Change Management

Published in PM World Today – September 2009 (Vol XI, Issue IX)

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PM WORLD TODAY – FEATURED PAPER – SEPTEMBER 2009

Change Management for IT Project Managers –A Practical Approach

By Eleonore Pieper, PhD

IntroductionTraditionally project managers have been trained to view project success as an open-and-shut case defined by meeting all agreed-upon scope requirements within an allocated time-frame and within a pre-determined budget. (Kerzner) However, newer trends in project management tend to define project success on a broader basis adding such concepts as use, learning or value; concepts that are prized very highly by project sponsors and users and by senior executives, and much less so by project managers and project teams (Nelson).

Perhaps our views and our approach as project managers have become too myopic for our emerging business environment. This would be borne out by some recent statistics that attest a high failure rate for IT projects, for example in the areas of CRM (Krigsman) or other technology areas with investment failures as high as 80% (Miller). It is time project managers took a broader perspective and started owning responsibility for “soft” success criteria such as value or use instead of hiding behind schedules and budgets.

The discipline of change management can help project managers add to their project delivery strategy in a way that breaks down and constructively deals with resistance to the changes their projects bring about and increases adoption of the project scope by the organization, thereby enhancing both value and use.

The following approach combines the concept of the Resistance Pyramid developed by Galpin and Herndon with Jeffrey Hiatt’s ADKAR model to define five areas of intervention that can easily be added to any project lifecycle by using a phased and scalable change management approach. It has successfully been used on large IT implementations as well as M&A projects and IT outsourcing projects.



The Change GapManaging Change is a core concern for CEOs in the current business environment and it seems to become more of a challenge as time progresses. A Global CEO study undertaken by IBM in 2006 showed that 65% of participating CEOs saw significant change in the time ahead. However, 57% also expressed confidence in being able to meet that change based on past performance. In 2008, 83% of CEOs expected significant change, and only 61% felt confident in their ability to face it successfully. What the IBM Study called the “change gap” had nearly tripled from 8% to 22% in just two years (IBM).

With organizations increasingly challenged by changes emanating from market factors, people skills, technology and globalization (IBM), IT projects will face their share of change, both as change drivers and as competitors for change readiness in increasingly stressed and overstretched organizations. The better project managers are at managing change, anticipating it, planning for it, controlling it and implementing it, the more successful their projects will be, if we take additional success criteria such as value to the organization and use by the user community into account.

The Challenges of ChangeBooks on change and change management are legion and in many instances will cover similar terrain. Change always constitutes a disruption of our familiar surroundings and of our routines. It is being met by a psychological reaction pattern moving from denial through resistance to acceptance (Zachary) and may be perceived as positive or as negative, depending upon the amount of control the individual feels they have over the change (Conner).

However, in a business environment this dynamic is often exacerbated, because not everyone is confronted with change at the same time. The reaction to change often is a staggered one, senior management knows first and reacts, then middle management, finally front-line employees. Senior managers are already out of their decline in productivity when the change is announced to the front-line employees and therefore react with impatience or don’t communicate, because for them it’s “over” and they have already adopted the change (Galpin, Herndon). In addition their amount of control over the change was much greater than it is for the individual employee; therefore their reaction to it was much more positive to begin with.



As project managers we have a similar role with regards to the change that our projects bring into an organization: we know the product we are implementing, we know its functionality and its value. We have had a great amount of control over the change, whereas the user community lags behind, both in their exposure to the change as well as in their amount of control.

As managers we need to take this dynamic into consideration as we face organizational resistance. Resistance in and of itself is not a bad thing, as long as it is addressed, allowed out into the open and dealt with constructively.

“An organization that doesn’t pay attention to resistance may eventually pay a dear price for its inattentiveness. Inattention or avoidance may slow, impede, compromise or block a potentially successful implementation effort. Carefully listening to and evaluating the sources of resistance helps an organization proactively avoid obstacles… Inviting resistance out in the open diffuses it and surfaces invaluable information that is useful for strengthening the implementation effort. “ (Zachary)

Analyzing ResistanceSo why is resistance often not dealt with constructively, why is it treated as everyone’s dirty little secret of change? Part of it may have to do with the fact that financially and in other areas of planning for a project it has not been taken into account. IT projects are often sold on increases in efficiency or financial return on investment, and no one factures in the reality that the organization will face a dip in productivity before the full benefits are realized. Galpin and Herndon construct a very simply mathematical model for the impact of change. Their calculations are tied to an M&A project, but one could easily envisage the impact of a new CRM or ERP system or a new patient data management system:

“Here is an easy-to-grasp example. Say that a company acquires a thousand-person asset from another company. Each of the thousand managers and employees of the acquired asset talks about the acquisition for just one hour per day instead of doing his or her job… At five days per week, 5,000 hours of productivity are lost each week. At an average of four hours per month, 20,000 hours of productivity are lost each month.” (Galpin, Herndon)

If we go one step further and attach a $20 value to each of these lost hours, we have arrived at the staggering sum of $400,000 loss in productivity for one month for a project that impacts 1000 users for an hour per day. I have not seen a single IT provider who would submit these figures to a client as part of their business case when bidding on an IT project.



