Thursday 10/27/11 - Ari-Pekka Pekari

Strategic change projects mean extensive entities of change with a significant impact on the organisation, competitive edge, capabilities, environment and processes of a company.

These include:

• Changes in the business models

• Organisational changes and business rearrangements

• Improvements in the effectiveness of the business processes

• Company sales and joint ventures

• Outsourcing

• Large IT projects (backed by business projects)

First Step:
Vision for Change and a Core Team (Plan)

	Successful change project requires a broad approach and persistency, Ari-Pekka Pekari observes.

The first requirement for a successful change is a strategy-based, clear will and vision for change by the leadership:  Why is change necessary?  Where are we going?  What does the future look like and how do we get there?

In addition, the leadership of change requires a tightly knit core team, working closely with the management and vested both with the responsibility and the authority to implement the change.

Second step:
Comprehensive Unpacking of the Vision for Change (Design)

This stage is the most critical. This is where mistakes are often made because the perspective is too narrow.

The vision for change must be unpacked into concrete plans taking into account leadership, organisation, systems and processes.

1) Leadership Perspective

• How to regenerate the leadership style and decision making in order to support the vision for change? Which entrenched practices is it time to get rid of? (Rules for decision-making, publicity of decisions and sharing of information on decisions, follow-up on implementation of decisions and so on.)

• What indicators will be used to measure the change, and how is the achievement verified? (Decision-making based on facts and implementation of improvements will require clear indicators.)

• How will the change be reflected in the organisation’s goal setting and rewards?

2) Organisational Perspective

• What is the optimal organisational structure to present the positives of the change? (There is no such thing as the perfect organisational structure: an organisational change fixes certain problems, but at the same time creates others. The issue is therefore about choices.)

• How should you define the responsibilities of the organisational units?  (This is so obvious, but it is often left only half done.)

• What is the correct size for the organisational units and what is the best geographical location for the activities?

• What new skills would the successful change require, and how is lack of resources compensated for? (Training, hiring, adoption of new methods/tools.)

• How should the change be reflected in the attitudes and behaviour of people? (This creates the foundation for the next stages of the change management process.)

3) Process and System Perspective

• What are the organisational key processes, and how are they linked into one functional entity?

• How should the processes be changed to line up with regenerative leadership and the organisation?

• What changes are required in the information systems and data for the implementation of the vision for change? (Even business changes that appear very small may require surprisingly extensive changes in information systems and data.)

Unpacking of the vision for change should not be attempted by the core team alone: the second stage includes launching of the vision for change and forming a broader project organisation.

Both launching and explaining the will of the leadership to the whole organisation are strong forces for change – naturally somewhat depending on the nature of change envisioned. At this stage, more people can be included in the planning for the change, which also commits them to the goals of the change. When there is also regular communication about the steps of achieved improvements, you are already quite advanced on the path of leading the change.

Third step:

From Plans to Implementation (Implement)

The third stage includes the implementation of plans and decisions made.

Extensive plans for change cannot be implemented within a single project: instead, they require a project portfolio, which is closely managed by the core team. The plans are chunked, phased and scheduled into workable entities.

For example, the following individual projects may be found in a project portfolio: practical implementation of the leadership system, completion of organisational change, downsizing of certain functions, skills development, implementation of process changes and renewal of information systems.

At the implementation stage, it is important

• To lead the change under one core team. Without centralised guidance, the projects are in a danger of taking on a life of their own.

• That the details get clarified as the process continues. Not everything can be finalised at the planning stage.

• That the adoption occurs with speed and iteration. Not all the parts of the project need to wait for the common adoption date; they can be adopted individually and improved along the way.

• That effort is made to communicate about the changes right throughout the implementation stage. The vision of change at the launch will need to be made concrete to individuals and to the level of daily tasks.

• That a coaching plan is designed for the core team in order for it to grow into a top change-centred leadership team!

"Business-as-usual” as the Monster in the Cupboard

Once the implementation stage has picked up speed, the biggest monster and stumbling block of the change project, ”business-as-usual”, arrives to threaten it.

Well-versed in the quarterly economy, the business management tends to view the world in budget-length blocks – first concentrating fully on one thing, then moving onto the next one – and the schedule of a change project is tied to half yearly blocks. The work must be completed by the end of the year or by the summer holiday season, with an entry in the project plan for the next six months reading ”business-as-usual”. Thinking like this is detrimental to a change project.

It is true that you can achieve a lot in six months. Creating a vision for change and selecting a core team can be done in a couple of months.  Organisational renewal with its employee co-operation negotiations and appointment rounds will be completed before the holidays. Defining the new management system and its adoption in the highest organisational layers will fit in the appointed timeslot, and there is even time for the smaller process adjustments and system changes.

What is the problem then? Only that it takes considerably longer than six months to achieve visible changes even in the lowest layer of the organisation. Even an adoption of a single new method easily takes a year in a large organisation: first the assessment, then training and finally monitoring that the learning has taken place.

In an extensive change project, there will be changes in many directions.  The individual limitations in the ability to learn and appropriate are reached and the achievement of visible changes slows down. If individual employees are not sure why the change is needed and what is expected of them, their old habits will remain unchanged.

If the core team at this stage announces that the change project is complete and transfers the responsibility for final touches to the line organisation in a ”business-as-usual” mode, ingredients are there for a mess. The change will stop in a multi-tiered organisation without even reaching the lowest tier. Viewed from the bottom of the organisation, nothing has changed – except maybe the name of the organisation.

Keep the project alive, until you see visible changes in practices

The solution is simple:  let’s extend the implementation stage. A good rule of thumb is doubling the period of practical implementation presented in the first version of the project plan. This will provide at least roughly the right figures.

It is also good to keep in mind the following:

• Hold on to the timetable. The length of the change project will be questioned several times, and you will need to be ready to defend it.

• Recycle the members of the core team. Long projects produce battle weariness. New members will bring new energy to the project.

• Keep the portfolio in a project mode. Do not allow the transfer of responsibility for projects to the line organisation too early.

• Emphasise the connection between new methods and business success when communicating about the change. Even small things are significant, when they are multiplied within an organisation.

Successful strategic change projects have in common a holistic approach as well as a core team with strength to keep the project alive until even visible changes in practices are achieved.

Ari-Pekka Pekari
ari-pekka.pekarimidagon.com