Jason West and Joe Ales at river bank

Joe Ales & Jason West

Season 2: Episode 3 – Manage Business Change

S2Ep3 – change management

Joe Ales: Welcome to the Underscore Transformation Podcast. My name is Joe Ales.

Jason West: And I’m Jason West.

Joe Ales: Today we are talking about business change. Change is, by its nature, uncomfortable. Our initial reaction to hearing about major change is rarely positive, even if the change is conspicuously positive to us. We need time to process it, work out what it actually means, discover more about the change, then reach an emotional accommodation with what’s about to happen to us. And the more time and resource we can dedicate to helping people through this change process, the more likely the change will stick. Some feedback we get from business leaders, even if they look back on successful transformation programmemes, is that they wished it spent more time and budget on managing the people elements of change. So now that your budget has been approved and you’re raring to go, Jason what’s the first thing to do or consider when it comes to managing change?

Jason West: I think the first thing that you want to do is go out and hire a change manager; and do this now. Do it right now at the start of the project; don’t wait just before you’re about to go live. Hire this person now. We typically recommend that you do hire this individual externally, so bring in a contractor, or consultant, or somebody with a wealth of experience. Because they can bring tools, and expertise, and knowledge about other organisations and multiple change programmemes; about what worked. In some organisations, they have in-house change management offices, with these types of people in them, which is great. If you have access to these experts, use them. But even if they do exist in your organisation, they can be really quite constrained because everybody wants a piece of them, so there’s a reasonable chance that you are going to have to go external for this. One thing we wouldn’t recommend is resourcing this role internally, with an enthusiastic amateur. It’s so important to your overall success. This isn’t just implementing a new piece of technology, or a change to process; this is transforming your whole function. People change is going to be central to the success. So even for the smaller organisations, if your budget can’t quite stretch to a full time change manager, make sure that your programme manager or some other member of the programmes team has this expertise. If one of these team members has the experience, it’s really critical that they have got the capacity to be able to do the job they need to do around the change elements of the programme. From a programme sponsors perspective, you’ve really got to satisfy yourself that the programme team has got the skills, the experience, but the capacity as well, to manage the people change. If there any doubts that as a sponsor that you’ve got capacity or capability constraints within your programme team around change management, you really need to address this as soon as humanly possible.

So, let’s say you’ve got your change manager on board. The first thing they need to be doing is working really closely with the project managers that are managing or planning out the detailed changes that are going to happen, around operating model, around process, around technology. And they need to put change management plans in place, in parallel with those project managers. That close collaboration between change and project is essential. At the programme level, you’re really looking for those key moments where your programme is going to touch various stakeholder groups. And you need to be mindful about how are they going to be engaged. You need change management plans at project level, but also at the overarching programme level. And when we think about those kind of main touchpoints in a programme, it would be the kick off meeting, it could be multiple kick off meetings, and we’ll talk about that; design workshops; any sort of technology prototype reviews, those sorts of sessions; operational steering committee meetings; change agent network meetings; user acceptance testing; model office simulations; consultation, if you’re making changes to the operating model, there is consultation to consider. Obviously, there are further touch points as we get into transition, and that whole piece around operational readiness and training, and all that stuff. But we’re going to cover that in a future checklist, so for each of these touch points there are some really important considerations, but we’ll just focus on kick off now, I think that’s a pretty good one to start with. And it is one of the most important ones, in actual fact, when it comes to the build phase, because it sets the tone, and the level of priority that people are going to place on this programme. We’ll use this as an example, but you can apply the thinking to any point that your programme is going to touch a stakeholder group, and you need to think about how you’re going to engage them at each stage. So the first consideration is: what’s the outcome? What are you trying to achieve here? What’s the outcome we’re seeking to achieve from engaging this group of people or this individual? For a kick-off meeting the first thing is to inform people; they need to be aware that a change is coming, and they need to understand why. They also have got to understand what’s the relative strategic priority of this programme over the other four that are happening, over my day job, over the boss’s pet project. Having that clarity is really key. They also need to know what’s going to happen, what to expect and, most importantly, I think is: what can I do as an individual to affect the outcome?

Your aim should be for the majority of people to feel like the change needs to happen, and that they can influence the outcome. The worst thing that you can do is instil a belief in people that all the major decisions have already been made. If you do, you’re in for a really bumpy ride. At best, you’re going to end up with really demoralised teams who are going to ineffective in their day jobs. At worst, you’re going to have people who react negatively, and find lots of inventive ways of resisting the change that you’re trying to put in. So getting the right balance of telling people about what’s going to happen, but also listening and receiving information back in, is really key, and we’ll get onto that in a bit. The second consideration is really about who should attend.

