1. business and industrial

How to Keep The People From Crashing When the System Goes Live:
Ten Success Factors for the Change Leader
Marcia Ruben, CMC, Principal
Ruben Consulting Group
520 Pacheco Street
San Francisco, CA 94116
(415) 564.7135 (phone)
[email protected] (e-mail)
http://www.rubenconsulting.com (website)
Introduction
I had just begun work as the external change management project leader for a
large-scale SAP implementation for a Fortune 500 company. This company had
assembled a full-time team of top performers from each of their functional areas
(sales, finance, operations, marketing, etc). These employees were pulled from their
day-to-day responsibilities to work on this project. Joining them were a team of
15-20 technical consultants who flew in from their respective hometowns on
Monday and left Friday, returning week after week for a period of several months.
The total team, which also included several from the company’s information
technology department, occupied an entire floor of the corporate headquarters.
Both the internal and external teams were led by experienced project managers
who knew a lot about bringing in projects on time and on budget, but not as much
about how to plan for and manage the impact such large-scale change would have
on people within the company. Needless to say, the company’s investment both in
terms of enterprise software, external consultants and the cost of internal talent,
ran in the tens of millions of dollars.
At about the same time, March 1997, a Wall Street Journal article compared the
implementation of enterprise resource planning software (in this case SAP) to the
corporate equivalent of a root canal. The comparison of enterprise resource
planning (ERP) projects to a corporate root canal resonated with many on the
team. During my first root canal, I experienced excruciating pain as the dentist hit
what felt like a raw nerve. Implementation of ERP packages, which coordinate all
of the business activities of a company, has the capacity to cause massive pain
because it impacts how people do their jobs, who they work with, and even the
corporate culture. Corporate executives salivate at the promises that ERP packages
will deliver, chiefly, information that allows a company to run faster, more
efficiently and with greater flexibility (Cangemi 1999). However, in order to
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realize these promises, companies usually discover, after assessing their current
work processes that a streamlined, or even radically different process will produce
better results. Making such massive changes at the organizational, division,
department and individual level means that there is a very real possibility of
disruption in the workplace as the company moves from one way of operating to
another, while still demanding that the product get out the door.
The purpose of this article is to share ten success factors and specific steps in each
for making certain that when new technology “goes live,” the people not only
don’t crash, but are on board and are ready to work in a new way. Root canals
can be tolerable if the patient is prepared and properly anesthetized. Likewise,
large-scale change implementation can be successful with extensive forethought,
planning and leadership.
What is Change Management?
Large-scale technology initiatives cost millions of dollars to purchase and
implement and failure to reap those returns poses a significant risk to corporations.
It was out of the need to mitigate these risks that what has been variously called
change management, change implementation and/or change leadership was born.
Change management is the proactive process of anticipating and effectively
preparing for the organizational and people impacts of large-scale change in a way
that ensures that desired business outcomes are realized. Change management
relies on a variety of tools, practices and techniques that take into account the
leadership and cultural realities of the organization. Typically, companies either
have the talent and expertise in-house, or hire external consultants with skill and
experience in large-scale change processes. Such consultants can provide an
understanding of the human and organizational dynamics at play, the ability to
influence and teach without taking over the project, and exceptional strategic
thinking, communication, and interpersonal skills.
Danger Signals That the People Will “Crash” Before the System Goes Live
There are a number of indicators that signal danger for a large-scale change
implementation. It is precisely the lack of awareness of and disregard for these
signals that causes an ERP project, for example, to feel like a root canal. Listed
below are some of the most typical danger signs:
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Corporate culture not prepared for a massive change
No forethought given to potential impact on people, processes and
productivity
Project sponsors do not demonstrate continued support
Key business leaders are skeptical about project and don’t release people
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Project is driven by Information Technology rather than the business
leadership
Key Stakeholders not only don’t support change but actively block it
Proposed change requires transformation in culture and past cultural
change efforts have failed
Dollars not allocated for training
Leadership has track record of not communicating to the workforce
Reward systems reinforce old behaviors rather than desired ones
No thought is given to new roles and responsibilities or how to transition
workforce
Changes are made but the organization structure remains the same, making
it difficult to realize a return on investment
The following are ten success factors that if followed, will ease the pain of largescale change and will ensure a successful implementation.
