Making Change Work

How to Create Behavioural Change in Organizations to Drive Impact and ROI

Emma Weber, Patricia Pulliam Phillips, Jack Phillips

• Publisher: Kogan Page
• Year: 2016
• Print ISBN:
  9780749477608
• Edition: 1
• eBook ISBN:
  9780749477615
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Underpinned by decades of research and application, Making Change Work shows that the lynchpin that connects change initiatives and their ultimate success is behavioural change. The book brings together the ROI Institute's established methodology for aligning projects and programmes to business needs and for evaluating impact and ROI with the Turning Learning Into Action methodology developed by Emma Weber to support learning transfer. It offers a step-by-step process that partners with any business initiative requiring behavioural change, providing the critical link bridging the knowledge and application. At the heart of the methodology is a framework for reflective conversation, ensuring accountability and aligning people to the desired outcomes.

Cutting through complex change theory, Making Change Work is a 'how to' guide, providing an end-to-end approach to solve the problem that businesses have grappled with for so long from change projects that don't deliver business impact. It includes real life case studies from organizations such as BMW and the University of NSW Department of Innovation on how organizations are using the framework to create successful outcomes that are not just demonstrated but that are delivered and measurable. It is ideal for any professional who is embarking on any organizational initiative requiring change and evaluation of the subsequent ROI, whether it is a learning initiative, quality initiative or change initiative.

PART ONE

Why change?

01

The need for results from change

Right now, somewhere in the world another change initiative just died. It was probably introduced with enthusiastic fanfare – a new IT system that would make the business more efficient and employees’ and customers’ lives easier or a new process that would streamline operations and improve productivity. The news of the impending change initiative was probably not met with quite the same enthusiasm from those affected as the person responsible for leading and implementing the change (change agent). And to be fair it’s hardly surprising.

Most of us who have worked in an organization anywhere in the world will have experienced some new change initiative or another. Some of us may even have some memorabilia to prove it – a T-shirt with the project name on the front and ‘We did it’ on the back (that no one wore because ‘we didn’t do it’) or a ‘Mission Ignite’ coffee mug where someone scored out ‘Ignite’ and replaced it with ‘Impossible’ with a permanent marker! We can probably all remember the initiative ‘that started so well’ but ended so badly or just petered out. Even those that seem destined to deliver, with clear objectives and detailed implementation plans, can so easily derail and all that is left to prove it was ever started is the implementation document that is now used as a hefty bookend.

In 1995 John P Kotter, the renowned change management thinker, revealed in an article for the Harvard Business Review that only 30 per cent of change initiatives are successful (1995). He later went on to publish what many regard as the seminal work in the field (1996). In 2002 David Miller reported in the Journal of Change Management that 70 per cent of change programmes fail. In 2005, Malcolm Higgs and Deborah Rowland reported in the same industry magazine that ‘Only one in four or five change programmes actually succeed.’ In 2006 McKinsey & Company surveyed 1,546 business executives from around the world to ascertain the new updated statistics for successful change implementation. Lo and behold only 30 per cent of change initiatives were considered a success (Isern and Pung, 2006).

Incredibly, all the independent research into the effectiveness of change initiatives over the past several decades, whether from the Gartner Group, Harvard Business School or McKinsey & Company and beyond, consistently illustrates the ironic truth that change doesn’t actually change that much (Keller and Aiken, 2008). All the time, money and energy poured into change initiative after change initiative doesn’t actually matter most of the time. It should matter, otherwise why start the change process in the first place? Even though we have known these dismal figures since the mid-1990s the failure rate of change initiatives is still stubbornly stuck at 70 per cent (Leonard and Coltea, 2013). In fact, Towers Watson bumped that figure up to 75 per cent when the ability to sustain change was factored in (2013).

And the changing pace and complexity of business mean that the situation is only getting worse. According to IBM’s 2008 Global CEO Study 83 per cent of CEOs and senior leaders expected substantial change – up from 65 per cent two years earlier. Unfortunately those reporting they had successfully managed change in the previous two years rose only 4 per cent, up from 57 per cent to 61 per cent. This ‘Change Gap’ or the disparity between the expected change and the ability to manage it nearly tripled between 2006 and 2008 (IBM, 2008a, 2008b). The same study two years later identified the escalating complexity of operating in an increasingly volatile and uncertain world as the primary challenge. And a surprising number of CEOs reported that they still felt ill-equipped to succeed in this drastically different world (IBM, 2010). In 2012 the challenge was still change – how to adequately manage and capitalize on the convergence of the digital, social and mobile spheres, connecting customers, employees and partners to organizations and to each other in new ways (IBM, 2012).

Today the challenges are even more pressing. We live in a VUCA world – volatile, uncertain, complex and ambiguous. Change is a constant and increasingly permanent aspect of modern business – and we are not adapting quickly enough. Too few of us possess genuine change capability and so are struggling under the weight of escalating change initiatives and expectations.

