Part 1: The Role of Organizational Change Management in Project Success

March 5, 2013 By Leave a Comment

In its most fundamental form change management is what we do to control and manage the impact of a change.  For example, Project Change Management provides us with a mechanism for controlling and managing changes that left unchecked could prevent a project from accomplishing its objectives.  System/Configuration Change Management is how we ensure that changes to computer systems and applications have been adequately tested and controlled so as to minimize the risk that a change will cause an error or interruption in service.  But how are we managing the impact of changes on people in the organization?  Are we deliberately taking action to control the impact of change and encourage adoption or the change or are we assuming that everyone will joyfully embrace change and adopt whatever is being introduced without question, resistance or complaint?

Experience shows that the most successful change efforts, whether they involve the introduction of a new product, business processes, or a business model, include a conscious effort to understand and manage the impact to people and affected organizations.  Indeed, Organizational Change Management (OCM) is quickly becoming one of the disciplines or practice areas recognized as essential to project success and we will frequently see specialists and consulting firms specializing in OCM either involved in major projects or in helping organizations implement OCM processes.  But in organizations or projects that don’t have formalized processes or resources to dedicate to OCM activities, the responsibility for identifying, planning and executing OCM-related activities falls to the manager and the project team.

In this article, we will explore why OCM needs to be considered in every project and how effectively identify, plan and manage those changes to support project success.

Organizational Change Management as a Project Component

Organizational change is generally defined as making changes within an organization that will affect the way the way individuals and groups operate and interact.  Introducing new processes or technologies may change the way jobs are performed, redefine roles and responsibilities, or change reporting structures.  More often than not organizational changes involve new expectations, new processes and tools, new partnerships and relationships.

In some cases changes to the organization are intentional and the role of Organizational Change Management in the project is obvious.  Organizational transformation initiatives and projects are undertaken with the primary objective of consciously introducing specific and often sweeping changes designed to improve organizational performance.  These projects focus on the changing the way the entire organization or a large part of it operates.  Transformation projects involve radical restructuring of job responsibilities, operating processes, and reporting relationships, major changes to how employees are evaluated and compensated and, in some cases, attempts to change the underlying organizational cultures and behaviors.  While these projects and their parent initiatives introduce significant organizational change, these are fairly well documented and the literature is filled with case studies and strategies for managing the changes resulting from kind of endeavor.

In other projects however, organizational change is not the primary project objective but instead a by-product or a component of the project:  something that impacts the organization in such a way that the organization and its people must change to adapt to or absorb that impact.  Much like a rock hitting a pile of sand, organization changes form as a result of the impact whether or not it was intended or accidental.  For example, consider a project to move a department from one office space into another – while the project team might be focused on the move itself, the people being moved are focusing on things like is the new space comparable to their old space?  Is it larger? Smaller?  Located closer to a window? Farther away?  Might their new location be perceived as  more or less prestigious than their current space?  Is the new space that someone else has been given a reward?  Or perhaps a punishment?

Organizational impacts may also result from the deliverables of the project or from how the project is organized and how it operates.  In other cases the impact is to the project itself; internally or externally introduced organizational impacts that force some organizational elements within the project to change.  Whether internal or external, caused by the project or affecting it, all of these impacts have the potential to significantly change the schedule, cost or scope of a project or program and, as such, require mindful and effective management.

Identifying Organizational Change Impacts

Like managing anything else, the first step in managing organization change is to identify what kinds of organizational impacts may result from the project effort.  Like in risk management there are organizational changes that we can anticipate and others that may appear from nowhere.  Needless to say, we want to anticipate and plan for as many as possible.

Identifying organizational impacts and changes can be difficult even when they are the primary objective of a project and expert resources are deployed to carry them out.  In fact, a large number of transformation projects are challenged or fail outright.  If the success rate is that low in initiatives where organizational change is directly linked to the project objectives and, hopefully, have been considered and planned for, it’s not surprising that organizational impacts resulting from other types of projects are not addressed in the project planning or execution processes and remain invisible until they become significant barriers to project success.

