How to Prepare Your Company to Manage Change
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1 How to Prepare Your Company to Manage Change By Bill Brendler Brendler Associates A CustomerThink SMART Guide from Copyright 2003 CustomerThink Corporation and CRMGuru.com. All Rights Reserved.
2 Introduction Don t expect your CRM project to succeed if you don t have a plan in place to manage change throughout your organization. Our research shows that most companies learn the importance of change management way too late once a project is said and done. Changing an organization requires a new respect for diverse views of those within the organization who can truly help to achieve success. So never underestimate the importance of change in any CRM project. As a leader facing major change, this guide will give you a blueprint of practical suggestions for succeeding in leading the transition to a new culture that supports a customer-centric strategy. Change Management is a skill. To successfully build Change Management into your company you need to understand what it is and determine how to use it. After reading this guide, you will be prepared to: 1. Elicit sponsorship from top management 2. Build a team of change leaders 3. Overcome user resistance 4. Build a systematic Change Management methodology 5. Avoid the pitfalls that can interfere with a project s success Why is Change Management so Important? Corporations are doing everything from implementing Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and Six Sigma to Business Process Reengineering and Supply Chain Management (SCM). All are different/varying projects, though one dynamic plays a major role in them all: Change. While companies spent fairly freely before the economy went sour, today, the pressure is on them to prove the benefits of their investments in IT-based initiatives like CRM or ERP. Numerous studies list the causes of CRM and ERP failure and consistently cite Organizational Change as the number one reason why implementations fail. Companies have learned, sometimes the hard way, over the past few years that it is simply not good enough to buy the right technology they must make major changes in their organizations, customer focus, use of people, and design and delivery of products and services. Yet there still organizations that implement CRM and ERP technology without incorporating a change management methodology. In a new report 2003 Best Practices in Change Management comprehensive findings from 288 companies identifies strong, visible and effective sponsorship as the top contributor to project success. Employees want to hear messages about change from two people: the CEO and their immediate supervisor. Which could go a long way in overcoming what the report found was the top obstacle to successful change: employee resistance at all levels front-line, middle management and senior management. The top reasons for employee resistance are lack of awareness about change and fear of the unknown. Middle managers resist change because of fear of losing control and because they are overloaded with current tasks and responsibilities. Organizational change issues cannot be ignored anymore. Effective Change Management is fast becoming a competitive weapon. Change cannot be left to chance and the company that cannot change will not survive. Second, there is a strong correlation between organizational climate and customer satisfaction. In other words, happy employees make happy customers. And those who Copyright 2003 CustomerThink Corporation and CRMGuru.com Page 2
3 have shepherded previous projects readily acknowledge that change management should be dealt with more formally. When ask what they would do differently the next time around, most implementation teams would begin change management activities earlier on, instead of approaching it as an add-on or an afterthought. If your company is serious about success you must: Commit to making change a key element your company s culture. Understand that change drivers are in the market and cannot be ignored. Build a systematic Change Management methodology. Integrate that methodology into the heart of your organization. All changes, from the overarching to the specific, must be identified and integrated to manage change effectively. In most CRM implementations major change cascades down and affects every individual in the organization. For example, the changes sure to occur in a company that moves from being product-centric to customer-centric are not accomplished simply by presenting a flowchart or making an announcement. They deeply affect people a fact that should be acknowledged in the early planning stages of a project. If you don t deal with the human factor you will not succeed. Obstacles To Implementing Change Have you ever wondered why change initiatives fail so frequently in organizations? Why companies spend hundreds of thousands of dollars training people in a new process like CRM, only to find out a year later that nothing has really changed? Change initiatives fail for many reasons: Employees do not perceive the need for change The change process isn t managed effectively The change lacks executive sponsorship The change lacks ongoing commitment of executives, managers and users The change is just one too many for the organization the organization s sponge is full The cost of that folly: the desired change does not occur; time, energy, and money are wasted: employees become frustrated; and the business impact is minimized and the opposite is accomplished a CRM initiative does more harm than good. When Bad Things Happen to Good Projects To understand some of the most common pitfalls, it s a good idea to hang the following list on the project war room wall as constant reminder to the project team. Failure to deliver early, tangible results Drowning in detail Ranking everything as high priority Old performance measures block change Voice of the customer is absent Voice of the employee is not heard Senior management wants to help but doesn t know how What s in for me is not clear Failure to form a talented team representing all stakeholders Copyright 2003 CustomerThink Corporation and CRMGuru.com Page 3
