Change Management Assessment Framework (CMAF)

1 Do you have a change management methodology in place that is supported by practical tools and examples of good practice? Welcome Managing change in any organisation is difficult, but the current generational shift in the Energy sector work force is making it doubly so. In our experience the challenge of delivering significant change programmes targeted at improving efficiency, effectiveness or to support M&A activities is often compounded by a lack of change management skills and experience. This is in part due to the generational shift where companies are experiencing a loss of critical experience and knowledge in a short period of time. However many organisations still fail to give the right level of attention to the fundamentals of successful change programmes. The organisations who are successful focus time and effort on developing a culture that is open to change. They work hard to develop their employees to have the expertise to deliver programmes that are continuing to increase in scale, complexity and pace. They also ensure that change is properly resourced and our experience shows that success means typically between 7 12% of total project spend is focused on specific, planned change management activities. At Molten we understand the change management challenges that are being faced by the Energy sector. The sector is in the midst of a drive to improve margins and reduce costs while improving the efficiency of assets. Molten has developed a comprehensive framework that allows you to assess the current state of your approach to change management and then define and implement a tailored method to ensure you reap maximum value from the change effort. Let us tell you more about it. Irene Molodtsov, Managing Partner 2 3 4 5 6 7 8 9 10 Do you have an active, engaged and visible leadership team from the executive sponsor through to the programme and wider business leaders? Is there a clearly defined strategy in place for each change programme and does the leadership team agree with each strategy? Do leaders in your organisation live and breath the change? Are they the face of the change management programme? Is there an integrated programme plan to help you coordinate change activities? Do you have the right people in place to run your change activities? Which part of the business should have accountability for delivering the change? What metrics do you use to measure the effectiveness of change and whether the change has been embedded? How do you develop change management expertise in your organisation? Are your change programmes delivering the benefits that you expected at the outset? 02 www.molten-group.com energy specialist 03

Change programme effectiveness There are particular limiting factors at play in the Energy sector today. By putting in place three core enablers, these can be addressed. Talent challenges Shortages of key technical skills compounded by Baby Boomers leaving and Millennials joining the workforce. Economic pressure Drive for efficiency and effectiveness and programmes that deliver fast results. Industry-level changes Technological, environmental and social changes alongside security and diversity of supply. Change programame effectiveness Limiting Factors Enablers 1 2 3 Change Impact Understanding the impact of the change on the business in terms of people, systems, process and governance. Measuring and addressing the scale of the change in a consistent way. Change Readiness Ensuring the business is ready for the change to happen at the required pace. Communicating effectively with different audiences and managing all stakeholders. Change Delivery Managing the complexity of the programme. Developing change management expertise and delivering the benefits of the change. 04 www.molten-group.com energy specialist 05

Change Management builds business value and mitigates risk using six high-impact components 1. Planning for change increases the chances of the change being successfully received and the business improvements promised in the business case being realised. Understanding how the change will impact different stakeholders is crucial to developing effective change plans. 2. Ensuring business readiness for the change mitigates the risk of things going wrong when the change is implemented. On many occasions, where organisations have implemented change and not readied the business, major risks become reality and the wider business is adversely impacted. 3. Managing your stakeholders carefully helps prepare people for the change in the organisation, fosters and supports better leadership through the change process and mitigates the risk of losing key individuals along with their knowledge and experience. 4. Realising the benefits of any change as soon as possible builds business value and improves confidence in decision making. Short-term quick wins are important and delivering something within six months demonstrates real progress. 5. Communicating effectively to the audience impacted by the change improves engagement in those affected by the change and reduces the risk of highly skilled professionals leaving your organisation or performance deteriorating. Done well it can help to foster staff engagement in the wider organisation. 6. Developing a core of change expertise ensures future programmes can be better delivered in-house and reduces the reliance on external consultants or contractors. 06 www.molten-group.com energy specialist 07

