Managing Change In Organizations: Lessons From The Best

Creating successful change today in any organization is getting more difficult. However, making change successful is not a choice that we have. How is your organization going about changing systems and people? IBM’s Global Business Services survey, Making Change Work Study, asked more than 1,500 people involved with change management projects about their change management practices. Organizations consulted in the study ranged from small to very large.

The IBM research looked at a representative sample of small to large programs implementing a range of strategic, operational, organization wide and technological changes. Projects surveyed covered sales, customers, revenue, innovation, technology and market segmentation.

The predominant learning from the IBM research is its support of the key notion that organizations need to respond decisively and effectively in today’s volatile business environment. Bringing about change is now a “must have” skill in every organization’s armory. Unfortunately, many organizations have not got this core requirement right. In fact, the increasing volatility and uncertainty of the current business environment has only served to widen the gap between the skills possessed and the skills needed. Businesses are now in a crisis situation and must meet the challenges if they are to survive.

The IBM survey demonstrates that the proportion of CEOs anticipating sizable change has increased from 65% in 2006 to 83% in 2008. However, CEOs saying that they had handled change well in the past has risen from 57% in 2006 to only 61% in 2008. The size of the gap between actual and needed competencies has more than tripled in the intervening short period. Why should this matter? Well, for the very important reason that botched change programs leave behind budget blowouts and disheartened and burned out employees.

How well do organizations bring about change? Most CEOs, according to the study, judge themselves and their business as largely inadequate at affecting change in their organization. The people involved in the actual change reported the following change project success rates:

41% fully met objectives

44% missed at least one objective

15% missed all objectives or aborted

In total, 59% of change initiatives did not win their objectives. This result should be a wakeup call to CEOs and change agents to start building change management capability before they go out of business. Another telling statistic is the difference between those organizations consistently delivering on their change projects and those serving up failure upon failure. In the top 20% are organizations that deliver their objectives 80% of the time. On the other hand, the bottom 20% of organizations deliver their change goals 8% of the time. The upshot is that the top 20% of businesses are ten times more successful at leading change than the bottom 20%.

Without a doubt, underachievers can learn a significant amount from organizations that have mastered change. What are the obstacles that organizations need to meet head on and what are the primary success factors that change novices need to bring into their change equation? The IBM survey gives helpful insights into what struggling organizations can do to learn the lessons from their better performing cousins. Here are the primary barriers to successful change revealed by the IBM study:

58% Changing mindsets and attitudes

49% Corporate culture

35% Complexity is underestimated

33% Shortage of resources

32% Lack of commitment of higher management

20% Lack of change know how

18% Lack of transparency because of missing or wrong information

16% Lack of motivation of involved employees

15% Change of process

12% Change of IT systems

8% Technology barriers

Take note of how people issues feature in the first three barriers and in four out of the top five. The so called “soft” people elements are in fact more important to get right and harder to factor in than the traditional “hard” stuff, such as resources and technology. The success of your change initiative can hang on how you treat these “soft and fuzzy” aspects of your change program. This situation is now a complete reversal of times gone by when the “soft” people aspects were not worth serious consideration.

This way of looking at managing change is further reinforced by the study’s highlighting of the key success factors for successful change projects. When asked, the top performers in the study listed these key ingredients for positive change:

92% Top management sponsorship

72% Employee involvement

70% Honest and timely communication

65% Corporate culture that motivates and promotes change

55% Change agents (pioneers of change)

48% Change supported by culture

38% Efficient training programs

36% Adjustment of performance measures

33% Efficient organization structure

19% Monetary and non-monetary incentives

Similar to what we saw above, people factors figure in the first six key elements for successful change. I want to show you how you can straight away use the findings from the IBM research to move your change initiative forward at a faster rate. On an empty sheet of paper, start at the top and draw a straight line down the middle of the sheet. On the left hand side of the paper, transcribe all of the key barriers listed in the IBM report. Above this list, write “Forces Against Change” in big letters. Moving to the right hand side of the sheet, list the key success factors mentioned above. For the last step in the preparing your sheet, label the list of success factors: “Forces For Change”.

This is where the real work begins. Draw a line under each factor on your two lists. With an arrow, point each line towards the line drawn down the center of the page. Importantly, draw the length of each line so that it is proportional to the strength of each force. Ensure that you include all of the forces on both sides of your sheet. When you are finished, you will have a report card on how your change program is progressing and an insight into how it will end.

To improve your chances of success, gather your team together. For each of the strongest forces you identified, ask your team how they can strengthen the existing forces for the change and weaken the existing forces against the change. Write up your results. This will be your strategy for moving your change initiative forward. Repeat the exercise with your team every few weeks and update your plan regularly.

Investigate further how you and your team can capitalize on the positive forces you identified and mitigate against the opposing forces. Go on now to further develop the change management skills of you and your team. It will be effort well spent. Remember the key learning from this IBM report: that the “soft” people issues are what will make or break your change program. I wish you every success.

IBM Corporation, (2008) Making Change Work Study

About the author:
Leslie Allan is Owner of Business Performance P/L, a company specializing in people and process capability. He is also the author of five books and many business articles. His company's Business Performance web site is a rich source of information, advice and tools in a variety of management areas. Visit today to download trial versions of products, free templates and introductory chapters. While you are there, subscribe to their informative monthly newsletter and join the blog discussion.
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