Being Human Best Practices in CM Transport for NSW 211114 by Being Human

Best Practices in Change Management Presented by Catherine Smithson Managing Director November 2014

Agenda •  Update on return on

investment of Change Management •  Highlights of 2014 Best Practices Benchmarking Report •  Key contributors to success •  Application activity for Transport for NSW 2

Introducing Being Human •  Founded in 1993 •  Our mission: develop

change-capable people and organisations so they achieve the benefits of change. •  Prosci Affiliate Australia and New Zealand since 2006

“People have two fears about the future. First, things will never get back to normal. Second, they already have”.

Prosci by the numbers •  1994 – Founded in Loveland

Colorado, USA •  8 global Benchmarking Reports •  16 years of research •  3,400+ research participants •  63 countries •  70% Fortune 500 companies •  25,000+ Certified practitioners worldwide •  3,000+ Certified practitioners Australia/New Zealand 4

Prosci Best Practices Report Overview 2% 2% 3% 5%

•  822 participants •  63 countries •  Top 3 roles: •  Change Management team leader •  External consultant •  Project team leader •  38 new topics

34% 14%

15%

25% Middle East

Latin America

Asia and Pacific Islands

Africa

Europe

Canada

Australia and New Zealand

United States

Snapshot of Australia & New Zealand participants

Change is the new “business as usual” •  Volume •  Speed •  Complexity •  Risk •  Accountability &

Transparency •  Others? “Life comes at us in waves. We can't predict or control those waves, but we can learn to surf.” Dan Millman

Executives and Boards identify change as a key risk Standish Group Chaos Study 2014 8,380 IT projects globally

IBM Making Change Work 2008 1,500 organisations

41% fully met objectives 44% did not meet time, budget or

16.2%

quality goals

31.1%

15% missed all goals or were Successful

stopped

Challenged Cancelled

52.7%

Reason for CEO departures: mismanaging change Mark Murphy, Leadership Excellence, 2005

Moving from “hit and miss” change….

to consistent, successful implementation and benefit realisation with high employee engagement 9

Executives globally recognise the need to invest in enterprise change capability 76% “Our ability to adapt is a key source of competitive advantage.” Pricewaterhousecoopers 2008

90% “Organisational agility is critical to business success.” McKinsey 2009

The evolution of Change Management as a profession and discipline •  Global Professional

Associations •  Education and accreditation

•  Vocational - AQF •  Graduate and Postgraduate

•  CMBOK - 2013 •  Global Change

Management Standard -2014 •  Recognition by PMI and AIPM 11

Current state in Australia •  Early adopter of

Change Management •  Public and private sectors •  COMPRAC •  Above global average: •  Use of a methodology •  Actively working to deploy

enterprise Change Management •  Enterprise Change Management Maturity

From warm fluffy stuff to key success factor: the business case for Change Management

Organisations change for a reason Current state

Performance

Transition state

Future state

Performance

Organisational change requires individual behavioural change

Current

Transition

Future

Current

Transition

Future

Current

Transition

Future

Individual change

Future

Organisational change

“Soft side” drives success on “hard side” •  How much value does a

new process deliver if noone follows it? •  How much value does a new technology or system deliver if no-one uses it? •  How much benefit is realised if users drift back to the “old ways”?

With a very large, negative ROI

Reframing the purpose of Change Management Apply a structured approach to the people side of change and equip leaders to lead change

achieve targets for adoption, utilisation and proficiency and deliver expected benefits

Why Change Management? â&#x20AC;&#x153;The case for Change Management is inextricably connected to project connected to project and organisational success. If you are not talking about achieving results, then you are having the wrong conversation.â&#x20AC;? Tim Creasey Prosci Chief Development Officer

Unified value proposition Project management

Current

Transition

Future

Change management

Solution is designed, developed and delivered effectively (Technical side)

Solution is embraced, adopted and utilised effectively (People side)

Complementary disciplines with a common objective

Top contributors to change success: Prosci 2014 Best Practices in Change Management Benchmarking Report

Impact of Change Management on business results Project management

Evolution of Change Management from â&#x20AC;&#x153;warm fluffy stuffâ&#x20AC;? & optional extra to critical success factor

Current state

Transition state

Future state

Change management

Change Management increases the probability of achieving outcomes Correlation of change management effectiveness to meeting project objectives

100% t e m t a th ts n e d n o p s e r f o t n e cr e P

s e ivt c je b o t c je ro p d e d e e cx e r o

90%

96%

80% 77%

70% 60% 50% 46%

40% 30% 20% 10%

16%

0% Poor (n=244)

Fair (n=653)

Good (n=834)

Excellent (n=165)

Change Management increases success rates by a factor of 6

•  "Of the 165 research

participants who reported having excellent change management effectiveness, 96% met or exceeded project objectives" •  "Participants with the highest level of change management effectiveness were 6X more likely to meet or exceed project objectives"