Ten Success Factors For the Change Leader
1. Conduct Upfront Assessment and Planning
2. Ensure Demonstrated Leadership and Sponsorship Commitment
3. Involve and Engage Stakeholders
4. Build an Expanded Project Infrastructure that includes Business
Representation
5. Assess and Monitor Cultural Impact
6. Provide Training and Development
7. Provide Honest and Straightforward Communication in a Timely
Manner
8. Rework Reward Systems To Align With Change
9. Identify and Plan for Workforce Transitions
10. Redesign and Align the Organization
1. Conduct Upfront Assessment and Planning
I vividly recall making a presentation to the executive team of a major corporation
that was on the brink of implementing SAP. The process was going to cost them
upwards of $40 million dollars. The consulting firm I was with at the time
proposed that the company invest in a change management planning process that
would ensure that the people in the company were adequately prepared for this
enormous change in how the company was organized, how they worked, and
possibly with whom they worked. We clearly described the pain and disruption
that had transpired in similar implementations when the people issues were not
attended to. One of the executives, when told that one of the biggest derailers of
these types of projects was the people aspect remarked, “ They’ll get over it.”
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Fortunately, wiser heads prevailed and the company did invest in identifying
potential impacts of this technical investment before they began the project. It
turned out that there were some clear danger signals that, if not discovered and
planned for ahead of time, would have seriously derailed the project.
Thoughts about the impact of how the technology will impact people and how
their work will get done are often an afterthought. The implementation is much
more likely to go smoothly when companies include a dedicated change
management team as a key partner with the technology and business reengineering
process. It is important to recognize that gathering specific information about the
recipients of the change during the design phase will help better inform the change
management strategy. It is imperative to involve the business in gathering this
information. In one particularly successful project, during the early technologyplanning phase, we held a series of data gathering sessions using large mind maps
and had people “vote” using dots. Using this kind of early data gathering, a
company can collect invaluable data, get business unit support and buy-in, and
know exactly what issues to focus on when planning the change implementation
strategy.
It is also important to consider whether the company is even prepared to make
such a change. Even if the benefits are compelling, if a business has an experience
of failed change efforts, is thinly staffed, engaged in multiple large-scale initiatives,
or if the business leadership is informed of the effort and sacrifice but don’t have
the ability to “stay the course,” it is best to cut losses early and not proceed.
2. Ensure Demonstrated Leadership and Sponsorship Commitment
By far, the most important element in any large-scale change effort is demonstrated
leadership commitment. Senior level teams may deliberate over the wisdom of
committing significant dollars for a change effort. They may make the appropriate
speeches as the project is kicked off. However, as priorities and conditions change,
it is easy and natural for leaders to be distracted. For example, in one major
implementation, the project team had been sequestered for months planning for an
SAP implementation. Things seemed to be stalled. After facilitating a leadership
session for all of the project leaders, we discovered that certain functional areas
said that they were in favor of this organizational change, and indeed they were on
an intellectual level. However, if it meant actually altering how the salespeople
worked, the Sales VP was not willing to make any changes. By far the biggest
problem was the perception of the team that their executive sponsors were not
“walking their talk” in terms of commitment to the project. Other priorities
received needing funding and resources and important messages regarding this
technology initiative were not being communicated to the workforce. This effort
ultimately failed.
Change implementations that have succeeded do so because of the specific and
repeated behaviors demonstrated by the leadership team, even when the going gets
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tough. Specific change strategies and behaviors for leaders are discussed at the end
of this article.
3. Involve and Engage Stakeholders
Stakeholders are those internal to your business and external customers, suppliers
and shareholders who might be impacted either directly or indirectly by the
change. There are several layers of stakeholders: those directly impacted, those
somewhat impacted and those slightly impacted, and those not impacted at all.
