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The only constant is change, change is pervasive, change is inevitable, change is ongoing. There are literally thousands of clichés that attest to the difficulty of managing change. And although most organizations recognize the importance of change management, research studies are consistently finding that around 70% of all organizational change projects fail to meet their stated objectives. So what is the problem? Why is change so hard to manage?
The short answer lies in the misinterpretation of the definition of change management itself. Without a clear understanding and application of the precise meaning of the combined words, there should be little hope for a successful venture involving change. And that is precisely where most companies get it wrong.
Change management is defined as: tactical business approaches using tools, methods, methodologies and models that support transitioning of people from a current state to a desired future state [i].
We think the definition itself is pretty good – if its intended application involves a project management style approach. For example: a fast food chain that needs to reduce costs by closing a restaurant or moving its head office from one side of town to the other. In this simplified example a decision is made at the executive level, the need for a desired future state is communicated, and management sets the wheels of change in motion.
Typically the events that follow involve the appointment of a Project Manager (PM) to manage the project team, and increasingly we are seeing the PM paired with a Change Manager (CM) to manage project change. Depending on the nature of the business and the scope of the project, the team usually consists of employees from the Project Management Office (PMO) and/or permanent employees that are seconded to the project and/or external consultants.
In this instance the commonality between project management and change management approaches is that they both have a start (current state), a finish (desired future state) and will use a variety of tools, methodologies and approaches along the way. The key, is that the notion of change is linear and is interpreted as a successful transition from current state to desired state. Typically the ownership, accountability and execution of deliverables that fall within the scope of the project plan rests with the project and change managers. Once they have completed the project deliverables and closed the restaurant (or relocated the head office), the project concludes. The managers and/or consultants would normally then disengage to move on to the next assignment and any seconded team members would return to their regular jobs in the business.
Let’s stop there and consider the following question: if change is constant, pervasive, inevitable and ongoing - then how can the successful management of change possibly have a clearly defined start and finish? Who will manage residual or future change once the project has concluded? Typically, change managers and consultants are quick to emphasize that once a project is completed – there is no more change in scope, and accountability is transferred back to the business. This failure to detect and ability to recognize the inter-connectivity of change is one of the key drivers for Enterprise Change Management advocates.
In the simplest of terms, if Business Managers are not accountable for successfully transitioning their people from current state to a desired future state then what exactly are they managing? Are they leading their people – or are they outsourcing the ownership, accountability and execution of what should be a core management competency?
The problem with the project approach to change management is that it interprets and applies the need for change at an atomistic level by defining the need to lead people from one state to another within a single project. To be fair, a strong and experienced PM and/or CM may attempt to consider (and is typically contractually obliged to neglect) the holistic business impacts and/or change implications from other projects or initiatives. Most consulting firms will require scope of work to be clearly defined in an engagement contract. And to keep costs competitive, contracts tend to narrow scope which severs the holistic organizational connectivity from change management to things like strategy, business process governance, risk, learning and development of people and ultimately – performance.
In a situation where change is managed holistically - because consultants are external to the organization - their level of understanding about the client business is often “high-level” or “continuing to evolve” and thus creates an additional (billable) layer of work as findings are confirmed, validated and socialized with the client. These activities are expensive, inefficient and dangerous as they can erode employee engagement, morale, and often undermine the business strategy. Why do we need to save costs [close a restaurant] when we can afford to pay external consultants to learn about our business? The mitigation of revised outcomes, changing expectations and deliverables is what consultants call “scope creep”.
Business managers in high performance organizations enjoy a competitive advantage and are successful in navigating their teams through transformational change because they don’t see change as a side effect of project based work. Rather, they seek to identify the real obstacles, threats and potential challenges that prevent the business from executing on its strategic goals and they manage the execution of corrective actions by their people – every day. This makes their business more agile, which is a key characteristic of all high performance organizations. In fact, 84% of all high performance organizations translate strategy into action better than industry peers.
Think about the most recent changes at your organization. Perhaps a new reporting tool or vacation policy was implemented, or someone was fired or maybe your company was recently acquired? No matter how large or small, the need to improve business performance is at the heart of every organizational change. Business performance improvement, operational agility and change management are intimately linked at the enterprise level. Most business managers either fail to see the connection or are forced to misinterpret how change should be managed and therefore seek the help of external change practitioners to manage change on a project basis. And so the linear approach to change management is perpetuated.
Irrespective of the performance output that is measured – financial results, market share, quality, security or cost structure – the brutal and inescapable truth is that the world is changing faster than ever before and today, companies must react to changes in the market to not only compete, but to survive. Any organization that fails to consider how it will improve business agility to more effectively respond to both external market shifts and internal organization adjustments including the capacity to execute transformational change is either:
a) highly unlikely to be a high performance organization;
b) taking on unnecessary risk;
c) not pursuing a competitive advantage;
d) should not be surprised if it no longer exists in the future;
e) all of the above.
Inukshuk defines Enterprise Change Management (ECM) as: a permanent and comprehensive organizational design platform that improves business performance by enabling strategic execution of change management across an enterprise with quantifiable results [ii].
Effective management of change requires a holistic approach that recognizes the overarching inter-connectivity of strategic business interests and performance goals with the entire portfolio of projects and associated change – across the enterprise. If not managing change on a daily basis – what are your business managers doing?
[i] Inukshuk ECM Institute definition of Change Management
[ii] Inukshuk ECM Institute definition of Enterprise Change Management