Therefore when resistance and its financial implications happen, they are often dismissed and ignored.

The other problem with resistance is the fact that it is not a monolithic phenomenon. While it is often seen as active defiance of a change, it can have many reasons: Galpin and Herndon propose a staggered model, a resistance pyramid that is first and foremost made up out of “not knowing” that the change is coming or what is expected. This is followed by being “not able” to conform to the new environment, because skills and abilities may not have been developed yet. Only at the apex of the pyramid do we find the attitude of being “not willing” to adapt to the change, the area of active resistance that so many managers equate with the phenomenon of resistance overall.

We ourselves developed a consultative approach that expanded this model by one further component: “not believing”. In an environment saturated with change we sometimes encounter change cynicism, where employees have been inundated with change only to find that eventually everything stayed the same. To introduce change into an environment where resistance is primarily fueled by “not believing” is possible the toughest challenge of all.

Overcoming Resistance, the ADKAR ModelIf resistance is not a uniform behavior, but is fueled by a host of different factors, overcoming resistance must also employ a variety of strategies in order to address each and every one of these factors. Jeffrey Hiatt’s ADKAR model which originally derived from an approach to dealing with change in an individual’s life can provide an excellent paradigm for project managers to engineer successful change management interventions in their own projects.

Before developing a model of 5 interlocking change strategies for IT projects we would like to briefly explain the ADKAR Model, and how it relates to the expanded change pyramid.

ADKAR stands for the terms awareness, desire, knowledge, ability and reinforcement. All five components are needed for an individual and an organization to successfully cope with a change. More importantly they have to be realized in sequence for the change to be adopted. In this Hiatt’s model is not unlike Maslow’s Hierarchy of Needs, for example.

In the awareness stage an individual understands the nature of the change, why it is necessary and how they can relate to it – what’s in it for them.



During desire the individual now develops the drive to grapple with the change, to support it and to come to terms with it.

Knowledge furnishes the individual with the information, the training, the education and skills in order to be successful in the changed environment and to function well.

Ability stands for operationalizing this knowledge where the individual or the group can implement the change at their required performance level.

And finally reinforcement is needed to sustain a change. It may come through seeing rewards and earning recognition or through feeling internally satisfied with the achievements that have come about because of the change. (Hiatt)

It is remarkable how well the ADKAR model allows itself to be modeled against the expanded resistance pyramid:

Translating ADKAR into 5 Strategies for Overcoming ResistanceIf resistance is grounded in “not knowing” we have to ensure that change targets are aware of the change, why the change is necessary, sometimes called the “burning platform” for change and also how they fit into the change.

If change targets do not believe in the change, because nothing has changed before, thestrategy to overcome this apathy is to make the change desirable, to furnish visible examples of how it can be lived and implemented in their work lives, how others, who are regarded as role models, are living the change right now.

Both lack of knowledge and lack of ability will result in resistance from “not being able”. We have to address both, a lack of knowledge of the basic skills, processes and behaviors needed, but also obstacles to implementation, the things that are preventing the individual to make the transition from theory to practice.



Finally, in the category of “not willing” we have to provide reinforcements, both positive and negative to show the individual that change adoption has advantages and is being recognized, and that persistent resistance will ultimately have negative consequences. In a business environment this may ultimately mean that entrenched resisters will face disciplinary action.

In our own consulting practice we have translated the ADKAR model into a grouping of five interlocking strategies that each need to be addressed during a successful Change Project:

Communication

On the level of awareness we have to communicate with change targets about the change: what it is, why it happens, what the risks would be if it did not happen, and what the individual can expect out of the change for themselves. This kind of communication transcends traditional project communication which is widely focused on performance reporting and project documentation. It has aspects of “sales and marketing communication” that project managers may feel unfamiliar or uncomfortable with. In our own consulting practice we have found that involving dedicated communications and even PR resources can have enormous benefits here, especially for large projects that engender transformative change.

