 The feedbacks of employees confrontation to the changes are timely. 6-4 The entire change process is computer-aided. Key: 1.Client Satisfaction, 2.Employees Satisfaction, 3.Improving Engineering Standards, 4. Information systems, 5.Cost Reduction Assessment: (-)1, 2,3,4,5,6,7,8,9,10(+) References [1] Datta, Avimanyu. Sukumar RayChaudhuri. " Modeling the Effect of Rigidity in Organizational Structure on Organizational self Renewal and Knowledge Diffusion ", [2] Likert, Rensis. New Patterns of Management, New York: McGraw Hill Book Company, 1961.work life counseling, 1991(ED ). [3] Lippitt. Gordon L. "Organizational Renewal: Achieving viability in a changing world" New York: Appleton- Canlury- crofts, [4] Hayes, J. The Theory and Practice of Change Management. Second Edition. Palgrave Macmillan, Hampshire, [5] "ADKAR" - a model for change management. Change management tutorial series. Prosci, Accessed August 21, 2006.

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