UNO IT Academy Organizational Change Management The Secret

UNO IT Academy Organizational Change Management The Secret to Delivering Project Benefits Dr. George Royce Ph. D. , PMP University of Nebraska at Omaha groyce@unomaha. edu

Agenda Topic Time Welcome and Introductions 8: 00 – 8: 15 Introduce Organizational Change Management and resistance to change and benefits 8: 15 – 8: 35 Team Activity 1: Share examples of resistance in teams and report out 8: 30 to 8: 40 Discuss why people resist change and how to identify it early in projects 8: 40 – 9: 10 Team Activity 2: Teams work on a project scenario and identify areas of resistance 9: 10 – 9: 25 Discuss why people resist change and methods to overcome resistance 9: 25 – 10: 00 Team Activity 3: Teams are provided a project scenario and must identify resistance in this project. They report to class potential resistance and rank 10: 00 – 10: 30 Break 10: 30 - 10 -45 Discuss methods to manage resistance and change management plans 10: 45 – 11: 10 Team Activity 4: Teams create a organizational change management plan for their project scenario 11: 00 – 11: 30 Teams present their organizational change management plans to the class 11: 30 – 11: 50 Summary and Wrap-up 11: 50 – 12: 00 2 Agenda Dr. George Royce

What is Change Management? For things to change, somebody somewhere has to start acting differently. Maybe it’s you, maybe it’s your team. Present State Transition Desired State CHANGE MANAGEMENT 3 What is Change Management? Dr. George Royce

Two Parts of Managing Change Requirements, Stories, Technology, Systems, Processes, procedures measurement, metrics, structures, tools, etc. The Ideas, fears, excitement, resistance, attitudes, buy-in, etc. of the People who must act differently But often the “soft part” of change is the hardest part to do well and key to a project’s success. 4 What is Change Management? Dr. George Royce

The ROI of Organizational Change Management Total cost Of Project Expected Savings from a Project Imagine if you could start saving from day 1 of a project. Implementation Begins 5 Why Change Management? Time Dr. George Royce Source: Prosci

The ROI of Organizational Change Management Total cost Of Project Expected Savings from a Project Realistic progression during rollout. You are not going to achieve all savings day 1 Implementation Begins 6 Why Change Management? Time Dr. George Source: Prosci. Royce

The ROI of Organizational Change Management Total cost Of Project Expected Savings from a Project Here is what the savings might look like if the adoption rate is slower for a project. Implementation Begins 7 Why Change Management? Time Dr. George Source: Royce Prosci

The ROI of Organizational Change Management Total cost Of Project Expected Savings from a Project Here is what the savings might look like if the some people never adopt the change. Implementation Begins 8 Why Change Management? Time Dr. George Royce Source: Prosci

The ROI of Organizational Change Management Total cost Of Project Expected Savings from a Project Here is what the savings might look like if the some people never adopt the change And others go back to the old way of doing things. Implementation Begins 9 Why Change Management? Source: Prosci Time Dr. George Royce

The ROI of Organizational Change Management With good change management you can achieve these results! Total cost Of Project Expected Savings from a Project Implementation Begins 10 Why Change Management? Source: Prosci Time Dr. George Royce

Business Impact of Change Management " Organizational Change Management is the Common Project Success Denominator " Mc. Kinney study examined many project variables and in particular the effect of an Organization Change Management (OCM) program on a project’s ROI. The study showed: 9 143 percent when an excellent OCM program was a part of the initiative; 9 35 percent when there was a poor OCM program or no program. " What do those these results mean? A 143 percent ROI means that for every dollar spent on the project the company is gaining 43 cents. On the other hand, a 35 percent ROI means that for every dollar spent they are losing 65 cents. " Ignore Change Management = put your project success at risk! Source: The Business Impact of Change Management http: //gbr. pepperdine. edu/2010/08/the-business-impact-of-change-management / 11 Dr. George Royce

When Do Projects Start Change Management Planning? 12 Why Change Management? Dr. George Royce

Change and Project Management Integration Project Management Change Management Project Initiation Preparing for Change Project Planning Managing Change-Planning Project Executing Managing Change-Execute Project Controlling Transition Project Closing Source: http: //dti. delaware. gov/majorproj/changemgmt. shtml 13 Monitoring Change Dr. George Royce

