What Is Organizational Change?

Organizational change is successful when most people in an organization consistently practice a new behavior. But, to practice new behaviors, individuals must be convinced they provide value. There are usually different types of cultural changes taking place within organizations at all times. Sometimes the change is rapid and dramatic. These situations often occur because of internal or external conditions that threaten an organization. Examples include bankruptcy, a forced merger with another organization, downsizing of a product line, or a loss of productive capacity.

Most of the time, however, cultural change is incremental and unfolds over time. A transition period may last between five and twenty years or even longer, depending on the specific organization and industry. In situations where successful change occurred, the changes evolved either through the execution of myriad strategically linked tactical projects or a major shift in strategic direction. In either situation, execution cultures tend to be more successful than those which have difficulty executing strategy because they align strategy throughout their organization in measurable ways using linked metrics targets and frequent reviews of performance under the direction of a leadership council.

There is a saying: “What gets rewarded gets measured, and what gets measured gets done.” Execution cultures effectively align rewards and punishments with strategic and tactical goals. There is accountability for effective and efficient project execution. In an execution culture, accountability is the normative behavior and gets rewarded. These organizations are more adaptable to changing global competitive conditions. They also closely align strategy and execution to prevent situations where the wrong initiatives and projects are supported.

Change Readiness

In the first chapter, we discussed Kotter’s eight attributes for successful change as well as the need for core competencies. Organizations differ in their readiness for change, even when there is an urgent reason. Adaptable organizations embrace initiatives. They learn to use the new tools, methods, and concepts and look for beneficial ways to integrate them into operational strategy in a manner that is aligned with the organization’s overall strategy. The attitude is proactive. Opportunities to improve operational performance and customer experience are embraced on a continual basis. This provides another core competence, i.e., the ability to adapt to disruptive events and increase competitiveness. External challenges become opportunities for these organizations. These organizations do not need a burning platform and do not need to be forced to change if there are significant benefits.

Adaptable organizations can change more easily because their culture also embraces facilitation tools that enable efficient change. Because change is normal, the adaptable organization is highly trained in methods to understand plan and execute new ways to work. Facilitation brings people together to develop broad consensus on the best ways to investigate opportunities, quantify benefits, and develop competitive solutions. These are learning organizations. Although any organization may have some barriers to change, facilitation helps to overcome or even remove these barriers. Typical barriers are associated with current success, lack of time and resources, and other factors.

After a supporting leadership council establishes a framework for change, readiness depends on several common change-management facilitation methods. Some of these will also be discussed in Chapter 14 in the context of sustaining initiatives and projects. Deployment planning starts after a leadership council is formed and key stakeholders are identified to support it. The planning was discussed in Chapter 1. It included integrating the initiative into the organization’s strategic planning with additional goals that can be achieved through various change initiatives (e.g., Lean, Six Sigma, and others). Organizational strategy is executed using applied projects. Over time, solutions from numerous projects slowly change an organization’s products, services, and process workflows and create a culture that embraces the right types of changes. Part of the planning process is assessing where each initiative is likely to create benefits based on its tools, methods, and purpose. Practical projects are also identified, and people assigned to move them to completion. These people or change agents will be trained and supported to practice the new tools and methods. This is the beginning of change readiness. The successful completion of projects or short-term wins will change organizational behaviors and how people work.

Project scoping is an important tool that is used to structure a problem for solution using a formal project. It is discussed several times in this book from differing perspectives. Project planning helps clarify a project’s objectives, metrics, customers, stakeholders, and team members. A useful approach is asking what is or is not in the project’s scope. Is the project focused on consumers or retail operations? Is it focused on one region or another? Similar questions are asked until the scope of the project is clearly defined. Project scope also helps identify where a team will work.

A team’s authority is described though a project charter, which is built from its scope. Project charters are also discussed throughout this book from different perspectives of application. The charter is a communication tool that reiterates the scope, goals, and deliverables of a project (i.e., the metrics for success and targets), the schedule for work, estimated benefits, team members, resources requirements, and other information as needed. Once the charter is drafted, the team can engage with stakeholders and customers.

A formal stakeholder analysis is needed to identify internal or external people who could be impacted by a project, need to approve work, or may provide resource or support. An example is shown in Figure 2.1.


