Transformational change extends to all parts of an organization and because of its overwhelming nature it can face high levels of resistance from the organization's divisions and business units. Many of these entities resist transformational change because it does not address their individual needs or in many cases their businesses' culture. Based on APQC's recent research on transformational change, Transformational Change—Making It Last, organizations can leverage three best practices that balance standardization and flexibility to drive adoption of the organization's transformation:
- Combine centralized governance with decentralized implementation.
- Provide a hybrid methodology to tailor the tactics and solutions to the people, processes, tools, and infrastructure components of transformational change.
- Build phased rollouts into the change plan.
This Article is part two in the series and explores the last two best practices for ensuring the adoption of strategic, enterprise-wide projects.
Provide a hybrid methodology to tailor the tactics and solutions to the people, processes, tools, and infrastructure components of transformational change.
In order to achieve full transformational change, there is a need to change the behaviors (or culture that is expressed through behaviors) to match the new vision or business model and a single methodology will not accomplish that. Instead organizations need to build a comprehensive framework that addresses all three key components of transformational change.
- People—includes the organizational structure and human capital management aspects of a transformation (e.g., training, leadership development, rewards/incentive systems, and behavioral models).
- Process—includes the business activities of the organization and their related rules, content, and measures.
- Technology—includes the technical infrastructure, information systems, and applications.
Many of the best-practice organizations in this study used Lean to set the ground work for their transformational change. The organizations leveraged Lean to understand their inefficiencies, identify their core competencies, drive a laser-like focus on customer value, and provide a common language across the organization. However, Lean was only able to take the organizations so far because Lean focuses the organization on the tools and process aspects of change and overlooks the people component.
Hence the best-practice organizations learned that effective transformation requires addressing all three components and tailoring the change framework to each unique situation. If an organization focuses on only one component, it risks creating something that no one will use or something that requires additional investments or rework before it will be adopted. For example, organizations will build a technical solution without taking into account the processes it supports or the functions (people) that will adopt the technology. When this happens, the organization will often end up with a technology that doesn't address the actual problem (i.e., shelfware).
What does this mean for business process professionals?
When examining the process component of change, APQC found that 80 percent of the best-practice organizations in the study use a hybrid change methodology (including ADKAR, Prosci, and Kotter's eight steps) and integrate their change methodology with techniques such as process management and project management to help reduce the complexity of transformational change (Figure 1).
As discussed in part one of this Article, PMOs and process management professionals are part of a core team that provides standardization through its governance of the transformation—ensuring all change plans support the end goal. The core team also provides personalization and flexibility by co-developing the change plans for each business and providing training and support on the change methodologies and tools. Similarly, the best-practice organizations combined standardization through an established change process with personalization through stakeholder engagement, training, and a comprehensive toolkit.
For example, one of the best-practice organizations uses a stage-gate change process (from identifying the desired end-state to evaluating and monitoring implementation) and a change roadmap to develop each business's change plan. The change roadmap compiles feedback from relevant stakeholders, provides context on the current business environment, and lists potential roadblocks. Each business leader within the decentralized implementation team is trained on the change methodologies and is responsible for leveraging the change roadmap to validate each step in the process, track the initiatives, and measure the steps in the process's alignment to the large-scale initiatives of the transformational change.
Build phased rollouts into the transformational change plan.
One often overlooked obstacle to change is employees' capacity to change. A general rule of thumb is that employees can only handle three to five major changes in a year; employees need time to go through the change journey—from understanding to internalization. Employees' capacity to change can be managed through staggered deployment or phased rollouts. However, this approach only works if an organization builds in two-way communication and deploys engagement tactics (e.g., focus groups, work groups, and surveys) to capture feedback and monitor the acceptance of change through the adoption of new behaviors.
Furthermore, phased rollouts help an organization capture and integrate best practices and key lessons learned into the implementation plan and tailor the implementation plan for each business unit's needs and culture.
How does it work?
Many of the best-practice organizations in the study used at least one of the two types of phased rollouts: stage-based or business- or region-based.
Stage-based means the organization takes a break between rolling out major changes. For example, the transformational change of one of the best-practice organizations focused on realigning the organizational hierarchy and staff to enter new markets and provide new capabilities for customers. Hence its initial phase focused on building a foundation for change and culture shift through a structural reorganization from matrix-based to market-aligned. The organization also changed to a single profit and loss model. The organization then waited six months for staff to get adjusted to the new structure before it launched into phase two: a new people model that focused on training staff on new skills and behaviors. Staged-based rollouts allow organizations to build on the success of the previous stages—such as using the cost savings from initial Lean efforts to fund new innovations or training—and ensures new behaviors are adopted and internalized before asking people to do more.
Business- or region-based means the organization rolls out the change to prioritized business lines, functions, or specific geographies. Prioritization is usually based on which entity will provide the largest return on the change and which entity has the highest buy-in for the change. Business- or region-based rollouts help the organization to experiment, see what works and doesn't work, and adjust the plan before moving on to the next rollout. It also allows the teams to work together to tailor the plan for the business and create buy-in within the business from the success stories of similar businesses.
Instead of taking a cookie cutter approach to change, best-practice organizations tend to take a strategic, customized approach. These organizations take a broad look at all the available methodologies and processes, adopt a holistic framework and toolkit of options, and match the right approach to the task. Furthermore, these organizations take into account employees' capacity for change and use phased rollouts to mitigate resistance and ensure the organization doesn't lose momentum.