STEP FIVE

Put a Change Strategy in Place

What’s the use of running if you are not on the right road?

—German proverb

Determining that an organization needs to change to be more successful is a starting point. Figuring out how to initiate that change often determines success or failure. A change strategy looks at how to make things happen with the resources available. The overall guide on what change is desired and how it will be achieved, a change strategy addresses the vision for change and what it will do for the organization; it includes the goals to accomplish, and addresses the issues that exist, the tasks involved in the initiative, and the plans for making it happen.

An organization’s change strategy may be driven by 

• changing customer preferences
• innovations in technology 
• changes in how competitors do business
• new competitors entering the market
• changes in how products and services are used
• development of new products to meet customer needs
• changing cost structures
• changes in government regulations.

All of these influences and others that show up unexpectedly along the way will affect an organization’s strategy and how it is implemented.

What Components Make Up a Change Strategy?

They say the shortest distance between two points is a straight line. If only it were that easy to build a change strategy. The challenges in keeping day-to-day operations running while taking on a change initiative can create a tough situation. Having a strategy and knowing what resources are available to support it can help minimize issues as they come up.

In some cases, the change strategy is broken down into three component areas:

1. Strategic—This is the overall plan as an idea, or what the organization hopes to accomplish, including end goals that will be achieved.
2. Operational—Identify what will be done in each area (the who and what).
3. Tactical—What are the specific tasks to be completed? These should include functional areas, names assigned, and deadlines to be met.

A change strategy should consider the following:

• Your organization’s current abilities (competencies)—What do you do well and not so well?
• The environment your organization functions in—How do your customers, competitors, and business partners see the organization? Do individuals see it as a trusted source, or do they avoid it?
• Alternatives—Do competitors offer other options for products and services? Obsolescence and innovation can have a major impact on alternatives. 
• Available resources—Are people, sources of funding, and technology on hand to help make things happen?
• The future of your organization—What does it mean to the stakeholders involved?
• The end results—What is the probability of success, and what are the implications of failure?

Being Aware of Your Boundaries

When crafting your change strategy, keep in mind that you may be limited by rules, policies, and procedures. These may be imposed internally by the organization as part of its culture and values, or externally by industry and government. Examples of external factors include safety regulations set by the Occupational Safety and Health Administration (OSHA), environmental guidelines by the Environmental Protection Agency (EPA), and financial influences (Congress, taxes, laws). Be aware of these boundaries and find ways to work within them.

Organizations must put in place accepted ways of operating based on their culture and values. Having a set of rules, policies, and procedures gives individuals guidelines for following accepted organizational practices.

Rules are the absolutes; they provide order and a way to deal with events. Violation of a rule leads to punishment. An example would be a school that has “no tolerance” for cheating on tests. Any individual caught cheating on a test is expelled. This is a set rule and cannot be overridden by a teacher or an administrator.

Policies are generally accepted ways of doing things. They give guidance but are not as rigid as rules. There is some room for interpretation and application as appropriate to the situation or task at hand. Not following a policy may be questioned, but the consequences of breaking policy are not as strict as those of violating a rule. Continuing with our previous example, the school, instead of having a strictly defined rule against cheating on a test, may have a policy. In this case, the policy may say that cheating is not allowed on tests and individuals caught doing so will be punished. It leaves the “punishment” more open­ended as to what it will entail and who will impose it. The policy also leaves discretion as to the level of cheating and the level of punishment imposed.

Procedures are the day-to-day ways that things get done. Sometimes they align closely with rules and policies, and other times they do not. The alignment (or lack thereof) tends to come from individuals seeking to accomplish a task and may evolve based on a change. A frequent explanation for not following a procedure is that the individual feels it needs improvement, and often he or she can show how. Often, this leads to things being done in a better, faster, and cheaper way, but how does it fit with the organization’s established practices, and what does it mean to deviate from these practices? What are the consequences of not following a procedure? Will the individual or the procedure be reviewed, will the situation be ignored altogether, or will the individual be punished for not conforming to the generally accepted practices of the organization? Following with our previous example, it may be stated among school administrators that individuals should not cheat on tests but not that there is a penalty involved. In fact, if cheating is found, the instructor may see if it helped in the learning process for all involved and may decide that group tests would be more effective than individual tests. This instructor’s procedure could then be changed from testing students individually to testing them in a group.

