Speaker 1: Change management is traditionally one of the most flawed and most misunderstood parts of a digital transformation or ERP or HCM project. But it's one of the most important, if not the most important part of any digital transformation. I'm going to talk here today about what's wrong with change management as we know it and how to make our change management initiatives more successful within our ERP or HCM projects. My name is Eric Kimberling. I'm the CEO of Third Stage Consulting. We're an independent consulting firm that helps clients through their digital transformation journeys. And deep down, I am a change management consultant. That's how I started my career 20 years ago. And so it's a topic I'm very passionate about, and I've analyzed a lot of the strengths and weaknesses of change management over the years. In fact, we just recently, as a company at Third Stage, we've recently published our guide to change management that's based on all that experience. And I've included a link below that you can download this guide to change management. And the title of it is why change management is the secret sauce to ERP success. So whether you're implementing ERP or HCM or some other digital transformation project, this guide will be very helpful for you. But I wanted to summarize in the meantime, what are some of the lessons from this paper and from our years of experience. And to start, it helps to tell a little story about my background, not only in my change management consulting, but when I first started in consulting, the partner I worked for at one of the big consulting firms, one of the first things she had me do is she made me go get SAP certified. So I had to go learn how to configure the software and really get my hands dirty and how the technology worked. And that was, I think, a six or eight week course. I eventually became certified in SAP. And believe me, I did not want to do this training. I was kicking and screaming and pushing back and trying to find a way to not do it because I don't consider myself a technical person then. And I still don't consider myself that technical now. And so I didn't want to do it. But she insisted that I do the training and she thought it would be very helpful in making me a better change management consultant. Now, the reason she had me go through this training is because I was about to be deployed on an SAP change management project. But even then, I still didn't quite understand why I had to go through the training. And the reason I share this story is because I think that was a very formative part of my view of change management. And she helped me understand why having more technical and pragmatic hands-on experience was so important to be a good change management consultant. And that's something I think is missing in the change management discipline and in general. That's where a lot of companies fail in their change management efforts is that they aren't integrated enough or aligned enough with the technology and operational aspects of these sorts of transformations. So what I want to talk about today is what are the things that are wrong with traditional organizational change management? And most importantly, what can we do differently to make change management more effective within our organizations? Now, one of the first things we can do to make change management more effective is to stop making it so academic. It shouldn't be a theoretical exercise. It shouldn't be a feel-good exercise. It shouldn't be an excuse to hand out gifts and prizes to employees, although that certainly could be part of your change management strategy if it's appropriate. But one of the challenges I see, especially when we're interviewing change management consultants for the third stage team, when we're managing these consultants, one of the biggest challenges and gripes I have with change management consultants in general and the change management discipline and profession in general is that as it evolves and as it grows over time, it tends to become more and more academic, in my opinion. Back 20 years ago or 10 years ago, Kotter was a common influential figure in the change world and still is, academic professor type that has very good philosophies and approaches to organizational change management, not at all a bad thing. But still, we're up here in the clouds, and for a digital transformation, we're down here in the weeds trying to figure out on the ground and in the field, how are we going to get people to adapt to change? So connecting the dots between those two extremes is one of the challenges that I think change management has, and that's what's given it a bad reputation for a lot of non-change management types. Another example is more recently, ProSci has become a very hot commodity, being certified in ProSci is almost a minimum requirement now to be a good change management consultant. And just as a caveat, I am not ProSci certified, I have not been through ProSci training, but my impression of those that have been in my understanding of the class and people that I've worked with and employed that are ProSci certified, is that again, we're up here in the clouds, it's a good academic, high level foundational place that isn't necessarily a bad thing, but it's not nearly enough to effectively change an organization that's going through a massive transformation. So in other words, we're not just talking about things like awareness and desire and just general leadership type of influence, we're talking about how do we get down to the battlefield and ensure that we're affecting the ground troops, so to speak, and how do we do so in a very targeted and tactical way. And so I know I'm overgeneralizing, I know a lot of you watching may not agree with those comments, especially if you are ProSci certified. Again, I have nothing wrong or no complaints about the ProSci certification, but I think it oftentimes is viewed as the single answer. If you have ProSci certification, therefore you must know how to manage change, and that's not true. Some of our best consultants are not certified in ProSci, and some of the consultants that we've had the most trouble with or some that we've passed on completely and not brought onto the team are ones that are ProSci certified. So there's not necessarily a correlation there, but I do want to point out that there is something missing in today's day and age with change management, and one of those things is that we are focused at an academic level of what change means and how to affect the change, but we need to do more with our digital transformations to get down to the ground troop level of how do we affect the change down in the trenches, and that's what we'll talk about throughout this video as well. So another challenge with organizational change management and a reason why change initiatives fail so often is because the plans are incomplete. We're operating at a high level, we do more of the flyover components of change management, things like communications, all-employee communications and newsletters and town hall meetings that explain why we're doing the project and when the go-live is going to happen, what