Leadership’s Role in Driving Change Management: Part I

PART ONE: The Change

As a practitioner of clinical/organizational psychology and behavioral sciences, I am keenly aware that “change is more than change,” it’s individual; yet, people and systems (organizations) are predictable. ArganoCSS’ methodology of integrating organizational change management into project delivery, system and business transformation is rooted in the application of these sciences along with proven change management practices. The outcome is proactive plans and purposeful interventions that drive rapid end-user absorption of the change and long-term sustainability — keeping the system and business processes the solution and not the problem.

In this four-part series, we will take a look at organizational change management and how proper executive leadership can greatly influence success, especially in the engineering and construction industries. By purposefully applying a number of simple principles and practices, I guarantee success rates will dramatically rise — research and years of experience fully support this.

Change is defined as “the act or an instance of making or becoming different, an alteration or modification” (Concise Oxford Dictionary).

In the construction Industry, the term “change management” is often used to refer to change control processes where changes to a project or a build’s scope — which may have impacts on time, cost or quality — are assessed and approved. Then appropriate measures are made to assist in the redirection or redefinition of budget allocations, resource use, business process, and other modes of operation.

There is a third type of change, a discipline that provides a structured approach to helping individuals, teams, leadership and entire organizations change their approach, attitude, position, and responsibilities — often predicated by significant technology or business drivers. I’m referring to organizational change management or OCM. OCM is the effective management of the human side of transformational projects — supporting program leadership, implementation change, and rapid stakeholder adoption. It involves:

  1. Organization-wide understanding of the change that is being implemented
  2. Supporting the people impacted by the change and the drivers of the change
  3. Creating strategies and actions that will help drive the successful transition and adoption of the desired change (such as communication, sponsorship, coaching, training, resistance management, and reinforcement mechanisms)

Why such a distinction… after all, change is change isn’t it? At the core, yes, I would agree “change is change” yet, the simple assumption that all organizations, and the people within, respond to change the same way has been the bedrock of many failed and laborious IT projects. In the construction arena, we have witnessed many new markets and labor pools open up, innovative ERP and peripheral solutions have put once-powerful — now stale — business models on the chopping block, and capital flows and partnership demands have become less predictable. E&C firms are far more sensitive to and more keenly aware of the role that culture plays in meeting these challenges.

By necessity, the industry is becoming more sophisticated in the best practices for organizational change management. Through applying behavioral sciences, organizational development, and a proven implementation methodology we have been able to successfully assist many E&C firms to manage change within their organizations — changes brought on by the introduction of new business processes, systems, and technologies. The idea that large-scale new technologies in the construction industry can be inserted into the culture in a linear manner is absurd. Changes at the enterprise level need to be managed in order to mitigate the negative impacts and safeguard quality and profitability.

Impacts and consequences vary according to the type and nature of the changes, but most importantly according to how they are managed. According to a Strategy & Katzenbach Center survey, the success rate of major change initiatives such as an ERP or Cloud initiative is less than 54 percent. This is far too low. Costs are high to an E&C firm when change efforts go wrong — not only financially but in confusion, lost opportunity, wasted resources, and diminished morale.

In an environment characterized by slim margins and ever-increasing global competition and customer expectations, managing technology and process change to stay ahead of the competition becomes more important, and at the same time more difficult, especially when companies have a geographically dispersed organizational structure, are multi-disciplinary in nature, and are managing more projects with ever-increasing partnerships.

For example, on-going changes in the market (globalization, consolidation and the movement toward E P C), ERP implementations have become strategic, focusing more on business transformation and less on software. This shift has placed greater emphasis on process improvement and user adoption. Most E&C firms are privately owned or started out that that way. The informal “get the job done whatever it takes” approach is still very much a part of their cultures. Cults of personality and “tribal knowledge” rule the day.

This entrepreneurial paradigm accounts for the success of most of these firms; and yet it also presents a very specific set of challenges with respect to leading change. This is an industry that is seeing “the old guard” move on to retirement; the institutional knowledge of how successful projects are executed is going away. Now, more than ever, the need is high to evolve systems to provide useful analytics. But, implementing the systems or technologies is a complete waste of effort and money if the adoption isn’t there. OCM is the key to that adoption.

Leadership’s Role in Driving Change Management: Part II