Joe Ales: Hopefully, you have engaged the organisation and a broad set of  stakeholders in scoping out the change. If you haven’t, this is the perfect opportunity to engage the organisation as broadly as possible. We have noticed, in some cases, there’s a bit of reluctance from some of the sponsors on engaging the business too widely. The fear, I guess, of setting expectations that change is about to happen, and a willingness to follow up the programme plan or change plan that communicates the outcome of what you’re trying to change just before you go live. In that scenario, change isn’t change, change is just the comms channel. If you do that, you’re bound to fail; your programme’s not going to be successful. You’re not going to change hearts and minds of individuals to do things in a different way, and the organisation will feel that change has been imposed on them, to your point Jason. So this is why the kick-off meeting needs to happen, and it’s really important that they happen with a broad set of stakeholders; so functional individuals across the organisation. They have got strong opinions on how things should be done in the future, or a strong point of view; people that actually might be resistant to change; have your suppliers involved in these conversations; any critical stakeholders, have them involved in conversations; have your functions – your finance, your operations, your business representatives, even your sales team if you’re doing transformation, your procurement team – those involved in your supply chain. People that are going to be impacted by your change – involve them in your kick off. Describe change and create a call to arms really; this is an opportunity for people to get engaged with the programme. And then make sure that your programme structure includes these relevant stakeholders in the various work streams, and use the change management workstream, and the change manager to support and help guide you through the comms and engagement activities with the various stakeholders. And keep them warm throughout. This is not a one off exercise; it’s not a one-off engagement exercise. It’s continuous engagement.

Jason West: And this is where your plan needs to come in here; your engagement plant. Because the other thing that’s really important is to invite everyone from your function. If you’re transforming finance, invite everyone from finance to attend as far as you possibly can, get them together in one room. Now, for global organisation with functions of 250 people, this can be a real challenge, but as far as humanly possible, you want people in the same place, hearing the same message, doing stuff together, working on the problem. That’s not always possible and you’ve got to work with the constraints that you have. But if you are running multiple kick off sessions, then it’s just worth considering how you go about doing that. Depending on the sensitivity of the message, and the culture of the business, it might be fine to have a big kick off, and then in a video conferencing, or putting stuff out on the intranet. But that does tend to lead to a bit of a “them and us” mentality, where the people in the “core” country get one set of messages, one experience, and everyone else gets so second rate. So either country by country kick offs, which we’ve done previously. In which case you’ve got to think about who delivers which message in that scenario. Or you have a core kick off country, but you put project team members out in the other countries, so that you can run the engagement and the workshop sessions that are vital to an effective kick off, and we’ll come on and say a bit more about that.


Jason West: So that’s the attendees. Then there’s the people “on stage” if you like. You have got to think very carefully about who’s best at delivering which message, and you’ve got a number of different messages that need to be delivered. Anything that’s around the overall business context: the case for change, what needs to change, planned activities, and how people can get involved are slightly different messages and you need differently people to deliver them. So wherever when you’re setting business context get the CEO to stand up on stage.

Joe Ales: If it’s important to the CEO, it will be important to the business.

Jason West: Absolutely. If you can’t physically get them there to do that business context and their strategic perspective, then a pre-recorded video is good, and good is better than the not. But ideally you do want that demonstration of executive sponsorship in the room. When it comes to those regional kick offs, having regional general managers or country CEOs doing their bit as well, shows that real local buy-in. Global projects or programmes can often suffer from a corporate head office saying “I’m here to help” message but not feeling it. But having those local leaders involved helps sell it; you get the CEO’s perspective and then it’s the local country leadership team putting it in their unique perspective on it. That really does help show really well-aligned sponsorship. Anything that’s about why this is happening, and what’s about to happen, it really needs to be the leader of that function. So, if it’s finance, it’s the CFO. If it’s HR, it’s the CHRO, or whatever the job title is. The key thing there is that it’s really demonstrating the importance of this change, to them as an individual, and what they’re going to do about it.

The detail around the plan about what’s going to happen, that approach piece, could be your transformation leader. We talked about that permanent person that’s on your team and accountable in a programme. A programme manager or programme director that you bring in from outside should probably be involved in delivering that, but the key thing here, is really just think about how who best delivers those messages.

And the final consideration, really, for any type of engagement you have with groups of stakeholders, is making a decision about: is this a transmit one way and you just need to be informed? Or have we got an opportunity to seek genuine engagement; a two way conversation. You’ve got a large number of people sat in a big hall somewhere, that’s an incredibly costly exercise, so just talking at them for half a day and showing them some PowerPoint is not a good use of everybody’s time. You really do want to get input, so really thinking through and planning a series of working sessions, with different people, different groups, getting them to provide their input and feedback is really key. And it can massively help your programme to tap into all that tacit knowledge that people have, and it also makes them feel like they can influence what’s going to happen, to genuinely influence what’s about to happen to them.

Joe Ales: Yes, we’ve run exercises in the past, where we’ve help with the entire functions refine its vision of the functional leader in finance transformation programme.