Change is a Process of moving from one phase to another TO-BE Phase Enthusiasm AS-IS Phase Energy Denial Transition Phase Anxiety Shock Hope Impatience Fear Acceptance Anger Frustration Skepticism Confusion Stress Approach-Avoidance 14 Change Management Methodology Creativity Dr. George Royce

Team Activity 1: " Assemble in teams of 4+ " Objective: Share one story of resistance observed inside or outside of projects at current or past jobs or even outside work. " Team votes for best resistance story to share with the class " You have 10 minutes BEGIN NOW!!! 15 Change Management Methodology Dr. George Royce

Resistance to Change Resistance is a natural part of the change process. It is the force that opposes any significant shift in the status quo. 16 Manage Resistance to Change Dr. George Royce

Resistance " Resistance to change in projects should be expected. " Don’t be upset when people resist your cool new software or cool new process improvement. We need to plan for resistance. " We need to predict/identify possible resistance and develop a plan to overcome resistance in all kinds of projects. " My interest in project resistance came out of an early and dramatic experience in resistance – be careful when you take a familiar tool away from workers! 17 Manage Resistance to Change Dr. George Royce

A Story of Organizational Change Management Projects involved moving claims examiners from dumb terminals and tape calculators to a PC application and a built in calculator on the screen Claims Examiner Workstation (CEWS) CAPS Why were claims entry staff and examiners so emotional about this change? 18 Manage Resistance to Change Dr. George Royce

But why do people become emotional about changes? Change happens in our personal lives. A First Child Harrison Royce A Real Change Agent! 19 Manage Resistance to Change Dr. George Royce

Learning /Relearning can be scary and emotional! " Change “lights “ up an area of the brain, the prefrontal cortex. " The prefrontal cortex is like RAM in a computer. Its capacity is finite and it takes lots of energy while you are using it to first learn new things. " The Prefrontal cortex is closely linked the amygdala – the fight or flight center of the brain. " If you try to process too much too fast with the prefrontal cortex, you can experience emotions of fear and anxiety. " The “pain of learning new things” is experienced by all of us. " People react differently to this emotion. How do you react? 20 Why Do People Resist Change? Koch, Chris. “The Science of Change. ” CIO Magazine, Sept 15, 2006. Dr. George Royce

Why Do People Resist Change? " When a person does learn something, it can creates insight and the “pleasure” of insight. " By repeating something many times, there are new paths developed in the basal ganglia of the brain. This is like writing things to the hard disk in a computer. " Creating those connections takes energy, time and can cause “discomfort” just like building muscles. It is also exhausting! " Until the new way is in the basal ganglia, people often revert to old ways already in the basal ganglia Basal Ganglia " Moving people rapidly through this change process is organizational change management. 21 Why Do People Resist Change? Koch, Chris. “The Science of Change. ” CIO Magazine, Sept 15, 2006. Dr. George Royce

Learning anything means “tuning” new connections " Getting better at anything (sports skills or paying claims faster in a new system) involves “tuning. ” " New paths and connections are created. " The more you exercise the path, your body responds by growing and moving myelin cells to speed the connection. " The brains creates the connections and then “insulates” /tunes them to make the newly created paths fast. 22 Why Do People Resist Change? The Talent Code Dr. George Royce

Top Reasons Why People Resist Change " Loss of Control " Excess Uncertainty " Surprise, Surprise! Decisions imposed suddenly " Everything Seems Different " Loss of Face " Concerns about competence " More work! " Ripple Effects " Past Resentments " Sometimes the threat is real! Source: Rosabeth Moss Kantor http: //blogs. hbr. org/2012/09/ten-reasons-people-resist-chang 23 Why Do People Resist Change? Dr. George Royce

Team Activity 2: " Each team will receive a one page description of a project and background information of people involved in the project. A. Web Content Management – Take Two! B. Drop. Box and start using the corporate version of Box to improve our security. C. Work-from-home in the call center for the new evening shift D. Physician’s office converts to electronic medical records(EMR). " Objective is to predict the areas of resistance in these projects based on the role of each employee mentioned in the story. " Teams present their finding to class " You have 20 minutes BEGIN NOW!!!! 24 Why Do People Resist Change? Dr. George Royce

Change Models and Methodologies Ways to move from As-IS to To-BE TO-BE Phase Enthusiasm AS-IS Phase Energy Denial Transition Phase Anxiety Shock Hope Impatience Fear Acceptance Anger Frustration Skepticism Confusion Stress Approach-Avoidance 25 Change Management Methodology Creativity Dr. George Royce