Rules, policies, and procedures set the tone for an organization’s culture during a time of change.

Change Management Planning

The purpose of a change management plan is to coordinate changes across the entire project and for all groups and individuals. The plan helps ensure changes are agreed on, the process is understood, and goals are set in terms of deliverables, time, and cost. It is a living document that can be changed as things change in the organization’s environment. 

Goals of a change management plan include reaching agreement on changes to be made, how they will be evaluated and tracked, and how they will affect the overall direction of the project. The plan should describe specific tasks and who is responsible for them, available funding and how it will be used, and how success will be measured. A risk assessment is often included to show what could go wrong along with a best-case and worst-case scenario. See Table 5.1 for an example of a change management plan for a fictional corporation embarking on a mission to improve its growth strategy.

Change plans can be modified to apply to an entire organization or broken down into subparts for various divisions, groups, and teams. A plan may also vary by geographic region, product line, industry served, organizational capability, or competitive pressures the organization faces.

Once an organization has scanned its environment, the goal-setting process can begin.

TABLE 5.1

Change Management Plan: SunSenior Corporation

Overall Change Goal

To determine the best overall growth strategy to allow SunSenior Corporation to become the leading senior healthcare provider in the United States.

Related Goals

Create a blueprint facility model that can easily and cost-effectively be replicated.

Create a relationship plan to work with other organizations and industries that support the senior healthcare market (medical facilities, senior services, and political organizations that affect and provide services to seniors).

Define a hiring strategy to ensure that the right (caring, dedicated) individuals are brought in as part of the SunSenior approach to senior care.

Change Management Additional Requests

Date: January 1, 2011 

Requestor: Dan Data—Director of IT

Description of Change Request: Have the project include an analysis of what new computer technology (hardware and software) will be required to support the change in growth strategy.

Change Team Response: The change team believes this is an important component of the overall change project and should be included. Someone from IT will be needed to analyze the current IT system and determine the difference between what exists and what will be necessary under the new growth strategy.

This person is expected to be needed between February 1, 2011, and March 1, 2011.

Progress Measurement and Control

The Growth Strategy Change Plan project is scheduled to last 90 days. Its estimated start date is January 1, 2011, and completion is expected by March 31, 2011.

A weekly status report will be shared with the project sponsor. This report will include:

• a description of areas identified as important in the change process— for example, the ease of change, cost—and how critical to the overall success of the project each area is
• any findings that can have a major impact.

After each 30-day period, an update to the board of directors will be provided, to share the progress and answer any questions that result. 

Goal Setting 

Setting goals keeps individuals focused on what they want to achieve, providing a means to measure progress. From a change perspective, goal setting can occur at the organization, team, and individual levels. Goals can be short term (less than a year), intermediate (1–5 years), or long term (longer than 5 years). What does the organization, team, or individual want to achieve within a certain time frame?

In setting goals, it helps to break down a large goal into manageable parts. Whether you are taking on a major organizational change initiative or a personal improvement plan, breaking down a goal into manageable tasks makes it easier to measure and achieve progress. For example, consider earning a college degree. If looked at from a bottom-line goal perspective, taking four years to complete 40 courses seems like a daunting task, but setting a goal to take five courses each semester is more manageable. Progress can be measured, and interim success can be celebrated.

In setting goals, keep in mind the other parameters, besides time, that can affect them. What are your goals with regard to money, available resources, and competition with outside change initiatives?

Depending on the type of change you are implementing and how it affects the organization, you may want to set goals in a time frame spanning anywhere from a few weeks to a few years. When crafting your goal statements, remember to make them SMART: Specific, Measurable, Achievable, Relevant, and Timely.

A poor goal statement might be “We want to greatly increase our business as soon as possible. I can use the new technology we have purchased to help.” When considering potential problems with this goal statement, ask yourself the following questions:

• Is it specific enough? Does it address who, what, where, why, and how?
• Does it have a set of measures to determine progress and success?
• Is it achievable? This probably depends on how you define “greatly increase our business” and “as soon as possible.” Furthermore, does it help others know when the expected level of success has been achieved? 
• Does it have a defined time frame? Are milestones identified, and is there an overall completion date?
• Is it relevant to people in the organization and what they do?

A better alternative would be “We plan to double the number of customers in the over-65 age category by providing at least 10 educational seminars related to aging at senior centers over the next six months.”