A vital part of any upfront project planning process in a technology
implementation is to correctly identify each stakeholder group and anticipate
possible impacts as well as the current and desired level of support needed to
ensure success. A best practice is to facilitate a stakeholder analysis meeting with
the sponsoring executive team, asking them to identify key stakeholders by group
and name, and then to come to consensus on where they believe those stakeholders
stand with regard to the proposed change.
Stakeholders can be divided into a number of groups. Based on Dick Beckhard’s
work (Beckhard and Pritchard 1992), the most common categories are:
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Strongly supports change and will champion on your behalf
Strongly supports change, will not champion on your behalf
Supports change
Neutral
Strongly opposes change but will not obstruct
Strongly opposes and will make efforts to obstruct progress
Once this analysis is complete, the executive team is assigned contacts and their
role is to meet frequently with stakeholder influencers to explain the change,
understand their concerns, and bring back to the project team vital information
that might impact design and/or implementation process. Many a project has
derailed when this process is not followed and engaged in with dedication and
commitment from start to finish.
4. Build Project Infrastructure that includes Business Representation
When the Information Technology group is the single driver of a large-scale ERP
project, without the voice, input and championship of the business, it is doomed to
fail. Why? Because the system ultimately has to do what the people who run the
company needs, not what the technology people think that they need. In one
successful project, a team of known communicators was chosen to be on the team.
Their participation, as well as the enlistment of other champions within each
business unit, helped to make the project a success. It is important early on to
identify people within each function who have influence within their own
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organization, who can clearly articulate these needs, and who also are willing and
able to communicate progress and their implications to their functional
organization.
5. Assess and Monitor Cultural Impact
In order for the promise of an enterprise resource planning software package to be
realized, changes in how the company operates and how work gets done must
occur. If the changes are significant, existing company norms, i.e., “how things get
done around here,” won’t support the newly required behaviors.
For example, in one ERP implementation with a Fortune 500 company, the
cultural ramifications in implementing the process were significant. This particular
company, like many others, operated with a top-down management style, in silos.
If a task was not in someone’s functional area, e.g., operations, it was “thrown
over the wall” to another function. This “it isn’t my job” mentality meant delays
in things getting done. The implementation of the ERP system would allow the
company the capability of putting critical business information at everyone’s
fingertips. In a company in which information was power and knowledge resided
only in one function, the cultural ramifications of giving everyone access were
staggering. In order to get maximum benefit, the leadership of the company would
need to embrace, demonstrate and model a new leadership style, one in which an
internal competitive attitude was replaced with a collaborative mindset.
In this particular example, work with the executive team to change leadership
mindset was critical and helped set the stage for a successful implementation.
Linda Ackerman Anderson and Dean Anderson define mindset as “…one’s
worldview, the place or orientation from which you experience your reality and
form your perceptions of it. The cornerstones of your mindset are your
fundamental assumptions about reality and your core beliefs about self, others,
and life in general.” (Anderson and Anderson 2001). Changes that require a
transformation of how work is even conceived and completed must start with the
leadership team driving the necessary cultural changes.
In another large-scale technology implementation, an upfront cultural assessment
revealed that certain corporate functions like sales and finance had developed their
own ‘homegrown’ software solutions to help them run their business. Their
company’s entrepreneurial style encouraged divisional leaders to do whatever it
took to get the work done. There was a certain amount of pride in developing and
perfecting technology solutions that became the way an entire workgroup did
business. Adding software at enterprise level meant standardization, and
standardization was against the grain of a freewheeling, do whatever it takes spirit.
As in this case, working closely with divisional leaders to understand the concerns
they have in running their business will help the technical team made the necessary
technical adjustments to ensure that there are no disruptions. Additionally,
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articulating to the workforce what will change, what won’t, and the benefits of the
new system and process are essential to a smooth implementation.