Why are organizational impacts and their attendant risks so often overlooked in projects?  Project management texts frequently identify and describe organizational risks, numerous published case studies on project failures cite organizational change issues as major contributors to project failure, and most experienced project managers have sat through at least one risk brainstorming sessions where someone on the team has brought up an issue or risk relating to organizational change.  In fact, most project managers and teams recognize the potential for risks associated with organizational change, but tend to dismiss them as unmanageable, indefinable or inconsequential.

So the first challenge is simply recognizing that organizational change will be needed for the project to accomplish its objectives.   While sometimes obvious, there are often projects where the need for change is more subtle or where the agreed upon deliverables may be in conflict or inconsistent with the beliefs or values of the organization.  For example, an effort to implement a heavyweight, detailed control process in an organization that prides itself in its speed and agility will require much more attention to organizational change than the same effort might take in an organization that highly values structure, discipline and rules.  In other words, for the project to succeed the mismatch must be recognized and the appropriate changes to the project and/or the target organization must be made.

Even when we recognize that our project will require some level of organizational change management,  we encounter a second challenge; clearly identifying and defining the specific impacts that may  result from or be created by any given project or effort so that efforts to mitigate or manage them can be included in the plans for the project.   This difficulty stems in part from the fact that the reaction to, and much of the impact of organizational change is emotional.  Rather than facing a straightforward issue or risk like ‘ part x doesn’t perform to specifications’,  the project manager is faced with concerns about changing behavior and beliefs, impacting morale and job satisfaction, and anticipating a myriad of emotional reactions which may not respond to a fact-based rational response.  In short, while many of us intuitively know that there will be an impact, we may be hard-pressed to define that impact and come up with effective approaches to dealing with them.

Recognizing the need for organizational change management as a component of an effort and establishing strategies and plans for meeting that need are critical first steps but much more is needed to ensure at organizational impacts are understood and effectively managed in a project.

Planning for Organizational Change impacts

Once we’ve identified where organizational change is likely, we can plan for it.  Obviously planning for organizational change is more proactive than dealing with it as an issue during the project.  Planning can include identifying organization change management activities as part of the project scope and schedule or addressing it as part of the Risk Management Plan.  Needless to say, your approach should be driven by the scope and impact of the change.  The more extreme the change and the more people effective, the greater the need for proactive organizational change management.

Any effort to plan for organizational change must consider: 1) A single project may introduce a number of different organizational impacts, 2) changes may impact different individuals and groups in a variety of  ways and 3) organizations are made up of people will not all perceive or react to the change(s)  in the same way.

Likewise, teams planning for organizational change need to be mindful that the sources of organizational changes are not always obvious.  While most of us are fairly sensitive to how the outcome of our project might require changes in the way individuals and groups operate and interact, we may not recognize that the execution of the project itself may introduce major organizational impacts.  Take for example the major project that requires significant participation of people normally assigned to operating groups. Whether the assignment is full time or in addition to their ‘real jobs’,  these people and the people who are not assigned to the project are being asked to change the way they operate and interact.

As another example, in the early 1980’s I was involved in a project to convert a loan collections operation from a paper-based system for keeping records and notes on collection calls to an on-line system.  The new system required collectors to type their notes using a keyboard.  While quite a bit of planning was done around implementing the new system and training the collectors to use it, and we had not considered the possibility that some of the collectors might not have keyboard skills (the majority did not).  As soon as this came to light, we arranged for training and practice sessions in touch-typing.  Fortunately we caught the issue early enough to minimize any cost or schedule impact.

Unfortunately the lack of keyboard skills was just the beginning of our problems.  It turns out that no one had considered the impact of the transition on productivity:  Forced to use a new technology with newly acquired, beginner-level skills, collections the first month after implementation dropped by 40%.  While some productivity drop had been anticipated by the organization’s management, what was not anticipated was the huge turnover in the collection staff that occurred shortly after the implementation.  It turns out that the collectors’ compensation plan was heavily based on commissions and bonuses for dollars collected and a number of them  were aggressively recruited by a competitor and left for compensation packages that would enable them to recover the income they had lost during the initial implementation.