The difference here is that the goal is specific: “double the number of customers in the over-65 age category.” It has measures and, depending on the product or service, is achievable; even more important, it gives specifics. This goal statement ties directly to today’s work and how to grow it, and the six-month time frame establishes parameters to follow.

Once you have established your goals, get executive input and buy-in on the strategic priorities for the organization.

Strategy-Building Tools

You can implement either force field analysis or scenario planning to help you develop your change strategy and create your change plan. 

Force Field Analysis

In looking internally at an organization’s capability and externally at changes in the marketplace, one useful tool is force field analysis, which helps to identify the forces for and against change. Identifying these forces helps clarify what actions need to be taken. See Figure 5.1 for an example of this model applied to a particular change topic, global expansion, which is listed in the middle. On one side, the forces driving the change are listed using arrows of varying length to show the direction and strength of the force. On the other side, the forces resisting the change are listed, and the arrows point in the opposite direction to show resistance. Again, the length of the lines shows the strength of the resisting force.

Areas that often emerge as forces of change include

• political interests
• technological capabilities and limitations
• stakeholder power
• fear of loss
• opportunity for rewards
• pressures on performance
• competitive pressures
• customer demands
• availability of resources
• culture and tradition
• other change initiatives currently under way.

An alternative approach is called “enablers and inhibitors.” List the change to be dealt with and ask what would enable your organization to make this change and what is already in place. Then list what could potentially inhibit the change (see Figure 5.2).

Keep in mind factors that may not have existed before. Remember that external changes can affect the current change process. For enablers, look at things like capabilities of the Internet, especially the new functionality with social media and other aspects of Web 2.0, not only use of cell phones but also integration of personal digital assistants (PDAs) and standardization of global processes. Even the adoption of English as the world’s business language can make a difference. For inhibitors, look at what people no longer accept, such as environmentally damaging processes, command and control management, and geographically isolated markets.

Identifying the right stakeholders and getting their input in the process generally helps point out issues up front and can result in a deeper level of buy-in from those involved.

Scenario Planning

Scenario planning, used often by military planners and increasingly by a number of organizations, looks at potential events and their impact. It takes a long-term view. One of the organizations most often cited as using scenario planning effectively is Royal Dutch Shell. Both Arie de Geus (1997) and Peter Schwartz (1991) from the team at Shell have written extensively on the approach, which includes the following steps:

• Identify the potential drivers for change—For Shell, an example would be the Organization of the Petroleum Exporting Companies (OPEC).
• Evaluate the drivers for patterns in how they make an impact—Shell, for example, would see how various countries respond to a new OPEC concept.
• Identify the potential scenarios and the possible impact—Shell would consider the impact of the OPEC concept on its operations.
• Come up with potential strategies based on the scenarios identified—Shell would determine what to do (have a plan ready) in case of OPEC concept implementation.

The overall goal is to identify potential opportunities and the consequences that would occur should the organization not act in the direction of change (de Geus, 1997).

In his work at Shell, de Geus not only looked forward, he also looked back at business history and found that certain characteristics stood out for those companies that managed to adapt through changing times:

• a strong sense of community
• a tolerance for change
• a focus on changes in the world around them
• financially conservative values.

Peter Schwartz uses the “what if” approach when working with his clients to help them create a response to potential changes. 

Key Points to Keep in Mind 

Strategy provides the detail to execute on the vision and to effectively carry out the change plan.

• Keep in mind the impact change will have on your organization and what it is known for. Think of the kind of business you are in—will it be the same business once you implement your change?
• Address what change will mean to your organization’s relationship with its customers. Will your customers remain the same, or will your change allow you to serve your existing customers in a new way and to serve customers you have not had before?
• Consider how the change will affect the way you work and its impact on structure and processes.
• Consider how this change initiative will affect your competitive position: Is this the beginning of a larger ongoing change process or a one-time change event?
• Think about how this change fits with the trends in the industry, society, and customer base. Will your change strategy allow you to stay ahead of the change curve, or might you have to change again in the near future?
• Consider the overall value proposition this change will allow you to offer.

WORKSHEET 5.1

Project: Growth Strategy Change Plan

This worksheet helps to keep track of the tactical components of your change plan—the specific tasks to be completed, including functional areas, names assigned, and deadlines to be met.

WORKSHEET 5.2

Strategy Checklist