C1.SA: Why Change Management Matters Flashcards
Failure rates of change initiatives–more particularly, where change achieves substantially less than the expected value–have been reported as high as…
…70–80 per cent (King and Peterson, 2007).
A few top-performing organizations experience success rates [of change initiatives] in excess of…
…80 per cent (IBM, 2008b).
Laclair and Rao (2002) found a close relationship between 12 change management factors (at three levels: senior, mid-and front line) and the value captured from change initiatives. Companies effective at all three levels captured an average of….
…143 per cent of the expected value
An IBM study (2008b) highlights four key activities that make change effective:
–prepare by gaining deep, realistic insight into the complexity of the change, and plan accordingly;
–use a robust change methodology aligned with a project management methodology;
–build and apply skills in sponsors, change managers and empowered staff;
–invest appropriately in change management.
An IBM study (2008b) found that the success rate of change projects using a dedicated change manager…
…rose by 19 per cent compared to those that did not.
Success rates can be improved through various practices, especially:
- Senior leadership understanding the nature and impact of the proposed change, and the organisation’s capacity and capability to undertake it.
- Achieving clarity in how the organisation expects to benefit.
- Effectively identifying stakeholders and engaging them through communication.
- Aligning change and project management, and sizing them appropriately for the organisation.
- Supporting individuals through leadership, training and facilitation.
- Advocating best practice across the organisation, supported by evidence.
Balogun and Hope Hailey (2008) describe what they call the ‘design choices’ to be considered in planning a change:
Change path: will the change be introduced ‘overnight’ or as a journey over a period of time?
Change start-point: will it roll out following the hierarchy (up or down), or grow from local ‘pockets’?
Change style: will it be introduced more directively or more collaboratively?
Change target: does it focus on performance, people or culture?
Change levers: what levers will be most appropriate? (See the McKinsey ‘7-S model’ in Chapter 6, Section A1.2.)
Change roles: who will sponsor and support the change, and how?
When making ‘design choices’ while planning change, change managers should consider many factors, including the following from Balogun and Hope Hailey:
Power: How concentrated or diffuse is power in the organization? How much local or individual empowerment do people experience? What power lies with different stakeholder groups? (Chapter 4)
Time: Is the change urgent–the result of a crisis? Is it possible to take a long-term view? (Chapter 2)
Scope: How widespread is the change? What are its impacts? (Chapter 6)
Preservation: What elements of the past should be preserved? Which must be destroyed? (Consider physical icons, such as buildings, locations and technologies, and intangibles such as values, ways of working and relationship networks.) (Section B and Chapter 11)
Diversity: How homogeneous is the organization? Is diversity amongst people an obstacle to achieving alignment? Is inadequate diversity an obstacle to creativity and change? (Section E and Chapter 12)
Capability: Do individuals have the range of skills required, both for the change process and for the demands they will face after the change? How good is the organization at managing change? Does it have access to suitably skilled people? (Chapters 7 and 9)
Capacity: Does the organization have the cash, time and people it needs for change to succeed? (Chapter 2)
Readiness: Is there a critical mass of people in the organization who see the need for change? How committed are they to change? (Chapters 5, 7 and 11)
