Au project-management-seminar-december-2010

Morgan McKinley | Project Management
Breakfast Seminar Report - December 2010

morganmckinley.com

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MORGAN MCKINLEY PROJECT MANAGEMENT BREAKFAST SEMINAR
DECEMBER 2010

INTRODUCTION

This year has been a very interesting time for project and change management. The market has
picked up and projects are back in full swing. Morgan McKinley Sydney held its fourth successful
project management breakfast seminar on Thursday 11th November at the Establishment Ballroom
in Sydney. The event, ‘Growing and Sustaining a Change Management Capability – Achievable or
Catch 22 Impossible?’ and organised by Morgan McKinley’s Project Management team to provide
expert advice from guest speakers, an update on the market and networking opportunities.

At the event, Chris MacDonald and Jacques van Schalkwyk discussed how to bring senior
stakeholders on the change journey and the development of a change operating model.

GUEST SPEAKERS

Chris MacDonald - Independent change management consultant

Chris’ discussion was inspired by his personal experience. He has not undertaken any formal
research or web search, believing you can do that at any time. His intentions were to promote
thinking around setting up and maintaining a change capability.

Chris discussed the context of the morning’s presentation and defined the ‘operating model’ as the
framework of things that need to happen for the successful creation, maintenance, growth and
sustainability of an organisational change management capability. The relevance of this topic is not
restricted to change function leaders. It is equally important for change practitioners, project
managers and hiring managers to have opinions on operating models.

Chris talked through his role as a change leader at AMP and presented the operating model that he
developed for the organisation.

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DECEMBER 2010

The Operating Model

On first inspection, the below operating model may appear simplistic. Chris stated that he simplified
the model to facilitate thinking and discussion, and urged attendees to change, add or delete labels
and boxes to suit their needs. Chris’ detailed slides (p5 onward) address both the ‘obvious’ and
‘not-so–obvious’ points of each element of the model.

Organisation
Sponsorship Business Unit Alignment

Governance
Engagement & Funding Reporting
Supply

Capability
Attract & Retain Develop Grow


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DECEMBER 2010

How the Operating Model Should Work

Most companies assess the maturity of their change management functions against a continuum
from ‘pioneering’ through to ‘mature’, such as the one below. In doing this they are likely to be
overly harsh regarding some elements of the operation and similarly overly complimentary against
some other elements. It is much more useful to assess the maturity of each element as this allows
the leaders to see where the most effort is required. It also allows for the informed planning of the
next steps for each element.

Manage
Sell

Pioneering Mature

Be crystal clear about where your organisation lies on this timeline for each element
of the operating model.

Plan and execute your approach to fit the current state and set up for the next level
of maturity.

Bear in mind, elements of the operating model will mature at different rates.


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DECEMBER 2010

The Operating Model in Practice

Chris talked through an example of what to consider when preparing a change management graph.
The below example shows that less needs to be done to secure a supportive sponsor and more
work is required on reporting and alignment etc.

Manage
Sell

Pioneering Mature

Alignment Attract & Sponsorship
Retain

Engagement Develop Business
& Supply Unit

Funding

Reporting Grow


5

GAN
DECEMBER 2010

Chris then talked through his final set of slides which discussed the model in more detail:

Organisation

Obvious Subtle Really?

You need a sponsor. Ideally someone with interest in “You get the sponsor you
The more senior the better. projects and change across the deserve” – work really
Well regarded is good. organisation, without bias hard at the relationship.
Able to influence peers across towards one division. A link with strategy will
the business and CEO. Someone who has experienced provide surprising
Make sure they have bought change done well – has religion. benefits.
into your approach and plans – Your sponsor needs to advocate
you don’t want them changing the benefits of growing internal
things too much along the way capability rather than buying it.
(interfering).


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DECEMBER 2010

Organisation


Your sponsor’s role will have the The function or team should be If positioned in the same
biggest influence on where the associated with supporting business unit as project
change management function organisational change (projects / management support or PM
resides. re-structures / MAD etc.). ‘pool’, you need to establish a
Ideally it is a part of the clear understanding of the
business that provides other differences:
support services. Same stakeholder,
It should be well regarded for different conversation
quality and value. Accountability (outputs vs.
outcomes)
Delivery risk vs. benefits
risk.