Sponsorship

On the level of desire sponsorship can be a practical strategy to show the change as desirable and as something that is at the core of the values and the culture of an organization. Good sponsorship examples will cut right through the fog of apathy and disbelief and energize target communities.

“Sponsorship should be viewed as the most important success factor. Avoid confusing the notion of sponsorship with support. The CEO of the company may support your project, but



that is not the same as sponsoring your initiative. Sponsorship involves active and visible participation by senior business leaders throughout the process. “ (Hiatt, Creasey)

Sponsorship examples may involve a corporation reinforcing a project that necessitates the flattening of hierarchies with refurbishing the C-level suite at their headquarters to look like the rest of the employee offices or cubicles. It may mean that the CEO of an insurance company and his direct reports man the customer call center of their insurance agents for several hours, taking customer calls and afterward commending employees for their hard work and dedication at a town-hall meeting. We have witnessed each of these examples in our own consulting practice and they have sent incredibly powerful messages to employees during critical times of change and have increased people’s willingness to engage in change and to believe in a successful outcome.

Project managers have to negotiate with leaders and change agents ahead of time to construct powerful and credible sponsorship interventions.

Re-skilling

Lack of Knowledge, one aspect of the “not able” component of resistance can be remedied with training or re-skilling, because quite often to just throw a technical training module at a user will not be enough. Re-skilling intervenes at a deeper level, including coaching, mentoring, behavioral training and long-term sustainment of knowledge transfer and knowledge assessment.

As with communication, devising a robust re-skilling program may expand beyond the skill level of an IT project manager, who may be comfortable with technical training, but less so with functional or behavioral training and coaching. Involving dedicated training staff may be an option for projects that need to plan for a lot of knowledge transfer.

Organizational Design

The other component of “not able” is being addressed by removing organizational obstacles to change. While change targets may now possess the desire and the knowledge to make the change work, organizational obstacles can be powerful sources of frustration that will ultimately extinguish any enthusiasm for the change.

If a project aimed at a fast turn-around for a process still requires four levels of upper management to put their seal of approval on the work results, the resulting time-lag may eventually cause the employee to feel his or her belief in the process erode. The project will



have to look at the fast turn-around time as well as at ways to flatten the hierarchy of approvers and push some of the decision-making power down to the change target, who is being asked to provide faster results.

Form follows function, and once the new function of the changed environment has been determined, the form and shape of the organization has to be adjusted accordingly. This may be a tough area for project managers to plan, because suddenly their sponsors and leaders may find themselves in the unexpected position of change target, asked to make adjustments and change themselves.

HR Management

To overcome resistance, the area of “not willing” and to provide reinforcements project managers will have to look at the current practice the organization uses to provide incentives and deterrents to employees and to ensure that rewards match exactly the new behaviors that are prized by the changed organization.

For example, if a project was supposed to make a department take less of a lackadaisical approach to process and protocol, it would be counterproductive to still pay bonuses to those managers who ignore processes to the point where they have to start fire-fighting and then put on a glorious show of working their team over-time and swarming around a problem that would not have arisen, if everyone had employed the new process and discipline. Instead, the organization will now have to look at ways to make the fire-fighters look not like heroes but like arsonists.

Again, this is a difficult area to engage in, because often sponsors and senior management have not considered these kinds of impacts, they may have financial consequences and they may also change an organization’s culture and values in very visible ways.

Scaling the Model

Devising a Life Cycle

We have pointed out five strategies that project managers can employ to operationalize the ADKAR model on their projects and to overcome the various components of the resistance pyramid. In order to align this practice even further with the basic principles of project management we propose that the employment of the strategies can be undertaken as a



phased approach and that it can be made scalable to suit the magnitude of change of an individual project.

Most change management methodologies propose a phased approach not unlike the classic project management life cycle. Hiatt and Creasey for example advocate a three-step approach including Phase 1 – Prepare for Change, Phase 2 – Managing Change and Phase 3 –Reinforcing change, which can be aligned alongside the project management process groups of Initiating, Planning, Executing and Managing and Controlling and Closing (PMBOK).

In our own consulting practice we have adopted a five phase approach that maps against the PBMOK Process Groups as follows

Adopting any of these mappings will allow a project manager to make change management into an integrated component of their project management practice.

Analysis typically results in taking a snapshot of the current environment and mapping it against the vision of the value and use their project is supposed to generate and performing a gap analysis. It is helpful to always keep the five strategies in mind, i.e. analyzing current communications, current levels of sponsorship, current incentives, etc., and then assessing the levels the project manager will need for their project. Designing and planning will result in translating the gaps into change initiatives within all five strategies that can then be broken down into schedule activities like any other work package and added to the project plan. The initiatives are implemented alongside the execution of the standard project deliverables and their effectiveness is checked and corrected by seeking feedback from stakeholders, in particular change targets and change agents. As the project is being closed, the change is anchored and sustaining reinforcement measures are put in place to ensure the organization does not fall back into old habits.



