Change Management for Risk Professionals

James J. Leflar Jr., James J. Leflar Jr

• Publisher: CRC Press
• Year: 2021
• Print ISBN: 9780367251598
• eBook ISBN: 9781000336696
• Topic: Business
• Subtopic: Financial Risk Management
• Index: Business

Change Management for Risk Professionals addresses a need in the marketplace for risk professionals to learn about change management. Organizations exist within a complex and changing environment. The changes within the organizational context (e.g., societal, technological, and customer preferences) place pressure upon the organization to remain relevant and competitive. Change is not inherently wrong; our perceptions of the change make it negative or positive. A perceived negative change can become a real opportunity for improvement if desired. Systemic degradation and irrelevancy are the results of an organization that fails to acknowledge the reality of change.

The book focuses on the dynamics of change management with an eye toward the risk professional. There is a real need for an uncomplicated resource that helps educate non-change management professionals involved in risk-oriented change initiatives. Examples of risk disciplines are organizational resilience, business continuity, risk management, crisis management, and security management, but any discipline or function within an organization focuses on risk. Any organizational project is an initiative requiring dynamic change management skills.

The author brings his extensive experience to offer risk practitioners advice, industry examples, and best practices to the change management process. Change Management for Risk Professionals will be a welcome addition to enterprise-wide business continuity, crisis management, disaster recovery, security management, and homeland security professionals wanting to learn the secrets to becoming successful in initiating organizational change.

Part 1

1
Change Management

No man ever steps in the same river twice, for it’s not the same river and he’s not the same man.

Heraclitus, Greek philosopher

Learning Objectives

The learning objectives of this chapter are:

• The Concept of Change Management
• A Systems Perspective and Change
• Kotter’s Change Model

The Concept of Change Management

Change management is much more than maintaining control over the changes to a project. Many people might consider that the extent of change management, but that is a limited and inadequate view of the power of change management. Change management is about how to plan, facilitate, empower, and achieve a desired state of change within an organization. Change management involves as much work as the actual change initiative (i.e., project).

While the achievement of a change initiative will, or at least should, contribute to the enhancement of organizational goals and the bottom line, change management is a more complex concept than it appears. Change is a process of moving from a current state of existence to a new state of existence. Lewin (1951) described the change theory in his classic model of unfreezing–changing–refreezing. The model expresses a behavioral evaluation of a situation that allows for the desire to change, the actual change, and the willingness to accept the new state (Lewin, 1951). Lewin’s model is the foundation of change theory. However, the complexity of change is perhaps best described in Kruger’s (1996) iceberg model.

Figure 1.1 is adapted from Kruger’s (1996) model and presents a visual depiction of Kruger’s (1996) diagram. The iceberg model of change describes the apparent aspects of change implementation, such as project scope components, allotted project time, and project cost – these are the visible portions of the iceberg (Kruger, 1996).

Figure 1.1 Change Management Iceberg Model - Adapted from Kruger (1996).

The exciting part of the Kruger (1996) model is the portion hidden beneath the visible surface, such as communication dynamics, resistance to change, the perceptions of those involved in the change, hidden supporters and opponents to the change, and the involvement of leadership. It is common for managers involved in a change initiative to focus on the visible implementation issues because those issues result from practical project experience. However, ignoring or failing to recognize the hidden aspects of the project will doom the initiative to failure.

Decker et al. (2012) examined the implementation failure rate of projects and concluded that while studies have indicated dubious rates as high as 93% and as low as 28%, the failure rate is likely between 50% to approximately 70%. Hughes (2011) indicated that there is no empirical data to support the popular claim of 70% initiative failure. The association between a poor understanding of the “hidden” elements noted in Kruger’s iceberg model, the lack of a systems perspective throughout the change initiative, and a partial or complete disregard of Kotter’s 8-step model (1996, 2012) ensure the failure of the intended change. Conversely, there is a higher chance of success if a change practitioner applies the concepts of change management, Kotter’s change model, and reliable project management techniques to any change initiative. Failure of many projects is associated with a lack of understanding of the nature and dynamics of organizational systems. Organizations are complex systems, and a change initiative must become part of the organization through an acceptance of a systems perspective.

Systems and Change

Since organizations consist of systems, it is essential to understand the nature and complexity of a system. An organizational system consists of the formal and informal structure (e.g., an organizational chart and working relationships), the processes that constitute the work of the organization (e.g., the internal and external interdependent activities), and the culture of the organization (e.g., the interrelated internal and external interdependencies of the people). Busby (2017) indicated rightly that any change initiative is inextricably connected with the culture of the organization.

Change is about working to involve people in making changes in an organization and in their behaviors to the extent of the change. For instance, consider a security project involving the implementation of photo ID cards and the use of the cards to enter a facility. The security department expects everyone to show their ID card upon entry to a building. However, the employees never had to show their IDs before. It is essential to realize the influence the change initiative will have on the organizational culture, and the influence the culture will have on the change initiative (Busby, 2017).

The organizational system always operates and may have a hidden influence on the outcome of a change initiative. An organizational system has interrelated and interdependent processes that work together to achieve organizational goals. One process might require inputs from another function and produces an output that is used by another process; the more complex the organization, the more complex the system.

Figure 1.2 illustrates a high-level perspective of a fundamental organizational system. The board of directors interacts with senior leadership to develop the high-level goals that impact the industry and the strategic vision of the organization. Senior leadership works with middle management to develop achievable business goals to facilitate the achievement of the market goals of the organization. The middle managers work with the employees to establish the enabling goals to promote the business unit goals that facilitate the high-level organizational goals. Each level of the organization is interrelated and interdependent upon the other levels. In addition to domestic business relations, the organization must include any international business considerations. An effective organization will ensure that all levels of the organization, along with the various major components, work together well to achieve the business goals.

Figure 1.2 High-Level Organizational Systems Perspective.

Since an organization does not operate within a vacuum (i.e., the internal environment), the external environment is a critical component of the systems perspective of the organization. Figure 1.3 provides a basic view of the relationship between the internal or company environment and the external environment involving the customers and any necessary financing for the company. For i...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Figures
• Preface
• Acknowledgments
• Author
• Organization of the Book
• Part 1
• Part 2
• Part 3
• Appendix A
• Appendix B
• Appendix C
• Appendix D
• Index