BUSINESS PROCESS REENGINEERING

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Chapter 16 Change Management

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Introduction

Change Management is a set of processes that is incorporated to ensure that significant changes are implemented in a systematic and controlled way to effect organizational change. The main goal of the change management is to reduce the risk associated with the implementation of change in the business environment. The other fundamental goal of the change management is rapid recovery of change-related problems when changes are implemented. Effective change management achieves these goals without compromising the values of business.
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Importance of Change Management

Identification of changes in the organization or a project can be initiated from within the organization or externally. How the organization responds to these changes is what that is more important. When organizations have more than one process running in parallel or series fashion, there are changes of changes made in one process to reflect in another. To implement changes in these environments is not an easy task. So a systematic and structured approach is necessary in change management.
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Importance of Change Management (Contd)

Broad skill set like political, analytical, business etc are required while managing the changes in an organization.
Operations and systems in the organization should be reconfigured in such a manner that organizations get the desired financial impact. Change management considers all aspects of the organization before implementing the change. So it plays a vital role in the success of any business.
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Action Plan for Change Management

There is increasing emphasis on the need to tailor change management strategies to the business entities of the organization and its environment and to address all aspects of the organization during implementation of change. Effective change management requires not only skilled management but also effective leadership and broad employee engagement and participation. Process and values which are the key factors of any business can become the restrictive factor while implementing the changes.
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Action Plan for Change Management (Contd)

So when an organization needs new processes and values, it must create a new organizational space where those capabilities can be developed in several ways. They are: Creating new organizational structures within the corporate boundaries where new processes can be developed Spinning out an independent organization from the existing organization Acquiring a different organization whose processes and values closely match the requirements of the new task
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Proscis Change Management Approach

Prosci is the recognized leader in change management research. It has developed a change management model which it claims to be research based and holistic in approach.

For addressing issues related to change management, Prosci makes use of ADKAR (Awareness, Desire, Knowledge, Ability, Reinforcement) model which allows organizations to focus their activities on specific business results. For more information, readers can visit Proscis website, www.prosci.com.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Proscis Change Management Approach

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Level 1 Ad hoc or Absent

Project leadership is focused only on the concrete or tangible aspects of the project including funding, schedule & issue tracking Communications from the project are on a need to know basis only and typically infrequent. Employees find out about the change first through rumors and gossip rather than structured presentations. Executive support is in the background as evident through funding authorization and resource allocation, but active and visible sponsorship is not present. Supervisors and managers have little or no information about the change, and have no change management skills to coach their employees through the change process. Employees react to change with surprise; resistance can be widespread. Productivity slows and turnover increases as the change R Srinivasan: Business Process Reengineering nears full implementation. Copyright 2011 Tata McGraw-Hill Education

When is change management used on a project at this level?

Change management is applied on a project at this level only as a last resort when employee resistance jeopardizes the success of the project.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Level 2 Isolated Projects

A large variation of change management practices exists between projects with many different change management approaches applied sporadically throughout the organization Elements of communication planning are evident, but there is little sponsorship or coaching as part of change management. Managers and supervisors have no formal change management training to coach their employees through the change process. Change management is typically used in response to a negative event. Little interaction occurs between the isolated project teams using change management; each new project re-learns the basic change management skills.
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

When is change management used on a project?

Change management is applied on a project when resistance emerges or when the project nears implementation with only isolated projects using change management at the beginning of their project.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Level 3 Multiple Projects

Structured change management processes are being used across multiple projects; multiple approaches and methodologies are being utilized. Some elements of knowledge sharing emerge between teams in the organization; experiences are shared between teams in some departments or divisions. While change management is applied more frequently, no organizational standards or requirements exist; pockets of excellence in change management co-exist with projects that use no change management. Senior leadership takes on a more active role, but no formal company-wide program exists to train project leaders, managers or coaches on change management. Training and tools become available to project leaders and team members; managers are provided with training and tools to coach front-line employees in future changes.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

When is change management used on a project?

Change management is initiated at the start of some projects, with a large fraction still applying change management as a reaction to employee resistance during implementation.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Level 4 Organizational Standards

There is an enterprise-wide acknowledgement of what change management is and why it is important to project success. A common change management methodology has been selected and plans are developed for introducing the methodology into the organization. Training and tools are available for executives, project teams, change leaders, managers and supervisors. Executives assume the role of change sponsors on every new project and are active and visible sponsors of change. Resistance and non-compliance is expected in isolated instances. Adoption is not yet at 100% and the organization is in the process of building change management skills throughout the organization.
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

When is change management used on a project?

At Level 4 teams regularly use a change management approach from the beginning of their project. Change management work begins at the planning phase of the project.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Level 5 Organizational Competency

Effectively managing change is an explicitly stated strategic goal, and executives have made this a priority. Employees across the enterprise understand change management, why it is important to project success and how they play a role in making change successful. Change management is second nature it is so commonplace that it is nearly inseparable from the initiatives. Managers and supervisors routinely use change management techniques to help support a broad range of initiatives from strategy changes to individual employee improvement. Extensive training exists at all levels of the organization. Higher ROI, lower productivity loss and less employee resistance are evident across the organization.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

When and how is change management used on a project?

Change management begins before projects begin.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

McKinsey's 7 S Model

The model is based on the theory that, for organizations to perform well, seven elements structure, systems, style, staff, skill, strategy and share values - need to be aligned and mutually reinforcing.

So, the model can be used to help identify what changes need to be implemented so as to improve performance of the organization.
For more information, readers can refer to book Strategic Management by Prof R Srinivasan, Volume 3, 2009.
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Practices in Change Management

Change management contains four stages. They are: Proposing a change Summary of impact Decision Implementing a change In order to continuously improve and monitor the change process, a process improvement program (PIP) must be implemented.

R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education

Summary

Change management is one of the most important processes in the organization. In any organization, it will experience a large volume of changes in its process, strategies while identifying and implementing the changes. As business experiences a continuous change, it is essential for any organization to bring a change in their strategy towards success of business.

After identifying the changes, it is of utmost importance to maintain these changes and to monitor these changes as it will have direct impact on the other entities of business.
It is always advised to follow a structured and systematic approach towards the change management.
R Srinivasan: Business Process Reengineering Copyright 2011 Tata McGraw-Hill Education