Change Management

It has been 18 months since I last wrote about change management and during that time I have developed a new theory for change as the focus for my PhD research program. The simple way of explaining the theory is to say change readiness and change intentions drive change success. In other words, if an organization is change ready and has the intention to create a specific change, then the likelihood of a successful change outcome is high.
The literature says that the probability of change success is currently low at around 30%. This raises the question as to how organizations progress at all. The answer is by trial-and-error. As long as the organization has tenacity and the will to continue, even with only a 30% likelihood of success, they will eventually get there. The cost to the organization in both financial and human terms is enormous.
Any business leaders reading this are probably asking "so what can I do to reduce this cost?" My research is continuing but it seems clear that change readiness and change intentions are the key. For an organization to be change ready there are five factors to consider:
1. Discrepancy. People must believe there is a need for the change, a discrepancy between where we currently are and where we need to be.
2. Appropriateness. The people must believe that the change methodology to be used is appropriate.
3. Efficacy. The people must believe that they are capable of achieving the change.
4. Principal Support. The people must believe that the leaders of the organization support the planned change.
5. Valence. The people must see the benefit for them in participating in the change process.
Leaders can influence each of these factors. My research will measure the relationship between each  factor and the level of change success the organization is achieving. In this way we can determine the relative importance of each.
The second key variable is the change intentions of the organization. The three predictors of change intention are:
1. Attitude. The attitude of the people to the planned change is important.
2. Subjective Norm. The perception of the people with regard to how the important people to them regard their participation in the change process is also important.
3. Perceived Behavioral Control. The people must believe they have sufficient control over their behavior to control the outcome of the change initiative.
As with change readiness the relationship between the three predictors of change intentions and the change outcomes will be measured to determine the relative importance of each. The change success levels will be measured using the perception of the research participants with regard to factors such as: financial performance, operational performance, and marketing performance.
The research findings will enable leaders to determine what the key factors are for achieving change success. Mindshop will provide resources for impacting each of the key factors.
These results are now only a matter of months away and my plan is to continue researching key aspects of running a business (and sharing that research with you). For now just think, if I make sure my organization is change ready and then focus the change intentions of my people I can significantly improve the probability of success of my change initiatives. The following is a link to a recent presentation on this change theory (it runs for 20 minutes).   

http://www.youtube.com/watch?v=oo1vC1znM6I&feature=youtu.be

It's not rocket science!

One of the challenges for any business is the fact that employees prefer their own way of producing the goods or services they sell. Let’s say our business is in the accounting space and we sell audit services. If I went and reviewed how each Audit Partner delivered their product to the customer I am sure to find a variety of processes leading to a wide variation in on-time delivery, quality, efficiency, client satisfaction, and even staff morale.

It’s not rocket science to reach the conclusion that there must be one best way; a process for delivering audit services that achieves the best outcome on all dimensions. So why doesn’t it happen? The main reason is that professional service firms tend to operate in silos. In our hypothetical audit practice I would guess that audit partners rarely get together, and when they do is to discuss the lack of growth and declining profitability (and resultant cash-flow issues).

So how we change this culture of anti-continuous improvement? I usually wait until they have a crisis that can be tied back to the culture and then suggest the following five step process.

1.       Get all the Audit Partners together and commit to developing one process that everyone must follow.

2.       Invite the exemplar Partner(s) to share exactly how they do their job. Document the process.

3.       Invite contributions from everyone present to further improve the process.

4.       Lock down the process and set key performance indicators that will highlight any deviations from the process.

5.       Meet at least at six-monthly intervals to review the process and document any changes agreed. My rule of thumb is that if everyone has had their say and two-thirds of those present agree, it is policy.

It is not rocket science. Anyone can do this. In the quality space it is generally agreed that 85% of what goes wrong in a business is due to ineffective processes. It is also accepted that the custodians of the processes are the leaders of that business. That means 85% of what goes wrong in a business is due to leaders not leading. It is essential that you build in consequences if people fail to follow the approved (and agreed) process. It is not rocket science.