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DECEMBER 2010

Organisation


Regardless of where ‘home’ is EVERY component of the It pays to be paranoid – test
for the change function, develop operating model relies on scenarios well before they play
and maintain good relationships relationships. out and have a ‘plan B’.
with other project support teams Establishing and maintaining Read the tea leaves – listen to
(and their managers): recognition that there is one the corporate mandate delivered
Project Managers source of change management to the various businesses (esp.
PMO capability is central to delivering financials) and make
Business Analysts / quality and value. adjustments to your model to
SME’s You can’t build a portfolio view accommodate constraints.
HR of change if you are not in the Understand short and medium
L&D / OD loop of all change initiatives. term strategies – they provide
Comms insight to the nature of change
Strategy about to hit.
Recruitment / Contracts Take a lead from the ‘mood’
Finance. projected by CEO / Marketing


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DECEMBER 2010

Governance
Supply


Get in the loop – the best place Your relationship with the Different BU managers or
to start is the business case PMO(s) is critical. project sponsors will have
approval process – become a Negotiate sourcing approach for different biases and hot buttons
signatory. when the formal cupboard is towards:
Different BU leaders may have bare including 3rd party Consultants – beat them on
different engagement processes specialists, informal network, price
– find it out what they are. Uni’s etc. Shared services – utilise
Develop a multi-channel Keep a keen eye on your supply their staff as a development
sourcing model for change and demand equation – having opportunity
people including internal roll-over options is a great If all else fails – discount
transfer, secondment, retention strategy for high If it is still just not working
redeployment etc. performers. with someone – provide
Utilise formal and approved Bench time is expensive and an alternative resource options.
facilities (PSAs / HR / Contracts opportunity to do some
Management). maintenance, R&D, training, tool


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DECEMBER 2010

Governance
Supply


Usually perception of value is If charging use the As you move up the maturity
influenced by cost – use realistic organisation’s standard loading curve, budget for and load day
costs in business case – allows for ‘like for like’ rates with as much OPEX or
estimates regardless of actual comparison. infrastructure costs as allowable
transfer of funds. Provide accurate market rates – ultimately you should end up
If not charging, track and report as notes in the financial model – fully recovered.
as if you were. get accurate benchmark data. Try to fund or part fund
Theory points to ROI and % Be prepared to discount (or development for all the team
benefits attributable to change – have tiered rates) – especially (including contractors and
use this in ‘sell mode’ but don’t where there are clear capability consultants).
rely on the stats being available differences within your team. Don’t expect all your sponsors
post implementation. Based on your knowledge of the to be on top of the
pipeline, work with key organisation’s financial
stakeholders at budget time to processes (charging, loading
secure some funding ahead of etc.).


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DECEMBER 2010

Governance
Supply


Be clear on the must do reports: PMs or Sponsors who are new It is very easy to over-engineer
PMOs will have tight to change may not know what to reporting data design and
schedules – give them ask for. Have a template for supporting tools.
useful information on time. CMs to use if they are asked. You will get more accurate and
They will love you for it. If the PM has a template – timely data from people if it is
Each PM will require data review it to make sure it simple and easy to consolidate.
from their CM – the format contains data that is required for Consider adding to or changing
may differ. consolidated reports – standard the focus of what you report
Be aware of corporate or data is more important than depending on the phase of the
group reporting that is used report format. project.
for Board etc. They may Beware of PMs who don’t ask Make sure your people track
ask for a contribution. for a report – they are probably actual time – even if the PMs
The ‘Portfolio View of only reporting the cost of use standard days.
Change’ will come up change – not the benefits.
eventually. Think about
how this might work as you
set up the reporting
structure – even before it is
required.


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DECEMBER 2010

Capability


You want to attract the best Be deliberate in identifying the Induction is important for all new
people – the best for each role competency and experience you people (contractors / perms /
(project). need for a particular role – temps) – take it seriously and
Good people will be interested interview to target these. follow-up:
in and value: Don’t oversell a role or the Buddy / mentor
Role clarity organisation – the promise must Performance agreement
Challenging work equal the experience. Feedback
A solid CM operating model One-on-one support.
The opportunity for
development
Belonging to a community
Recognition
The potential for roll-over
projects.


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DECEMBER 2010

Capability


Personal development Invest time in developing the Investment in development will
opportunities are valued by CM community (CoP) – this will attract the best people, improve
everyone – one of the top provide an internal professional the quality of delivery and
retention factors for high association for all people enhance the team’s reputation.
performers. involved in change. You can then recover the cost
Design a development program Link people up with CMI. by increasing your margin.
that enhances individual, team Peer coaching or more formal
and organisational capability – presentations at team meetings
advertise (and sell) the program will encourage people to attend.
– this also improves the Delegate development of the
reputation of your team). tools – they might then use
Consider a capability them.
assessment (CMI). Don’t forget broader capability
Training in your Change development – especially
Framework should be available. leaders.


