Speaker 1: Change management is a very broad discipline that encompasses a lot of different things, a lot of different work streams and strategies that you can be using to deploy change in your organization. However, there's a way to simplify it. And what I want to do today is talk about the five steps, the most important steps to make your change initiatives more successful. My name is Eric Kimberling, and I'm the CEO of Third Stage Consulting. We're an independent consulting firm that helps clients throughout the world reach their third stage of digital transformation success. And one of the service offerings we provide our clients is change management. We help clients go through digital and business transformations. We help them with the change management initiatives, and we help ensure that they're managing the change initiatives to be successful. And oftentimes what we find is organizations and people in general are overwhelmed by change management. They don't understand what it means. They get confused by all the different tactics that are out there, the different training courses. So what I want to do today is boil change management down to five simple steps and the five most important steps that you can take to make your change initiatives more successful. Now, if you're looking for a deeper dive into change management and some tactics and strategies that we've seen work with our clients, I encourage you to read our guide to organizational change management. It's a guide that contains a number of best practices and lessons we've learned from helping clients through their digital transformations and the change components of their digital transformations. You can read that guide by scanning the QR code in front of you or using the links below. Now, the first of these five steps in deploying a change strategy is to conduct a change readiness assessment. And a lot of organizations tend to think that, yes, we're ready for change. We know that we need to change, so there's no point in doing a change readiness assessment. A change readiness assessment is not meant to determine whether or not you're ready. It's to determine how ready you are and, more importantly, to anticipate where the potential pockets of resistance might come as you go through a digital transformation. So you think about the things that are going to entail change in your organization, things like process improvements, organizational restructuring, certainly new tools and systems that you might start to use, and you combine that with the culture of your organization and past change history and your management style, leadership style, all the different things that make you who you are, and inevitably those things all combine to create some sort of unintended resistance to change. And the key with a change readiness assessment is to dive into and proactively address what the potential resistance to change is going to be. So a way to reframe the question is not to ask yourself whether or not people will resist change, but to ask yourself how will people resist change, how severe will that resistance be, and what will the root causes of that resistance be. No matter how well-intended your people are, which I have no doubt they are well-intended, they are going to resist change, not because they're bad people or they're trying to sabotage the project, but because you're imposing change that's going to create fear, uncertainty, and doubt within their personal lives. So the key is to recognize and understand that and do a change readiness assessment to dive into that and anticipate where those sources of resistance might come from. Now when we do change readiness assessments for organizations, both at the beginning of a project but also ongoing throughout a transformation, we'll start with a two-pronged change readiness approach. One is an online anonymous tool that we deploy to people to capture quantitative information and quantitative data points around the culture of the organization, the management style, the collaboration style, the communication style, all the things that tell us who the organization is and allows us to understand where the dark sides might be and the pockets of resistance might be. The second prong that we deploy is a qualitative series of focus groups where we dive deeper into an understanding of the culture of the organization and some more of the qualitative nuances of the organization so that we can combine those qualitative and quantitative data sets to anticipate and mitigate those potential sources of resistance. So this change readiness assessment is one of the first steps, if not the first step, that you should take in a change management initiative to ensure that you understand the lay of the land so that you can create a change strategy that best aligns with and addresses those things that you've identified in the assessment. It's very difficult, if not impossible, for a digital transformation to succeed if your executives are not aligned and if your overall organization is not aligned. When I talk about alignment, you may wonder, what does that mean? What does it mean to be aligned? Well, essentially it means to be on the same page, to be rowing in the same direction, to have the same vision, to have the same understanding of where we're going as an organization. Now, every organization has levels of misalignment. As you grow and as you add people and you bring in different personalities from the outside, it's inevitable that the organization is going to become somewhat misaligned. So that's the reality of a growing organization, especially a larger, more complex organization. So while we may not be able to change that reality, what we can do is understand where the executives and the overall organization is not aligned and work to get alignment on where the organization is headed. So let's just use as an example a case study from a recent client of ours. We have a client that grew very aggressively through mergers and acquisitions. They acquired over 40 different companies over the course of less than five years, and they came to us and said, hey, we want some help coming up with a digital strategy and executing a digital strategy that allows us to create a common set of business processes a common operating model, a shared services model, and a way to really create one company and take these 40 different companies and start acting like one global company. Sounds simple enough and straightforward enough, but when it came to the details of what exactly that meant and some of the tough decisions that needed to be made around what it means to look like a single company in a common operating model, that's where the executives disagreed. They couldn't agree on what exactly that broad statement meant to act like one company. And until they agreed on that, they weren't able to successfully move forward with the transformation. And if you think about it, if the executives aren't aligned on what the overall vision and the strategy is going to be, the rest of the organization is not going to be aligned either. So it's very important that you spend time working with executives to ensure that they get aligned. And for more information and more details on how we approach executive alignment, I encourage you to check out this deep dive video on my YouTube channel that dives into that topic in a little bit more detail. It gives you a framework for how you might deploy that within your organization. The third and most important step in a change strategy is to do a change impact assessment. And a change impact assessment is essentially looking at where you are today, where you're headed in the future, where you plan to be in the future with your change initiative, and identifying all the gaps and the differences between current state and future state. And we need to do that not just at a global macro level, but also at an individual department, individual business unit, and in some cases, even individual people level. So in other words, if I'm an employee within an organization going through a change, I need to understand what exactly this means to me in my job. I care to some degree about what it means to the overall organization. Even if I'm on board with why we're going through the change, I can't be on board with it fully until I understand what the change means to me and until I'm comfortable with that change. So the point of the change impact assessment is to really identify and fine tune and get down to a micro level of how the changes are going to impact the organization so that we can start to work through those changes with