Kevin Briggs

Interim Financial Management

Change management

"Criticism may not be agreeable, but it is necessary. It fulfils the same function as pain in the human body. It calls attention to an unhealthy state of things." Winston S Churchill

On this page, I look at the scenario of change management, communication strategies and some examples of my application of these, and the defence mechanisms that can be found and how to combat these. Finally, I consider some change management techniques that fit in with this overall change management framework.

Scenario

Change happens in all organisations and at every level in the organisation, whether that is a minor change in the procedure for processing a sales order or whether it is the strategic change that Westinghouse managed in taking itself from a manufacturer of power stations to being an important media company (RCA). There are a number of imperatives behind change management which determine the intervention strategies that are necessary, depending on the level at which the change is happening:

·         the cause of the change

·         the imperative behind it

·         the strength and type of power in the organisation's structure

·         the strength of the organisation's culture (the stronger, the harder it is to change)

·         the organisation's immediate and remote past history

It is a key change management skill to work out these dynamics and to assess which change management program is best suited for that particular scenario. Note that the term "organisation" can be a group, team, department, division, company or group of companies.

The basics of change management involve a degree of leadership (where there's a specific section on Leadership and Change Management). Its about the extent and magnititude of change, and that involves communication and visioning. In making the assessment of the degree of change that is required, there are a number of opposing forces that should be considered in this context and these degrees determine the intervention strategy that is required:

Instability

Upheaval

Unpredictability

Threat

Disorientation

Opportunity

Rejuvenation

Growth

Progress

Innovation

At the heart of the negative aspects of this is a basic human instinct. Its fear, or more politely, "small 'c' conservatism": a fear of those adjectives in the left hand column, which is a feature that drives change management at all levels, even up to company acquistions. Note that these features listed could be seen as opposites and depending on the change management scenario, either the negative points or the positive points will be perceived by people as being the stronger. These negative feelings can lead to defence mechanisms and again to combat these, there are different intervention strategies that can be used, depending on the situation encountered.

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Communication

There is a continuum of communication styles that range from the change manager being seen as a partner across to the change manager enforcing a way. My view of the different intervention strategies, and my application of them, are:

·         Co-creation. The new process (if that's what it is) is "co-created" by the change manager and the employees directly effected. Employees need a high degree of motivation and knowledge of not only the process but all that surrounds it.

·         Consultation. The change manager is a consultant or possibly a facilitator

·         Test. The change manager devises a new process and ask for the employees for their input and comment

·         Sell. The change manager devises a new process and "sells" the idea to employees. They can't change it, but are persuaded by it.

·         Tell. The change manager devises a new process and "tells" the idea to employees - they have to accept it whether they like it or not. Examples of where this would work would be a turnaround situation or where there is an authoritarian structure.

The decision as to the communication intervention strategy to use depends on the circumstances of each situation as well as the personal style of the change manager. Ideally, the change manager should be able to over-ride a personal style in favour of adapting their communication style for the given situation. Examples of different communication intervention strategies include:

·         At Bookham Technology I used "consult" and "test" with the ex-Marconi team that were being made redundant: the "tell" regime that Bookham had adopted to date had not worked and these chaps were leaving with large payoffs. With the implementation of Impact, this turned more towards sell/tell.

·         There was a certain amount of resistance to the implementation of Oracle at the Olympic Delivery Authority where a "co-create/consult" approach was taken. Again, a similar approach was taken at Oxfordshire County Council, particularly with regards to improving management reporting. This is a very common scenarios in public bodies where people work for more altrusitic reasons than just to earn money; note a slightly different effect in the next point, another public body.

·         The London Development Agency's problem with BVPI 8 was an altogether more difficult scenario. Here, I would have limited time to complete the process changes that were necessary and there was a considerable amount of resistance from the business. However, the directors knew that they had to make drastic changes to improve performance. A "sell" approach was taken, offering different alternatives, but I knew that a "tell" solution was the only one to take. The alternatives did not work and in the end (some months after I had left) the directors accepted my change proposal and took a "tell" approach in implementing it.

·         At Sainsburys, I adopted a "test" approach to answering their needs for inventory management. This approach worked for the manager most directly concerned, but the "sell" that was needed for the senior managers of the IT function did not work - see below. Having said that, it worked for the senior managers of the property directorate - they had the same control issues and were persuaded of the system that I had devised in the "test" phase.