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DECEMBER 2010

Capability


‘Grow’ in this context is really It is not necessary to grow the If you provide ‘top shelf’ leader
about organisational capability. number of change managers in training, they will be more open
Growth will come by: the team – but it does help. to sharing resources.
Delivering successful Try to get the change Tap into the performance cycle
projects competencies (CMI) included in to encourage team leaders to
Training permanent the organisation’s competency budget for selected people to
employees model (LMS / PDs / career attend your training. Secondees
paths / development guides etc.) will benefit the most from your
Leadership training
Getting a change intranet site up change framework.
Transfers and can be daunting but will help
secondments grow capability.
Deploying best practice
methods and tools.
Like everything else your
approach needs to take the
organisation from a starting
position to a stated and agreed
future position – this will require
support from your sponsor.


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DECEMBER 2010

Hot Spots

Chris finished with a final slide that summarised areas to look out for and be mindful of.

Work really hard at the relationship with your sponsor.

Change management is a creative process – recruit accordingly.

No two assignments are the same – be flexible and customer focussed EVERY time.

Frameworks are important but not every situation fits neatly.

Relationships – relationships – relationships.

Understand short and medium term business strategy – be one step ahead.

Development initiatives will assist you to attract and retain talent – however the project
should always come first.

Cost models need to be sensitive to the financial culture and charging precedent – know
where your organisation is on the maturity curve.

The portfolio or ‘single view’ of change is highly desirable and usually highly complex –
prepare early by setting up standard reporting from the start.


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DECEMBER 2010

Speaker 2 – Jacques van Schalkwyk

The role of change management is not about getting people to like change (which is impossible in
some situations), but done correctly, it can help individuals to deal more effectively with change.
Change management also aims to minimise the impacts of change on the organisation and its
bottom line.

Change management is a leadership responsibility and involves all facets of the business.
Mobilising the organisation’s leaders to take active roles is vital. This will help employees to deal
with change constructively and will enable the organisation to operate smoothly post-
implementation.

Case study – ANZ

Jacques gave a practical example of his experience in change management by discussing a project
he led for ANZ in 2008/09. ANZ went through a massive restructure and de-layering exercise that
affected 40,000 employees globally; a significant change for the organisation. Jacques was asked
to lead the change management project at a time when change management was poorly
understood in the company and ANZ’s history with change management was limited. ANZ’s most
recent employee engagement survey indicated that change management was handled poorly. Key
to the success of the project was ensuring all stakeholders had a proper understanding of the role
change management could play within the organisation.

In preparing for the project, Jacques considered the example of a restaurant that went through a
transformation exercise. Everything was changed appropriately down to payment systems and
even the décor. The experience was fantastic but when customers were served, the waitress was
rude which upset them. The result was that customers did not return. The waitress’ employers
thought she was wrong to behave in this way and the only solution was to fire her for misconduct.


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DECEMBER 2010

However, Jacques felt that what they really needed do was look at whether she was brought on the
journey of change – was she given training in new skills, did she continue to get paid on time, were
there issues with other colleagues that might make her behave in a way that was detrimental to the
business?

The role of change management is to ensure that the business impact of the change project is
managed effectively. This means minimising the impact of change on individuals to reduce the
likelihood of any business risk as early on in the process as possible. The potential business impact
to ANZ was enormous due to the fact that it affected 40,000 staff in several countries, as well as
other stakeholders. Significant market and reputational risk was therefore involved.

ANZ had a small core team of five change managers and a larger change management network –
however this was not enough to reach 40,000 employees. Therefore the strategy from the outset
was to spearhead change by getting leaders to manage the change process. As well as leading,
they needed to roll up their sleeves and get involved to minimise the impact of the transformation
on the organisation and its people. The role of Jacques and his change management team was to
equip and support leaders in doing this. They used a step-by-step process to implement this top-
down approach at ANZ:

Step 1 – Start at the top

It is crucial to ascertain and understand the level of commitment at senior level. There is a
difference between formal and informal behaviour i.e. what is agreed publicly in meetings and what
people will actually do in practice.