Here was a case where we recognized the potential impact of using a keyboard, but we didn’t think beyond the objectives of the project to the individuals within the organization.  The moral of the story is that we need to consider a broad set of possibilities in order to really plan for organizational change.  This means looking at how we might be disrupting both individuals and the organization as a whole.

Change is by nature disruptive.  The introduction of new systems, processes, products, tools and methods all have the potential to upset the normal operation of the organization and how individuals see themselves in that organization.   If t we are unable to effectively manage the level of disruption, the backlash will prevent a fully successful realization of the desired project outcomes.  Likewise, if the project team is effective in managing and minimizing the disruption the effected organizations will be more likely to accept and readily adopt the changes being implemented.

Filed Under: The Business-Driven PMO Tagged With: , , , ,

Improving Adoption and Usage of PPM in Your Enterprise

March 4, 2013 By Leave a Comment

What makes a Project Portfolio Management solution deployment successful?  A great deal of hard work?  Definitely.  But there are some other ingredients in that “special sauce” that makes your PPM deployment succeed.  Let’s explore.

A few years ago Jack Welsh of GE fame led a keynote speech on large programs.  He was presenting to the business leaders of some of the largest enterprises in the world.  The speech began something like this:

“If you can’t get top management to support your program, don’t even bother.  Don’t even waste your time.”

Why did Jack say that?  Because to him, adoption of the program and solution is so important that a both are doomed to fail without that top level support – all the way from the top to the bottom.  You can spend an extraordinary amount of time, effort and financial resources around setting up a program, developing a methodology and implementing your PPM solution but without the team being ‘on board’ with your solution you will have a very difficult time succeeding.

Once we can secure an executive sponsor, and have them attend the kick-off, and elaborate why the initiative is so important, what’s next?  The next step is to make sure your solution takes advantage of a very simple setting – allowing project managers to ‘align’ their project with one of a limited number of corporate initiatives.  This simple step will serve two purposes;  it will enable the project manager to understand where their project fits (and more importantly, how it contributes) to the company’s goals as well as act as an indicator to tell the PMO and executive committee which projects are going “rogue” – those which are not aligned to any goals or objective.  One of the best examples that come to mind comes from the early 1960’s, before man landed on the moon, when President John F. Kennedy was touring the NASA Manned Spacecraft Center.  A humble and down to earth leader, JFK encountered a janitor as he was being guided through the facility.  He stopped the entourage and approached the janitor and asked him what he does there.  The janitor replied: “I’m putting a man on the moon.”  Surely he knew he wasn’t directly flying an astronaut to the moon, nor did the director of the space agency tell him to answer that way if the president asks.  No.  The mission of the center was so clear from the very top to the very bottom that every single person knew what their contributions were working towards.

Next idea has to do with appreciation for the stakeholders and user community.  A solution’s adoption is most successful when everyone is able to contribute to its design and change.  It is essential for the PPM Steering Committee (the team who manages the solution’s use and configuration) needs to capture end user feedback in order for the solution to evolve and grow with the program.  Why is this so essential?  Simply because when we set out to design the program, we may not have taken everyone’s perspective into account.  We may also not have thought about how each role would interact.  But more importantly, you increase the chances of success by casting your feedback “net” as broadly as possible.  There’s an old story that helps demonstrate this idea.  On some highway, a trucker is driving his semi.  He approaches a bridge with a sign that warns of 13’ of clearance.  Thinking he can fit, he continues onward only to hear the sound of crushing metal and his truck quickly stopped.  He gets out of his rig and finds his trailer wedged under the overpass with no easy way to get out.  The state police are called followed by the civil engineer.  Bridge plans are reviewed and a crowd starts to gather.  A little girl walks up to the engineer and says “mister, why don’t you just take the air out of the truck’s tires?”  The truck is lowered and is now able to roll out.  Sometimes the best ideas come from the strangest places.  But even more important, one of the people in the community was able to share an idea that had a direct impact on solving a problem, creating a positive environment across the entire community.

Of course, there are many other aspects to user adoption of your PPM solution, but getting the support from the entire organization, from the top to the bottom, is essential to the success of your continued deployment.

