Monday, March 22, 2010

Is Change Management the Missing Link?

I recently had lunch with a financial executive who expressed frustration with his company's lack of success with strategic initiatives.  He told me that the initiatives tended to evolve from high expectations to disappointment to - in the most drastic instances, being abandoned altogether.

Among the initiatives he mentioned that had disappointing results over the last couple of years included projects related to reducing the product development cycle time, implementing lean manufacturing, and upgrading the company's ERP system.

It was very clear that the company's lack of success was not due to a lack of desire or interest.   The management team spends a significant amount of time each year developing the strategic plan and creating initiatives to improve competitiveness.  A manager or director is always assigned the responsibility to lead projects and a fairly detailed plan is developed for each initiative.

So What's the Problem?

The inability to successfully complete high-level initiatives is a fairly common problem for companies.  Like many organizations, this company tended to approach strategic initiatives from a purely technical perspective, while ignoring the behavioral factors involved in change.

For most organizations, strategic initiatives involve a significant level of change.  Whether it is a change in behavior or method of operation, success requires respecting and validating the human complexities involved, no matter how insignificant the change appears to be on the surface.

There are barriers to change in virtually every organization that interfere with successful completion of initiatives.  These barriers can be personal (related to an individual's personal fear of change), political (resulting from the interactions and culture of the organization), or organizational (caused by policies and systems within the company).  Recognizing the existence and extent of the barriers can greatly improve the chances to succeed with the desired change.

Planning for Change

It is important to include steps to address the barriers as part of the planning process for change initiatives.  For example, if there is fear within the organization, steps must be taken to identify the causes and actions to reduce its effect on the initiative.  The types of fear often associated with change include fear of job loss, fear of appearing ignorant for asking questions about the change, fear of retaliation for questioning the approach being taken, and others.  Although it is virtually impossible to completely eliminate fear within any organization, it is important to understand where it can interfere with the change and minimize it as much as possible.

An Example

A global company with factories in several countries around the world created an initiative to implement a best practices process throughout the organization.  The initiative included a kick-off meeting attended by the company's plant managers where the process was introduced and expectations communicated.  Throughout the following year, though, very little sharing was done between plants and everyone pretty much operated as they had before the initiative was announced.

When I was called in to help with the initiative, I began with a series of interviews to identify barriers that existed within the company that could interfere with the sharing and adoption of best practices.  From the interviews, it became clear that despite the importance surrounding the initiative, the company's culture actually discouraged sharing of information and accepting suggestions from people at other plants.  The plant managers had been in their positions for many years and were regularly rewarded by acting independently.  Many were selected for the position because of their strong, independent personalities, and had always been expected by senior leaders to be experts on pretty much everything related to the factories they led.

It quickly became obvious that the plant managers did not accept input from each other because of the fear of appearing less knowledgeable than one or more of their peers.  Also, since the company's culture was highly competitive, people did not want to share information that would help improve another plant's results.

Resolving this problem required modifying the behavior of the senior leaders, coaching the plant managers, and changing the company's systems of measurements and rewards.  It required a lot of effort and consistency at the senior level but eventually the initiative began to visibly progress and result in significant productivity improvement across the company.

In the above example, the process for sharing best practices and visible commitment from the top was excellent.  All that was missing was a change management approach to the initiative.  Once the barriers to change were identified and addressed, implementing the process became much easier.

Whether a company is implementing a best practices process, pursuing lean, or integrating an acquisition, it is vital that a change management approach is used to make sure the people issues (i.e., the barriers to change) are adequately addressed.

Change as a Competitive Weapon

As we slowly emerge from the worst economic period since the Great Depression, those companies that are able to adapt quickly to changing market conditions will be the most successful.  Organizations cannot afford to waste time with initiatives that move too slowly or fail to achieve desired results.  Making the effort to identify and remove the barriers to change within the company will greatly improve the level of success with initiatives while simultaneously creating more a flexible, adaptive, and profitable company.

2 comments:

Craig said...

It is well documented in change management literature and as I design and deliver change management programmes I always emphasize the people aspects. It just does not seem to be on the radar of change processes.

I try to counteract it by creating templates for planning change initiatives that include people issues and then having leaders fill it out in the session.

Damon said...

Our facility has been involved in lean implementation for over 2 years and have seen great results. Still, there is a clear separation between those who believe and those who don't. We have done training, weekly communication meetings and created clear goals for the company but still we have those who are strongly opposed.

In my experience, those who don't participate are those who want to be walled in and only care about there small footprint and then there are others who are resistant to any change.