Satir’s Change Process Model New Status Quo Change Integration Late Status Quo Transforming Idea Chaos in reaction to the change The impact on group performance of a change during the five stages of the Satir Change Model Virginia Satir – Famous Family Therapist – her model was adopted by organizational change in the 90’s 26 Change Management Methodology Dr. George Royce

Kubler-Ross Stages of Change Model 27 Change Management Methodology Dr. George Royce

Kotter’s Phases of Organizational Change Model What’s in it for Me? (WIIFM) 28 Change Management Methodology Dr. George Royce

Lewin’s Dynamic Stability Model 29 Change Management Methodology Dr. George Royce

ADKAR - A Methodology for Change Management " ADKAR is a methodology for Change Management originally developed by Jeff Hiatt, founder of Prosci Research. Stage Awareness Description Desire to participate and support -- motivating factors and consequences and level Knowledge Ability about how to change -- skills and insights Reinforcement to keep the change in place -- incentives and constraints to make it stick of need for change -- reasons, and degree of comprehension to implement new skills and behaviors -- evaluate level and determine shortcomings 30 Change Management Methodology Dr. George Royce

Role of the First Line Manager in Change Initiatives When you come back from the big change announcement in the auditorium what happens? 31 Change Management Methodology Dr. George Royce

Who Should Deliver the Message? • The current situation and rationale for the change • Business issues or drivers that created the need for the change • Competitive issues or changes in the marketplace • What might happen if the change is not made • Vision of the organization after the change is made • Overall timeframe • Alignment of the change with business strategy 32 Change Management Methodology Dr. George Royce

Change and Project Management Integration Project Management Change Management Project Initiation Preparing for Change Project Planning Managing Change-Planning Project Executing Managing Change-Execute Project Controlling Transition Project Closing Source: http: //dti. delaware. gov/majorproj/changemgmt. shtml 33 Monitoring Change Dr. George Royce

Successful Projects Start Change Management Early Project Success Project Management Closing Monitoring / Controlling Executing Planning Initiation Managing Preparing Managing Planning Executing Analyze. Transition Change Management Source: http: //dti. delaware. gov/majorproj/changemgmt. shtml 34 Change Management Methodology Dr. George Royce

Assessing Impact of Change Risk Determination Table 110 Medium-High Risk Organizational Attributes High Risk 44 Medium-Low Risk 22 12 24 60 Change Characteristics Source: http: //dti. delaware. gov/majorproj/changemgmt. shtml Change Management Methodology Dr. George Royce

Stakeholder Analysis for State Conversion to People. Soft HR (ERP module) Developers End-users Web Client Service Desk Customer Care Center Vendors End-users Fat Client (HR specialists - power users) Executive Sponsors Governor Source: http: //dti. delaware. gov/majorproj/changemgmt. shtml Change Management Methodology Dr. George Royce

Organizational Change Management Plan Major Changes Roles/Areas Impacted Change Management Assessment Likely Forms of Resistance Approach to Manage Resistance Importance 1=Low 5=Medium 10=High _______ Influence 1=Low 5=Medium 10=High _______ Importance 1=Low 5=Medium 10=High _______ Influence 1=Low 5=Medium 10=High _______ Dr. George Royce

Assess the Change and Those Being Impacted " Identify the nature of the change and relative size of change. " What is the scope of the change? " Who is being impacted by the change? " What is the risk if the change management is not done well? " Is the sponsor a seasoned sponsor of change with a good track record in the this areas? " What kind of support can we expect from first line managers? " What is the culture like and how is change handled in this culture? Change Management Methodology Dr. George Royce

Build Your Change Management Resistance Plan " Consider each group and begin to anticipate resistance from each group. " How will the front line employees react? " How will their managers react? " What kind of change management tactics should be used to get the resistance out quickly and begin to deal with it? " How can the sponsor help? " Develop your resistance plan 9 What should you do to address the resistance. 9 What should the sponsor do? 9 What should the first line managers do? Change Management Methodology Dr. George Royce

Team Activity 3: " Objective: Assess the likely resistance that will develop based on roles. Predict the forms of resistance " Using our sample projects, each team now needs to assess the potential influence and importance of each actor you have identified and the likely forms of resistance you expect. Complete using the change management plan template " Teams present their finding to class " You have 20 minutes BEGIN NOW!!!! 40 Change Management Methodology Dr. George Royce

