Change at any level in an organization presents a healthy set of challenges and pitfalls. The conglomeration of the various variables and associated factors or levels that define the organization introduce a level of system complexity that is difficult to understand and even more difficult to manage. Due to the longevity of these change challenges (in essence, since Adam and Eve were removed from the Garden of Eden), humans have had the opportunity to face and overcome these challenges on multiple fronts and in numerous ways. The evolution of the best methods, or best practices, in change management has afforded current leaders and other stakeholders the opportunity to learn from successful change initiatives. It also provides these individuals and the organizations they support with recommended tools and techniques that have been tried, tested, and validated through practical application. This practical application has also driven the development and publication of case studies that demonstrate best (and worst) practices in change management. These allow interested parties to explore the topic of change management and witness a portion of or the entire process of change in an organization other than their own. The combination of these best practice solutions and the case studies, the shared war stories, provide support for the furtherance of the science, the philosophy, and the application of change management in any organization.
All organizations experience change or transformation continuously throughout their lifecycles. There is no avoiding it. The startup process requires the formation of the entity where none previously existed. Normal (and special) operations necessitate the adoption of and adherence to evolving or devolving customer requirements. Divesting from the business, whether in sale or closing, removes the entity, in its current or historic form, from the business community. Regardless of the change or the rationale driving the change, successfully embracing, navigating, and implementing change is a daunting task. “Change is difficult enough for the individual. When we talk about organizational change, the difficulty increases with each individual that is added to the equation, introducing new personality traits, perspectives, and experiences” (Bowie, 2011).
To make the pursuit more daunting, change efforts fail more often than they succeed. “There is a broad consensus that planned organisational change frequently fails to achieve the outcomes for which it is implemented” (Evans, 2020). These numbers are high. “On the basis that the definitions of success and failure are relatively consistent, studies indicate that around 70% of change initiatives fail” (Dempsey et al., 2022).
While a 30 percent probability of success is disheartening, there is hope. The current literature is ripe with change management best practice methods and mechanisms, and also with numerous examples and case studies depicting the risks, benefits, and efforts applied to both successful and failed change management journeys. A careful review and discussion of these tools and accounts provides a clearer perspective of these types of engagements and allows business to consider and compare their situation and needs.
Best Practices in Organizational Change
A plethora of industry-agnostic approaches, methods, and tools are available for organizations to employ in their transformation pursuit(s). These mechanisms were specifically (but not exclusively) designed to reduce the risk of change effort failures by leveraging data, information, experience, and other factors at the individual level for increased benefits at the organizational level. Some of these solutions include frameworks for initiating and managing change initiatives, different methods of strategic planning, and tools for tracking evolutionary progression, digression, and regression.
Change Management Frameworks: Kotter’s Eight Stage process of creating major change and the knowing model
Change management frameworks (also termed roadmaps, processes, etc.) provide industry-agnostic guidelines and summary progressive steps for initiating, managing, evaluating, and improving change efforts. Well-known frameworks include Kotter’s Eight Stage process of creating major change and a more recent entry, the knowing model.
Kotter’s Eight Stage process of creating major change applies the program- or project-management philosophy and presents an iterative approach for implementation. This eight-stage iterative process provides a high-level framework that separates discrete activities into two sections, then breaks down four stages within each section, to enable a step-by-step approach to managing organizational change.
The knowing model “suggests that for information to impact members’ behavior, members must be aware of it, integrate it as knowledge, and act on that knowledge” (Freeburg, 2020). Similar to Kotter’s Eight Stage model, the knowing model includes stages for review and evaluation. “Each stage includes methods for evaluation and goals and strategies for overcoming barriers to move on to the next stage. All three stages must be realized for behavior change to occur” (Freeburg, 2020). This model includes fewer enterprise-wide factors than Kotter’s Eight Stage process of creating major change (e.g., “generating short-term wins”) and focuses on information absorption, adaption or assimilation, and action at the individual- or employee-level.
Both of these approaches include elements of best practice project management techniques such as the Six Sigma five-phase framework based on the scientific method (Define, Measure, Analyze, Improve, and Control (DMAIC)) and Lean manufacturing’s eight-step problem solving process (starting with define the problem and culminating in continuous improvement).
Strategic Planning: The Balanced Scorecard and Hoshin Kanri
From the outset of any change or transformation initiative, a guiding plan should be created with a select group of representative stakeholders and communicated with all affected stakeholders. “Successful changes require leaders to develop an appropriate and accepted vision, with measurable objectives and a strategy that guide the organization to the realization of expected benefits” (Errida & Lotfi, 2021). This is aligned with the third and fourth stages in John Kotter’s Eight Stage Process of creating major change, “developing a vision and strategy” and “communicating the change vision” (Kotter, 2012).
The question for many organizations is often how or what method should be used? Strategic planning can be achieved with several strategic planning and communication (or deployment) models including the Balanced Scorecard and Hoshin Kanri planning.