4 How to Create A Blueprint For Change Based on my experience guiding organizations through 94 successful change projects there are must do steps to follow which incorporate best practices and techniques in every change management initiative: 1. Conduct interviews and a cultural assessment We begin the process by learning about the organization through interviewing a sampling of key stakeholders to identify the barriers and enablers to change and how they are affected by the culture. Once we complete this assessment, a summary of our findings is presented to management. This presentation becomes the basis for outlining key aspects of the change initiative and organizing an offsite retreat. 2. Organize a senior team retreat to create a mandate for change We then hold a customized multi-day offsite retreat with the senior management team. This is a roll up your sleeves meeting that deals directly with the results of the assessment. What we shoot for at the end of this meeting is a strong case for change. During this retreat the CEO and other executives identify a suitable individual to manage the implementation a sponsor/change leader who ensures the success of the project. They pick a leader who can build the case, sell it, marshal the necessary resources, set goals and establish the project plan. The change leader willingly becomes identified with the change initiative in the people s minds. He or she reiterates the message of change throughout the organization to keep employees focused on the big picture. We look for a leader who is visionary, with almost evangelical, fervor coupled with dogged determination to knock down every barrier. To select your change leader ask yourself these basic questions: Who is driving change in your organization? Is this person committed, even passionate about the possibilities and about making them real? Is he or she genuinely in a position to influence others or is more executive support needed? Unless and until your key audiences clearly understand what must change to achieve a vision, there is no real mandate. The wake-up call often comes from customers that begin to feel hampered by flawed processes and poor performance. 3. Form an Implementation Team The senior team selects the leaders who will become the group that commits to implementing the change initiative. Other stakeholders are involved (managers in related divisions, key customers and suppliers, etc.) to ensure broad-based support. The implementation team is launched at a kick-off session. This Implementation Tam manages and facilitates the change effort from start to finish. The quality of this team is key to the project s success. Implementing a comprehensive change like a CRM or an ERP initiative requires a mix of technical competencies and personal styles. This team s makeup will Copyright 2003 CustomerThink Corporation and CRMGuru.com Page 4
5 depend on the business issues to be resolved and the scope of the change envisioned. It will certainly involve different disciplines, functions, and personal capabilities. It is very important that this team be made-up of respected individuals from different functions and levels in the organization. The rest of the organization should see the project team as role models individuals sensitive to people s needs and ideas. Their role is to monitor and facilitate change. They need to: Determine whether desired benefits and improvements are being achieved Flag potential problems arising from the change initiative Keep the change initiative on schedule, on budget, and on course Provide feedback to all stakeholders and vendors 4. Diagnose change readiness Executives should start getting ready for implementation on the first day of a change project. The implementation team must accurately diagnose the change readiness of the company. When we re working with them, we show them how to use our proprietary diagnostic tool to assess their organization s readiness. This tool was designed to prepare the implementation team for challenges it will face in getting the organization ready for the change initiative. The tool identifies key resistance issues, surfaces hidden and political agendas, and outlines critical areas that will impact the change initiative. Our diagnostic tool, for example, will assess an organization s readiness for change to: Raise the overall awareness of the change process and outline fundamentals to successfully manage the change process and its likely impacts. Surface hidden agendas and key resistance issues that might prove troublesome later if not discovered early on. Provide focus for later stages of the change effort. Determine the political challenges in the organization. 5. Draft the blueprint The implementation team should create the first draft of a blueprint that will guide the implementation efforts throughout the project. The components for the blueprint are: A plan for communication change like this must be over-communicated to get people s attention. Simply circulating a memo isn t going to cut it. A plan for creating breakthrough experiences to help people change old mindsets and learn tools for transforming their work environment. A plan for developing change leadership skills for managers a culture change effort is the perfect opportunity to develop the company s next leaders. A plan for building momentum with short-term wins to show measurable results as soon as possible. A plan for long-term organizational change to align the systems, structures, and policies so they reinforce and strengthen the cultural vision. Copyright 2003 CustomerThink Corporation and CRMGuru.com Page 5
