When we make a change, individuals may be asked to take on unfamiliar or uncomfortable new roles. Life becomes less predictable and less controllable. Individual status and standing is affected as those who used to be considered experts become learners, just like everyone else. By examining and discussing an organizational change in light of how strongly it impacts individuals and how they are likely to react can provide valuable insight into risks associated with resistance, non-acceptance, poor morale, fear, turnover, etc. While the project team can take an initial pass at this, participation by affected individuals from multiple organizational levels will provide a more realistic perspective as well as valuable input around mitigation strategies.
Questions to use in identifying risks from disruption may include:
- Are different skills required to use the new process (or tool, or methods)? Are they related to the existing skills?
- How much of a change does this represent to the person/people performing the work? Will this create more work or less?
- Where did the request or idea for the change come from? Do the new processes address a problem identified by the people doing the work or is the primary impetus external (required by someone other than the impacted organizations)
- Will this change result in staff changes, reallocation or reassignments? Do people believe it will?
- What is the level of additional effort required to make the change? Do individuals see the additional effort as excessive? Is the organization willing to accept a temporary drop in productivity as a result?
How Does Change Impact Organizations?
Organizational structures refer to the organizational constructs which have the potential to support (or derail) an organizational change. By the organizational constructs we mean the structures that define the organizational hierarchy (who’s in charge, who reports to who), the agreed upon roles, responsibilities and levels of authority. The organizational structures define who makes decisions and, in some cases, defines the processes for how those decisions get made. Organizational structures exist at many levels; across the enterprise, within individual departments and in the form of temporary organizations which may include committees, task forces and project teams. An individual project can both affect and be affected by organizational structures. Additionally, the organization structure of the project itself may contain risks: conflicting functional objectives or approaches, different toolset and standards, or different reporting relationships can inject risk into the project. This is especially true when the members of the project team are from different companies where the interaction between the members of the team may have contractual or financial implications to one party vs. the other (Hendrickson 1998).
All projects are subject to risks related to organizational structures. Loss of sponsorship or priority resulting from leadership changes, changes in decision-making processes, renewal of commitments from reorganized functional areas all introduce risk into the project. Also in any project, the structure of the project team itself may be the source of certain risks. Weak matrix teams must consider the risks associated with negotiating for priorities and scarce resources with functional managers, while dedicated project teams must manage the risks associated with staying connected to and consistent with the direction of other parts of the organization.
There is however evidence that there are two other types of risks specifically associated with organizational change: 1) the impact of changes on the way an organization is structured and interacts with others and 2) how well the project integrates or fits into the larger organization.
When a project is going to impact an organization structure, our organizational change strategy must consider the socio-political implications of the changes being proposed. Often changes are perceived by an organization or the individuals within it as a threat to power, control, influence, status, access or resources (including people and money). Concerns may also arise about the dynamics of interactions between organizations based either on past experiences or a desire to preserve the status quo. In either case the reactions, both rational and emotional, may manifest as vehement objection to total withdrawal of support for the project. What at the outset of the project may seem like a straightforward set of decisions about who is going to do what, become complex negotiations escalated up to the most senior levels of the enterprise. In some environments, even a minor change to the composition or responsibilities of organizations may require huge amounts of time and resource to redefine and document the detailed process and interactions of those reconstituted groups. While some organizations are adept at making these changes, others are much more resistant and may require more time to fully design, document, and review before they will accept or relinquish responsibilities. In efforts where the organizations cross corporate boundaries (multi-company efforts) contracts may need to be renegotiated or terminated.
In considering organizational disruption consider the following questions about the proposed or planned changes:
- Will this affect the overall role of an organization?
- Does this affect the level of control a department has over their work? Will this be seen as a loss (or gain) of control?
- How will the project team interact with the departments?
- How will this affect how organizations interact? Will it make one organization more dependent upon another? Less dependent?
- Does this affect staffing levels or reporting relationships?
- Do we know the procedural requirements of the functional department. Are there any processes or procedures which are a mismatch to how we intent to operate?
Once the nature and scope of potential changes have been identified and understood it is reasonable to assume that the appropriate activities needed to effectively address the organizational change requirements of the project can and will be effectively executed. But here again, those project teams not familiar with or sensitive to organizational change activities may find themselves challenged to determine how best to execute the organizational changes needed for successful project implementation. Fortunately, there are a number of approaches that can be used, individually or in combination, to address organizational change.
Communication and Commitment
Good communication across an organization is always important, but when an organizational change is involved the importance increases. Communication from the most senior levels of management demonstrating commitment and support of the change is critical and is most effective when the rationale of and urgency for the change is clearly explained. When Lou Gerstner took over a troubled IBM in 1993 he recognized that employee communication was an essential part of the effort to transform the organization and return it to profitability. Gerstner knew that the impending changes would cause pain in the organization but that they were necessary given the magnitude of IBM’s crisis. He recognized that as CEO his role was to “strongly and continuously” communicate both the crisis and the plan for addressing it:
“All of this takes enormous commitment from the CEO to communicate, communicate, and communicate some more. No institutional transformation takes place, I believe without a multi-year commitment by the CEO to put himself or herself constantly in front of employees and speak in plain, simple, compelling language that drives conviction and action throughout the organization.” (Who Says Elephants Can’t Dance?: Leading a Great Enterprise through Dramatic Change, Louis V. Gerstner, 2003)
While Gerstner’s transformation effort was far broader than the organizational changes associated with most projects, the need for strong consistent executive commitment and ongoing communication of that commitment are equally essential.
Two-way communication between the project team and the impacted organizations is also a critical component for successful organizational change. While executive communication focuses on why the change is needed, these need to focus on the content of the change (the what) and how it will be implemented. By communicating what and how, impacted individuals and departments have more time to think about and adjust to the upcoming change. Likewise for the team – open, two-way communication between the project team and the impacted organizations can significantly reduce the “element of surprise”, where unknown objections or problems surface at the last minute.
Phasing and Chunking
Another strategy for mitigating risk is associated with organizational changes is to introduce the changes gradually either by phasing in the changes within the project or by dividing a larger projects into phases or ‘chunks’. From an organizational change perspective the incremental approach has a number of benefits. First, smaller changes cause less disruption which in turn may reduce the amount of organizational and individual resistance. Second, smaller efforts may be seen as more achievable, encouraging support and buy-in from impacted organizations. Third, lessons learned in earlier stages, about the organization and how it reacts to change, can be integrated into later efforts. Lastly, individuals and organizations involved in earlier organizational changes can be called upon to assist in “selling” the effort to others.
In implementing new products, systems and processes we often ask individuals to quickly acquire and apply new knowledge on the job. Even with the best most comprehensive training programs turning “what one learned” into “what one does” back on the job can be frustrating and stressful. Combined with the demands of “getting the job done” these frustrations and stresses can result in a backlash that threatens the success of the project. One strategy that reduces impact is providing coaches to support the initial implementation. The role of the coach is to help people quickly work through problems or issues, share knowledge about nuances of the new product or process, and act as a conduit for feedback to the team on usability issues or other functions and features that were great ideas in the lab, but not in practice.
The most effective coaches are individuals who were actively engaged and part of creating the new product or system being implemented. These people intimately understand not only the mechanics of using the product or process, they understand why certain things were done the way they were and the intent of certain design decisions. Optimally the coach is able to share that knowledge – enabling the new user better understand the rationale and apply the change more effectively.