“Change comes more from managing the journey than announcing the destination” – William Bridges
Successful change management like so many things comes down to execution. However, this is problematic because most major change initiatives fail to generate the value originally set out for them. In fact, enterprise change failure rates are cited as being as high as 70%. This is often because one or more of the five key components of change are overlooked or under addressed. My 3PSM model helps avoid that pitfall.
There are many different drivers of change such as:
- Growth – the desire to take advantage of or create a market opportunity – Cisco’s former CEO John Chambers called these “market transitions”.
- Performance – the need to adapt to changing market conditions or expectations – typically these require a major focus on organizational performance improvement and cost reductions.
- Event – undertaking a major, one-off event – often involving a merger or divestiture.
Each of these change drivers has its own unique challenges. However, there are five components that should always be addressed when executing change, regardless of the driver.
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Any successful change effort will address each of these five components. However, depending on the driver and situation, components will have different emphasis and weighting. For example, in an acquisition where one company is integrating another similar company, policies may not change much. However, when looking to take advantage of a market transition with a move into a new market space there may need to be substantial policy adjustments to accommodate the new operating model.
Each of the 3PSM components is broad and must be adapted to the circumstances of the specific change event. However, here is a summary of what each one generally covers.
The first component covers overarching operating policies and procedures, including corporate structure and governance. The elements of this component should tie back to and align with an organization’s core purpose. They tend to be statements and declarations and will not effect change by themselves. However, they provide boundaries in regards to how to achieve the desired change outcome. Policy changes define behavioral expectations, therefore it’s critical they are understood across the organization. An example comes from a national non-profit organization which was undertaking a major transformational change to its culture. They started with a number of policy changes to define behaviors which were and were not considered acceptable in the new culture being created. This set the stage for the other components to more effectively drive the change.
The process component gets to the nitty-gritty of how things get done. In every change effort it should be expected, and communicated, that some things will be done differently in order to fully realize the benefit of the change. Process changes will inevitably impact different parts of the organization differently. Looking again at an integration example, an acquiring company may see little to no process change in a particular area while the acquired company could see substantial change. On the other hand, sometimes the acquired company has a better process in a functional area than the acquiring company. In these cases, the acquired employees may not see much change, but the employees in that particular functional area of the acquiring company could see substantial change. The point being, process changes always come down to changing human activity. Therefore, the process component is an area where change communication and design should focus on specific groups and sub-groups within the organization versus the broader one-size-fits-all view of the policy component.
Often rightfully cited as the most crucial change component the people element will impact a change management effort faster than any of the other components. This is because organizations don’t change, people do. Once enough people change, organizational benefits begin to be realized. While much has been written on the people side of the change equation, it is rare and virtually impossible to over focus on this particular component. Three keys to this are: transparency, tailored communication and training in order to help individuals adapt to the change as well as ultimately help guide and create the change. Here is a primer on some of the key people roles in any change effort and why they matter.
Not surprisingly this component refers to the technology aspect of any change. Over the last few years the term “digital transformation” has become common place. However, it’s overused and becoming a catch-all term for everything having to do with technology related change. An overview of a true digital transformation can be found here where it states: “Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance”. While digital transformations can be valuable in and of themselves, often they are a necessary part of a broader effort. Even when the primary change driver is technology related, the other change framework components must be considered. For example, a technology based change driver could be to adapt aging infrastructure to modern standards in order to improve operating efficiency. While the systems component is certainly key, process, people and possibly policy changes will need to be implemented in conjunction for it to be fully successful.
The final key component is metrics often referred to as Key Performance Indicators (KPI’s). As with anything, that which gets measured gets done. This is especially true when executing change. Metrics should be established for the end-state outcomes and there should be both predictive and descriptive metrics. Predictive metrics tend to be forward looking and show progress towards an outcome allowing for adjustments along the way. Descriptive metrics are backwards looking to measure if an outcome has been achieved and is being maintained. In addition, metrics should be developed for steps along the way. For example, large transformational change efforts often last years. So metrics should focus on both the end state as well as interim milestone states. This allows individuals to see progress towards the end-state goal and helps maintain momentum. It also provides early warning signals if interim milestones are not being met so adjustments can be made.
By addressing each of the five key components within the 3PSM structure change management leaders can improve the chances of their change effort being one of the successful ones.