Filed Under: The Business-Driven PMO Tagged With: , , , ,

The Forrester WaveTM: Project/Program Portfolio Management, Q4 2012

January 14, 2013 By Leave a Comment

Forrester Inc. came out with its much-awaited Forrester Wave report on Project/Program Portfolio Management in December 2012.  As expected, the report highlighted some key industry trends that are redefining the scope of PPM and shed light on what to expect going forward.  As per the report PPM now has two distinct segments: Planning and Execution. Here are some excerpts from the report:

Demand for Business Agility Drives Change to BT Governance Processes: Accelerating demand for business agility forces firms to adapt. Manual data entry and ponderously slow feedback loops from planning-as-usual don’t enable firms to pivot as business conditions change. Today’s organizations need to see and trust information as it develops to make decisions that will help them outpace their competition.

The PPM Tools Market has a New Dividing Line — With Key Features on Both sides: The need to support Lean and Agile processes makes today’s PPM tool choice more difficult. Above-the-line tools support strategic planning focused on value, risks, and benefits. Below-the-line tools focus on managing demand and day-to-day work. Several vendors have functionality that straddles the line, but few vendors are strong across the board.

One-size-Fits-all is No Longer Relevant — It’s Time To Take a Layered Approach: As firms turn to Agile and Lean practices, a single PPM tool may not make sense. Think more in terms of constructing a “layered approach” to PPM. Seek flexible solutions that handle the day-to-day work for both waterfall and Agile projects (below the line) that also convey aggregated information to more strategic (above-the-line) planning.

The report further deep dives into the changing face of the industry and highlights that demand for business agility will continue to fuel adoption of Agile development techniques that can deliver differentiating business technology (BT) solutions within accelerated time frames. Organizations that fail to adopt governance processes that span traditional waterfall and Agile will struggle. Also, while PPM has historically been seen as a tool for either top-down forecasting and planning or for project management, organizations rarely use a single tool for both purposes.

In this report, Forrester Research, Inc., evaluated 10 of the most significant PPM vendors against 68 criteria in two segments: above-the-line strategic planning and below-the-line work execution.

To access the complete report, click here.

Filed Under: Official Daptiv Blog Tagged With: , , , , , ,

Why is team collaboration not enough?

January 7, 2013 By Leave a Comment

Expanding beyond team/social collaboration to business collaboration

The term “collaboration” has become one of the primary hot topics for businesses and analysts throughout the industry lately.  At its most basic level, “collaboration” simply means “working with others in a coordinated fashion toward a common goal.”  But few actually attempt to define what it really means in the context of business and PPM.

If you ask most people what capabilities define collaboration in the workplace, they generally talk about the sharing of information within a given team:  document management, threaded discussions, activity feeds, instant messaging, shared calendars, task assignments, facilitation of problem solving and idea development, communication of decisions and meeting minutes, etc.  This is all good, and certainly helps a team move forward in coordinated fashion toward the common goal of completing a project or specific unit of work.  Nearly all PPM solutions provide functionality to address each of these needs within the scope of a project.  SaaS PPM solutions are particularly well-suited to providing this level of team collaboration since, by their very nature, they are accessible to all team members regardless of geographic diversity and the information they contain is always available in near real-time.

I would argue, however, that this limited view of collaboration is incomplete.  Looked at from a broader perspective, an entire organization can be viewed as a collection of units which must all work together in a coordinated fashion toward the common goal of alignment and execution against the business’ corporate vision and strategic objectives.  Thus, business-level collaboration is necessary to establish the direction for an entire organization.  “Business Direction” includes the definition for the organization’s Vision, Goals and Strategies.  By sharing and collaborating on the Business Direction, the business teams will be better prepared to drive the various work efforts.  True business-level collaboration therefore depends on the free flow of information between the project teams and the outside world – management, other departments, executives, stakeholders, etc. – to facilitate proper alignment and effective decision-making throughout the entire organization.  It is this level of “business collaboration”, as opposed to individual “team collaboration”, which is often missing from a company’s collaboration strategy.  All too often, anyone not on the core project team is actually excluded from access to the system of record for project performance and must therefore depend upon periodic status updates or word-of-mouth communications to understand, participate, or make critical business decisions on project information.