Agenda Topic Time Welcome and Introductions 8: 00 – 8: 15 Introduce Organizational Change Management and resistance to change and benefits 8: 15 – 8: 35 Team Activity 1: Share examples of resistance in teams and report out 8: 30 to 8: 40 Discuss why people resist change and how to identify it early in projects 8: 40 – 9: 10 Team Activity 2: Teams work on a project scenario and identify areas of resistance 9: 10 – 9: 25 Discuss why people resist change and methods to overcome resistance 9: 25 – 10: 00 Team Activity 3: Teams are provided a project scenario and must identify resistance in this project. They report to class potential resistance and rank 10: 00 – 10: 30 Break 10: 30 - 10 -45 Discuss methods to manage resistance and change management plans 10: 45 – 11: 10 Team Activity 4: Teams create a organizational change management plan for their project scenario 11: 00 – 11: 30 Teams present their Organizational Change management plans to the class 11: 30 – 11: 50 Summary and Wrap-up 11: 50 – 12: 00 41 Change Management Methodology Agenda Dr. George Royce

Switch – How to Change Things when Change is Hard 1. Direct the rider 2. Motivate the Elephant 3. Shape the path How to change things Dr. George Royce

The Emotional Side of Us is Like an Elephant "The Heaths suggest that since our emotional and rational minds compete for control, both must be appealed to in order to create effective change. How to change things Dr. George Royce

The Rider is Much Smaller Than the Elephant " “Perched atop the Elephant, the Rider holds the reins and seems to be the leader. But the Rider’s control is precarious because the rider is so small compared to the elephant. Anytime the six ton elephant and the rider disagree, the rider is going to lose. He is completely overmatched. ” How to change things Dr. George Royce

Both have Strengths and Weaknesses "The Elephant looks for immediate gratification, but also has the energy and drive to get things done. "The Rider has the ability to think for the long- term and to plan for the future, but also a tendency to spin his/her wheels – overanalyze and over-think How to change things Dr. George Royce

DIRECT the Rider " FOLLOW THE BRIGHT SPOTS. Investigate what is working and clone it. " Problem: A large of number children in rural villages were malnourished. " Jerry Sternin with Save the Children in 1990 was assigned to help fight malnutrition in Vietnam. " Jerry decided to look for exceptions and determine what they were doing to avoid it. " Jerry found the bright spot and then communicated it throughout rural Vietnam helping cure malnutrition! " We are using the same technique for a project in the customer service call center! How to change things Dr. George Royce

DIRECT the Rider " SCRIPT THE CRITICAL MOVES. Don’t think big picture, think in terms of specific behaviors. " Researcher in the 1980’s wanted to have people “eat healthier”. " Finally FOCUSED on moving people from whole milk to 1% milk. " Advertisement: 1 glass of whole milk had the fat of 5 strips of bacon. " People changed their buying habits after the campaign How to change things Dr. George Royce

DIRECT the Rider " POINT TO THE DESTINATION. Change is easier when you know where you’re going and why it’s worth it. " Crystal Jones was assigned to a first grade class that had no kindergarten. The students had little or no reading skills. " Jones set a goal that was tailor made for first grade psyche " She announced: “ by the end of the school year your going to be third graders” (at least in reading) " Called the students scholars and their work was scholar work. " By the end of the year 90% were reading at or above the 3 rd grade level! How to change things Dr. George Royce

MOTIVATE the Elephant " FIND THE FEELING. Knowing something isn’t enough to cause change. Make people feel something. " Jon Stegner wanted to convince his senior management that decentralized purchasing was costing the company millions. " To make an impact, he piled 427 DIFFERENT sets of work gloves with price tags ($5 to $17) on the table for a meeting with senior management " The management team reacted by asking Jon to lead the change to centralized buying. " The gloved became a part of a traveling road show " Check out 40 famous leaders motivational pep talks! https: //www. youtube. com/watch? v=m. Qer. L 6 Ymx. R 8 How to change things Dr. George Royce

MOTIVATE the Elephant " SHRINK THE CHANGE. Break down the change until it no longer spooks the elephant. " Company wanted to convince customer to come back to their car wash. " Used two punch cards 9 One with 8 punches and then receive a free car wash 9 The other with 10 punches but 2 are already punched " Which was more effective? " Celebrating small milestones in large projects also helps to shrink the change. " Completing and demonstrating stories in Agile projects every 3 weeks. How to change things Dr. George Royce

