Change Management & Fundamentals

Article series written by David Maerz

Part 1: What is Change and Why Do It?

In this Change Management Fundamentals Series, we look at why Change Management is important and how to go about building a change management plan that is robust and workable. We then finish with how to make sure that the benefits you expected as a result of delivering the project can actually be achieved and sustained over the long term.
Our first paper in the series sets a working foundation by explaining what change management is and how a simple but robust methodology can help.

Introduction
In organisations large and small, projects are being initiated to achieve some kind of business outcome. Whether these projects are concerned with implementing a new tool or technology, building or re-engineering a set of business processes, changing the organisations’ structure or permutations and combinations of some or all of these things, one constant is present in all of these activities: CHANGE! Much has been written about the importance of managing change however, it is often an activity that is time and again forgotten when actually running a project. This paper will highlight why managing change is just as important as executing the technical activities in a project and a simple and well known methodology for helping in the change process.

What is Change Management?

Quite simply, Change Management is the process, techniques and supporting tools to manage the people-side of change to achieve the required business outcome or outcomes. What is important here is that an outcome is actually achieved (rather than an output) and there is a major focus on people.
What’s the difference between outputs and outcomes you ask? Well, an output is typically what gets delivered at the end of a project, e.g. a new system or tool, a new process, a merged department. An outcome is the business benefit that was (hopefully) documented and quantified in the business case justifying why the project was stood up in the first place. Just because outputs are produced does not necessarily guarantee that outcomes will be achieved or that they will be sustainable over the long term. The table below provides a few examples of the difference between an output and an outcome:

Output
Outcome
5kg weight reduction through diet and exercise
Improved health; reduced risk of heart disease
A new ERP system
Orders are generated in 10 minutes, not 3 hours
A revised delivery route schedule
Decreased fuel costs and increased Customer Service
Statistical forecasting is implemented for B & C class items
Reduced stock holdings of B and C class items has resulted in a 20% reduction in inventory
Benefit Realisation and Management is another set of activities that needs additional executive focus and attention but is really outside the scope of this paper. This is covered in more detail in the 3rd paper in the GRA Change Management Fundamentals series, entitled ‘Sustaining Change: Benefits Realisation’.

Why Worry About Change Management?
Undertaking change management well significantly increases the likelihood of a project meeting its objectives, finishing on time and on budget and achieving the return on investment articulated in the projects’ business case. The better change management is performed, the better the project’s outcomes. The following graph illustrates the effectiveness of a change program and ultimate success of a project:

Just as Project Management has a formal set of disciplines and processes, so does Change Management. For these to mesh together, strong organisational leadership and support must be provided.
GRA is a practitioner of Prosci’s Change Management methodology and the combination of Project Management, Change Management and Leadership is nicely summarised in Prosci’s Project Change Triangle (PCT):

The States of Change and the ADKAR Model
When thinking about change, there are 3 broad states an organisation moves through:
Whilst this may be true for an organisation, as we know, it is really people that make up the organisation. It is the people that must undertake a change journey from where they are today to where they need to be in the future. So if we look at the 3 broad transitional states at an individual level, it looks like this:
Considering the sometimes very considerable number of individuals that are affected by a project (internal and external), you can see that there can be a significant amount of work required in order to make the changes necessary to achieve project outcomes.
Fortunately, there is a well-accepted methodology to help people and organisations through the change journey. As with all good methodologies, there’s a good acronym to help you remember the various stages of the change process. It’s called ADKAR®
ADKAR provides tools and techniques for managing the change process at the organisational level as well as the individual level.
From an individual perspective, techniques and tools are available to help understand how a person can make the change from old-state to new-state as well as techniques for managing resistance to change.
From an organisational perspective, there are tools and techniques that help project managers and project teams facilitate the people side of change. Far from being ‘soft and fluffy’ activities that focus solely on communication or ‘team building’, the methodology is defined and concrete and importantly, straightforward to apply with a solid foundation supported by extensive research.
For many projects that GRA gets involved in there are varying amounts of change as a result of delivering a project outcome. Organisations typically want to work smarter, be more effective, get a better return on their investment and maintain or improve their competitiveness. This can be achieved through:
  • Introduction or improvement of business management disciplines such as Sales & Operations Planning
  • Improved core planning disciplines such as demand and supply planning
  • Implementation of a best-in-class demand planning tool
  • Redesigning their supply chain for increased efficiency and effectiveness at lower overall total cost
All of these activities typically involve new ways of doing things and people are at the forefront of the change. But as we know, most people are uncomfortable with change and are threatened and frightened by change and what it might mean for them. How can we manage this fear and use the project as an opportunity for achieving desired outcomes? By using the ADKAR approach and working with client teams, project success and the ability to achieve desired business benefits is significantly improved.
So what are the tools and techniques and who gets involved in using them? To find out the answers to that, look for the second paper in the Change Management Fundamentals series, ‘Building and Executing the Change Management Plan’.

Notes:
David Maerz is a senior manager at GRA Supply Chain Consultants.
GRA is a Supply Chain Consulting firm providing advisory services in supply chain strategy, planning and execution, working in both Defence and commercial industry.
This is the first in a three-part series to be published throughout July 2013.

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