Jacques believes that the seven most critical corner stones that need to be in place for a successful
business transformation can be determined by conducting one-to-one structured interviews with
senior executives.


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DECEMBER 2010

These interviews should allow change managers to ask the following questions:

1. Do you support the business case?

2. Do you buy into the vision?

3. Do you support the change strategy?

4. Are you confident that the projected business benefits will be realised?

5. Is the program set up for success?

6. What is the perceived alignment of your peers?

7. What is your own personal alignment?

It is important to note that there are often people who are considered to be completely supportive of
the change, however if they were in charge of the project they would do things differently.
Therefore, the change manager needs to have an action plan with true buy-in and must not take
top-down support for granted.

Step 2 – Mobilise and equip leadership of the organisation

ANZ’s top 1,300 leaders were critical to the company’s transformation process. Jacques used a
simple change management framework which helped to manage two major factors affecting the
implementation of the project: rational response versus emotional response to the concept of
change.

He discovered that the challenge for leaders in the business was to get the balance correct – there
was a need to understand why, what and when as changes took place across the company.


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DECEMBER 2010

Understanding the emotional response to these facts required analysis on three levels:

1. Self – it starts with each leader, before being able to help others understand

2. Individual – working to help others in the company gain clarity on the scope of the project

3. Themes

Jacques and his team used a ‘change leader manual’ throughout the ANZ project which included
the six steps outlined here as well as practical guidelines and tools. Every leader in the organisation
worked through all six steps to deliver change in their part of the business with additional resources
available to coach on an ongoing basis. The difference was that they were not being asked to ‘talk
up’ or ‘sell’ the project – instead they were asked to take practical action e.g. answering key
questions such as ‘what do your people need right now?’. This gave leaders a real role in the
change management process.

Talent management was also a key focus; it was important to ensure employees remained calm
and were continuously well-managed throughout the process. Within the toolkit of resources
available to leaders, a script was provided of how to conduct conversations with concerned
employees. The change management team at ANZ asked leaders to take on the role of change
mentors in developing the organisation’s human capital.

Step 3 – Assess and manage the individual

To ensure effective understanding of change at the individual level, Jacques’ team used a tool to
practically assess the impact on direct reports and to help the business leaders in managing staff
through it.


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DECEMBER 2010

Step 4 – Guidelines for change conversations

The toolkit provided guidance on how to manage individuals by engaging in one-to-one
conversations with them to explain job role changes that would evolve from the transformation
project.

Step 5 – Re-mobilise teams

It is necessary to provide clear organisational guidelines and facilitate a team exercise immediately
after the change project has taken place.

Step 6 – Transition and handover management

The change leader manual used by Jacques and his team provided advice on how to manage
change across the business when an external change management team takes over. The manual
included advice such as:

• Documents covering strategy and change should not get lost in the process of handover.

• The process should start by focusing on the Board of Directors first. They need to continue
the change work done by leadership through various activities which provide support to
employees.

• Leaders should enrol themselves in workshops to manage themselves through the change
process. ANZ used an intranet site offering practical guidelines, hints and tips on how
employees could help themselves during the change project.

• Ensure that senior stakeholders are engaged. In the ANZ project this involved:

o Briefing the Board on a weekly basis and HR general managers on a regular basis.
They also held monthly one-to-one meetings with the HR team so it could understand
what was being undertaken, why and when to support the managing directors and
their teams.


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DECEMBER 2010

o A change management update was also sent to the Chairman to reassure him that
the staff and organisational aspects of the business were being taken care of.

o Weekly meetings were held with the group Managing Director (who acted as a project
sponsor) to discuss the project strategy alongside the HR Director.

o The progress of leaders was tracked and reported against the manual on a regular
basis to ensure sustained activity and support. This clearly indicated which steps
were not being followed.

o Leadership in the organisation needed to know what the change plan was and how
each of them could have role in it. This had to be done proactively without leaders
having to guess how they should get involved.

o It was important to create situations where top leadership could demonstrate they
were actively on the journey e.g. a leadership conference.

o The change management team provided a scripted interview for the HR Director to
talk through with top members of the Board to demonstrate that executives were all
on supportive of the project. The conversation covered issues such as ‘how can we
lead people to be more change resilient?’ and ‘what should we as leaders do to ignite
the spirit of our workforce?’

• Supporting leaders and people beyond the change effort. This involved designing a ‘new
beginnings’ workshop which was effectively a mini-strategic planning session to support the
communications process.