MOTIVATE the Elephant " GROW YOUR PEOPLE. Cultivate a sense of identity and instill the growth mindset. " Braliziata – a can manufacturer in Brazil wanted to have employees adopt continuous improvement. " They created a new identity and employees became know as “inventors. ” " New employees signed a “innovation contract”. " New ideas poured in and led to new products and more efficient production lines. How to change things Dr. George Royce

SHAPE the Path " TWEAK THE ENVIRONMENT. When the situation changes, the behavior changes. So change the situation " A great example of this is Amazon’s One Click ordering! How to change things Dr. George Royce

SHAPE the Path " BUILD HABITS. When behavior is habitual, its “free” – it doesn’t tax the Rider. Look for ways to encourage habits. " Set Action Triggers (the next action is preloaded) 9“When I drop Anna off at school, then I will go to the gym. ” " Stand up meetings and a fixed agenda in Agile Project How to change things Dr. George Royce

SHAPE the Path " RALLY THE HERD. Behavior is contagious. Help it spread. " Seeding the tip jar " Seeding the United way effort! " Blackberry junkies in meetings – when they sneak a look at their blackberry – the rest of the team stare at the person. " Sending out monthly Application Portfolio Management reports describing the progress of each team How to change things Dr. George Royce

Team Activity 4: " Objective: Complete the Organizational Change Management Plan by describing the actions needed to manage the resistance you have described in Activities 2 and 3. " Using our sample projects, each team now needs to describe the actions needed to manage the resistance you have described in Activities 2 and 3. " Teams present their finding to class " You have 20 minutes BEGIN NOW!!!! 55 How to change things Dr. George Royce

Summary " Resistance is a natural part of the change process. " Resistance to change in projects should be expected. " Don’t be upset when people resist your cool new software or cool new process improvement. " We need to plan for resistance. " We need to predict/identify possible resistance and develop a plan to overcome resistance in all kinds of projects. " Organizational Change Management needs to be started early in any project using any methodology! How to change things Dr. George Royce

If you want to learn more about organizational change management – check out these excellent sources: Summary Dr. George Royce

Resources 1. 2. 3. 4. 5. 6. 7. 8. HBR http: //blogs. hbr. org/2012/09/ten-reasons-people-resist-chang/ Lean Marketing Blog http: //business 901. com/blog 1/overcoming-resistance-and-backsliding/ Graziadio Business Reviewhttp: //gbr. pepperdine. edu/2010/08/the-business-impact-of-changemanagement/ Delaware OCM http: //dti. delaware. gov/majorproj/changemgmt. shtml Kubler Ross Model http: //blog. readytomanage. com/coping-with-change/#!pretty. Photo Kotter CM http: //www. kotterinternational. com/our-principles/changesteps Lewin CM http: //www. change-management-coach. com/kurt_lewin. html Prosci Model of CM http: //www. prosci. com/ (also Delaware OCM) Dr. George Royce

Supplemental Topics Follow This Slide Supplemental slides Dr. George Royce

Elements of a Communications Plan Communication Plan – a plan to communicate key messages to a variety of audiences impacted by a project and/or initiative. " Determine goal of a project and/or initiative " Identify and profile the audience " Develop the messages " Select communication channels " Choose activities and materials " Establish partnerships " Implement the plan " Evaluate and make mid-course corrections Supplemental slides Dr. George Royce

Communications technology factors that can affect the project include: " The urgency of the need for information " The availability of technology " The expected project staffing " The length of the project " The project environment " Methods: 9 Email 9“Webex” or “Same. Time” Meetings 9 Document Collaboration Database Supplemental slides Dr. George Royce

Project Communication Plan Message Objective " " " Impact on Audience Vehicle Sender of Message Preparer of Message Reviewer of Message Feedback Mechanism Target Date Complet ed Date Frequency Message Objective Impact on Audience (Low Medium High) Audience Vehicle (Email, One on One, Presentations, etc…) Sender of Message Preparer of Message Reviewer of Message Feedback Mechanism (did the audience receive and understand the message) Target Date Completed Date Frequency (if recurring message such as a project update). Supplemental slides Dr. George Royce