Jason West: Yes, and breakout sessions on particular sub functional areas of finance or HR, whether its resourcing or its procure to pay, or whatever it is. Actually get teams of people engaged and ask “what’s working well today? What’s not working so well?” Do that stop-start-continue exercise, these well-tested, simple working sessions, but get it documented. Get business analyst to write this down, and pull them into the requirements for consideration.

Joe Ales: Because, actually, some of those individuals will describe pain points in the downstream systems, and ways of working that people might not necessarily recognise. And actually, the programme’s a good vehicle to address some of those pain points – why not?

Jason West: Yeah, absolutely. Get people to describe what world-class looks like, get their vision, and you’re getting this buy-in to a vision of world-class. And then get them to decide “where are we today? And perhaps where should we aim to be?” Because not everything needs to be world-class; and it’s good to see the group’s ambition, and how well that aligns with the sponsor’s vision on where things need to be in these different areas.

The other thing is around culture and doing workshops on our culture today, and what should our culture be tomorrow? Identifying challenges: what are the risks that we might expect to see you as we’re delivering the programme? Or sometimes you just need information. If you’re kicking off a programme, there’s a whole load of information that you need and who do we need to go for it through to for this data? What systems are we using to report out of? Are there individual stakeholder groups that we need to be particularly mindful of? Those sorts of things: really meaningful information. Use the wisdom of the crowd.

Another thing that we’ve done several times is around behaviours, so contracting a very broad level for “these are the programme behaviours that we’re going to have. And this is my personal commitments as an individual.” Get people to sign up to these.

And the final bits are outcomes. What are the outcomes that we expect in learning and development? What would the business benefits be? And this is where, throughout all of this, having a business representation in each of these working sessions is key, and finding ways of tracking what the business thinks, versus what the function thinks. That’s really useful information as you as you get into the design phase. Then there’s the good, old-fashioned question and answer. So lots and lots of ways to engage people, at these kick off session, so wherever possible you’re really looking for that opportunity for that two-way conversation. Because, realistically, it will affect the design of the solution – if you really understand what people want and need, and it should.

Joe Ales: Because ultimately, you don’t want to run transformation programmes every two to three years, to address business issues and operational issues etc. So this is a perfect channel, the perfect vehicle to address an awful lot of pain across any organisation. Use the wisdom of the crowd to get their insights.

Jason West: Yes, and given the complex nature of transformation, your ability to digest information that’s coming out of the broad stakeholder group and analyse it, make changes, adapt, shift course is really key because it is a bit of a process of discovery. And you need to have that flexibility and that agility to make changes as you go. But as and when you do, it’s really important to have a good level of discipline around you documentation and tracking where your requirements have changed, and design decisions have changed. It’s all too easy, if you don’t track these changes, to end up in a bit of a circular design loop. And that’s the downside of this two-way engagement: you engage, you find out new information, you adapt, you change. And then you find another piece of new information, and if you haven’t really fully understood why you changed then you could just keep changing, and you find your information, and you end up in a bit of a circular pattern. So be mindful of that, but absolutely go out there and engage.

So, if you find yourself midway through implementation and you’ve not done any of these things, if you’ve just been broadcasting and you have not sought any engagement, and you haven’t worked through “what’s the outcome? Who are the people we’re talking to? What do we want them to walk away with? Who’s the right people to address the messages?” All those sorts of things, well you know what, it’s not too late. Start doing it now, if you’re not doing it already, because it’s really never too late to start managing the people elements of change – unless it’s just before you go live, in which case it really is.

Joe Ales: Yeah, you have got to live with the consequences of resistance in operations.

Jason West: Absolutely; you know, the change will happen, it’s just whether it’s controlled or not and whether the outcome is what you really expect.

Joe Ales: And it won’t be a pleasant experience for the sponsor. Change is tricky. What’s interesting is: we’ve touched on a topic and it is a really vital topic for the successful deployment of any change, of any transformation, which is that hosting that kick off, getting the hearts and minds of individuals engaged right up front. But change management, as a whole, is so broad and we’ve only touched on one element of it. The change manager, and the change management role will be much, much broader: there’s all the hearts and minds, finding out who the key stakeholders are, who the influences are, how do you engage the organisation formally using formal channels, formal structure. And then there’s all of the activity that needs to happen informally. So, what are those conversations that need to happen in corridors? Who are those individuals that are resisting any form of change? There’s a an awful lot of activity and thought that needs to go into a change plan, that has both all of these activities, but also has the subtleties of the “dark arts” of change management, that needs to happen. And this is a set of skills and capabilities, these are individuals that have got professional change management, qualifications and accreditations. So to your point, at the very beginning: do not give this task to an enthusiastic individual full of energy. Absolutely they need to have that, they also need to come equipped with the skills and capability to drive change techniques through the organisation.

Great; now we’ve talked about the kick off, we’ve got a whole load of input and pain points across the organisation, into a set of requirements and well documented. It’s only natural that we now start thinking about design. So next week’s episode will be focusing on solution design. We hope you enjoy this podcast, and please like, share and subscribe via all your favourite podcast channels.