6. Provide Just-in-Time Training and Development
Whether the technology implementation involves enterprise wide software, or a
new email system, there is likely to be a change in how employees work. Planning
ahead for targeted training is essential. While the technology and business process
team are planning the specific technical elements, it is critical that the training
resources are included so that training can be developed and ready prior to
implementation. The most successful training efforts were those in which the media
of training was matched to content and audience need. For instance, some
technical training can easily be accomplished online via the company intranet.
Other training requires face-to-face instruction, practice and feedback.
Training must be ready to roll-out prior to implementation, which means that
pilots of the training program should be designed and completed well in advance.
Developing and providing targeted training that prepares the workforce in skills
for new tasks is essential to implementation success.
7. Provide honest and straightforward communication in a timely manner
Without exception, when asked in upfront change readiness assessments what was
most important in organizational change, employees cited the need for ongoing
communication. Paradoxically, project teams working long hours on tight
timeframes under constantly changing conditions and parameters want to wait
until “everything is tied down” before developing messages and channels of
communication. In the most effective large scale changes, a communications expert
is attached to the team, designing and delivering an ongoing stream of project
updates that answer the basics: who, what, when, where and how.
I worked on a successful large-scale change effort in which the communication
team developed succinct communication packages for each corporate leader. As the
change progressed the company held a series of large-scale meeting with the top
leaders of the company. The top leaders left the meeting with a communication
packet that they used in a series of meetings with their entire staff. This same
presentation was cascaded throughout the organization. This ensured consistent
communication.
Even when clear answers are not known, communicating what the team does
know, what they don’t know, and plans for when and where gaps in information
will be communicated go a long way in quieting the ever-present rumor mill.
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8. Rework Reward Systems To Align With Change
An essential part of any change management plan includes the reworking of the
performance management system. Workers must be evaluated and rewarded for
new behaviors that lead to increased effectiveness and overall efficiency.
In one Fortune 500 Company, plant managers ran their plants however they saw
fit. There was no standardized, disciplined approach. The implementation of the
ERP system meant that workers, many of whom had never operated a personal
computer, would now be required to accurately enter data on a daily basis. This
information would be integrated with other company information to provide an
overall picture of the company’s health at any one moment. The reward system
was changed to reflect the need for the disciplined and timely entry of data by the
workers. Managers as well were rewarded on the decisions that they made based
on the data at hand. Reworking reward systems is an integral part of any change
management plan because without it, employees have no incentive to support the
change.
9. Identify and Plan for Workforce Transitions
One of the unfortunate consequences of large-scale change is either the
redeployment or laying off of the workforce. The way a company handles
redeployments and layoffs can greatly impact the morale of those who remain in
the company. A part of the critical upfront planning of a large-scale technology
change is an assessment of the work processes, roles and skill sets required in the
new organization.
In one successful example, the company assembled a team of human resource
professionals to plan for the inevitable disruptions deployments and layoffs cause.
Every effort was made to redeploy existing employees to new jobs within the
company. When this was not possible, the company planned generous severance
packages and outsourcing services. Managers were notified ahead of time and
given a complete package of how to communicate in a way that preserved the
employee’s dignity and self-esteem.
The rest of the company received communications in a timely manner. In this
particular case, people were not necessarily happy about being let go, but felt that
the company had treated them in a fair and humane way. When new openings
came up later with the same company, they were much more likely to accept a job
with that company.
Planning ahead for workplace changes, then, requires thinking about the impact of
the change on individuals, work units and the organization as a whole. It also
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requires planning for costs associated with those changes. An outside change
consultant who is experienced in these matters can be very helpful. Large-scale
change also requires more expansive thinking about how the very organization is
structured.
10. Redesign and Align the Organization
Large-scale technology implementation that involves a change in processes and
workflow must most likely also require a change in the way the company is
organized and structured. A company organized by functional groups, e.g., sales,
finance, operations, R & D, may find that this structure impedes the smooth flow
of information. David Nadler and Michael Tushman define “organizational
capabilities as ” …the unique ways in which each organization structures its work
and motivates its people to achieve clearly articulated strategic objectives.”(Nadler
and Tushman 1997).