CHALLENGE 1 CHALLENGE 2 CHALLENGE 3 Change Planning Business Readiness Stakeholder Engagement CHALLENGE 4 CHALLENGE 5 CHALLENGE 6 Communications Benefits Realisation Change expertise development Change is a constant and so the lines between Change and Business as Usual are blurred Competing agendas across departments Requirement for everything to happen very quickly Generations in the workforce have different attitudes to change. Costs are constrained on programmes Increase in the number of interested stakeholders Definition of a key stakeholder has broadened Culture in organisations has become much more collaborative and stakeholders expect more engagement Shorter attention span Different generations expect different styles and channels Contradiction between requests for more content, but limited attention span to actually read it Less tolerance for projects that don t deliver business results quickly and effectively Greater demand for demonstrable return on investment, even from softer more intangible change programme More demand for people to have the right mix of change skills and the experience of change in the energy sector Fewer smaller change programmes to enable the development of change skills Challenge for change management to be seen as a valued skillset of it s own HOW TO ADDRESS Be clear on who has the responsibility for the change programme, develop RACIs to help clarify Take an holistic view of all change programmes and resolve competing demands Implement a simple checklist and tracker for business readiness and change impact Target different groups using different communications interventions that resonate with each Question the number of stakeholders who need to be involved in each decision i.e. those who need to be consulted or merely informed Develop a detailed stakeholder map and spend some time exploring how to engage in a targeted way Use a mix of communication channels to target different employees and give people choice in what ands how they access information Use new communication channels to employees such as internal social media Consider how video and podcasts can play a part in the communications mix Develop a map that links change activities to the delivery of strategy and business results (directly and indirectly) Develop a realistic business case with figures that are achievable Ensure that quick wins are in place to show the immediate benefits that are being delivered Focus on developing leadership s understanding of change management Develop learning programmes for employees to develop their change skills and become accredited Raise awareness of the value of change management skills ( change as a constant ) 08 www.molten-group.com energy specialist 09

Developing a targeted Change Management approach There will always be a core of change management effort required for any project or programme, but it will differ depending on the dimensions of scale, pace and complexity of the challenge. 1 2 3 The enabling factors are those that we consider in developing a targeted change management approach. Pace Change Readiness How fast does the change need to happen for the project to meet it s objectives? Does it need to happen quickly in order to (for instance) maximise profits this period or meet a near term regulatory requirement, improve profitability or meet regulatory requirements? Ensuring the business is ready for the change to happen at the pace it needs to happen. Effectively communicating to the audience and managing stakeholders. Change Impact Scale What is the scale of the change for the business? Is the change a small shift from the current state or a transformational change? Is it enterprise-wide or localised? Complexity How complex is the change activity in terms of it s scope and does it require expertise that don t exist in the business? Understanding the impact of the change on the business in terms of people, systems, process and governance. Measuring and addressing the scale of the change in a consistent way. Change Delivery Managing the complexity of the programme. Developing change management expertise and delivering the benefits of the change. 10 www.molten-group.com energy specialist 11

We have a proprietary Change Management Assessment Framework (CMAF) 1 2 3 4 What is the likely scale, complexity and pace of your change programme? Are your change programmes set up in the most effective way to deliver success? How does the way you deliver change programmes compare to sector best practice? Are your current change management activities delivering the benefits that you expect? 12 www.molten-group.com energy specialist 13