Operational initiatives increase productivity.

Stakeholders represent the project’s scope. The broader the scope, the more stakeholders who will need to be included in the project. A stakeholder analysis is a useful tool to help understand initial stakeholder positions to gain support. The second question is, “What do they need from us?” Will they need project updates, inclusion of their feedback into the project charter or other types of work? After this, the stakeholders are rated on a scale between strongly against the project to strongly supportive of it.

Stakeholders provide support based on their best interests. Stakeholders who directly benefit from a project’s solutions will be more supportive of a project. In contrast, those who may lose power or must provide scarce resources may resist a project or modify its scope. The goal of a stakeholder analysis is to identify the important stakeholders and understand what is needed for approvals, resources, and team members to successfully complete the project. Properly constructed, a stakeholder analysis moves stakeholders from their current level of support to a higher level and further clarifies the project’s charter.

A resistance analysis, shown in Figure 2.2, is also a useful method for evaluating potential organizational barriers to expected change. A resistance analysis reduces organizational friction that occurs because of poor communication or execution by a project team, cultural differences across an organization, an unwillingness to share available resources, or concerns about a potential loss of organizational power due to changes in policy, roles and responsibilities, processes, and other changes. This tool categorizes elements of the project into change promoters and inhibitors.


Stakeholder analysis.

Promoters include project alignment, effective communication, empowerment, training as required, rewards and recognition, and clearly defined roles and responsibilities as well as team facilitation. Barriers to change include conflicting stakeholder priorities, fear of the unknown, bureaucracy (ie, the need for extensive and sometime irrelevant information before allowing project movement), limited training, little rewards and recognition, and poorly defined roles and responsibilities. The goals are to understand the organizational environment and create a plan to overcome obstacles that impede a project’s success.

An infrastructure analysis evaluates the resource ecosystem and supporting processes to look for constraints that may impeded a project’s progress. Infrastructure includes materials, facilities, equipment, people, training systems, reward and recognition systems, as well as information technology (IT) systems that impact a project. The project impact varies and includes lack of resources for data collection, analysis, or implementing improvements. An infrastructure analysis is useful to identify barriers that, if not overcome, can stall a project. If there are several projects all competing for common resources, it may be better to phase their execution or initiate other projects that require different resources.

As a team works through the project stakeholder and resistance analyses, it should also identify project risk with a view toward eliminating it from the project or mitigating its impact. There are several types of project risk: resource constraints, stakeholder support, technology (especially if it is new and untried), cultural aspects that impact the adoption of new behaviors, and external micro and macroeconomic risks. Once identified, risks can be prioritized for elimination or mitigation.

Another important analysis for change is a R ACI analysis, which is used to dectne team roles and responsibilities. RACI is an acronym for roles, accountability, consulted, and informed. People who do the work are t he о nes r esponsible f or t he w ork p roduct. W ork i s a ssigned b у managers who are accountable to the organization that it is completed on time and accurately within budget. Projects have subject matter experts who provide consultative advice during a project. Others need to be informed of a p roject’s status. These are the stakeholders that provide approvals, resources, and other forms of assistance to a team. Many process issues that are associated with process complexity, outdated policies, poor communication are caused by poor RACI analysis. An example is shown in Figure 2.3.

Communications of different types are needed throughout any project. A team must know its stakeholders, the messaging, and the best communication format to deliver the message. An example is shown in Figure 2.4. An organization will need to know the project’s scope, beneats, resource needs, and other information that should be included in the team charter. The messaging will be updated to include what the eventual changes will be and how best to implement them. Effective communication throughout a project is important because it helps a team obtain resources and organizational support for its project activities and the changes that will eventually need to be implemented. An organization’s communications team should be consulted for how best to communicate the project for different


Resistance analysis.


RACI analysis.

audiences and messaging formats. It is important that messages be consistent throughout an organization and easy to understand based on the audience. Effective communication is an important characteristic to show people what needs to be changed, how to change it, and the benefits the proposed changes will deliver. People have a greater tendency to agree on what the problems are and what needs to be changed if unbiased facts and analyses are used to show why they are necessary. Change initiatives also require other soft skills, including the basics for building diverse teams, developing team consensus, and presenting analyses and recommendations to stakeholders in formats that are easy to understand.

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