22 22

Change Management drives staying on budget Percentage of respondents that met or exceeded project objectives

Correlation of change management effectiveness to staying on budget

t a th st n e d n o p s e r f o t n e cr e P

100% 90% t e g d u b r e d n u r o n o e r e w

80%

81%

70%

71%

60%

63%

50% 40%

48%

30% 20% 10% 0% Poor (n=258)

Fair (n=737)

Good (n=1001)

Excellent (n=180)

Overall effectiveness of change management program * Data from 2007, 2009, 2011 and 2013 Copyright ÂŠ 2014 Prosci. Best Practices in Change Management â&#x20AC;&#x201C; 2014 Edition.

Percentage of respondents that met or exceeded project objectives

Change Management drives staying on schedule e r e w t a h t st n e d n o p s e r f o t n e cr e P

Correlation of change management effectiveness to staying on schedule

100% 90% le u d e h c s f o d a e h a r o n o

80% 70%

72%

60% 50%

54%

40% 30%

32%

20% 10%

16%

0% Poor (n=293)

Fair (n=793)

Good (n=1032)

Excellent (n=181)

Overall effectiveness of change management program * Data from 2007, 2009, 2011 and 2013 Copyright ÂŠ 2014 Prosci. Best Practices in Change Management â&#x20AC;&#x201C; 2014 Edition.

Instant Poll

Which factor would you rate as the #1 success factor for change? 25

Greatest contributors to success 1.  Active and

visible executive sponsorship

2.  3.  4.

5.  6.  7.

Structured Change Management approach Dedicated Change Management resources and funding Frequent and open communications about the change and the need for change Employee engagement and participation Engagement and interaction with Project Management Engagement with and support from middle management

2011 rank ✔ é é ê

✔ ☐ ê

Sponsor effectiveness directly correlates to project success Percentage of respondents that met or exceeded project objectives

Correlation of sponsor effectiveness to meeting project objectives

t a th st n e d n o p s e r f o t n e cr e P

100% 90% s e vi t c e j b o t c e j o r p d e d e e cx e r o t e m

80%

85%

70% 67%

60% 50% 40% 30% 20%

34% 25%

10% 0%

Sponsor was very ineffective (score < 2)

Sponsor was ineffective Sponsor was effective Sponsor was very (score between 2 and 3) (score between 3 and 4) effective (score between 4 and 5)

Average sponsor effectiveness rating

What Is meant by Sponsorship? • Actively and visibly participate throughout the project

• Build a coalition of sponsorship with peers and managers

• Communicate directly with employees

Start Change Management early for success Correlation of when change management efforts began to meeting project objectives 100% t e m t a h t ts n e d n o p s e r f o t n e cr e P

s e vi t c e j b o t c e j o r p d e d e e cx e r o

90% 80% 70% 60%

68% 57%

50%

51%

40%

41%

30% 20% 10% 0% Initiation (n=234)

Planning (n=164)

Design (n=110)

Implementation (n=93)

When change management efforts began Copyright ÂŠ 2014 Prosci. Best Practices in Change Management â&#x20AC;&#x201C; 2014 Edition.

Methodology use on projects now 79% Growth in use of a methodology 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2003

2005

2007

2009

2011

2013

Australia is an early adopter of Change Management methodology •  Countries higher than global

average:

•  Latin America: 90% •  Africa: 82%

United States: 81% •  Australia and New Zealand: 80% •  Industries higher than global

average: •  •  •  •  •  •

Finance Insurance Telecommunications Education Pharmaceuticals Government: Federal, State, Local 2014 Best Practices in Change Management Report. 822 participants in 63 countries. Prosci copyright 2013.

Major gap between methodology use at project and enterprise levels

of organisations apply a Change Management methodology

of organisations applying Change Management methodology to all projects

Resources and budget â&#x20AC;&#x201C; the good news

74% had dedicated Change Management resources globally

81% had dedicated Change Management resources in Australia and New Zealand

27% had dedicated Change Management budget

16% the average budget for Change Management as a % of the total project budget

Now the bad newsâ&#x20AC;Ś..

60% Said the budget was sufficient or more than sufficient

40% Said the budget was slightly or significantly less than sufficient. Budget most lacking at implementation. 34

Integration of Project Management & Change Management

7% 22% 71%

Yes

Don't know

Impact of integration on project success 70% Percentage of respondents who met or exceeded project objectives

Did you integrate Project Management and Change Management?

60% 50% 40% 30% 20% 10% 0% Did not integrate

Integrated

Application activity: benchmark a current change against the top 7 success factors •  Individual or table team

activity •  Choose a current or recently completed change •  Assess against the top 7 success factors •  Discuss and spokesperson to report back •  Keep doing – top 3 •  Do differently – top 3