The Ever Changing Organisational Environment
“The ability to learn faster than your competitors may be the only sustainable competitive advantage.”
Arie De Geus
Learning is a critical organisational competency and retaining competitive advantage in today’s global economy. Arie De Geus’ statement may well point to one of the last key strategic options to retaining competitive advantage left for organisations. Unfortunately, most organizations do not realise the importance of retaining and developing organisational and individual competencies and its potential impact of the future success of the organisation. In their Maritz Institute white paper Hendel-Giller et.al., quote Cross (2002), who’s research concluded that only 10 to 20 percent of formal organizational training transfers to the job, and that informal learning, which accounts for at least 80 percent of organizational learning, (and is the very essence of the learning that de Geus is referring to), happens in an ad hoc manner, without design or strategy. 
Change interventions typically occur as a reaction to specific problems or opportunities organisations face based on internal or external stimuli. While the notion of ‘becoming more competitive‘ or ‘becoming closer to the customer‘ or ‘becoming more productive‘ can be the motivation to change, at some point these goals must be transformed into the specific impacts on processes, systems, organization structures or job roles. This is the process of defining ‘the change‘.
It is however, not enough to merely prescribe ‘the change‘ and expect it to ‘happen’ – creating change within an organization takes hard work and structure around what actually has to take place in order for the change to ‘happen’ when moving an organization from a current state (how things are done today), through a transition state to a desired future state (the new processes, systems, organization structures or job roles defined by ‘the change‘).
Any change to processes, systems, organization structures, and/or job roles will have a ‘technical‘ side and a ‘people‘ side that must be actively managed by executive leadership. Executive leadership have authority to make the change ‘happen’. They sponsor, legitimise and sanction change, and have line authority over the people who will implement the change and control of resources – such as time, money and people.
In considering their role in the change, executive leadership must understand that not all interventions carry the same weighting. Mitigating roadblocks and minimizing disturbance resulting from resistance to change by middle management during the change process are critical.
Why Change Interventions Fail
John Crawford in his Paper on “Building an Effective Change Management Organisation”, Second Edition, April 2013 points out a series of nine reasons why, without the correct facilitations, ‘about 70% of change projects don’t achieve the desired outcomes and benefits, or were are outright failure’;
- Poor linkage to business strategic plan,
- Disconnection between business change and IT change, being run by IT departments that don’t have the business insight of the impact of change on organisational processes,
- Focused on project management methodologies for IT department and not for the business department,
- Struggled to accept lack of capabilities in the organisation and work on a “wish and a prayer”,
- Projects have overreached the competencies of the department,
- Derogation of individual competencies as a result of reduced training budgets,
- Poor partnership relations with third parties and how they should be integrated into the delivery of change,
- Employed business and IT architects but not sure how they should be effectively used,
- Change process altered on a piecemeal approach without taking a complete view of how the change department runs.
In essence, John Crawford maintains that all change should have a ‘business imperative’, without which change is pointless. Any Individual or company envisioning a change must identify ‘strategic business objectives’ as part of a forward-looking business strategy and turn the strategies into change programmes to meet agreed objectives and desired outcomes.
These findings were largely complimented by the results of Prosci’s eighth benchmarking report, released in early 2014 – Best Practices in Change Management – 2014 Edition. The report presents data from more than 3400 change leaders from 65 countries. Along with historical findings from Prosci’s previous seven studies, the 2014 report features brand new data from 822 change management practitioners who participated in the 2013 study. In every study since 1998, Prosci have asked participants: 
“What has been the single greatest contributor to the success of your change management program?”
The list below shows the top seven contributors to change management success as identified by the 822 participants in Prosci’s 2013 study.
- Active and visible executive sponsorship,
- Structured change management approach,
- Dedicated change management resources and funding,
- Frequent and open communication about the change and the need for change,
- Employee engagement and participation,
- Engagement and integration with project management,
- Engagement with and support from middle management.
The participants that identified these contributors were experienced practitioners, project leaders, executives, and consultants (over 70% of them had four to more than twelve years of involvement in applying change management).
