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HCC Demystifying Change Management Presentation 9.27.11



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  • 1. Demystifying Change ManagementWhat HR needs to Know to Produce Organizational ChangeScott LeuchterPartnerCamden Delta ConsultingChicago Human Capital ClubSeptember 27, 2011 Proprietary & Confidential
  • 2. Agenda• Introduction• The Burning Platform• Goals for Today• The Psychology of Change• Organizational Change vs. Change Management• Change Reactions & Management Considerations• How to Asses Change Readiness Proprietary & Confidential 2
  • 3. Grounding Our DiscussionThe human side of change is the “soft stuff”, and the soft stuff is a lot harder than the “hard stuff” Proprietary & Confidential 3
  • 4. Introduction• A little about me• A little about what I do• A little about Camden Delta Consulting Proprietary & Confidential 4
  • 5. Camden Delta Consulting Camden Delta is a management consulting firm that provides Strategic ChangeManagement & Human Capital solutions that support organizational transformation Strategic Workforce Integrated Talent Planning Management Strategic Organizational Change HR Strategy and Leadership Organizational Development & Effectiveness Coaching Proprietary & Confidential 5
  • 6. The Burning Platform• Organizational Change is omnipresent and inevitable feature of organizational life• CEO’s rate speed, flexibility and adaptability to change as their top business challenge since 2004• 31% of Board of Directors cite the failure to effectively manage change as the top reason for firing CEOs Proprietary & Confidential 6
  • 7. The Burning Platform• Strategic Imperative: 70% of all organizational change initiatives FAIL Type of Change Median Success Rate Strategy Deployment 58% Recruiting & Downsizing 46% Technology Change 40% Mixed Collection of Change Efforts 39% TQM-Driven Change 37% Mergers & Acquisitions 33% Re-engineering and Process Design 30% Software Development and Installation 26% Business Expansion 20% Culture Change 19% ALL 33% Proprietary & Confidential 7
  • 8. Goals for Today• Understand the psychological factors and considerations that determine change• Understand the difference between organizational change and change management• Understand the different reactions to change• Provide a framework to help you assess readiness and manage change in your organization Proprietary & Confidential 8
  • 9. The Psychology of Change Proprietary & Confidential 9
  • 10. The Psychological Reality of Change• People are not rational or linear• People are loss averse• People make decisions through peripheral processing• Decisions to change are anchored on prior knowledge• What people Think and Feel will determine how they will Behave Proprietary & Confidential 10
  • 11. Psychological Equations for Change A+C=B CG = (f) IB + GB Proprietary & Confidential 11
  • 12. Case Study in Change• Who • Fortune 500 “Worlds Most Admired Companies” • Global Financial and Professional Services Firm • Human Resources Function• What was the change?• What was the rationale?• What happened?• What did they do?• What happened after that? Proprietary & Confidential 12
  • 13. Key Definitions• Change • v. to make, become or behave DIFFERENTLY• Organization • a TOOL used by PEOPLE to coordinate their ACTIONS to obtain something they desire or value• Organizational Change • The PROCESS by which organizations MOVE from their current state to some desired future state to increase their effectiveness.• Change Management • The PROCESS of planning, implementing, and evaluating change within organizations or communities Proprietary & Confidential 13
  • 14. Organizational Change vs. Change Management Underlying Theory Role of Change Intervention Agent StrategiesOrganizational -Psychology -Facilitator -Not traditionally linkedChange -Process Consultant to strategy -Focus on one component/unit at a time -Change attitudes to change behaviorChange -Psychology -Content Expert -Driven by strategyManagement -Sociology -Process Consultant -Simultaneous focus -Economics -Member of cross on several areas -Project functional team -Leverage models to Management -Part of project change actions organization Proprietary & Confidential 14
  • 15. Change Management ModelsChange Component Frequency Percentile RankUrgency and need to change 16 59% 1Clear vision 16 59% 1Assessing organizational readiness 15 56% 2Planning the change 15 56% 2Metrics, monitoring, controlling 15 56% 2Change management structures/delivery 14 52% 3Short-term wins 14 52% 3Building Consensus 12 44% 4Context for change 11 41% 5Communication 11 41% 5Consolidation 11 41% 5Putting resources in place 9 33% 6Clear empowerment and team authority 6 22% 7Leadership 5 19% 8Sponsorship 4 15% 9 Proprietary & Confidential 15
