Change Better Change Faster AIPM Hunter 241114 by Being Human

Change Better Change Faster: Building a Change Capable Organisation Presented by Catherine Smithson November 2014

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

change-capable people and organisations so they achieve the benefits of change. •  Exclusive Prosci Affiliate Australia and New Zealand. 2

Topics •  The need for enterprise

change capability •  What is enterprise Change Management? •  Global outlook – latest research •  Top Contributors to success •  Mistakes to avoid •  The role of Project Managers

“Change is the law of life. And those who look only to the past or present are certain to miss the future.” John F. Kennedy

Why are organisations investing in building change capability?

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 are more aware that change is risky 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 7

CEOs see the need for investing 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

A select group of organisations have become “change masters” •  People factors dominate key

success factors: •  Top management sponsorship •  Employee involvement •  Honest and timely

communication •  Corporate culture that motivates and pro- motes change

IBM Making Change Work study 2008, 1,500 organisations

Reframing Change Management •  “Project Managers

manage change.” •  “Change Management is a deliverable of Project Management.” •  “Change Management is training and communications”. •  “Change Management is LIFO.”

Organisations change for a reason: to achieve benefits

Future Performance

Current Performance

Organisational change requires individual change

The individual is the unit of change

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

new process deliver if no one follows it? •  How much value does a new technology or system deliver if no one uses it? •  How much benefit is realised if the people 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

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

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

Change Management increases the probability of success 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 c r e P

s e iv t c je b o t c je ro p d e d e e c x 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"

17 17

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.

“So, does anyone else feel that their needs aren’t being met?”

What does it mean to be a “change-capable organisation”? The Prosci Project Change Triangle

•  Three capabilities required

for successful change •  Not roles or jobs •  Need strength in all three capabilities •  Missing capabilities increase project risk

Bringing the three capabilities to life across the project portfolio 10 9

Culture for Tomorrow

Sales Plus Supply chain

Lean

Focus Risk factor

Sigma

ERP 2 4 3

HR-IT

Safire 2 1 0 $0

$100

$1,000

$10,000 Investment (K)

$100,000

Triggers to get started •  Volume and complexity of

change underway •  Past program or project failure •  Demonstrated success of projects applying Change Management •  Risk Management •  Employee Engagement and/ or Culture Survey results •  Others?

Project level vs enterprise level Change Management Change Management is like building a house

How do we effectively manage the people side of change on one project or initiative?

ECM is like designing a subdivision

How do we bring Change Management to our entire organisation?

ÂŠProsci. Used with permission www.change-management.com

What is Enterprise Change Management ? Institutionalizing change management practices, processes, capabilities and competencies

Building organizational change management capabilities and competencies

Deploying change management broadly throughout the enterprise

“Great change management” is second nature & part of our DNA Change management is the organisation’s Standard Operation Procedure Change management is the norm on projects and initiatives All employees have internalised their role in leading change

©Prosci. Used with permission www.change-management.com

Instant poll: Where is your organisation in building enterprise Change Management capability? 1.  2.  3.  4.  5.

We haven’t even thought about it Early discussions taking place We’ve started to mobilise We’re on the first year of deployment We are over a year into deployment

Just over 50% of organisations globally are actively building enterprise Change Management Actively working to deploy Change Management 100% 90% 80% 70% 60% 50% 40%

2011

2013

30% 20% 10% 0% Yes

Donâ&#x20AC;&#x2122;t know

Australia & New Zealand are early adopters Actively working to deploy Change Management by region

Australia and New Zealand Africa Entire study population United States Canada Asia and Pacific Islands Europe Latin America Middle East 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Early adopting industries Participants actively working to deploy by industry Pharmaceutical Insurance Finance Banking Services - Other (except Public Administration) Mining Retail Trade Utilities Information Services Oil and Gas Entire Study Population 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PMOs are leading change capability building Originator of the effort Project Management Office (PMO) Human Resources (HR) Organisational Development (OD) Information Technology (IT) Executive Leadership Strategy, Transformation, Planning Corporate and Shared Services Independent change management group Within business units, Operations Grassroots Other 0%

10%

12%

Percentage of respondents

14%

16%

18%

20%

Most Change Management groups are located in the PMO

Top Locations

38% Had a Change Management Office or functional group globally

•  •  •  •

PMO: 28% HR: 24% OD: 17%IT: 14% Strategy/Transformation:13%

Key Roles 1.  2.  3.

45% Australia & New Zealand

4.  5.

Own & maintain methodology Own & maintain tools Consulting support to Change Management resources on projects Maintain CoP Provide resources for projects

Only 23% report high levels of success Success of deployment effort 70% 60% 50% 40% 30% 20% 10% 0% Very unsuccessful

Unsuccessful

Moderately successful

Successful

Extremely successful

Major gap between Change Management at project and enterprise levels

of organisations apply a Change Management methodology

of organisations applying Change Management methodology to all projects

Key ingredients for success 1.  2.  3.  4.  5.

Treat ECM as a project Secure sponsorship before moving forward Build a strong case for Change Management Multi pronged approach Adopt a single, effective, consistent methodology and upskill people to use it Position Change Management as everyone’s job 2014 Best Practices in Change Management Report. 822 participants in 63 countries. Prosci copyright 2013.

Mistakes to avoid 1. Failing to treat it as a project with a

vision, outcomes & plan 2. Moving forward without Sponsorship.. 3.  Failing to build the case for Change Management. 4.  Applying a single solution. 5. Not adopting a consistent methodology. 6. Not making change everyone’s job. 7. Not using Change Management on Change Management

©Prosci. Used with permission www.change-management.com Source: 2012 Prosci Best Practices in Change Management Benchmarking Report

Project Managers play a critical role: Project level •  Integrate and align

Change Management •  Start at business case stage •  Secure adequate funding •  Educate Sponsors to utilise the right measures of project success: •  End user adoption and

proficiency •  Benefits realisation 38

Project Managers play a critical role: Enterprise level •  Bring your Project

Management discipline to “Project Change capability” •  Baseline Change Management Maturity •  Manage the Change Management function •  Embed capability into the DNA

Bring your Project Management discipline to â&#x20AC;&#x153;Project ECMâ&#x20AC;? Project management

Current

Transition

Future

Change management

Prosci Change Management Maturity Audit 速

Prosci Change Management Maturity ModelTM Audit Level 5 Level 4

Level 3 Level 2

2.06

Level 1

0 Overall Change Management Maturity Model Audit Score 速

Prosci Change Management Maturity ModelTM Audit Level 5 Level 4 Level 3

2.88 2.38

Level 2 Level 1

2.08 1.58

Capability Area 1: Leadership

Capability Area 2: Application

1.40

Capability Capability Capability Area 3: Area 4: Area 5: Competencies Standardization Socialization

Q&A

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