Scaling the Effort

Not every project will result in massive change and needs a dedicated change program or even change resources. We propose three levels of scale that will suit every type of project with every level of change.

Change management lite: Add a category of people risk to your risk management plan and risk register. Imagine the scenarios if your change target community is not knowing, not believing, not able or not willing with regards to the changes brought about by the project. Use the five strategies to formulate prevention and contingency strategies. You are simply using the methodology to make your risk management more robust and to deal with the fall-out from user resistance. Having to deal with fall-out from resistance is added to the time-line and budget as contingency reserves.

Mid-size change management: After your gap-analysis, treat the five strategies as project deliverables and add them to your WBS. They are meeting projectrequirements to deal with stakeholder resistance and will impact your budget and your schedule just as any other resourced schedule activity. You may have to ask for dedicated resources to work on some of the strategies, such as a communications resource or a training resource.

Large-scale change management: Consider making the change initiative its own project. It will now be the scope of your project to be scoped, decomposed, planned and executed with dedicated change resources as your project team. Projects like these should accompany major transformations as part of an overall transformation program, for example for ERP or CRM implementations, for M&A projects or for large IT outsourcing deals. These projects will usually require specialists such as organizational designers, HR transition managers and PR resources.

ConclusionChange Management should come as naturally to project managers as checking their schedules or performing earned value analysis if they wish to move beyond the mechanistical definition of project success as “on time and on budget” to a broader definition of success that assesses whether their project s are making a tangible impact on their organization by adding value and being adopted by user communities.

Change management does not have to be an esoteric discipline, but can translate into a simple and scalable model of five strategies that can be added to the project management



lifecycle in order to prepare an organization to receive the benefits of an IT project when it is ready to deliver them.

Bibiliography:

Tim Galpin and Mark Herndon: The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level. 2nd Edition, John Wiley and Sons, 2007.

Jeffrey M. Hiatt, Timothy J. Creasey: Change Management: The People Side of Change. Prosci , 2003.

Jeffrey M. Hiatt: ADKAR, A Model for Change in Business, Government and Our Community. Prosci, 2006.

IBM: The Enterprise of the Future. Global CEO Study. IBM Global Business Services, 2008.

Harold Kerzner: Project Management. A Systems Approach to Planning, Scheduling and Controlling. John Wiley and Sons, 2009

Michael Krigsman. “IT Project Failures”. Blogs.ZDnet.com, August 11th 2009.

Miller, D. (2002). “Successful change leaders: What makes them? What do they do that is different?” Journal of Change Management, 2(4), 359-368.

Nelson, R. (2005). “Project Retrospectives: Evaluating Success, Failure, and Everything in Between,” MIS Quarterly Executive, Vol. 4, Nr. 3, pp. 361 – 371

Lois J. Zachary: Creating a Mentoring Culture. John Wiley and Sons, 2005.



About the Author:

Eleonore Pieper, PhD

Author

Eleonore Pieper works as a consultant specializing in the areas of Project Management Training, Facilitation, Organizational Change Management and Program Office Implementations. She has partnered with Fortune 500,

healthcare, finance, telecommunication, manufacturing, transportation and IT corporations and worked on government projects for more than 13 years. During this time she has leveraged her experience as a specialist for methodology development, Program Office management, project planning and Organizational Change Management, delivering consulting services and training across the United States, Europe and India. Her practical People Change Management knowledge supports people change on both internal organizational process improvements and billion-dollar, multi-year outsourced contracts. Based on her experience she wrote the People Change Management methodology and established the People Change Management practice at a Fortune 500 company. She is also experienced as a versatile and adaptable facilitator for workshops in a wide variety of settings, including executive strategic visioning sessions, and scoping, planning and review workshops both nationally and internationally. Most recently she has successfully delivered project management training at a 995-bed hospital, built a PMO for a leading Oracle Configurator solutions provider; and designed, built and taught a PM training module for a North Texas university whose business school is ranked among the top 20 in the nation. Dr. Pieper holds a Ph.D. from the University of Muenster, Germany and is an International Association of Facilitators (IAF) Certified Professional Facilitator (CPF) and a Project Management Institute (PMI) certified Project Management Professional (PMP). Dr. Pieper can be contacted at [email protected].

Change Management

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