Feature

posted 3 Aug 2007 in Volume 10 Issue 10

Masterclass

Change management

Andrew MacNeil has more than ten years experience in change management with drinks giant Diageo. In the first of a two-part masterclass, he introduces the subject and just what it is that makes change management so challenging.

By Andrew MacNeil

“Change is inevitable. In a progressive country change is constant.”

Substitute the word ‘company’ for ‘country’ and most people in any modern organisation will nod and sigh deeply (although few will know that the quotation comes from British Prime Minister Benjamin Disraeli and was made way back in 1867 – plus ça change, plus c’est la même chose).

‘Change management’. What an ambiguous term it has become!

Setting aside the uses for software version-control and other quality-related applications, it has several

other interpretations in business. Some use it to simply refer to training and communication in business projects, some for all the people-related aspects of a business challenge. Others use it to refer holistically to all the activities necessary to make a successful change to some aspect of a business.

As a result, the term has become so ambiguous, and its use in job titles and curriculum vitaes (CVs) so broad, that a recruiter I recently spoke to confessed that he immediately ignored any CV with those words in it. This was a rude awakening for me as I have had the phrases ‘change manager’ or ‘change management’ in my job title for much of the past ten years.

Change management, interpreted as ‘the skills (and methods) that enable successful planning and management of the business-change agenda, on behalf of the accountable executives’, is a necessary part of organisational and business success. This definition implies a holistic approach – the whole agenda, not just some parts of it – and I shall use the phrase in that way for the remainder of this masterclass.

I italicised some words in this definition to emphasise key points:

Skills

Change management requires a combination of important skills; it is not a challenge that everyone would be interested in, or good at;

Successful planning and management

We want change to be successful, and that requires rigour and planning. It doesn’t just happen by itself or succeed as a result of serial fire-fighting;

On behalf of the accountable executives

The leaders of the business being changed remain in charge during the change, the ‘skilled’ changemanagement professional acts on their behalf, with their authority, to make the change happen successfully.

Why is business change so hard?

Before we try to answer this question, let us address one common experience.

Business change is hard – very hard. It seems unnecessarily difficult in most situations, but why is that so? My experience is that it is our fault – we humans. We are creatures of habit and are adept social operators. We like routine and we create some of the most sophisticated social communities on Earth based on familiar routines.

First, resistance to change is a standard human instinct – indeed, humans are poor at dealing with virtually any alteration in their expectations for the immediate future, even when they could be regarded as ‘good’ rather than ‘bad’. For example, just read the many newspaper reports about jackpot lottery winners that highlight how their ‘lucky’ wins have not necessarily improved their life.

However, for most people living from day to day, earning money to support themselves, their families and their dependents, gives a structure and meaning to their lives and suddenly removing that purpose can be unwelcome and uncomfortable. My point: even unambiguous changes for the better can cause resistance and great discomfort among staff.

Second, the modern organisation has become hugely complex. Far from simply representing logical arrangements of activities into processes with clear roles and responsibilities, each playing a defined part in its smooth operation (like Adam Smith’s pin factory, for example) we divide people up in a traditional way based on their ‘craft’, we create a complexity of decision making and information-sharing circles in our committees and working parties. We impose information systems that cannot fit into this complex model and so create further layers of confusion.

Things get done not because that is the way it was intended, but because that is the way people have found to make it work. How often do you find that things only happen because someone knows ‘the right person to talk to’ in accounts, human resources, purchasing or elsewhere?

If that were not enough we expect – even require – everyone to have career plans, which means they have to improve their skills managing the organisation (thereby reinforcing the comfort with complexity) and to compete with each other for recognition and career advancement.

However, such challenges can be met by the application of some straightforward methods by people with the right skills. At drinks giant Diageo, a dedicated change-management team and many other committed individuals have used such an approach to deliver hundreds of successful business changes – of all sizes, in all parts of the business.

What skills?

Everyone would agree that you need the right skills to do a job properly, and yet companies can be hypocritical in actually putting this into practice. I have often seen a business-change project held up as a ‘development opportunity’ for someone. We take a difficult challenge and then assign someone with unproven skills and no experience to tackle it.

The skills needed for good change management are common – but not everyone has all of them, in strength. I believe (and have much evidence to support this belief) that the skills needed are as follows:

Commercial awareness;
Communications skills;
Flexibility;
Innovation;
Interpersonal skills;
Personal motivation;
Planning and organising;
Problem solving and analysis.

People with these skills can go into a business and work with unfamiliar people to find out what it is they need to achieve and where they are starting from. They can work out how to get there and plan the route that the team ought to follow. They can lead the project team, facilitate resolution of the inevitable conflicts and deal with uncertainties and ambiguities.

They can maintain a focus on the organisation’s commercial imperatives, leading accordingly, while being supportive and empathetic to those who are struggling with what is happening.

They have the courage to have uncomfortable conversations with senior people in order to make them successful. They may not quite be able to ‘leap tall buildings and run faster than a speeding bullet’ as well, but such people do exist in every organisation and they enjoy the challenge of what they do.

Right skills – what methods?

There are many different methods and approaches to business change, usually based around the same set of truths and theories; each has worked well for its discoverer and successful followers. (Those who do not succeed invariably blame the method, rather than themselves, and will switch to an alternative one!)