it means to the organization, why it ties into the overall strategy of the organization, stuff that's very important. You certainly do not want to overlook those things, but oftentimes we dwell too much on the high-level flyover type all-employee communications, and we don't get down in the trenches again. We don't define to individuals and work groups and individual locations and departments how are their jobs changing, why are they changing, and working more closely with them to figure out how can we help them through those changes. So while we do want to do those high-level communications, the high-level training, the activities that happen downstream, those are very important aspects of any change plan. We also want to make sure we're doing other more tactical change activities. Some examples of things that often get overlooked or we don't spend enough time and effort on are things like organizational design, just defining simply how people's jobs are going to change, what the roles and responsibilities are going to be, what the reporting relationships might look like, what are we going to do with someone's job when we've automated half of their job, what are they going to do with their 50% of their time that's now free, not to mention the fact how are we going to get them comfortable with the fact that we are automating 50% of your job. That's also a very important thing to address. So those are all the types of things we have to think about are things like organizational design, change impact, how are people's jobs changing, what is the impact, where are we connecting the dots between where we are today, point A, and where we are tomorrow, point B, for each individual and workgroup and department and location affected by this digital transformation. Another really important one that gets overlooked is organizational readiness and organizational assessment. That's one of the first things that should be done to understand the lay of the land and understand where the pockets of resistance are going to be, where the organizational landmines are, really understanding at a tactical level, but also a strategic level, where are those resistance is going to come from, what's the root cause of resistance and how can we get ahead of it and start attacking with precision that source of resistance so that we can overcome it and get ahead of it before it becomes too much of a problem. And then finally another, just one more example, is benefits realization. And this is where again change management and tactical operational understanding tend to collide or get misaligned in some cases. So benefits realization is really focused on how do we ensure that we're optimizing the tangible business benefits we're getting out of this digital transformation. That may not sound like change management to you, but in my definition of change management that's extremely important and that's where a lot of change initiatives fall short because again we're getting out of the academic phase and down into the tactical aspects of how are we realizing value, where are the obstacles to realizing that value, what are the actual results of the implementation that we're deploying. So for example, we implement phase one of a multi-phase project, we're going to fall short somewhere in the immediate months and weeks following a go-live. We need to understand how we can in a targeted way address why we're falling short of that business value. Oftentimes it's real simple things like retraining employees or redefining a process or reconfiguring the technology to work in a better way. Whatever the case may be, there's a whole benefits realization component that's focused on optimizing value. And it's not just about making sure people are ready for the change and creating awareness and creating buy-in and all that stuff that's important. It's now about getting down to let's actually deliver real business value. And that's a key part of what's wrong with change management today is because we aren't focused on creating real business value. We may feel good about the activities we're doing and it may be an intangible benefit, but at the end of the day none of that matters unless we can deliver real business value. And that's a key missing component of change management. So when we look at our change strategies, our change plans for our digital transformation, we need to be thinking strategically, we need to be thinking tactically, operationally. There's a lot of different components that go into an effective change plan. Should be tailored for you, but it certainly needs to be a complete plan that doesn't just focus on those really high-level components of change that a lot of us tend to focus too much on. One of the things that drives me crazy about traditional change management, and I know I'm generalizing here, this isn't always the case, but it's common, very common. One of the things that drives me crazy is when you see change management and change management practitioners and team members that are operating over here, kind of in isolation from the rest of the team. And they're certainly part of a broader team, regardless obviously, but a lot of times people think of themselves as just change management people. I'm only here to do change management. I'm not going to get too involved in the technology, I can't get too involved in the operational understanding or the re-engineering. That's something different. I'm a change management consultant. And quite frankly, that's how I viewed myself when I started my career. I thought, I'm a change management consultant, I shouldn't be getting certified in SAP. I shouldn't be getting Six Sigma training, which I later also got. I shouldn't be learning how to re-engineer business processes. But as I did more of that, and as I combined that with the change interest and background I had, I found that having that background made me a much better, a much, much better change management consultant. And looking back now and looking at some of the challenges we still see in the marketplace, I see that as a big problem with change consulting and just change activities in general, whether it's an internal team or a set of consultants, they all tend to struggle with it to some degree, which is how do we integrate all of this into our overall plan? So in other words, or for example, let's say we're going through the design stage of our project and we're implementing SAP or Oracle, whatever the product may be. And we're, in essence, re-engineering our processes. We're trying to figure out how are we going to use technology to make our processes better. That's something that the change team should be very involved with, involved in, is helping define what are those new processes? How can we re-engineer and streamline some of those processes? That's just going to make them better at helping enable some of the changes and helping people understand how the changes are happening. If we work over here in isolation while the team's over here designing the software and redesigning business processes, you lose a lot of translation throwing that information over the wall, but you also don't have ownership