Why Change Management?
Change Management is more important than ever to ensure project success.
Fifteen years ago twenty-five percent of major business change initiatives impacted less than fifty people and cost less than $100,000. Today, that same twenty-five percent impacts more than 5,000 people and costs more than $10M. This is a one hundred times increase in fifteen years! This growth has been driven by globalization and an increase in technology projects. That means projects have become one hundred times riskier. Few companies can afford a $10M loss if a change project fails. The number one reason projects fail is employee resistance to change. If this seems improbable, ask yourself what percent of the success of your current projects is based on employees changing their behavior? When I ask that question to my clients I often get the answer 90 to 100 percent. If that is the case, what percentage of your budget are you dedicating to support that change in behavior?
Investing in proven project management strategies and structures that monitor project timelines, scope and cost is critical to success. However, delivering a project on time, within scope and budget doesn’t guarantee success. Your employees have to embrace and adopt the new systems or processes. Change management is a structured methodology whose purpose is to engage employees in the change. It complements the formal project management efforts. Ideally, the project plans combine project management tasks along with change management tasks so they both can be budgeted, tracked and delivered.
Change Management is so much more than training and communications.
Typically, organizations believe change management consists only of training and communications efforts and those activities are usually part of the budget. While employees have to have the knowledge of the new systems or processes to be able to perform in the ‘new’ company environment, it’s rarely enough to get employees engaged. For example, my teenage daughter knows how to use our brand new dishwasher. That doesn’t mean she is motivated to load it with dishes and turn it on. However, when employees are asked why they are not adopting the new desired behaviors, their answer undoubtedly will be: “I wasn’t trained.” Don’t confuse their opinion about the quality of the training they received and their level of proficiency. Proficiency comes when people push through their low level of comfort using the knowledge they gained in training.
Communications becomes the tool by which companies ‘tell people’ to push through that low level of comfort. So employees are told or asked to perform the new desired behaviors. Let’s see how that worked for me. I asked my teenage daughter to load the dirty dishes into the new dishwasher. She said she would, but then she didn’t. I asked her again, and again she failed to complete the task. Then, I told her to do it, no more Mrs. Nice. She grudgingly did what I told her to do, but then I had to keep ‘telling’ her time and time again to regularly get clean dishes. I had training and communications in my ‘new dishwasher’ plan, but it continued to be difficult to have clean dishes.
I understand that this example is oversimplified; however this process and result are very common in business situations as well. Leaders feel that ‘telling’ their employees what to do is sufficient to get them on-board. This is partly true. The key is how to relay the message, the content of the message and who sends it. These considerations are part of a structured change management plan.
Leadership coaching is actually the most important component of Change Management.
The interesting thing is, while having a structured change management approach is important to engage employees in the change, the most important part of that approach is leadership coaching – not training or communications. Prosci is the global leader in change management research and they have recently completed their ninth change management best practices benchmarking report. They began this research in 1999 and have since worked with thousands of global organizations spanning most industries who are undergoing transformational change. Their top two findings have been the same for the past seventeen years: The number one reason projects fail is employee resistance to change. The best way to mitigate the resistance to change is active and visible sponsorship1, not training or communications.
Therefore the main responsibility and role for a change manager is that of a leadership coach. Think of the change manager as the ‘Chief of Staff,’ keeping sponsors in front of their employees sending the right messages to keep their constituents supporting their efforts. This isn’t difficult for leaders. It doesn’t take a huge time commitment just to be visible. Employees can only get behind leaders they recognize. In fact, sponsors need to treat their change efforts as leading a campaign sending meaningful messages to rally the crowd. Their messages have to contain information about why employees should engage, how it’s important to the organization and ‘what’s in it for them’ to get on-board. This is a far cry from ‘telling’ people to just get it done.
Change managers coach leaders to be active and visible, so communicators are supportive of the change.
It’s not enough for sponsorship to ‘say’ they support the change, they have to model the desired new behaviors. If the company is installing a new human resource software, teach and support the CEO to demonstrate the software to their leadership team. Ask the CEO to come speak with the project team to stress how important their work is to the company. Leaders should be the first to go to training and they need to require their employees attend as well. They need to recognize that there will be a dip in proficiency and reassure employees that’s OK.
Most if not all employee communications need to come from leadership. Change managers create the messages and communications plan and then support sponsors in executing it. Don’t let them delegate this responsibility to the project team. This diagram shows how important it is that they be the message senders2. 
Executive leaders communicate the importance of the change to the overall strategy and vision of the organization. Mid-level managers communicate the ‘what’s in it for me’ message, otherwise known as the WIIFM. Managers best understand how the change will benefit their department and how their employees will be impacted. They will be the people who require their team to attend training and who will reinforce new behaviors.
Ironically, mid-level managers tend to be the most resistant to the change. They are absolutely key to employee engagement, yet are the most difficult to get to buy-in. Your change management plan needs to recognize this and have special tactics to address their resistance. Reward and recognize early adopters, give them the additional resources they need to work through the productivity dip. Develop resistance and sustainment plans with them. Most importantly, the change manager should be an advocate for managers and their teams – bringing feedback, questions and concerns to the project team to ensure they get addressed.
There are seven ways leadership can support employees through transformational change.
Chances are the lion share of the Return On Investment (ROI) for your change initiatives is rooted in employees changing their behavior. Leaders have the biggest influence on whether employees adopt new systems and processes, and change management supports leadership in achieving this goal. In fact, change management best practices research participants identified seven top contributors to a successful change initiative and they all are dependent upon sponsorship buy-in and support3.
Ranked in importance they are:
- Active and visible sponsorship
- Using a structured change management approach
- Dedicating change management resources and budget
- Integration and engagement with project management
- Employee engagement and participation
- Frequent and open communications
- Engagement with middle managers
I want to pull these concepts together using a real-life story. A few years back I had the opportunity to work with a large healthcare system and some great executive leaders and project directors. They were required by the government to install an electronic medical record. The sponsors had been part of a failed attempt in the past where the doctors refused to use the new system. After spending millions of dollars they learned firsthand the power of employee resistance. This time around, they invested in a Change Management Office using a structured approach. The project director insisted the change management plan was integrated with the overall project plan. The sponsors were active and visible throughout the entire project even after installing the new system. They constantly communicated directly with employees. They held their managers accountable for the project’s success and they met all their project objectives and achieved what they called their ‘people ROI.’
Enhance your skill set to successfully navigate through change with Kent State’s Certificate of Change Management.
1,2,3 Best Practices in Change Management. Prosci Benchmarking Report, 2016. Tim Creasey and Robert Stise, Editors. Prosci Inc.