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Cracking the CODE on Change Management

Overcoming the Technical, Behavioral and Cultural Barriers to Change

By Ralph Smith

CODE graphicI had two “real” jobs before I moved into the world of consulting. The first was as an analyst at United Airlines, charged with reviewing large data sets and producing city-to-city travel times. So if you ever wonder why your flight is scheduled to leave at 8:56 and arrive at 11:13… that was me. It was a great job in retrospect because I had a team leader that was extremely insecure and resistant to change –hoarded information, micro-managed– you know the type. Learning how to deal with a difficult personality taught me many valuable lessons I applied later as a consultant when trying to change company cultures.

My second job was at a manufacturing company called Kawneer as a quality engineer. My three-person team was charged with implementing organization-wide process improvement in 23 facilities throughout North America and Europe. Kawneer had been #1 in its field for 80+ years (read: had no sense of urgency to change). I travelled location to location teaching courses, facilitating teams, sitting with management to discuss organizational barriers– whatever it took to make change happen. It was an invaluable experience because I got to compare and contrast what worked and didn’t work in facilities that were roughly the same size and did roughly the same thing. My earth-shattering conclusion: Companies that have a clear direction and a capable management team that gets along and is committed to achieving the direction will be successful. Ta-da!

It was during my time at Kawneer when I learned and applied fundamentals of change management that eventually codified into the easy-to-understand four-step model we use at Orion symbolized by the acronym C-O-D-E. The CODE methodology has been successfully applied to organizations that are rethinking processes, transforming technology, involved in merger and acquisition integration– any number of change management situations. The acronym stands for:

Let’s take a look at each step and what is involved.

Step One: Create Vision for Change
One of the most critical factors to successful change management is understanding precisely what you are trying to change to. Think about the strategy of a runner who is participating in a short sprint versus hurdles versus a marathon. The pre-race training is different, the mental preparation is different, the race plan is different, the skills needed are different, and so on. Now imagine your organization trying to implement change without clarifying which race it is that you are going to be running. Multiple definitions of the end state will inevitably result in stakeholders working at cross purposes and lessen your probability of success.

How can this be combatted? Start by determining the time frame for change. Are you looking two years out? Five? Ten? Once this is decided, gather a group of key stakeholders together and engage in the process of “painting the finish line.” In other words, put up the year in which change is supposed to be fully implemented, and come to consensus on what success will look like. For example, I worked with a health plan that decided they wanted to be the premier plan in their chosen markets. As we sat down to discuss what premier actually meant, there were different interpretations. The CEO defined premier as “the largest number of members,” and got the ball rolling by noting that “right now we have eight million members in our plan. If we succeed in becoming premier, then in three years we’ll have fifteen million.” This generated a great discussion; the rest of the leadership team immediately pointed out the difficulties of the market. Going from 8 to 8.2 million might have been possible through service improvements and organic growth, but 15 million immediately transitioned the discussion into acquisition of other health insurance plans. Other aspects of the “premier” discussion were related to product mix, technology friendliness, customer service/access to information… all meaty and worthwhile topics. And when discussed in the context of the need for acquisitions it was useful in identifying the type of partner needed. The point is that in 60-90 minutes the leadership group agreed on the desired high-level outcomes of change management.

Once the outcomes have been specified, spend some time considering whether the outcomes are worth the effort. Consider the example of a large hospital with more than 20 different clinical specialties. Each specialty had its own process for booking clinic visits –and required a certain amount of expertise– to properly screen appointments, allocate the right appointment length, and so forth. The change under consideration was moving to a central scheduling system. This would necessitate forgoing any type of detailed Q&A prior to booking the appointment, as it would be impractical for a scheduler to have detailed expertise in every specialty. The positives? Patients would love the new process since it would make scheduling much faster. Also, one scheduler could book appointments into multiple clinics for the same patient if needed, which would heighten convenience and improve coordination. The drawbacks? Without pre-screening it would be inevitable that doctors would sometimes see patients with commonplace maladies that did not need to be seen in a hospital clinic setting. Doctors wouldn’t like that. And there was a serious behavioral barrier. Each clinic was convinced their process was the best one, so there would be serious internal resistance to cede control to a centralized system of schedulers with a perceived lower level of expertise. Once the leadership team acknowledges the challenges to be met and believes that the benefits will be worth the trouble, creating the vision for change is complete.

