Organizational Change Management In the Planning of Enterprise-Wide Technology Projects

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1 Organizational Change Management In the Planning of Enterprise-Wide Technology Projects By Celia Ellis, Manager PMP, ITILv3 Golden Source Consulants This white paper is focused on organizational change, offering insight on how to more effectively manage the people side of technology projects and the resistance that comes with them.

2 Change is hard. Organizational change is a term that makes many managers cringe, especially those who have been through the gamut and seen how easy it is for projects that require change to outright fail. Their loathing is well founded recent research by the University of Oxford reported that IT projects typically take longer than planned and cost more, with only 16% of projects hitting their targets. 1 The study reports that budgets are being overrun by 18% while delivering 93% of the original specifications for the project; 31% of projects were abandoned; and 54% of projects failed to deliver on the planned-for functionality. A lack of management commitment was cited as the biggest risk to an IT project, followed by confusion over the objectives and a lack of commitment. In other words, resistance to change. ORGANIZATIONAL CHANGE: AN IT CASE STUDY To understand what we mean when we talk about organizational change, let s take an example, modeled on a real world scenario at a Fortune 500 company. The Change: In our example the firm is pursuing an enterprise roll out of a hypothetical sales force automation (SFA) system called Cool SFA Plus a well-known system for managing leads and opportunities that will be implemented among a global sales team of 2000 users. A vendor has been engaged to support this roll out, and $14M in funding has been secured. Leadership announces to the company that: 1 Month Later, Feedback Starts to Trickle In: Cool SFA Plus will be launched across five countries this year A dream team of IT superstars has been selected to manage this implementation Additionally, 10 business analysts, 10 developers, and two architects are on board A first-year target has been selected All 2000 users will move to the fully functioning new system on a given date The Response: One month after the implementation, the feedback that begins to trickle in is not good. It seems that the global sales team didn t buy into the fact that they were going to be using a new system. They didn t see the value in it, or what was in it for them. Our other lead management system was faster! Why did we have to roll out this system anyway? Nothing was wrong with our old system. My sales are going to plummet! Forget the leading-edge technology and the many efficiencies it delivers. Forget the decrease in resources necessary to process orders, due to a significant reduction in data entry. Never mind the new capabilities to track lead sources and measure the performance of those campaigns, or the cost savings benefit of $5M. Or that sales representatives now have the time and tools to focus on doing what they do best sales. 2 Page

3 Understanding Resistance to Change FEAR Will my role change because of this transition? Will management see that I don t have the skills required to work this new technology? Individuals may not be resisting the change as much as they are resisting a potential loss of status, pay, comfort or power that arises from expertise. Often there is no disagreement with the benefits of the new process, but rather a fear of the unknown future and about their ability to adapt to it, e.g., fear that one will not be able to develop new skills and behaviors that are required in a new work set. ing. RESENTMENT Disgruntled employees may feel left out of the decision-making process that lead to this change in the first place. This perceived unfairness can be strong enough to lead to sabotage. Some employees may see the change as a violation of personal compacts management has with their employees. This can involve elements of mutual trust, loyalty and commitment and go very deep. a PERSONAL AGENDA An employee may have a competing commitment that is incompatible with the desired change. Others may be acting on a desire to protect what they think is in the best interest of the organization. Some employees may provoke insightful and well-intended debate in order to produce a better understanding or to make valid suggestions for improvement. Others, however, will let their objections interfere with the success of the change. 3 Page

4 Four Main Behavior Patterns of Resistance 2 Dominant Behaviors They are openly defiant about the change. Passive Aggressive Behavior They support the change in front of you, then undermine the change behind your back. Passive Behaviors They do the bare minimum to implement your strategy and barely use what has changed after implementation. Independent Behavior They continue to do things their own way regardless of what the change requires. How prevalent is resistance to change? 3 15% of the workforce is eager to accept change 15% of the workforce is dead set against it 70% of the workforce is sitting on the fence, waiting to see what happens 4 Page