My intent is not to compare and contrast the range of potential approaches, but to explain what I have found to be the four foundation stones for success in every type of change that I have dealt with. I will introduce these in this article and explain them in more detail, with examples, in part two next month.

Before I start there is one common model that I do not agree with at all and that is the commonly asserted belief in the importance of getting ‘buy-in’ to the new idea or solution. It may not be intended as such, but it is a most unfortunate metaphor: ‘buying’ implies ‘selling’, which implies negotiation (over price, service, product or whatever).

It implies ‘consumer choice’ – the buyer can always walk away. I do not believe that the shareholders or other owners of our businesses would welcome the thought that we spend our time negotiating with employees over what they are prepared to accept.

Nor do I advocate the ‘JDI’ model (just do it!) where we naively expect them to do what they are told when they are firmly told. I believe, as I will explain below, that we should explain with empathy and understanding, and try to address people’s reservations and concerns and help them to overcome them (while keeping the ultimate objective in mind and outcome unchanged).

Foundation one: Sponsorship Every change method cites sponsorship as a key fundamental. Successful change needs overt, committed and appropriate sponsorship to be successful. Someone with authority must need to want it to work and be prepared to stand up and say so – they must not just provide vocal support, but must act like they believe it, too.

Furthermore, it cannot simply be someone just senior enough and political enough. Organisational communities will have well-established mechanisms for ‘directing’ employees to the right behaviours – most notably with the corporate objectives and appraisal system.

This ritual is designed to determine the activities considered important and to recognise and reward them. It usually follows the organisational structure that has been defined. The choice of sponsor needs to be informed by, and in sympathy with, this approach or the unfortunate (non) sponsor will find themselves fighting every inch of the way against the organisation’s own measurement system. They may succeed – but it is an approach fraught with risk.

Foundation two: The solution Imagine the difference between setting out to implement a new way of doing things that is incomplete and has hidden faults, compared to one that has received more time, care, attention and all-round rigour. How much effort will it take to progress, filling in or working round the shortcomings, losing credibility each step? Why should we expect people to embrace a new way of working that they can clearly see is flawed?

Yet we often proceed with ideas that are flawed from the start – because we have run out of time, budget and/or the will to do it right. As a result, for example, systems go live with known faults; service centres measure and reward throughput, not service; and, sales bonuses are based on volume and not revenue.

Complete, robust, credible – three quality criteria for a good business design. Complete in that it addresses processes, skills, organisation, culture, systems and measurements/rewards; robust in that it is broadly fault-tolerant and can be relied upon; and, credible to the employees who will be expected to make it work.

Foundation three: Look after people I proposed earlier that people will always be resistant to change – it is human nature. But it is not a question of how to prevent people resisting it, nor should it descend into a battle of wills (yours against theirs). Rather, you need to help them come to terms with the proposed change. That means acknowledging that there will be a natural resistance, but that it will pass more quickly with correct supporting interventions.

Imagine that you are on the receiving end of a change-management programme – which approach would you prefer? On the one hand, you might be told how necessary this is to the business, how good the new approach will be, how much effort and money has already been expended upon the solution.

Compare that, on the other hand, with a firm, but sympathetic approach that explains up-front what the impact will be on your role and what is expected of you in the process. The change manager understands that you will naturally have reservations and be inclined to be resistant, but asks what can be done to help you accept the change, but is firm in the belief that this is the right thing to do for the business.

The first approach will make individual employees feel like expendable cogs in the machine – unimportant and, frankly, standing in the way of progress. The second puts the individual employee at the centre of change management: they will not be allowed to stand in the way of progress, but they are being offered help to adapt.

Foundation four: Organise to deliver Business change is best approached using a project (or, in ambitious cases, a programme) yet many organisations resist this approach. To be fair, this is not always the case. I have met people from many organisations who genuinely embrace projects as the way to get things done. However, I can say from experience that there is frequently much resistance to the project approach.

Projects can be seen as bureaucratic and cumbersome, regarded as arcane practices that create work for project managers (of course), but which cast a death sentence on otherwise successful careers and provide a refuge for people in the last days of their employment before retirement or a long-anticipated redundancy (the ‘special projects’ syndrome). The project team, in other words, is frequently full of deadbeats and dead wood, which is not exactly a recipe for success.

People frequently advocate ‘getting a group of people together’ and creating a ‘working party’. They will work part-time, meeting from time-to-time to solve the problem in hand.

Be that as it may, the opponents of projects nevertheless miss the real reason for their need. Business change necessarily means doing something that has not been done before. Line organisations (and that includes working parties designed and created to undertake fundamentally repetitive activities) are not suited to handle situations that they have never faced before.

These situations require management of (unfamiliar) deliverables, changes to scope, resolution of issues, acknowledgement and action against risks. They are best dealt with by full-time attention (part-time effort simply reduces pace and increases risk).

Because of the unknowns and uncertainties they require a higher degree of sharing, communication and mutual support between team members than many people are used to. A properly mobilised project has all these attributes. Business change needs a project approach because it has the right tools to deal with the challenges.

Business change is difficult because of the hidden complexities of companies. However, it does not require esoteric or unusual techniques to deliver it successfully. Straightforward methods in the hands of people with the right skills can prevail. In the next article, I will explain these methods in more detail, illustrated with examples.

Andrew MacNeil was formerly head of change management at Diageo, the world’s largest drinks company. He is now a freelance consultant specialising in successful business change. He can be contacted by e-mailing armacneil@gmail.com.