Business collaboration provides a level of transparency and visibility to project details throughout an organization.  At its heart, business collaboration makes heavy use of enhanced dashboarding and powerful reporting capabilities to expose appropriate project information to those who are outside the core project team.  Ideally, facilitation of business collaboration also provides processes and methods for these external resources to submit inquiries and participate in discussions, access project documentation, and all of the other traditional collaboration capabilities as well.

When examining the collaboration strategy within your organization, be sure to keep the big picture in mind.  Team-level collaboration is certainly important.  But enabling collaboration across departments and across levels within a larger organization can often be even more critical to the success of the entire business.

Filed Under: The Business-Driven PMO Tagged With: , , , , , , ,

Top-5 Predictions for Project Portfolio Management in 2013

January 3, 2013 By Leave a Comment

As project management gains wider visibility and recognition in organizations around the world, PMO’s will now develop new tool-sets to serve a broad spectrum of users. Organizations have recognized that projects are a major aspect of their business and more of their people are working on projects and using project management processes. Because projects are a major vehicle by which companies grow, improve and meet their business objectives, the need to successfully complete projects has never been greater. Daptiv forecasts top five PPM trends for 2013 and they are:

  1. PPM will Continue to be the Fastest Growing Category of SaaS - According to the Dataquest research report, “Competitive Landscape: SaaS Project and Portfolio Management Software, Worldwide,” PPM is the fastest growing category of SaaS enterprise software, increasing at a 41% CAGR for the 5-year period of 2009-2014. In 2013, even more organizations will embrace SaaS-based solutions to manage or transform their portfolios. In the PPM world, the benefits of this approach versus traditional on-premise software products include: Rapid deployment, team collaboration, reduced risk of failure, tighter vendor/customer relationships, and reduced cost of implementation and support.
  2.  PPM will Cross the Chasm From IT-Driven to Business-Driven - Organizations have come to realize that much of their growth and future sustainability comes through projects. Projects are vehicles of change, and the best way to improve the management of them is through PPM tools. PMO’s are getting more strategic about where PPM principles can add value, and they are finding green field opportunities for PPM in places that didn’t previously exist. In 2013, we will see an increased emphasis to “projectize” work in different business functions, such as line-of-business divisions, sales, marketing, and human resources. As such, more organizations will begin taking into consideration the business intelligence generated through PPM systems to refine their overall business strategies.
  3. Putting IT back in control of the BYOD explosion: PPM goes Mobile - Smartphones and tablets are poised for dramatic growth, especially with the arrival of new devices from Apple, Google and Microsoft. According to a Forrester report, 66% of employees now use two or more devices every day, including desktops, laptops, smartphones and tablets. As the mobile market continues to grow and with the increasing BYOD trend, enterprises/project managers will look at IT and the PMO to help implement new applications to ensure secure access across dozens of disparate platforms and handsets/tablets being used by the company across multiple regions.
  4. CFOs Give Green Light to PMOs - According to PM Solutions research, 65.8% of high performing organizations have enterprise PMOs. As companies begin to quantify the financial benefits of having a PMO,CFOs will be the ones leading the charge for the implementation of PPM solutions in the year 2013. This in turn will have a positive impact on creating an effective portfolio management operation, and it will be viewed as a way to bridge strategy, operations, and finance. Portfolio management will stimulate the interest and attention of the CFO, as PPM services become a proven method of improving system quality, and project and service delivery levels across the organization.
  5. Economic Uncertainty Drives Need for ROI Accountability - Given the continued uncertainty of the economy, cost management and efficiency will continue to top the list of priorities for most CEOs. In this environment, companies will remain cautious, and we will find companies leaning more heavily on PPM as a way to measure the ROI of their investments. In 2013, PPM will be recognized as a crucial change agent that will help companies’ transition out of recession-area thinking, towards driving innovation and business transformation initiatives at companies both large and small.
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