Change and people - Strategic Management

Change management is a structured approach to shifting/transitioning individuals, teams, and organization from a current state to a desired future state. It is an organizational process aimed at helping employees to accept and embrace changes in their current business environment. In project management, change management refers to a project management process where changes to a project are formally introduced and approved. Kotter defines change management as the utilization of basic structures and tools to control any organizational change effort. Change management's goals is to minimize the change impacts on workers and avoid distraction.

Linda Ackerman Anderson, co-author of Beyond Change Management, described how in the late 1980s and early 1990s top leaders were growing dissatisfied with the failures of creating and implementing changes in a top-down fashion. They created the role of the change leader to take responsibility for the people side of the change. February 1994 is the unofficial beginning of the Change Management Industry, with the publication of the first "State of the Change Management Industry" report in the Consulting News.

McKinsey consultant Julien Phillips first published a change management model in 1982 in the journal Human Resource Management; though it took a decade for his change management peers to catch up with him. Marshak credits the big 6 accounting firms and management consulting firms with creating the change management industry when they branded their reengineering services groups as change management services in the late 1980s.

  1. Mission changes,
  2. Strategic changes,
  3. Operational changes (including Structural changes),
  4. Technological changes,
  5. Changing the attitudes and behaviors of personnel,

As a multidisciplinary practice that has evolved as a result of scholarly research, Organizational Change Management should begin with a systematic diagnosis of the current situation in order to determine both the need for change and the capability to change. The objectives, content, and process of change should all be specified as part of a Change Management plan. Change Management processes may include creative marketing to enable communication between change audiences, but also deep social understanding about leadership’s styles and group dynamics. As a visible track on transformation projects, Organizational Change Management aligns groups’ expectations, communicates, integrates teams and manages people training. It makes use of performance metrics, such as financial results, operational efficiency, leadership commitment, communication effectiveness, and the perceived need for change to design appropriate strategies, in order to avoid change failures or solve troubled change projects. Successful change management is more likely to occur if the following are included:

  1. Benefits management and realization to define measurable stakeholder aims, create a business case for their achievement (which should be continuously updated), and monitor assumptions, risks, dependencies, costs, return on investment, disbenefits and cultural issues affecting the progress of the associated work.
  2. Effective Communications that informs various stakeholders of the reasons for the change (why?), the benefits of successful implementation (what is in it for us, and you) as well as the details of the change (when? where? who is involved? how much will it cost? etc.).
  3. Devise an effective education, training and/or skills upgrading scheme for the organization.
  4. Counter resistance from the employees of companies and align them to overall strategic direction of the organization.
  5. Provide personal counseling (if required) to alleviate any change related fears.
  6. Monitoring of the implementation and fine-tuning as required.

Figure draws heavily on some ideas by Alexander, one of the few people who has undertaken research into the implementation of strategic plans. It suggests that there may be two factors which work either together or against each other to contribute to successful implementation: agreement with the change and the degree of effort put in by key implementers. It is possible to have low effort combined with an agreement with the change. This may be because the implementers are preoccupied with normal work, and do not give the time to the

Change, it may be because they do not understand the role that has to be played by them, or think that it is someone else’s job. It may also be that the psychological contract gets in the way. Alexander calls this tokenism, and it is important for those trying to cause change to develop approaches to overcome it.

Typical-responses to strategic change Inspired by Alexander

The second low effort box is when there is little or no acceptance of the change, either because the need is not seen, or because the strategy is believed to be wrong. This can cause outright rejection, cynicism Good communication, with clear explanation of the need to change may change this situation, although there will always be a problem if the rejection is justified, and the change is inappropriate!

The ideal box is where both dimensions are high, and the key implementers take on the task of inspiring others and driving the change forward. The final box may lead to successful change, but can indicate a problem. ‘I don’t agree with it, but I expect the board is right’ as a response may help the change forward, but is unlikely to lead to many creative inputs from the implementers. Making the best of a bad job conceals disagreements that would be better in the open.

Getting managers to plan the implementation of strategy
Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals. Implementing your strategic plan is as important, or even more important, than your strategy.

The critical actions move a strategic plan from a document that sits on the shelf to actions that drive business growth. Sadly, the majority of companies who have strategic plans fail to implement them. According to a Fortune cover story in 1999, nine out of ten organizations fail to implement their strategic plan for many reasons:

60% of organizations don’t link strategy to budgeting 75% of organizations don’t link employee incentives to strategy 86% of business owners and managers spend less than one hour per month discussing strategy 95% of a typical workforce doesn’t understand their organization’s strategy.

A strategic plan provides a business with the roadmap it needs to pursue a specific strategic direction and set of performance goals, deliver customer value, and be successful. However, this is just a plan; it doesn’t guarantee that the desired performance is reached any more than having a roadmap guarantees the traveler arrives at the desired destination.

Getting Your Strategy Ready for Implementation
For those businesses that have a plan in place, wasting time and energy on the planning process and then not implementing the plan is very discouraging. Although the topic of implementation may not be the most exciting thing to talk about, it’s a fundamental business practice that’s critical for any strategy to take hold.