5 Why You Should Care About Resistance If ignored, the triggers and behaviors mentioned above can quickly lead to disengagement and a slump in productivity, which inevitably impacts the bottom line. Minimizing the size and duration of a productivity dip is dependent upon quickly creating acceptance to the strategic plan and all that it entails. But gaining that acceptance is often a difficult process, as some employees will, for various reasons, seek to block the change. Productivity Improvements Go-Live Break Even Point Valley of Despair 5 Page

6 Successful Execution of Organization-Wide Change RESISTANCE DENIAL EXPLORATION RENEWAL Anger Withdrawl Fighting I do it my all, now look what I get I don t like it Emotional shut-down Acting as though no change has occured Inability to take in new information This will all blow over attitude Gradual acceptance of change Introspection Challenging of the old ways Bargaining Experimentation Motivation Renewed Energy Learning New Skills Thinking Positively Flexibility Let s get back to the Cool SFA case study. Their first attempt at deployment was a miss, so let s rewind the clock for them and try again. To ensure that change is embraced, and to give this project a better shot at success, leadership should: 1. Understand the path of change. It s important to know why change is hard and to be aware of the triggers and behavioral patterns mentioned that can lead to resistance (see graphic above). 2. Engage the user base early in the process of change. This will help the employees feel like they are part of the plan, not an afterthought. Leadership should connect the employees to the change from the top down. 3. Involve people from every area of the organization. Leadership must ensure that every department affected by the change is involved. Design a team of employees to help manage the change in each location and department. (continued) 4. Invest in the tools and resources to adequately support the change. Sometimes that means engaging outside consultants to ensure that employees concerns are heard and to help build acceptance. 5. Build out a solid communications strategy. This includes identifying and training champions to circulate the reasons for and advantages of the change. It also means developing ads, announcements, newsletters, articles and webinars to ensure that everyone fully understands the vision and the plan for implementation. This is another area where outside consultants can be a great help. 6. Listen to the user base. Engage the user base in dialogue and document their feedback. Prepare FAQs in advance that highlight potential problems and responses, and then adjust those questions and answers to reflect the dialogue. 7. Improve upon the change. Show your employees that you are willing to adapt your vision and plan to their insights and concerns. Be flexible, while at the same time maintaining persistence in your effort to execute the project. The response to change that is thoughtfully executed is much different than previously presented. Wow, this new system is much faster! Nothing was right with our old system, thank goodness it s gone. The new system really meets my needs. I can finally see the ROI on my campaigns! Why didn t we roll out this system sooner? Same system in a different package better execution, and better branding. 6 Page

7 Conclusion One of the most important variable factors that determine a project s success or failure has nothing to do with the complexity of systems, shortage of resources or lack of budget. At the end of the day, success of a project is determined by an organization s ability to successfully absorb change. People, and their resistance to change, often present a much greater risk than all other factors combined. When considering information technology initiatives, a solid organizational change management approach is just as critical as the expertise of the development team. Enterprise rollouts can be successful when there is a solid underlying strategy that organizes and energizes people to understand, embrace and make full use of new process and technology. This does not come without up-front investment and a concentrated effort in change management activities. If you need help with incorporating a change management approach with your enterprisewide IT roll-out, Golden Source Consultants strategic consultation services can help you expedite your plan. We help enterprises deliver innovative solutions and true ROI through creative and About the Author Celia Ellis is a Manager at Golden Source Consultants known for her deep expertise in Project Management. She brings more than 15 years of experience ranging in from financial services, technology services, and telecommunications. Celia s background in IT roles drives her passion to bridge the gap between the business and technology. Leveraging her skills as a PMP and knowledge of ITIL, Celia continues to exceed client expectations in Program Management, Vendor Management, and technology strategy. About Golden Source Consultants Golden Source Consultants is a management consulting firm focused on business strategy, project management, process improvement and training development and facilitation. GSC collaborates with clients to provide a roadmap for achieving breakthrough performance and driving continuous improvement across all functions of the organization sandhill.com/article/how-to-successfully-implement-organizational-change/ 3. Anderson, Dr. Lynn. Navigating the Winds of Change. Howard Books, Page