Contributors to success range from having to do with specific practice areas, such as sponsorship, to addressing structural elements like dedicated resources. Four of the seven factors as presented in the Prosci Report are outlined below: 
Point 1 – Active and visible sponsorship
Sponsorship was cited over three times more frequently than the next contributor. When sponsorship is effective, it means the change intervention has a positive leader who is actively guiding the rest of the organization through the transition. The report points out that participants consistently used the key words “active and visible” to describe this top contributor. “Active and visible” means that the sponsor is:
- Supporting the change by giving consistent attention to the change and the need for change management
- Championing the change by leading and motivating others in the organization; being the face of the change
- Making effective and influential decisions regarding the change, including the ability to align priorities among other leaders in the organization
- Maintaining direct communication with the project management and change management teams and being accessible during the change
Executive coaching comes into its own when applied in these types of situations. The demands resulting from the pace and complexities of change interventions frequently fin Executive leadership and senior management in situations where they are working outside their area of knowledge, comfort and influence – often forced to operate in unfamiliar areas. This can lead to individuals feeling isolated. The role of an outside Coach is to provide a safe sounding board for the coachee, assist with overcoming obstacles, and facilitate movement to action and the desired state of change in order to meet the required and stated outcomes.
Point 4 – Frequent and open communication
The fourth greatest contributor, ‘frequent and open communications’ includes:
- Delivering change messages in a timely and transparent manner,
- Using effective channels and communicating frequently,
- Tailoring messages for the intended audience,
- Including clear and compelling reasons for the change and the implications of not changing,
- Participants identified the groups that employees prefer to hear change messages from.
One of the most striking conclusions to draw is that employees need to hear about change from two people – the most senior person involved in the change Sponsor/CEO and their Line Manager.
The CEO/Sponsor is best suited to communicating business messages around the change, whereas an employee’s line manager is best suited to communicating messages that are more personal. This supports the notion that the overarching vision and strategic direction once communicated needs to be translated into a local context.
It is clear that this is a critical potential roadblock as research has shown that middle management (point 5) frequently resist change and will negatively impact on the behaviour changes sought if not actively managed by executive leadership.
Point 5 – Employee engagement and participation
The reason we apply change management is to drive employee adoption and usage in order to realize organizational results and outcomes. Because of this objective, it is clear why employee engagement and participation was identified as a top contributor to success. Highlights include:
Change requires individuals to do their jobs differently. For this reason, it is especially important to address front-line employees in the change plan.
Study participants identified front-line employees as the second most resistant group; however, almost 50% of participants believed at least half of this resistance could have been avoided with better change management leadership.
Working with key individuals through effective coaching focuses on changing beliefs and behaviours – releasing fears and other issues, which are holding individuals back. Effective change management needs to identify key frontline employees who can benefit from either individual or team coaching interventions in order to mitigate the huge risk of resistance to the learning intervention and the consequential impact of their influence on the rest of the workforce.
Point 7 – Engagement with and support from middle management
Managers can become a change practitioner’s greatest ally in times of change because they are closest to employees impacted by change. Participants explained this top contributor as:
Managers are often faced with the dilemma of trying to meet their performance KPI’s and a leadership that provides little or no support and who often have opposing behaviours and values. The role of a business coach in these situations is to assist teams and managers to move forward through the development of actions and strategies that consistently deliver successful outcomes in their particular working situations.
The Prosci survey revealed two critically important points; firstly (point 5) ‘Middle Managers were considered to be the most resistant group in Prosci’s study’. Secondly (point 7), similar to employee resistance, most participants believed a majority of this could have been avoided as a significant 60% of participants said their ‘organizations did not adequately prepare managers to lead change’.
It is clear that the lack of a structured approach to any change intervention such as organisational learning, knowledge management, skills development, productivity improvements or any intervention embarked on in the name of ‘Improvement’ in order to sustain competitiveness or regain lost market share, will require the organisation undertakes a structured, formal approach with a clear understanding of where the organisation is currently, (Current State), and where it wants to be, (Future State). This approach will of necessity need to include all relevant stakeholders in the planning and analysis phases of the project prior to embarking on the intervention, together with a detailed breakdown and understanding of the action required to initiate, plan and achieve the desired outcomes which have to then be detailed in order to ensure that post intervention they can be measured and evaluated against what was expected and what was desired. Most importantly, executive management have to consider the reasons why change interventions fail and address each of these potential risks as effectively as possible, in particular they need to address the people issues, which more often than not, are responsible for determining the successful outcomes of change interventions and projects.
Next – Part 6/7 The Neuroscience of Learning