of it. And now we're suddenly expecting some isolated team to go implement those changes and build that into the training and communications and that sort of thing. So I'd much rather see, instead of having a bigger dedicated change management team, I'd rather have that be a smaller change team with more of the people doing the actual technical configuration and process re-engineering and process design. I'd rather have more of them take on the ownership of change management with the support and guidance from a smaller change team. That typically I found to be more effective. It also integrates change management more effectively into your overall team. So the takeaway here is how can we integrate change management better into our overall plan and strategy? How can we ensure that it's not a standalone activity with standalone skill sets, overly targeted skill sets, and how can we make that fit closer together? A lot of change management strategies we see from internal organizations and especially the big system integrators, very cookie cutter. They're very consistent, they're very repeatable, which is somewhat understandable because for a big system integrator with hundreds of thousands of employees, you want to know that you've got a repeatable process. But change is something that can't be cookie cutter. We can bring our tool set to the table. We may have hundreds or thousands of tools and tactics that we could be using, but every client we work with, we're going to use different tools and different tactics and different strategies in enabling that change at the ground level. So that's one of the big things is that we need to know where to pivot when our background or our preferred methods of change are or are not appropriate. Every change project we do tends to look a little bit different. There's certain fundamental things that are very consistent. For example, we almost always do some sort of organizational assessment to get a lay of the land, to understand the magnitude of change, where the pockets of resistance are, and just really give us a good input to define a change strategy that's tailored for that organization. But beyond that, the strategy, the recommendations, the tactics, the plan, the resourcing plan that we recommend for any given client is going to vary heavily based on that organizational assessment. No two companies look the same, and therefore, no two change initiatives should look the same either. And even if we're deploying cookie cutter, off-the-shelf vanilla software, the change and the impact to people is going to be very different. So that's the one thing we can't have be a repeatable, canned, off-the-shelf vanilla approach. It's one thing that should be heavily customized, heavily tailored for our organization. But too often, we as change management practitioners will say, this is our approach. We go A, B, C, D, because that's what we know, or that's just what we like best. It doesn't matter what we know or what we like best. What matters is what's best for the organization and how we tailor that approach. So just knowing when to pivot, not just at the beginning of a project when you're first defining your change strategy, but as things change, as you work through the battlefield and you see grenades being launched around you, the landscape is changing. You uncover risks and organizational issues that you didn't see before. You need to know where to pivot and where to reallocate time and resources and where to pull different tools from your tool set and put others away because they're not working. That sort of thing is a sort of nimble, agile approach that I found that change practitioners in general aren't very good at. And so the best ones that we work with and we develop on our team are the ones that know how to be flexible and know how to pivot. So I mentioned before that a lot of change management practitioners are ProSci certified or they've been trained in Kotter's methods or they may have other change training and change background. And what we encourage change practitioners to do is really think outside the box of what other training could you be getting, not necessarily instead of ProSci or whatever other training you may already have, but just outside of change management. How could we maybe get Six Sigma certified or take a course on project management or courses on process re-engineering, even some technical courses? I mean, as I mentioned at the top of the video, it certainly didn't hurt. It actually helped me a lot to get certified in how to configure software. And to this day, that training helps me a lot because even though I no longer configure software and do any of the technical aspects of implementation, I still understand how technology works, whether it's SAP that I've certified in or any other product that we work with now being independent. So as a change practitioner, understanding technology, understanding what it looks like, how it feels, how it's going to affect a person, or understanding how to re-engineer processes and how to streamline processes will just make you that much more effective as a change consultant. So while ProSci has done a great job in filling a void, which was there have been traditionally no really good common standards for change management training, it's simply a starting point. I view ProSci as a starting point. You need additional training and competencies and skill sets to be strong and to be a very good change management consultant. So really look for ways you can think outside the box. There's a lot of different trains. I'm happy to share ideas with you of what we've encouraged our team to be trained on. And by the way, just as a side note, some of our best consultants are ones that have taken a variety of different training. Those are some of the best change consultants we have are the ones that also know how to re-engineer processes and how to program manage and how to configure technology. Not that we're asking them to do all those things all the time, but that makes them much better at their jobs as change management consultants. So feel free to reach out. I'd be happy to share ideas on that as well. So hopefully that provides some background on what the problems are with change management, why so many change initiatives fail, and more importantly, what can we do to improve upon and make change management more effective in our digital transformation initiatives. Now I encourage you as a couple of takeaways or resources I've mentioned before, our guide to change management for any sort of ERP or digital transformation, I encourage you to download that. I've included links below. I've also included a number of other links and articles below that may help you in your change initiatives and just your digital transformation in general. And I also encourage you to please like this video, subscribe to my channel. If you have any comments about change management, if you agree with me or you disagree or you have other ideas, I'd love to hear your thoughts below. Any comments you have, I really encourage that. I want to thank you very much for your time and hope you have a great day. Bye. Bye. Bye.