We know from industry research that the more people are affected by an organizational change, the more important it is to manage the people side of change to achieve the initiative’s expected ROI. As a result, many organizations are looking to implement organizational change management (OCM).
What Is OCM?
OCM is a structured process that uses a set of tools to support the people side of an initiative. Effective OCM begins well before a project starts and continues well after a project ends. For example:
• Before the project begins, the Sponsor acts as a champion for the initiative, communicates a compelling vision for change and obtains support across the organization.
• Throughout the project, the Sponsor continues to champion the initiative while the project team does the “heavy” work of installing the change and transitioning the people.
• After the project, the Sponsor monitors how well people are accepting and adapting to the change and takes measures to make the change “stick.”
When you review the initiatives in an organization that have had a high impact on people, you begin to see the importance of OCM. Initiatives that fail to meet ROI expectations tend to exhibit these symptoms:
• A Sponsor who didn’t see the need to manage the people side of change, provided little support and left the whole business to the Project Manager (PM).
• Inadequate analysis of how work was being conducted, what would change or who the changes would impact.
• Stakeholders who felt overlooked and uninformed were ultimately resistant to the change.
For example, one initiative I reviewed was intended to reduce the number of full-time employees in a particular business unit. Six months after the project had ended the number of full-time employees had actually increased. What went wrong? Sponsor involvement had been negligible; consultation with stakeholders had been minimal; and there had been inadequate analysis of how work was being accomplished and the impact of any changes. Therefore attempts to redistribute work were firmly rejected by the affected business units and attempts to automate work resulted in cumbersome work-arounds that ultimately created more work.
The Challenge of Implementing OCM
Many organizations are integrating OCM into their existing project management methodology and are developing OCM best practices and tools specifically for project teams. One of the challenges is to ensure that OCM doesn’t create a lot of extra work for the project teams. OCM must leverage what they are already doing and be scalable to the projects.
Not every organization is ready to implement OCM on a grand scale. Therefore in practice, OCM may not begin before the project starts or continue after it ends. The PM can be perceived as being responsible for OCM, despite having no control of what happens before or after the project itself.
Many PMs and Business Analysts (BAs) are well aware of the importance of OCM to their projects and are actively seeking practices, tools and support. Here are five OCM best practices that can help.
1 - OCM Assessment
This is a useful practice that becomes absolutely critical when the Sponsor has not engaged in OCM before the start of the project. It involves the PM meeting with the Sponsor at the onset of the project to discuss the need for OCM, define the Sponsor’s commitment to OCM, and negotiate support for OCM activities and resources during the life of the project.
Here are the types of things it is useful to discuss at a high level:
1. Magnitude and Complexity: The level of risk associated with the initiative; any interdependencies between this initiative and others; the organization’s experience with this kind of initiative; and whether there is time to build OCM activities into the project. The corporate project management office can help identify impacts to/from other initiatives enterprise-wide.
2. Leadership and Stakeholder Alignment: The Sponsor’s experience with OCM; the relationship between the groups making the change and those being impacted; and the buy-in from other leaders in the organization to support the initiative.
3. People Impacts: The number of people impacted; the scope of change people will experience; the potential for restructuring or downsizing; the need for a shift in culture or mindset; and the amount of change people have already experienced in the past year. The human resources department can often help to assess impacts on organization structure, roles and responsibilities.
4. Reputational Risk: The potential negative effect to stakeholders if the project fails; whether the initiative contradicts any stated goals or previous commitments; and the potential for media coverage and involvement of government/elected officials. The corporate communication department can often help to assess reputational risk.
5. Resources needed to execute OCM best practices: The amount of OCM needed; whether an external third party will be completing any of the OCM activities; the project team’s OCM skills and experience; additional resources needed to complete OCM activities; and the Sponsor’s involvement in completing these activities.
2 - Stakeholder Analysis
This identifies those who have a “stake” in the project, including all those who can affect and be affected by project activities and outcomes. BAs often do this through interviews, relationship mapping and business process mapping.
3 - Gap Analysis
This identifies what the business is doing currently as well as what it will be doing in the future. BAs often accomplish this through As-Is and To-Be business process mapping.
4 - Change Plan
This identifies all the ways in which the change will affect people and their work and the various actions needed to help people make the change. The human resources, corporate communication and training departments can often help with developing communication and training strategies. Developing an effective change plan takes work and can be assigned to a dedicated “Change Lead.”
5 - “People Readiness” Assessment
Finally, this practice involves assessing not just project readiness, but people readiness. Are the recipients of the change ready for it? The PM accomplishes this through interviews with key stakeholders using a pre-defined set of questions.