Organizational Change That Sticks

Editor's Note: Take a look at our featured best practice, Change Management Strategy (24-slide PowerPoint presentation). Seventy percent of change programs fail, according to the April 2001 Harvard Business Review article, "Cracking the Code of Change". According to Bain & Company, businesses that implement fast, focused, and simultaneous change programs can create enormous and long-lasting shareholder [read more]

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This is the true story of two organizations that have recently undergone significant change.  Economics forced them to re-examine their key business processes and staff allocations in order to continue to survive and hopefully – grow.  I have changed their names in order to protect the innocent.  We’ll call them Organization Opportunity and Organization Challenge.  One situation was a success while the other failed although the same process was used in both cases.

Change Event Announcement

Organization Opportunity called a meeting for all employees to be held early one morning.  This type of “town hall” meeting had never been done before.  Staff were curious and somewhat nervous.  The room had posters saying “Project X.”  A large cake was brought into the room with Project X written across it.  The 400 employees walked into a large conference room.  Coffee was served.  The President spoke about the need for a change in “how we’re working, how we’re structured, our products and services, etc.”  Staff tension increased with the uncertainty as to what does this mean to them.  Then he concluded his remarks with; “We’re going on a journey.  I don’t know where it’ll end up but there are no planned lay-offs though the work each of you are now doing may change, reporting relationships may change and your work environments may change”.  I was called up to introduce the process they’ll undertake for the change.  At this early stage there were only two key steps to be done.  One was to create a Steering Committee to oversee the journey.  The other was to launch a contest to name this change initiative.  In the interim they called it Project X.  There was some level of excitement mixed with continued uncertainty.  This is a normal response.

Organization Challenge took a different route to start their journey.  The CEO of this 250 person organization decided to hold a “town hall” all day meeting and use this meeting to rapidly go through some of the first steps in the Strategic Change Management process with all the employees.  The intent was to gain early and quick buy-in to the change.   Employees were organized at round tables of 10.  One member of the management team was assigned to one or two tables as a facilitator.  I had spent time with them to overview what we’ll do in the course of this day and how they can help facilitate each team through the steps, ensuring everything is documented.

The Strategic Change Management Process Steps I Undertook with Both Organizations

Stage 1 – Create the Steering Committee

The steering committee oversees the entire journey of change.  They are a mix of management and staff level employees.  They are an on-going, not temporary, body though members may change every 6 months to a year.  The steering committee oversees the entire journey to ensure it is on track, makes recommendations, develops implementation strategies, implements these approved strategies and communicates to all employees throughout the journey.

Organization Challenge identified their Steering Committee members at the conclusion of their all-day meeting.  Their mandate was to take, from the all-day employee meeting, the organizational change readiness outcomes, strategic change visions and change strategies as the basis for the development of their final plan.

Organization Opportunity identified 8 individuals comprised of management team members and selected individuals from various departments.  Although these committee members were pre-determined, staff were informed that there’ll be opportunities for many of them to be involved in the implementation of the change strategies, once developed.  These details will be included in their first employee communication.  They collected all of the ideas for a name for this change initiative and agreed on the name “evolution”.  A gift basket was awarded to the winner.

Stage 2 – Identify Organizational Change Readiness

One of the Steering Committee’s first tasks is employee engagement.  This is accomplished by bringing staff together in small focus groups, providing each focus group with an opportunity to “vent” and to talk about the past in a safe environment.   These sessions are organized so that staff, working in their focus group teams, respond to structured questions focused on how they have felt about the past and how they are feeling about the present.  A skilled facilitator is required to help move this discussion from the negative to the positive.  The Steering Committee also assesses change readiness through the use of a Change Culture Assessment. 

Organization Challenge posed a question to each team in their all-day meeting:

Think of a time in your experience, within your organization/department, when a change was handled poorly, a time when a fairly major change in direction, methods, policies etc. was attempted but back-fired or was implemented poorly or slowly and encountered real resistance.

Each team was then asked to record:

• The nature of the change
• How the change was initiated
• How it affected productivity and morale
• How it affected them and others
• What they disliked about the change.
• What they liked about the change.

Teams concluded their discussion with a list of “What is necessary to make change happen successfully?”

Organization Opportunity held focus groups throughout the organization with up to 15 individuals in each group.  Approximately ¼ of all employees participate.  I facilitated these to ensure an environment of openness.  The outcome was similar to the success seen in the Organization Challenge sessions.  Organization Opportunity followed this with a Change Culture Assessment.  This assessment was given to all employees.  This ensured all employees had an opportunity to provide feedback on how they wanted this change to be managed.  We had almost 90% participation from employees which is well above all averages for employee feedback surveys.  Between the focus group inputs and change assessments, the steering committee had a lot of great information to help them develop the vision and strategies for the change initiative.