The Balanced Scorecard provides subjective, facilitation-driven tools and methods coupled with data and analyses to produce an integrated, deployable plan (financial, customer, process, and employee training perspectives) that is cascaded vertically throughout the organization’s strata and horizontally to affected partners and suppliers. The strategy map is a key deliverable. This tool makes the discrete elements of the plan (e.g., the vision, goals, objectives, measures, etc.) visual and it captures the interdependencies between different groups and tactical-level projects (termed “initiatives”). The scorecard captures and consolidates or “rolls up” critical driving and outcome metrics to support fact-based decision-making processes.
Hoshin Kanri (“compass management”) is closely tied to Lean manufacturing. This method requires users to develop and deploy strategic goals and associated policies throughout an organization. It is a top-down cascading model as well, where the communications flow from higher levels of management down to employees. This approach includes active upstream and downstream communication and coordination as well with discussion and exchange meetings (termed “catch ball” meetings) involving personnel from different levels in the organization (e.g., vice presidents meet with directors, managers meet with supervisors, supervisors meet with employees, etc.).
Evolutionary Progression: Maturity model
Maturity models are matrix structures that provide organizations with a construct for defining success factors and other traits that may be used to assess and monitor change progression. The success factors are developed in a phased or staged manner wherein multiple definitions are crafted and typically placed in descending row headers. “The identified success factors can be used to develop a maturity model which will assist organizations in requirements change management in the global context” (Akbar et al., 2019). Progressive stages or levels are included as column headers (e.g., level zero represents the current state, level one includes critical, nearer-term objectives, and level five may include the criteria for the ideal state). The organization cannot advance to the next level until all requirements for the current level are satisfied).
This tool offers organizations a visual management solution. Any and all stakeholders can readily view and interpret the current state and also understand where the organization needs to improve in order to achieve its goals. Although maturity matrices are heavily utilized in software development, they are also employed in manufacturing, distribution, and other industries as well.
Case Studies in Organizational Change
Change management best practices abound in literature, but what about reality (application)? Multiple case studies are presented from businesses across diverse industries to explore and better understand the implications, applications, and effects of these frameworks, methods, and tools. These organizations include a third-party reverse logistics company, a seafood processing, restaurant, and grocery firm, and a retail distribution company.
Case Study 1: Third-party Reverse Logistics Company
A third-party reverse logistics firm secured a consulting team with expertise in change management at the strategic (executive or enterprise), operational (core systems, value streams, and processes), and tactical (individual-, product-, and task-specific behaviors and activities) levels to transform their business. This transformation included consolidation of (and possible divestment from) multiple facilities, evaluation and potential reorganizing and restaffing the executive and middle management teams and redesigning all tactical processes to meet measurable strategic goals. Facilities included multiple modular and flexible retail locations that changed short-lease locations on a weekly basis.
The owner and president of this company was extremely supportive. The remainder of his staff, unfortunately, were not. In fact, they primarily functioned as obstacles. This led the owner to consolidate all leadership and decision authority under his own role, which in turn led to additional problems. While the owner was extremely knowledgeable concerning the sales process, customer relationship management, and the industry in general, his operational knowledge and experience were both extremely limited. To further exacerbate the issues facing this organization, the owner was making decisions without involving the most experienced personnel and communicating those decisions and their expected impacts in a delayed manner.
The consulting team designed the change management plan, incorporating multiple improvement initiatives (projects) ranging from facility consolidations and closures to process and equipment modifications. To drive these tactical plans forward, the consulting team also introduced sprint meetings, a best practice from the agile methodology, to share leadership by including the stakeholders with the experience and expertise required to make the most informed and hopefully the best decisions possible. “Shared leadership enabled change by alternating competence and role, depending on what was most needed for the specific contingency” and this included seeking and applying guidance from other stakeholders, “even if it came from a team member without the role of the formal leader” (Binci et al., 2020).
This simple, singular change dramatically increased support for all change initiatives and the portfolio as a whole. The increased awareness and participation accelerated estimated project timelines and improved the magnitude of the benefits.
Case Study 2: Seafood Processing, Restaurant, and Grocery Firm
A seafood processing and retail firm contacted the same consulting firm with a different change challenge. They were pursuing expansion and growth and had already extended the dining space in their premiere sushi restaurant by approximately 100 percent (doubled the available seating). Analyses performed by the consulting team revealed that the “improvement”, the expansion of the dining area, had actually led to reduced revenue, an unexpected outcome for certain.
The president of the organization faced many challenges, the most difficult of which was racism. As a man of European descent, he stood out. He was surrounded by management team members primarily from the Republic of South Korea, but also from China and Japan as well. The cultural viewpoints expressed by these specific members, quite openly in fact, was that people who look like him are inferior to members of their native populations. As a result, the president exhibited a supportive leadership style, but he did not exude authority. This stifled decision-making processes, generated excessive meeting volumes, and was hampering needed change initiatives across multiple facilities and businesses (e.g., seafood harvesting and processing facilities, warehousing and distribution centers, sushi restaurants, Japanese patisseries, Asian grocery stores, etc.).
