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The people side of change

The people side of change

Since the 1980s all industries have increased their dependence on information technology. Two forces driving the shift: customers are demanding faster response, greater flexibility and better accessibility, while shareholders are demanding better returns on their capital investment. In this IT-dependent environment, change in the organisation is either underpinned by hardware or software updates or, in an increasing number of cases, actually enabled and led by the introduction of new technologies.

In the past, and as recently as the early '90s, when technology-enabled change failed, the likely reason was technology risk, that is the potential for incorrect or inadequate specification, development, or installation of hardware and software components. The slightest misstep in any of these areas saw projects running late, over budget or abandoned. Fortunately today, these technology risks - the "hard" risks - are controlled with methodologies and the application of rigorous project management. Unfortunately, in some instances the emphasis on minimising hard risks has seen other less mechanical dimensions - the "softer" areas of change management - neglected.

Indeed, our recent experiences in large-scale organisational change programs suggest that the balance has shifted. Today, it is the failure to pay due regard to the impact on personnel, customers and the organisation overall which can, and frequently does, derail change programs. Even if the change program is implemented, many organisations never realise the benefits painstakingly forecast in the original business case. But the reality is that the demands on organisations to change show no sign of abating in the foreseeable future. In this environment, organisations cannot afford to ignore the soft issues of change management.

Two changes on the technology side are compounding the effects of this shift.

First, armed with experience in the methodologies and project management disciplines organisations are managing the selection and implementation of the technological components of their change programs far better. Second, the final technology choice is the critical factor only in those few situations which really need solutions from the "bleeding edge". In the majority of cases, organisations are choosing between two or three solutions which are almost equal and conform to standards for integration, inter-connectivity and interoperability.

So, with the key to realising change benefits shifting to the softer change management aspects, the questions which a CEO preparing for large scale change must answer are: "How ready is my organisation for change?" and "What can I do to create a climate of change readiness?".

Our conclusion, based on work here in the Asia Pacific region and experience in North America and Europe, is that a change readiness assessment in four key areas: management, organisation, structure, people and work practices and procedures significantly increases the probability of achieving the required benefits. The scale and complexity of the assessment depends on the degree of change proposed.

Management. Management is too often taken for granted or overlooked in the change process. An assessment will ascertain whether current management will be able to provide support through the period of change and enable the change to be effectively assimilated into the organisation. The management dimension can include a comprehensive cultural assessment. It should address at a minimum:Leadership style and control systemsThe quality of both internal and external communicationThe adaptability of current processesMotivation and energyPerceptions of success and acceptance of previous initiativesOrganisation structure. The new organisation structure is generally one of the first visible changes implemented. It signals to the organisation as a whole that things will be different: reporting relationships are revised, positions removed and new positions created. The existing structure is often unsuited to the future and in some cases an interim organisational structure may be required. To establish the capability of the organisation to support the transition, an assessment of this dimension should addresses at a minimum:The adequacy of the current staffing levels and experience The impact of the program on resource numbers and deploymentThe redefinition of roles and responsibilities and reporting lines for the duration of the programPeople. Resistance to change, particularly where new technologies are involved, can be a powerful force in limiting the change program's expected benefits.

Opposition can occur at all levels within the organisation and may be due, for example, to the removal of long established informal power structures or status or, simply because the message about the future has been misunderstood. The people dimension appraisal only needs to be a broad brush picture but should establish:An understanding of the need for changeA level of excitement and motivation for changeThe rituals, routines and myths which will promote change and those which will hinder itThe current and required skills and experienceThe overall morale and impact on the culture of the organisation Work practices and processes. Changing the information technology should embrace changing the way work is done to make the best use of it. Frequently the way management thinks work is performed and the way it is actually done vary considerably. This is generally because current work practices have evolved to accommodate shortcomings in old systems or as workarounds to organisational or logistical problems. At this stage a qualitative and high-level view of the current practices is required. It can be used to assess the ability of key processes to support the change program and the extent of change required for the future. The scope of the work practices and procedures dimension should include:An agreement to the key procedures affected by the change programThe level of documentation of key proceduresThe current practices for these procedures and conformance with documentationCurrent performance measuresConstraints imposed by personnel policies and union rulesThe first step A change readiness assessment is most valuable when conducted at the beginning or during the very early stages of a change program. Considering the four key dimensions above provides insight into the potential risks and barriers to implementation.

It should be performed at a level appropriate to the scale and scope of the change program but should always be a broad brush picture. When coupled with a systematic approach to risk management, a change readiness assessment provides the basis for developing a comprehensive change management strategy, which is specifically focused on addressing the risks and overcoming the organisation's weaknesses.

David Hovenden is vice-president strategic information practice at A. T.

Kearney Australia

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