The process of employee engagement helped both Organizations move their staff into a sense of control and engagement.  Of course there was some scepticism.  “We’ve done this before”.  “They never listen to us.”  “What’s the point”, etc.  This placed a huge burden on the Organizations to honour this past and to recognize the need to engage employees throughout their change processes using ideas from their employees on how to make it happen successfully.

Stage 3 – Create the Strategic Change Vision

This is the creative part of the Strategic Change Management Process.  The Steering Committee creates their vision of what the future will look like, once the entire change process has been successfully implemented and the new culture is apparent. 

Organization Challenge and Organization Opportunity used a similar process for creating their change vision.  I took them into the future and asked them to develop a story describing their organization, its employees, customers, structure, etc. in 5 years time.

These scenarios were created in each team during the Organization Challenge’s all day session.  They read them out to each other.  Applause broke out at the end of each presentation.  It was an incredible event to see.

Organization Opportunity created this story during a steering committee meeting.  It gave them a sense of control over their future.  Both Organizations found that reviewing the outcome from the employee focus groups and the change assessments helped them to develop these scenarios.

Stage 4 – Develop the Change Strategies

The Change Strategies close the gap between the present and the “ideal future” as defined in the vision.  Essentially, the change strategies move the vision of what the organization is trying to become in the employee’s and customer’s eyes into reality.

Organization Challenge had spent almost a day together in their meeting.  Before leaving I had the teams identify the key events they believed were necessary in order to get closer to their future scenarios and to align with what they believe is necessary to make change happen successfully (from their first team discussions).  They were clear and surprisingly similar between the teams.  This provided wonderful direction to the steering committee.  The steering committee’s first meeting took two days to combine all of the information from the day long employee session.  When they ended, they had a clear vision and change strategies for their initiative.  They started to create their communication plan to present to all employees.

Organization Opportunity’s steering committee identified 7 key strategies.  They started the development of their communication plan but wanted to wait until they gave some thought to a high level change plan before delivering it.

Stage 5 – Create the Change Plan

The Change Plan includes identifying the Objectives required to meet each of the Change Strategies and the detailed Action Plan required to meet each identified Objective.  Performance measures are added to ensure that it is clear when each change strategy and related objective has been met.

Organization Opportunity moved into high gear at this stage.  They developed a communication plan and organized another “town hall” meeting to present it to all employees.  At this meeting they reviewed their change strategies and their plan to implement these.  It required assistance from all employees.  They posted sheets at the back of the room with the change strategies and a request for volunteers for each one.  Each strategy would be headed by a member of the steering committee to oversee each change strategy team.  They had an overwhelming response.  Teams were formed for communication, culture, training, business process reviews, etc.  The steering committee promised, through the communication team, to produce regular newsletters updating all employees of the progress towards each change strategy.

Within 6 months the effects of the change in Organization Opportunity could be felt.  The culture had been re-shaped, key business processes improved, the organizational structure revamped including reporting relationships.  Productivity increased, morale increased and customer satisfaction levels increased.  You can walk into the organization and “feel” the difference.

Organization Challenge was different.  The steering committee developed a comprehensive communication plan.  They were going to ask for volunteers to help create committees to implement the actions required to ensure each change strategy was successfully implemented.  They presented their plan to the CEO for approval.  The corporation promoted the CEO the next day and moved him to another division.  This created a delay in the communication plan’s delivery.  A new CEO started 4 weeks later.  I desperately tried to connect with her.  The steering committee appealed to her to allow them to proceed, at least with smaller steps.  She had her own agenda.  The change plan was never implemented.  The staff became disillusioned.  This will now become one of their descriptions of a change, badly managed.

Conclusion

Managing change is a risk.  Status quo is always safer.  Starting a change event and following the strategic change management process can deliver remarkable success in a relatively short span of time.  But starting the process is the same as opening Pandora’s Box.  Once opened, you cannot close it.  The consequences, both positive and negative, will last a long time.

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"The only constant in life is change." – Heraclitus

Such is true for life, as it is for business. The entire ecosystem our organization operates in—our customers, competitors, suppliers, partners, the company itself, etc.—is constantly changing and evolving. Change can be driven by emerging technology, regulation, leadership change, crisis, changing consumer behavior, new business entrants, M&A activity, organizational restructuring, and so forth.

Thus, the understanding of, dealing with, and mastery of the Change Management process is one of the most critical capabilities for our organization to develop. Excellence in Change Management should be viewed as a source of Competitive Advantage.

Learn about our Change Management Best Practice Frameworks here.