·         There were multiple approaches at SMF Displays, but this time they were used for external stakeholders. Clearly, this was a turnaround situation where "sell" was the approach for the bank and "tell" was the approach for securing an unqualified audit report. Internally, when sorting out the commercial issues that gave rise to the losses, given the ominous financial state, the "sell" was much easier!

Personally, my style is somewhere between "consult" and "test", although since you're having to adapt styles to situations, like any actor, its hard to tell the real you:-).

In another dimension, there are a number of different parts to "communication" to be considered in any situation where this tool is needed. Key elements include the process, barriers to communication, listening, feedback and non-verbal communication as well as the continuum described above. These elements are covered in more detail in the separate paper, Communication.

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Defence mechanisms

Not only are defence mechanisms a feature of individuals (and depending on our personal circumstances, these may value as to type as well as intensity), but they also depend on the history of the organisation. That's not just recent history, the history that current staff remember, but can also be a more remote form of history. All of this needs to be considered in determining the change management intervention strategy required. These defence mechanisms (and their answers) include:

Problem or history

Distorted perception

Dulled motivation

Failed creative response

Political deadlocks

Action disconnects

Solution for the future

System thinking

Personal mastery

Mental models

Shared vision

Team learning

Clearly, there is a significant amount of learning and application behind all of these concepts and again, depending on the circumstances of the organisation's change management requirement, these scenarios (and their associated solutions) may not all be relevant, although there may be links between some of these (action disconnects and distorted perception, for example). The skill lies in both identifying the problem and then applying the solution.

Examples of the "action disconnects" scenario are abundant in post-acquisition integration scenarios and sometimes, turnaround situations require counters to dulled motivation and a failed creative response. Political deadlocks and distorted perceptions can occur in many situations and it is my view that this was part of the problem in identifying the systems changes at Sainsburys (above).

In developing the solutions for a given situation, the techniques used are called "structured problem solving techniques". These techniques help people responsible for a process to "think outside the box" to understand not only the problem but also the solution as it is difficult to identify root causes and solutions when someone is involved in the process on a day-to-day basis. Note that visioning is an important part of change management; aside from showing people how something will work, it is an example of a structured problem solving technique. Note that I have prepared separate papers on motivation and coaching and mentoring.

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Techniques

There are certain change management strategies that managers use, almost in deference to the points covered above. Generally, change management techniques fall into one of four camps:

Process-based techniques

These techniques started to emerge after 1945 with writings by the likes of Deming and Juran. They include techniques such as the Systems Intervention Strategy (which arose from implementing new computer systems) and perhaps the only genuinely strategic "hard" system, Six Sigma (which comes from total quality manufacturing but has been successfully used in service businesses). They are so-called "hard" techniques because of their process base and generally go through a series of set stages. An interesting example of this type of technique is one devised by Mike Hammer in 1975 called Business Process Engineering. The following year, the author retracted the technique believing that it is unworkable, producing an alternative that looks like SIS. As a result of the high profile of this writing, the name has stuck to anything that relates to a business process that needs to be changed.

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Project management techniques

Apart from different project management techniques, there are a number of associated topics. The main technique, PRINCE2, is applicable to all projects whereas some other techniques, such as Agile, are specialist in nature (Agile is particular to the software industry but adheres to PRINCE2 principles). Associated with this is a version of PRINCE2 for project management and a separate technique for handling risk.

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Organisational techniques

These are non-process change management techniques that focus on soft issues, such as culture; these take longer to implement as their implications are more far reaching for the people in the organisation as opposed to its systems and processes, although the follow a similar series of rational activites. It's possible for an interim manager to be involved in this type of technique to some degree, but usually its initiated by outside change management consultants and implemented by the Board using outside facilitators. An example of the implementation of this type of change was being carried out at Sainsburys during my time there; this had a particularly strong focus on establishing a set of values that Sainsbury's had always been known for as a way of returning it to its former greatness.

Under the term "organisational development", there are a number of change management techniques. Whereas the process-based techniques originate from quality management and IT, these techniques originate from the behavioural sciences and human resources. I have prepared some papers in using culture as an agent for business transformational change using a sociological and a psychological approach as well as summarising Organisational Development itself.

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Turnaround techniques

Finally, this technique is explored in a separate paper, turnaround.

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