The strategic plan addresses what and why of activities, but implementation addresses the who, where, when, and how. The fact is that both are critical to success. In fact, companies can gain competitive advantage through implementation if done effectively. In the following sections, you discover how to get support for your complete implementation plan and how to avoid some common mistakes. Avoiding the Implementation pitfalls

Because you want your plan to succeed, heed the advice here and stay away from the pitfalls of implementing your strategic plan.
Here are the most common reasons strategic plans fail:
Lack of ownership: The most common reason a plan fails is lack of ownership. If people don’t have a stake and responsibility in the plan, it’ll be business as usual for all but a frustrated few.
Lack of communication: The plan doesn’t get communicated to employees, and they don’t understand how they contribute.
Getting mired in the day-to-day: Owners and managers, consumed by daily operating problems, lose sight of long-term goals. Out of the ordinary.The plan is treated as something separate and removed from the management process.
An overwhelming plan: The goals and actions generated in the strategic planning session are too numerous because the team failed to make tough choices to eliminate non-critical actions. Employees don’t know where to begin.
A meaningless plan: The vision, mission, and value statements are viewed as fluff and not supported by actions or don’t have employee buy-in.
Annual strategy: Strategy is only discussed at yearly weekend retreats. Not considering implementation: Implementation isn’t discussed in the strategic planning process. The planning document is seen as an end in itself.
No progress report: There’s no method to track progress, and the plan only measures what’s easy, not what’s important. No one feels any forward momentum.
No accountability: Accountability and high visibility help drive change. This means that each measure, objective, data source, and initiative must have an owner.Lack of empowerment: Although accountability may provide strong motivation for improving performance, employees must also have the authority, responsibility, and tools necessary to impact relevant measures. Otherwise, they may resist involvement and ownership. It’s easier to avoid pitfalls when they’re clearly identified. Now that you know what they are, you’re more likely to jump right over them!

Covering all your bases
As a business owner, executive, or department manager, your job entails making sure you’re set up for a successful implementation. Before you start this process, evaluate your strategic plan and how you may implement it by answering a few questions to keep yourself in check. Take a moment to honestly answer the following questions:

How committed are you to implementing the plan to move your company forward? How do you plan to communicate the plan throughout the company? Are there sufficient people who have a buy-in to drive the plan forward? How are you going to motivate your people? Have you identified internal processes that are key to driving the plan forward? Are you going to commit money, resources, and time to support the plan? What are the roadblocks to implementing and supporting the plan? How will you take available resources and achieve maximum results with them?

You don’t need to have the perfect answers to all these questions right now, but just make sure that you’ve given all the questions equal consideration. You don’t want to look back six months from now, and wish you had identified some big issues that are now threatening your success. If you’ve identified some red flags, assess if they’re huge obstacles or small ones. If they’re big, get them out of the way before you implement, even if it means pushing your timeline out for awhile.

Making sure you have the support
Often overlooked are the five key components necessary to support implementation: people, resources, structure, systems, and culture. All components must be in place in order to move from creating the plan to activating the plan.

The first stage of implementing your plan is to make sure to have the right people on board. The right people include those folks with required competencies and skills that are needed to support the plan. In the months following the planning process, expand employee skills through training, recruitment, or new hires to include new competencies required by the strategic plan.

You need to have sufficient funds and enough time to support implementation. Often, true costs are underestimated or not identified. True costs can include a realistic time commitment from staff to achieve a goal, a clear identification of expenses associated with a tactic, or unexpected cost overruns by a vendor. Additionally, employees must have enough time to implement what may be additional activities that they aren’t currently performing.

Set your structure of management and appropriate lines of authority, and have clear, open lines of communication with your employees. A plan owner and regular strategy meetings are the two easiest ways to put a structure in place. Meetings to review the progress should be scheduled monthly or quarterly, depending on the level of activity and time frame of the plan.

Both management and technology systems help track the progress of the plan and make it faster to adapt to changes. As part of the system, build milestones into the plan that must be achieved within a specific time frame. A scorecard is one tool used by many organizations that incorporates progress tracking and milestones. See the section “Keeping Score of Your Progress” later in this chapter for info on how to create a scorecard for your company.

Create an environment that connects employees to the organization’s mission and that makes them feel comfortable. To reinforce the importance of focusing on strategy and vision, reward success. Develop some creative positive and negative consequences for achieving or not achieving the strategy. The rewards may be big or small, as long as they lift the strategy above the day-to-day so people make it a priority.

Determine your plan of attack
Implementing your plan includes several different pieces. Implementing a plan can sometimes feel like it needs another plan of its own. But you don’t need to go to that extent because I’ve done it for you! Use the steps below as your base implementation plan. Modify it to make it your own timeline and fit your organization’s culture and structure. What follows is a set of comprehensive implementation steps:

Finalize your strategic plan after obtaining input from all invested parties. Align your budget to annual goals based on your financial assessment. Produce the various versions of your plan for each group. Establish your scorecard system for tracking and monitoring your plan. Establish your performance management and reward system. Roll out your plan to the whole organization Build all department annual plans around the corporate plan Set up monthly strategy meetings with established reporting to monitor your progress.

Set up annual strategic review dates, including new assessments and a large group meeting for an annual plan review.

Factors-to-consider in implementation

Figure is an example of a method I have found useful in strategy workshops to get managers discussing and identifying the mix of hard and soft issues that should be considered. It takes a number of negative statements from Alexander’s research, and turns them into positive things that have to be done. Sixteen items appear on the list. It would be possible to add more, and this may be desirable if there are particular situations in the company that should be considered. All managers in the workshop are asked to rank 10 of the 16 items. The scoring method is designed to make it easy for all the questionnaires to be aggregated, so that a top 10 for the whole group can emerge. After ranking, they are asked to assess the degree of difficulty they see in dealing with each issue. When producing a total difficulty score for all people on the workshop, it is worth remembering that the appropriate average is of the people who have ranked the factor, not of the number who have completed the questionnaire.

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