Step Two: Organize for Change
The key issues when organizing for change are getting the right people in the right roles to give yourself the highest probability of success, and then giving them the necessary tools and resources to execute. In terms of roles, there should be a leadership group that collectively has the breadth of authority to oversee the entire change effort. In the CODE methodology we also recommend a sponsor for change management projects. The role of a sponsor is critical, and analogous to that of a general in the army. The general doesn’t participate in the battle- he/she develops and approves strategy, makes sure the troops have the resources they need, tends to big picture barriers, and so on. A sponsor does the same thing. Ongoing meeting participation isn’t a requirement, but communication with the troops, allocating, responding to team recommendations, and clearing organizational barriers are all sponsor-related activities. As an example, recently I was working with the logistics division of the Marine Corps. They were attempting to transform into a more customer-focused unit, and one project was centered on how to get equipment in for preventive maintenance and turned around quickly. One of the problems was that equipment tended to arrive in waves, because the policy was that it couldn’t be scheduled for maintenance more than one year in advance. The maintenance depot would get overloaded, causing delays. The team lead went to the commander to discuss a policy change, which is a typical sponsor-related issue. In this case the commander listened and agreed; he made one phone call, killing the one-year requirement so logistics could level out the flow into maintenance.

Having traditional project leaders and facilitators is of course also important, but I learned in my days at Kawneer that having that red tape-cutter at the sponsor level is integral to success.

Step Three: Deploy for Change
Successful deployment is a function of planning, communication, and demonstration of commitment. With regard to planning, projects should have charters that contain clear purpose statements, boundaries, metrics and expectation of results.

Communication is possibly the top challenge when implementing change. I worked with a county government many years ago that was focused on streamlining its processes. It was just before Halloween when a team realized that a proposed change would result in about a half dozen fewer people needed to perform a certain function, which obviously caused a bit of fear/concern. When I discussed the issue with the county executive, his response was “Nobody is going to lose their jobs over process improvement ideas, and I told them that at our kickoff meeting in March.” My response: “That was about six months ago, so you’ll need to repeat it about 200 times before people believe you.” The lack of communication in this case wasn’t done out of malice or due to incompetent management. It was simply that the leader had the issue settled in his head and didn’t appreciate the need to keep repeating himself. A communication plan that details the messages, audiences, and delivery intervals can be the antidote to making these false assumptions.

Everyone involved in a change effort will be constantly watching for signs that the leaders are committed to the new direction. Make sure it’s easy to find them. When I was at Kawneer we regularly heard “management isn’t committed to process improvement.” I eventually started pushing back with “what would you see if they were committed?” The response was inevitably “I don’t know… but they aren’t committed.” I’d point out the list of quick fix recommendations that had been implemented and red-penned in the break room, the number of people that had gone through company-paid process training, the results of completed teams, etc. The problem was not that we didn’t have leadership commitment– the problem was that people were not associating the things the leaders were doing with the process improvement effort. Don’t make the mistake of keeping commitment a secret.

Step Four: Evolve Towards the End State
Evolution toward the end state requires metrics to gauge progress and continued ownership by internal stakeholders… particularly leadership.

With regard to metrics, in step one we created a vision for change that included desired outcomes. These usually can and should be measured along the way to give a sense for whether the organization is moving in the right direction. The leaders should periodically review the numbers and talk through:

Companies often make the mistake of viewing change management as a touchy-feely subject. Don’t fall into that trap – define success and measure progress towards it from day one.

With regard to continued ownership, I’ll share a story from one of my favorite CEO’s. Each year after the strategic plan was updated, he would ask his subordinates to prepare implementation plans for key initiatives. They would bring options, discuss as a group which to actually pursue, and he would make the final decisions. One of his leaders would be designated as sponsor for each initiative, and successful implementation would be written into their performance objectives. That system promotes continued ownership – often change management is viewed as something “extra” to do when we aren’t doing our real jobs. At this organization it was part of their real job. An interesting denouement to that story. When annual performance review time came around, there were three possibilities with regard to change initiatives:

  1. The sponsor did not execute and was penalized in the review because of it.
  2. The sponsor did execute, the initiative produced the intended results, and the sponsor was rewarded in the review because of it.
  3. The sponsor did execute but the initiative did not produce the intended results.

The first two situations are straightforward. What would happen in your organization in situation number three? In the case of this company the CEO took the approach that “we didn’t get where we needed to go, but that was my fault for picking the wrong initiative.” The sponsor was not punished on her/his review due to a poor initiative selection decision that was out of their control. To make a system like that work presupposes that the CEO understands enough about all aspects the business to properly assess execution efforts. (In other words, the CEO can’t be bluffed!) This wasn’t an issue in their case. As I mentioned, this was one of my favorite CEOs.

Change management is a subject that has grown in emphasis over many years and is being thrust front and center by the current world situation. Niccolo Machiavelli once said, “Whosoever desires constant success must change his conduct with the times,” which has never been more relevant than it is today. Following the straightforward steps outline in the CODE methodology can be a great guide to success.

There are several tools and techniques that can make it easier for you to navigate the change management path. Orion can provide training or consulting to assist:

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