The initial revenue loss findings referenced above spurred the president to action. The quantified failure helped him to understand and safeguard against the unintended consequences that may accompany change efforts. This is referred to as the “cobra effect”. “Learning from failure, although important, is a challenging endeavor” (Dinesh et al., 2021). The president shifted his focus from anecdotes and opinions to facts and data analysis and began demanding the same from his team members. His commitment included integration of the required skillsets into his management team by funding Lean Six Sigma training and certification for fast-track managers and supervisors.
But data is not enough. This firm also faced cultural challenges because it was founded by a currently diminishing religious group. Personnel felt deep connections to the company and often expressed issues or gains in an emotional manner. This connection may be cultivated by the organization and leveraged to improve the quality of their decisions. “It (the change management failure) could probably also have been prevented if the emotions and feelings that were expressed were acted upon in a timely manner, instead of being dismissed by implicitly juxtaposing emotional expression against rational decision-making” (Graamans et al., 2020).
Over time, the president realized the benefits of integrating these two critical elements (objective data analysis and emotional intelligence). To enforce these new management support methods, he began to adopt a more authoritarian stance requiring the inclusion of data and consideration for all anticipated effects, both positive and negative, as they impact the members of the workforce.
Case Study 3: Retail Distribution Company
The consulting team was requested by a distribution center with over 80 retail internal customers (brick and mortar locations). The core issue was diminishing throughput from their one and only distribution center. The stores could not get enough of the products they needed to satisfy customer demand.
The acting Chief Executive Officer (CEO) was demanding but not supportive. He demonstrated impoverished management, which “is representative of a leader who is unconcerned with both the task and interpersonal relationships. This type of leader goes through the motions of being a leader but acts uninvolved and withdrawn, and could be described as apathetic” (Northouse, 2018).
The CEO did not understand the emphasis on the system throughput in a distribution center (i.e., a company cannot ship more than it receives, etc.). His perspective was more discrete and resided at the project-level. Traditional project management standards and practices tend to present an incorrect perspective for a system of dependencies, because the organization is not going to achieve gains in a dependent system until all of the interrelated pieces are improved. “We often don’t appreciate a crucial fact: that changing highly interdependent settings is extremely difficult because you have to change nearly everything. Because of all the interconnections, you can rarely move just one element by itself” (Kotter, 2012).
Worse yet, when decisions were made by his appointed managers that countered his opinion, the CEO would complain through informal channels (the rumor mill) and he would also publicly sulk. This is a worst practice because “sulking isn’t just childish. It also exposes something more than greed. Sulking exposes this about your heart: you aren’t content with the providences of God” (Merida, 2015). His emotional reactions encouraged key members of his senior and executive teams to emulate this behavior, and this further inhibited change efforts.
The CEO also did not visit the distribution center to better understand the issues or communicate his vision and goals. This affected managers and employees by starving them of information and guidance, and worse yet, they were aware of this neglect. This type of leadership behavior drives diminishing morale and ultimately, the associated diminishing throughput as well.
Furthermore, the CEO waivered on and often delayed important decisions that affected the change process. This is counter to some of the simplest advice that God provided in the Scriptures. “Let what you say be simply ‘Yes’ or ‘No’; anything more than this comes from evil” (English Standard Version Bible, 2001).
These two points, the lack of system perspective and the lack of effective leadership, drove implementation failure. “The consequences of unmanaged or improperly managed requirement changes can spell disaster for system development. These negative consequences can result in cost and schedule overrun, unstable requirements, endless testing and can eventually cause project failure and business loss” (Jayatilleke & Lai, 2018).
These challenges required the application of best practices from the change management realm. After careful thought and planning, the consulting team later re-engaged this client with a robust and reinforced plan. Targeted training was delivered to communicate the change goals (as supported by Eliyahu Goldratt’s Theory of Constraints) and to increase the level of understanding for dependent system optimization. This training included presented materials and a hands-on simulation which required participation from all students. Decision processes were supported and made visual using prioritization matrices, and specifically, the Analytical Hierarchy Process. The lack of leadership visibility (by employees) was addressed with the Gemba Walk system. This requires leadership to spend time in the place where the work is actually performed to observe the processes, talk with the people, ask questions, and provide answers. Finally, the decision lead time was reduced by introducing weekly management meetings. These meetings were framed with targeted agendas and included the stakeholders needed to make any decisions at hand.
What makes enacting change and change management a difficult endeavor? In short, everything. Balancing goals, effort, costs, personnel, resources, and a host of other variables in a system (the organization) that is currently operating while managing a diverse spectrum of stakeholder expectations and financial requirements is quite literally akin to the old adage “building an airplane while its flying.” Fortunately, industry-agnostic best practices in the forms of tools, techniques, methods, approaches, and frameworks, abound in literature and application. Case studies are also available to review to better understand the critical success (and failure) factors, the best (and worst) measures to utilize, and what methods or approaches are being utilized in organizations all over the world. For any individual pursuing change at an organizational level, it is important to note that a change management success story in one organization is rarely directly applicable to another organization. There are components that may be applicable, but in general, organizations are as different as species. This individuality is what makes the organization unique, perhaps feeding its brand, and these exclusive combinations of facets must be understood prior to embarking on any change engagement. The differences, even if they are subtle, will define the right path to take and the tools leadership needs to bring on the journey.
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