In one successful technology implementation, the consulting team assembled a
cross-section of the organization for an intensive five-day organization design
planning process. With all of the key stakeholders in the room, everyone heard the
same data and was involved in redesigning an organization that would work more
effectively than the current one. In another example, the consultant worked with
the project team to map out the current and desired work processes, introduced a
variety of organizational designs, e.g., functional, by product, by geography, etc.
The consultant facilitated a process that ensured that the resulting organization
design aligned with the organizations’ goals and strategies and would ensure a
smoother business operation.
The question any change leader must ask is whether the current organization
design and structure supports the new business processes and enables maximum
benefit from the technology. If the answer is “no,” the change leader must be
willing to make the changes that ensure the best return on investment. These
changes are best done in a way that captures the hearts and minds of the
workforce. This can be accomplished by giving those most impacted input and
involvement in the process.
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Summary
"Technology will introduce change and turbulence into every industry and every
job. In particular, the necessity for constant learning and constant adaptation by
workers will be a certain outgrowth of technological innovation."
William B. Johnston and Arnold E. Packer Workforce 2000, 1987
Changes in process wrought by new technology can also mean a change of roles
and power within organizations. As technology evolves, it "moves the locus of
knowledge and hence the power in the organization, it changes the time
dimension of processes and decisions, and it enables new organizational
constructs to be implemented."
Sloan Management Review, 16& 17.Summer 1992
The explosion of technology implementations in the mid-to-late 1990’s led to more
streamlined and efficient organizations, when these technologies were implemented
thoughtfully. More technology innovations continue to be introduced, the latest
being interfaces with the customers via the worldwide web. Each innovation that
involves changes from the current to a new way of operating will require a plan to
ensure that the “people don’t crash when the system goes live.” Ultimately, it is the
business leadership that must lead, direct and drive any large-scale change.
Based on work with a number of large-scale change projects, the following is a list
of behaviors that clearly express leadership support. The change management
consultant’s role is to educate leaders regarding these behaviors and provide
ongoing coaching and support.
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Clearly and repeatedly articulate future vision and its benefits to the
organization through one-on-ones, staff meetings and company wide
meetings. If the organization can visualize a clear and compelling future
they are much more likely to become champions for the change in order to
more quickly make the future vision a reality.
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Assign appropriate resources to ensure successful change implementation.
Find substitutes to handle their day-to-day responsibilities. This is a good
growth opportunity for both the people on the project as well as for those
doing the day-to-day work.
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Make decisions and set priorities that support the change. People are often
skeptical of corporate changes and regard them as the “flavor of the
month” that will go away if they just wait it out. Only when employees see
leaders stick to their guns over the long haul will they take it seriously.
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•
Work “behind the scenes” to ensure continued support of key stakeholders.
Leaders play a key role in making sure that all impacted parties are onboard
and champions of the change.
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Implement a “consequence management” system to reward change. People
will do what is inspected, not what is expected. Leaders who are resolute in
making changes make sure that reward systems change.
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Monitor the change to spot early issues and make sure that they are
resolved. Change by its very definition is messy and unpredictable. A change
plan is only a framework and guideline. People and work processes must be
constantly monitored to prevent unintended consequences from disrupting
the process.
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Release people to be educated and trained. As simple and obvious as this
sounds, leaders often overlook this important reminder.
By learning from past lessons, many of them painful, corporate root canal dramas,
companies can short-circuit the pain and disruption of large-scale change.
Engaging professional management professional expertise to help guide these largescale change efforts has many advantages, including the benefit of knowing where
the “potholes” are and what works to avoid them, objectivity, leadership coaching
and strategic thinking. Ultimately, however, it must be the leadership of the
company itself that makes the change happen.
