Thursday, December 3, 2009

OCM – Realize Your ROI by Managing the People Side of Change

In this economy, realizing the ROI on IT projects isn’t just a matter of growth, but a matter of survival. Studies have repeatedly shown that a significant contributor to project failures is the lack of attention to people factors. It doesn’t matter how well the system solution is designed or processes optimized, your employees’ adoption will be key to realizing your ROI.

Common symptoms of poor people change management:

  • Lack of commitment and follow through by senior executives and middle management
  • Low level of employee understanding of project objectives and impacts to the organization
  • and individually
  • Employee perception of “ivory tower” making changes
  • Little to no employee ownership or adoption of changes
  • Lack of training and education of system and processes

As a result of these symptoms, additional costs are typically associated with:

  • Supporting a large number of training-related help desk tickets and end user support after implementing changes
  • Re-training employees on system and procedural changes
  • Low morale and turnover of employees due to frustration and dissatisfaction
  • Mitigating issues with unions and vendors from a lack of communication relating to changes to procedures
  • Dissatisfied customers from poor level of service

So, how do you make sure you realize your ROI and manage the people side of change on your projects? The answer lies in first understanding change. Changing is hard for most people, especially when it is imposed upon them. In business, change often involves putting trust in new and unfamiliar technology, processes and people and is likely to affect the way people do their work; this can be very intimidating and challenging. After all, change requires that we sacrifice something familiar, do something beyond our "comfort zone," and requires us to make an effort to learn something new. This can be unnerving for some and the impending fear of failure is inevitably threatening! Significant changes can even mean that we need to redefine our identities, reexamine our self-worth, and reassess our self-image. Resistance is a normal reaction to change.

Motivation is a significant factor influencing a person’s willingness to engage in the effort and discomfort required to learn and to change. A well thought-out and skillfully executed Organization Change Management (OCM) Plan can play a crucial part in improving the motivation of the workforce and easing the transition.

OCM gets them ready by making everyone aware of what will happen, increasing their understanding of how it will affect them through Communication; teach them what they need to know to change systems or processes effectively through Education and Training, getting them to accept these changes as necessary and beneficial through Sponsorship, managing the inevitable obstacles that arise in any significant change through Risk Management to obtain their commitment to finally ‘own’ the changes to a system or process.

Implementing changes to a system or process will often change the way people perform their jobs. Far-reaching changes to work practices will affect most non-production employees.

Managing expectations requires understanding of:

  • Why the change is happening?
  • What will change?
  • Who are the stakeholders affected?
  • How will changes affect behavior?

The biggest mistake I’ve seen in IT projects is the reliance on training being the only forum for providing people these answers. Training generally occurs late in the project and is meant for ensuring people understand what to do, but not necessarily why they’re doing it that way. An effective OCM plan will ensure that people are involved throughout the project and contribute to the final end state of a system or process. It will also localize the project team by creating change agents across business locations to promote two-way communication and involvement of all stakeholders.

There is a misconception that OCM is all “fluff." In the IT industry, the focus tends to be on technology with all the bells and whistles. As soon as you mention managing the change with people, eyes glaze over. The fact of the matter is that dealing with human factors is more complex and ambiguous than configuring a system or modeling a process. People often feel uncomfortable talking about softer issues and find it difficult to approach it objectively. A strong OCM approach can however provide assessments that measure the readiness of individuals and effectiveness of managing change. An effective OCM program lets the data from assessments drive the actions required to manage the change based on the unique environmental conditions of an organization.

For example, some of the assessments used on our projects provided the following measures:

Business Impact Assessments: Measures number of major and minor business impacts by process area / by organizational role/by department

Change Readiness Assessments: Measures people’s readiness based on their confidence of the value proposition / project mission / sponsorship / stakeholder enrollment (also indicator on resistance) / organizational & infrastructure / risks with competing initiatives

Communication Effectiveness Assessments: Measures people’s level of awareness, engagement, and commitment to the project

Training Effectiveness Assessments: Measures people’s understanding and ability to apply new systems and processes to their jobs, and measures effectiveness of training instructor and course materials

In my point of view, managing the people side of change provides very real, tangible and measurable benefits to your projects whether you’re implementing a new system, upgrading, optimizing business processes, or outsourcing IT. The question I like to pose to organizations isn’t whether they can afford to invest in OCM, but whether they can afford not to.

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