people. And the other beauty of doing a change impact assessment is that it brings some of those change freak out moments earlier in the project. In other words, we're not waiting until we get to classroom based training where we're training people on how to use a new system. We're not waiting until then to spring a bunch of changes on them and surprise them with a bunch of changes to their jobs. That stuff's already been worked through earlier in the process through these change impact assessments. The sooner we do the change impact assessment, the sooner we're able to work through that communication and that sort of pre-training to help people understand how their roles and responsibilities are going to change and making sure we get on the same page with that. And you have to give people a chance to freak out because they will freak out when they learn that they're going to lose their spreadsheet or they're going to materially change their jobs or AI is going to automate part of their jobs. So really understanding that impact and articulating that impact is very important. Now a word of warning here is a lot of organizations and project teams tend to overlook this step because they think they just need to focus on the future state. They're so focused on designing the new processes and the new technologies. The software vendor is pushing hard to deploy new technologies within the organization and they tend to overlook the reality of the human dimension of change. And the change impact assessment is critical and it's a key foundational aspect of downstream change management activities. When we look at how disruptive technology can be and how much of a game changer technology can be to organizations today, we have to recognize that there's a dark side to that game changing ability of technology. And when I say there's a dark side, I mean that it affects humans more than it ever has in the past. People's jobs are going to change. The way they do their jobs are going to change. All these are things that affect us as humans and these are the things that we need to work through as part of our change strategy. So just to give you an example here, if we say that we're going to deploy artificial intelligence tools to automate a certain percentage of my job, what I need to know is what am I going to do with that part of my job that is now automated. It's not enough to tell me that you're going to automate 30 or 40 percent of my job with AI tools that make my job easier, but the reality is that I'm going to panic a little bit when you tell me that you're going to automate 30 to 40 percent of my job because what am I going to do? Are you going to get rid of my job? Are you going to replace me with someone else? Are you now not going to value me as much because you don't rely on my heroics the same way you may have in the past to work through some of these process inefficiencies that we've always had? Those are the types of things in the human psychology that need to be understood when you're going through a digital transformation like this. And so what we need to do is not just say, Eric, we're going to automate 30 percent of your job and make 30 percent of your job easier. We have to clearly articulate what my job looks like and what that organizational and job design is going to be going forward. It may also mean that we are going to restructure the way I report to people, the way I collaborate with people, the way I do my own job. And so my entire job is changing. And so that organizational design aspect of change management becomes absolutely critical. And it's another one of those underrated, overlooked things within change management because so many times we want to focus on the end state. Let's just put new technologies and tools in place. People are going to love it. Don't worry. And let's go ahead and train them on these new technologies and tools and go live. But the reality is we're deploying technologies to make our organizations more successful, more efficient, more profitable, and we're doing it to make our teams more effective. So we have to define how is it we're making our teams more effective. Just putting the technology in place is not enough. We have to define what the organization looks like and what the job roles and responsibilities are going to look like going forward. So it's very important not to overlook organizational design and make sure that organizational design is one of your top five steps to an effective change strategy. A fifth important step to organizational change management is one that doesn't sound like it has anything to do with organizational change management, but it has a lot to do with it. And that is benefits realization or value realization, depending on what kind of term you want to use. But in essence, what we're saying is how do we realize the potential value of all the technology and process improvements that we're investing in as an organization? And it's not enough just to put in new technology. The benefits and the value will not just automatically come because we put new tools in place. They come because we've managed the benefits. We've managed the value optimization of the project. So benefits realization starts with a business case. And I think most organizations understand and most project teams understand the value of creating a business case largely because they have to do it to justify the project. They have to determine whether or not there's an ROI in the investment they're about to make. But oftentimes what we do is we set that business case aside. Once we get approval, we let it collect dust on a shelf and we go forward with our digital transformation. The more successful organizations and the more successful change initiatives will take that same business case and use that as a benefits realization tool and a value optimization tool to ensure that we're managing to those benefits and realizing the benefits over time. And the scary part about it that leads a lot of people to just forget about benefits realization is that when you go through a benefits realization exercise, you will inevitably find that you're not realizing the business value you expected as fast as you thought you would. And that's okay. It's better to understand that and recognize that and do something about it rather than setting it aside and just hoping the problem goes away. So we want to make sure that we use benefits realization to optimize benefits after the fact. And the way we do that is we go back and measure and look at how much business value are we actually getting now that we've gone live with new technologies and how can we optimize that longer term. And that may come in the form of process improvements or retraining, refresher training for the team. It could be that we reconfigure or redeploy technologies in a different way than we originally did. So it's a way to be agile and to fine-tune the implementation and all the time and money we've just spent on that deployment. The other way that benefits realization helps is even shorter term than that. It helps us have somewhat of a north star and a guiding light in our digital transformation so that we can make better decisions when it comes to potential scope increases or additional modules or deployments of different types of technologies. Now we can make more informed ROI-based decisions on whether or not it adds business value to our organization and it'll help us from a project governance perspective as well. So there's a whole host of reasons why you want to use benefits realization and leverage that work stream within your change management strategy and plan. So I hope this has given you some guidance on the five steps that are most important to get started on your change management strategy. I'm not saying that these are the only five steps you should follow, but I'd say if you start with these five steps in your change strategy, you're going to get a majority of the value that you can and should get out of change management, especially if you are operating with a limited change team or limited resources or limited time or all of the above. Now for more information on change strategies and best practices and lessons learned, I encourage you to read our guide to organizational change management. It's a guide that contains a number of best practices and lessons learned and you can read that by scanning the QR code in front of you or you can go to the links below. So I hope you found this information useful and hope you have a great day. Transcribed by https://otter.ai Those business... That's not the word I mean to say. Stop saying it. Okay.