Molten Capability Diagnostic Model Molten has developed a best practice model based on our experience of major programmes across many clients Change Planning Business Readiness Stakeholder Engagement Communications Benefits Realisation Change Expertise Development Change management strategy and plans Business readiness strategy and plans Stakeholder engagement strategy and plans Communications strategy and plans Benefits realisation strategy and plans Change management learning strategy (internal vs. external) Change management team structure, roles and responsibilities Business change agent network structure including roles and responsibilities Stakeholder engagement team structure, roles and responsibilities Communications team structure, roles and responsibilities Governance Change management centre of excellence Change planning processes continuous improvement Business readiness policies and processes continuous improvement Stakeholder engagement processes continuous improvement Communications processes continuous improvement Benefits realisation processes continuous improvement Change expertise development continuous improvement Change planning KPIs Business readiness scorecard and sign off criteria Feedback analyses and actions Communications channels / collateral Benefits tracking Change management learning programmes Technology and tools supporting change planning Culture (support of top management and acceptance of employees) Stakeholder / deliverable tracking tools Communications KPIs Change impact analysis Business readiness technology and tools Stakeholder engagement KPIs 14 www.molten-group.com energy specialist 15

CMAF assessing the current state of Change Management within your business Our Change Management Assessment Framework challenges you to think about how well you are set up for success on your change programme. We can tailor this to your context in the early part of any project or programme to support scoping, planning and prioritisation. It can also assist you in engaging the leadership and programme team and help increase your understanding of how to manage the change. 16 www.molten-group.com energy specialist 17

CMAF assessing your current capability in Change Management Stakeholder Engagement 10 8 Communications 6 Understanding your Change Management capability helps you answer these questions: 4 2 0 1 2 Do we allocate enough time and effort to change management activities? Can better change management ensure the success of our strategic projects and programmes? Business Readiness Benefits Realisation 3 How much more could we benefit by ensuring projects are delivered and embedded effectively? Change Planning Change Expertise Development 18 www.molten-group.com energy specialist 19

We selected Molten, a specialist organisational change consultancy and energy sector specialist, to partner with us on the project. Their team brought significant experience and expertise to us, but above all an approach and style that allowed us to take the lead and to develop the skills and confidence to undertake this type of project again Change Programme Manager UK affiliate global energy company Why Molten? We help your people to minimise the risk and maximise the value of your change programme. We understand change and our business is built on our capability to help clients in this area. Unique combination Molten has a combination of energy sector and organisational change experience on international and complex assignments with different clients. Understanding of the role and value of change management in the Energy sector Molten understands how important effective change management is for energy companies and can help you articulate a compelling case to senior leaders for including it as part of your overall transformation programme. Change management proprietary tools Molten has developed a set of robust tools for every stage of a change programme. Time to value We help our clients accelerate the value from their change programmes by quickly tailoring and deploying a change management approach. Independence Molten is not associated with any software vendors or delivery houses, so our advice is unbiased. 20 www.molten-group.com energy specialist 21

Molten has developed a framework with six decisive components all of which work together to deliver what you need from your change programme. About us Molten is a transformation consultancy that is focused on business performance improvement in the Energy Sector. We help companies deliver major business transformations. To do this, Molten draws on a range of tools, methodologies and disciplines, with particular expertise in: Technology and Data IT Technology Oilfield Technology Data Analytics Data Management Organisation Operating Model Development Organisation Design Talent Management Change Management Process Improvement Assessment and Strategy Process Improvement Performance Benchmarking and Design Systems Diagnostics and Design 22 www.molten-group.com Contact us: Irene Molodtsov Managing Partner, Molten Group 22 Grafton Street Mayfair London W1S 4EX T: +44 20 7629 0403 Honor Guiney Partner and CEO of Molten Americas 4306 Yoakum St., Suite 350 Houston, TX 77006 USA T: +1 281 785 8199 energy specialist 23

Our presence 4 1 3 2 5 6 8 7 9 Our offices 2014 Project locations 1 Germany 2 Hungary 3 Croatia 4 Russia 5 Kazakhstan 6 China 7 Pakistan 8 Iraqi Kurdistan 9 Mexico 10 Brazil 10 United Kingdom 22 Grafton Street Mayfair London W1S 4EX United Kingdom T +44 20 7629 0403 Americas 4306 Yoakum St. Suite 350 Houston TX 77006 USA T +1 281 785 8199