The pressure on CEOs and senior leaders to continuously deliver shareholder value is relentless. For most businesses that pressure means a necessary preoccupation with short-term results and a continuous drive for growth and elevated performance. Indeed it is this drive for better financial results, either increased revenue or cost savings, that is behind most change initiatives.

There is little doubt that modern business is encountering more change than ever. Research collaboration between the Association for Talent Development (ATD, formerly ASTD) and i4cp found that only 17 per cent of business and learning professionals surveyed rate their organization as highly effective in managing change initiatives. That’s not very encouraging when most organizations are facing a minimum of three major changes per year (ASTD, 2014).

Essentially what all this means is that not only is our ability to successfully implement change notoriously poor across the board but our need to implement more change successfully is escalating at an alarming rate. Clearly we need a solution.

But before we unpack that solution in more detail it’s worth getting a handle on just how urgent the need for answers really is.

The cost of failed change

There are three main costs when it comes to failed change initiatives:

• financial cost;
• human cost;
• competitive cost.

Financial cost

Think about the last change initiative you were involved in… consider all the meetings, analysis, and presentations you were privy to. Think about the various options that were explored before a decision was made to opt for one change initiative over another. All this took time and therefore money. And that was before any change was even announced. Whether you are installing a new database or order system or moving premises or instituting a new quality initiative, change is always expensive.

Dr John McManus and Trevor Wood-Harper showed that the estimated cost of IT project failure across the European Union was a staggering €142 billion. Professor Chris Clegg of the University of Sheffield conducted research into the same area and discovered that as much as £58 billion is wasted in IT-related change in the UK every year (McManus, 2004).

An investigation by the Independent found that a significant number of IT change initiatives undertaken by the UK government suffered severe delays, ran millions of pounds over budget or had been cancelled with the total cost estimated to be £26 billion. Parliament’s spending watchdog described the projects as ‘fundamentally flawed’ and blamed ministers for ‘stupendous incompetence’ in managing them (Savage, 2010).

In 2005 the US Air Force initiated the Expeditionary Combat Support System to assist in resource planning. Despite costing $1.1 billion, no significant capabilities were ready on time and it would have cost $1.1 billion more just to get a quarter of the original scope. Needless to say the project was cancelled.

It almost seems unfair to call out these examples – in truth there is no shortage of war stories about the epic waste of money caused by failed change initiatives. Often IT changes are easier to quantify and therefore get more media attention but failed change of all types is financially costly. But unfortunately it’s not just the financial cost that’s so frustrating.

Human cost

If 7 out of every 10 change initiatives fail then a huge number of people may only have experienced failure. That has serious repercussions on employee morale and engagement. It’s hardly surprising that the mere mention of any change initiative is universally met with heavy sighing and copious eye-rolling along with veiled mutterings of ‘Oh no, not again’.

Failed change is soul destroying. And if we look at Gallup employee engagement figures there is little doubt lack of engagement is a problem for many organizations. During 2010–2012 Gallup conducted a comprehensive study into the US workforce and discovered that just 30 per cent of the 100 million full-time employees were engaged, 52 per cent were disengaged and 18 per cent were actively disengaged. This means that some 70 million US workers are ‘not engaged’ or ‘actively disengaged’ and are emotionally disconnected from their workplaces, which makes high performance and productivity unlikely. In fact Gallup estimates that these actively disengaged employees cost the United States between $450 billion and $550 billion every year in lost productivity, stating disengaged workers are ‘more likely to steal from their companies, negatively influence their co-workers, miss workdays, and drive customers away’ (Gallup, 2013a). And, in case you are reading this and thinking, ‘Oh, that’s OK, I live in Australia, UK, Europe…’ according to Gallup’s 142-country study into global workplace engagement North America and Canada are at the top of the list! Australia and New Zealand come in second with engaged employees accounting for 24 per cent of the workplace, while only 14 per cent of Western Europe’s workforce is engaged. According to the report, ‘Currently, 13 per cent of employees across 142 countries worldwide are engaged in their jobs – that is, they are emotionally invested in and focused on creating value for their organizations every day. As in Gallup’s 2009–2010 global study of employee engagement, actively disengaged workers – ie those who are ne...

Table of contents

• Cover
• Title Page
• Contents
• Acknowledgements
• PART ONE Why change?
• 01    The need for results from change
• 02    Business alignment: The V Model
• 03    Current failures of behavioural change
• 04    The TLA process and applications
• 05    Preparation
• 06    ACTION conversation
• 07    Evaluation planning
• 08    Data collection
• 09    Data analysis
• 10    Reporting results
• 11    Making TLA work: Skill set
• 12    Making TLA work: Guiding the conversations
• 13    How to roll out TLA in line with the alignment model
• 14    Case study: UNSW Innovations at UNSW Australia
• 15    Case study: Successfully managing a mature workforce
• Appendix 1: Sample TLA Plan
• Appendix 2: Turning Learning into Action™ Change Agreement
• Appendix 3: Sample conversation to illustrate the flexible TION part of the ACTION model
• Index
• Copyright