About the Author
Marcia Ruben, principal of Ruben Consulting Group and a Certified Management
Consultant, is an organizational consultant who helps individuals, teams, and
companies achieve higher performance. Her firm focuses on organizational change
management, leadership and team effectiveness and executive coaching. She has
worked with leaders of a variety of mid-size and Fortune 500 companies in a
variety of industries for over twenty years. Marcia’s change work is grounded in
training in Appreciative Inquiry, Facilitating Large Systems Change, the Lominger
Organization Architect, and Dannemiller-Tyson’s Whole-Scale Change model.
Ms. Ruben graduated Phi Beta Kappa from the University of California, Berkeley,
and received her Master’s of Science degree in counseling from California State
University. She is currently engaged in doctoral studies in Human and
Organizational Systems at the Fielding Graduate Institute.
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Bibliographic References
Anderson, D. and L. S. A. Anderson (2001). Beyond Change Management: Advanced
Strategies for Today's Transformational Leaders. San Francisco, Jossey-Bass/Pfeiffer.
Beckhard, R. and W. Pritchard (1992). Changing the Essence: The Art of Creating and
Leading Fundamental Change in Organizations. San Francisco, Jossey-Bass.
Cangemi, M. P. (1999). "The Evolution of Computer Systems-ERP." IS Control JournalTechnology Developments 1: 2.
Nadler, D. A. and M. L. Tushman (1997). Competing by Design: The Power of
Organizational Architecture. New York, Oxford University Press.
Copyright 2003 Ruben Consulting Group All Rights Reserved
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Change Management: The Ruben Consulting Group Approach
Ruben Consulting Group works with organizations to help implement large-scale change
initiatives. We have significant experience and tangible results in providing change
management services to companies in a wide variety of industries. We have been a part of
and/or led teams that implemented enterprise wide technologies, supply chain
reengineering and mergers and acquisitions.
Our Approach To Large-Scale Change
We recognize that getting a return on your investment is your highest priority. While we do not
have a standard methodology that we use with every client, we work in partnership with you,
building upon a few general principles and guidelines for successful change. Our approach is
grounded in training in Appreciative Inquiry, Facilitating Large Systems Change, the Lominger
Organization Architect, and Dannemiller-Tyson’s Whole-Scale Change model.
General Guidelines for Successful Change
The following are the guidelines for successful change:
ƒ Match the specific type of change with the appropriate strategy to accomplish that change
(i.e. the strategy for developing better project managers is very different than the strategy
for transforming from a manufacturing focused to marketing focused company
ƒ Take a systemic approach. A change in one area will likely result in unintended changes in
other areas
ƒ Be certain “plan” addresses leadership and sponsor commitment, stakeholder involvement,
training, communication, organization alignment and design, transition of employees and
new ways to measure performance
ƒ Integrate change management plans with process and technology change plans
ƒ Recognize that a change “plan” can at best be a plan to discover and readjust versus a
fixed plan
ƒ Implement change in many areas and set up ways for people to learn from each other
ƒ Identify the most practical ways to involve people in different ways
ƒ Find ways to engage the hearts and minds of those being most impacted by the change—
the wisdom is always within the system
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Types of Services We Offer
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Change Readiness Assessment to pinpoint what change strategy will be the most effective
for your company
Implementation Planning and Execution to ensure that you have a roadmap for creating a
shared vision, the required leadership mindset and behaviors, stakeholders who will
champion the change, an organization design that matches the business strategy, and
employee engagement in the change process.
Project Leadership to ensure that the right change project deliverables are completed
effectively and on time
Process facilitation to ensure that you have captured the best thinking of your sponsors,
key stakeholders and project teams
Strategic Communication to ensure that communication efforts are integrated with the
entire change management process, that key messages are consistently and effectively
delivered to each target audience
Coaching to ensure that executives, managers and the project team are on board and
making the requisite changes in mindset and behavior
Leadership Transformation Workshops to ensure that leaders willingly make needed
changes in mindset, which leads naturally to changes in leadership behavior
Pulse checks to make necessary course corrections
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