  • 16. Change Measurement• What do you measure? • Subjective • Objective• When do you measure it? • Before • During • After• Who do you measure? • Employees • Customers Proprietary & Confidential 16
  • 17. Change Reactions• Stress / insecurity / psychological adjustment• Readiness / preparedness to change• Performance / coping with change• Receptivity to change• Attitude toward change• Openness to change• Intentions to resist / willingness to cooperate• Innovation / change adoption• Commitment to change / status quo• Adjustment to change• Perceived benefits of change for learning• Resistance to change Proprietary & Confidential 17
  • 18. Change Resistance• Top reasons why management resists change and creates obstacles • Lack of awareness of why the change is happening • Lack of involvement in the change process • The change is not aligned with their operational objectives • They anticipated negative impacts to their day-to-day operations • They fear loss of control or power Proprietary & Confidential 18
  • 19. Change Resistance• Top reasons why employees resists change and creates obstacles • Lack of awareness of why the change is happening • Perceived negative impact on their current role • Past performance of the organization with change Proprietary & Confidential 19
  • 20. Management Mistakes• Most common mistakes made by managers and supervisors • Ineffective communication with employees • Actively resist the change themselves • Ignore the change Proprietary & Confidential 20
  • 21. Management Roles• Most critical roles for manager and supervisors in times of change • Communicate with direct reports about the change and why the change is happening • Demonstrate support for the change • Coach employees through the change process • Engage with and provide support to those driving the change initiative • Identify and manage resistance • Assess change readiness Proprietary & Confidential 21
  • 22. Change ReadinessAssess Analyze Act Proprietary & Confidential 22
  • 23. Assessing Organizational Readiness• Assess your organizations readiness for enterprise implementation • Assessment must be based on the Principal of Compatibility • Before, During, After • Alignment with business strategy • How does the organization view change? • What does success look like? • What is the organizations history with change? • How much change can we handle and when? • What are the main barriers and challenges to this change? Proprietary & Confidential 23
  • 24. Assessing Your Organization• Assessment Methods • Survey / Questionnaire • Interviews / Focus Groups • Observations• Analyze • Content / Statistical Analyses • Identify and challenge assumptions• Act • Share analysis and results with senior leadership • Make recommendations planning decision(s) based on the data • Share the information and plan with employees Proprietary & Confidential 24
  • 25. Conclusions• Appreciate that change is a human psychological phenomenon experienced by individuals and influenced by groups• Recognize that change management models neglect the psychology of change and adjust accordingly• Assess employee readiness prior, during and after a change event• “To change or not to change, that is REALLY the question” Proprietary & Confidential 25
  • 26. Goals for Today• Understand the psychological factors and considerations that determine change• Understand the difference between organizational change and change management• Understand the different reactions to change• Provide a framework to help you assess readiness and manage change in your organization Proprietary & Confidential 26
  • 27. Thank You! Scott Leuchterscott.leuchter@camdendelta.com www.camdendelta.com 773.255.1632 Proprietary & Confidential
  • 28. ReferencesSlide 6: IBM. (2002, 2004, 2006, 2010). Global CEO Study;Slide 7: Smith, M. E. (2002). Success Rates for Different Types of Organizational Change. Performance Improvement, (41) 1, pg. 26-33Slide 13: Jones, G. R. (2007). Organizational theory, design, and change. Pearson-Prentice Hall.Slides 14: Martins, L. L. (2010). Organizational Change and Development. APA Handbook of Industrial and Organizational Psychology, 3, pg. 691-727.Slides 18-21: Prosci. (2009). Best Practices in Change Management Benchmarking Report Proprietary & Confidential 28