6 6. Align Implementation Team Executive groups and the implementation team must be on the same page. Only when they are aligned can they: Clearly define the success measures of the project Understand the critical success factors to implementing major change Are fully committed to change Understand their role and responsibilities in supporting, reinforcing, and coaching their people in the new methodology Communicating the right messages to the field organizations 7. Develop Sound Measures That Drive Change At this point, the Implementation Team should concentrate on identifying quantifiable metrics. A clearly defined, measurable metric in the case of an office supply manufacturer, for example, is fill all orders within 24 hours. This mandate for change and its highly specific target came from the organization s largest customer which simply demanded this level of performance. One chemical company we worked with determined through market research that on-time delivery was the single most important factor driving customer satisfaction and repeat business customer retention. The customer incurred penalties for shipments delivered a day early or late. There was no available railroad siding if early and the plant was closed if late. It was clear that on-time delivery should be the new measure driving performance and the new performance metric could be nothing short of 100 percent on-time delivery. 8. Enroll Key Stakeholders Knowing how to enroll key stakeholders in a change process is critical to a successful change initiative. It s a common mistake among managers trying to bring change about they confuse inflicting change with leading it. Even if you are the CEO, and theoretically in a position to compel people to perform, when it comes to change, you re liable to create your own worst nightmare: people quit, but stay; people say yes, but don t follow through; people go through the motions, but don t perform. Change is not a compulsory exercise. You cannot force people into change - they have to enroll. We have created a proven change methodology that begins with a workshop that allows the participants to enroll in the change process and at the same time it provides the means of tapping into every functional department and every level of the organization. We identify three threads that make this workshop process different from anything you are likely to have done before. First, we invite a much broader cross-section of stakeholders than is usual - a widely diverse people who affect each other but rarely or never meet; Second, we have them collectively self-manage tasks of discovery, dialogue, learning, and planning; Third we have them explore, together, an integrated view of the whole system its opportunities, constraints, trends, and reasons for change it. This unique planning process provides the basis for a three-day workshop that has been very successful in building and sustaining commitment to change. The workshop process bridges the gaps of culture, class, race, gender and hierarchy. In addition, management identifies a small sampling of customers, partners, and suppliers who also are represented in this workshop. Copyright 2003 CustomerThink Corporation and CRMGuru.com Page 6
7 The main purpose of the workshop is to create a plan that builds buy-in and support for common goals. The underlying assumption of this workshop is that the wisdom necessary for success lies in an integrated view of the all the stakeholders, not just the views of executives at the top. 9. Implement the plan, but be prepared to modify The completed plan will guide the Implementation Team s actions, but we have found that plans often need to be altered as they go, due to unforeseen circumstances and changes. Keep your plan flexible. 10. Transfer ownership This is a critical aspect of successful change initiatives. The transfer of ownership is complete when each of the managers in the organization can support, reinforce and coach the process with their employees. To prepare them, we include them in specific activities at every phase of the implementation. During the project we introduce managers to their coaching role and support them throughout the project. And finally, we provide ongoing support until managers and the project team are fully equipped to sustain the change. Conclusion At the heart of the change initiative is an Implementation Team that seeks to hear and appreciate differences. They model a process that leads to commitment to action what buy-in is all about. The outcomes of this change methodology can be quite startling. They range from revitalizing a major company s customer care system to dramatically improving supply chain product delivery time by 80%. One company discovered they needed to make changes to their packaging practices to reduce customers waste disposal problems and make a cleaner environment. </hr> About the Author Bill Brendler, president of Brendler Associates, Inc., is a visionary thought leader with extraordinary qualifications in Customer Relationship Management (CRM) and Change Leadership advising and providing clients with necessary tools to realize change. He has written numerous articles on CRM and ERP implementation and is quoted extensively in top business publications. He is well known throughout the industry for his devotion to associate and client working relationships. Bill is a best selling author of a groundbreaking on-line book that applies practical methods to address the pressing corporate issues that face every CRM implementation. Contact Bill at bill@brendler.com Copyright 2003 CustomerThink Corporation and CRMGuru.com Page 7
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