Summary: critical success factors

• Leaders need to understand the purpose of change management and the role they play in
the process

• The change process needs to be understandable with a clear roadmap

• Change leadership should be practical – use tools and coaching


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DECEMBER 2010

• Leaders must be engaged throughout the process

• Change managers should measure and report to key stakeholders on a regular basis;
comparing the progress of different divisions or departments to ensure transparency and
identify issues

• Change leadership should always be driven from the top

• Most importantly – do not over-plan and/or under-deliver

Q&A SESSION

Q. Helen Campbell – Change Management Institute

When the Change Management Institute was set up five years ago half of all members were
contract workers and half permanent. Helen expected this to change over time, but it hasn’t. Why is
this?

A. Chris MacDonald

A 50/50 split within the change management community is good. I like to adjust my team depending
on the business set-up and the environment. Generally it’s better to have more contractors to allow
the business some flexibility.

For change management practitioners, it’s no surprise that there is a split between contract and
permanent workers. On one hand, there is a genuine need for specialist contractors and
consultants who come from a background where you can pick and choose people that are backed
by an infrastructure of change capability. However, equally sustainable internal capabilities are also
important. This kind of split is indicative of where the the market for change management
practitioners is and probably shouldn’t change right now.


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DECEMBER 2010

Q. Paul Webster – CommInsure

How long did ANZ carry on before they felt the project was truly embedded?

A. Jacques van Schalkwyk

Corporate communications were also involved in the project, which helped as it was a sensitive
project with a very specific start date. It required ample time to prepare the entire project as well as
time allowed for the initial internal announcement. There was an opportunity to engage the press
office to provide input into how the messages of the change project would be communicated to staff
across the business and to review them from an organisational change perspective.

The communications cycle was frequent in the beginning. For example, ANZ’s CEO communicated
to all staff on a fortnightly basis. The change management team provided support materials to the
Board and Managing Directors to ensure communications were leader-led and not too clinical.
There was a strong focus on face-to-face communication and consistent messaging. It was
important that the business had a head start on what staff might read in the press by ensuring that
everybody had the most accurate internal information first.

This level of communication continued for several months after the project was formally completed,
to raise morale and restore confidence across the business.

Q. Helen Campbell – Change Management Institute

Has he left ANZ in a better state than he found it?


Feedback from ANZ was that it was an example of good, solid, constructive change management.
This came from all leaders who actively participated as well as the internal change management
team. ANZ created a Global Head of Change Management role after the project was completed.


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DECEMBER 2010

Q – to both speakers

Post implementation – is there a minimum or maximum time that can be recommended if
organisations don’t want to support a project for long? Should three months be a minimum?

A – Chris MacDonald

Change has to be measured and embedded to ensure it is sustainable once it has gone live. When
I put in bids for funding past ‘go live’, three months is a typical timescale. One solution for lack of
follow-through is that sustainability needs to be pushed back into the project before it goes live, so
a lot has been done before the end date.


Change managers need to push to keep the project alive. Some project managers will look at the
finishing line and may overlook budgeting for the period after the main project is finished. There
should be a strong business case for extending the project beyond the core transformation to ‘tidy
up’ and make sure the business is set up. It won’t just happen, it needs to be engineered and made
to happen.

Q. Nadene Serman – Serman Consulting

What are the lessons learnt from ANZ – what would be done differently if doing it again?


One of the key lessons learned was that managing change can’t be successful without tapping into
all the different mechanisms within the organisation e.g. communications, leadership etc. They
need to be allies throughout the process. Equipping those allies to contribute in a constructive
manner is crucial to success, being evangelical is not enough – give key people a role will help
them contribute. Define the role and support them in executing it. Make sure they are told
everything will be done to ensure they get a suitable role in the project and in return invite them to
help by becoming a role model within the organisation. A well-defined role will help get people on
board – something that the change management community needs to work harder at.


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DECEMBER 2010

***

SPEAKER BIOGRAPHIES

Chris MacDonald
Chris is an independent consultant whose recent assignments include Westpac and AMP.

Jacques van Schalkwyk
Jacques has over 10 years’ experience in change management and designed the change
management approaches, frameworks and methodologies of Westpac, ANZ and APA. He also
authored the book “On Track to the Top”.


Level 10, 17 Castlereagh Street

Sydney, NSW 2000

Tel: +61 (0)2 8986 3100

morganmckinley.com

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