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Knowing where you are, before starting down the path to where you want to be can only be common sense.

Knowing where you are, before starting down the path to where you want to be, can only be common sense. That applies to any journey, and no more so than for transforming an organisation’s culture.

An underlying principle of the Imaginist’s Change Equation methodology is that the connection between people and process never gets out of alignment during a change initiative. (I am including customers as ‘people’ – organisational change must be designed from the outside in, not the other ways around, or it will fail.)

So just mapping the organisation’s processes will never give you the route map for change. You also have to focus on the organisation’s culture – ‘the way we do things here’. The OCAI-online toolkit provides a very useful and intuitive way to develop an ‘As-Is’ > ‘To-Be’ culture change route map. Developed by Marcel Lamers and Marcella Bremer, and based on the Quinn Cameron ‘Competing Values Framework’, it takes only a few minutes to complete the self-assessment exercise.

I was once asked to come and talk about my Change Equation methodology to a Global company’s transformation team. The plan was to start with an ‘As-Is’ > ‘To-Be’ culture map created by their programme manager (15 minutes), introduce my methodology and discuss how it might be applied to get them from A to B (1 hour) and wrap up with some action planning (15 mins).

It made sense to start with the ‘As-Is’ picture. But you have probably guessed what happened. The team comprised 8 quite senior people from across the company and none of them accepted that the ‘As-Is’ picture represented where they thought they were. The team thought they knew where they were – they had identified the systems, processes and data repositories, but their lack of clarity about the company’s current culture was a stumbling block they could not get over.  An hour into the meeting, and still no closer to agreement, I suggested that we postpone the discussion about the A to B journey until they had a clearer understanding of their starting point. The last I heard, the programme manager left the company, the initiative was abandoned and they never did achieve the ‘To-Be’ objectives.

Please note, I am not advocating spending ages doing a detailed As-Is > To-Be analysis. Rather the exercise should be undertaken quickly and with as wide a participation as possible, to give people on the ground the opportunity to get involved and discover what we consultants know already – that the gap between what is being done around the company and what is supposed to happen can be as great as 80% apart.

So knowing were you are before you start, makes perfect sense. In fact you can’t really move forward with a culture change programme unless you have a shared understanding of the starting point as well as agreement on where you want to end up.

 

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March 23, 2013 Posted by | business change management | , | Leave a comment

It is the “how” of change that determines whether change will stick or not

I don’t usually write a blog that steals all its inspiration from someone else’s writings, but this is too good to miss.

The original article, ‘Engaging with 21st century change: how to make it work’, was by a colleague and business partner Marcella Bremer, founder of OCAI Online, based in Holland. Marcella is a consultant, trainer and writer in the field of organisational culture who has always been fascinated by the human mind and human behaviour. She is an experienced and enthusiastic proponent of of the Organizational Culture Assessment Instrument OCAI developed by US professors Kim Cameron and Robert Quinn in 2005 and has adapted it for use as a online diagnostic tool.

I became the UK Partner for OCAI Online because I share Marcella’s fascination for the myriad ways that organisations manage to get their change programs wrong – and her approach for putting them right.

The problem is a familiar one to any consultant with a liking for theory. One can list all the reasons why more than 70% of change projects fail, but that doesn’t seem to help. Look at how many change management books there are out there – including my own!

In practice, the devil is always in the detail. Every situation has its own complexities and requires a customised approach.

The WHAT may be easy – it is the HOW of change that determines whether change will stick or not

It’s easy to describe the WHAT of change. “Leadership is crucial.” “Change must recognize current culture or will be sabotaged.” “Opinion leaders must buy into the change and become change agents.” “We need a burning platform: why change is necessary now.” “People need a vision to see where they are going”. It is all true.

But that’s not enough. The WHAT of change may be straightforward, but the real challenge is in the HOW of change: solving the puzzle of how to put it into practice in this particular system, within this specific group, in this unique setting.

One can find many examples of assignments where change didn’t stick, despite having properly structured change plans (the WHAT) in place:

  • A leadership team that backed away when it came down to consistent action because the changes became too personal and too tiresome for them
  • An executive team who wouldn’t stop role playing – never being sincere, because they had been working in a toxic team for too long
  • A few self-appointed ‘leaders’ within teams who sabotaged crucial steps to boost their own egos
  • A group of employees who were simply exhausted and couldn’t bear another change on top of all the things that were going on.

It is the HOW of change that determines whether change will stick or not.

The HOW is a journey

And it’s not just a matter of solving the puzzle and then leaning back – it requires action: DOing what will make a difference, to achieve change in this organisation. Walking the talk… and not giving up before it is done. There appear to be three crucial stages in creating successful organisational change:

  1. Spend time tailoring the HOW to change
  2. Do it (not just talk about it)
  3. Persistence (keep doing it!).

Spending time on the HOW is the part many organisations like to outsource or skip altogether. They like hearing the theory, seeing the outcomes of their surveys, agreeing on generalist concepts, values, directions… but the real work is to trace those particular details that will make a difference in a given situation. For example:

  • How precisely will the behaviour of the leader affect the rest of the organisation? Is there a gap between what he/she says and what he/she is seen to be doing? What does that communicate to the rest of the team? How is that showing up in their responses?
  • How can you influence the current underlying culture and shift it towards the desired situation? What exactly is the current culture? Does it hinder debate, block co-operation and prevent us finding solutions for problems that arise?
  • Who are the opinion leaders in this organisation? How can we engage them? How do we avoid making the others feel excluded?
  • How do we create Daryl Connor’s ‘burning platform’ (‘Managing at the Speed of Change’ 1993)? What does that mean in this particular case? Would putting too much emphasis on the urgency of the need for change raise stress levels even further in this dysfunctional organisation? 
  • Who creates the vision that will appeal to everyone? Shouldn’t we include everyone in visionary dialogue and co-create our future together? Or is that miles away from current culture…? Would we be wasting our time running workshops throughout the organisation, because no-one will open their mouths in front of management? Would that just be another change ritual, devoid of true meaning and content?

It may not be easy to uncover and identify the underlying cultural threads, but this work must be done. Even if a CEO has a clear idea on the HOW that will make a difference, he/she still can’t order the others to make the change. They need to see it, too, and commit to the change – or they won’t really do it.

‘Circles of 10’

Marcella has developed a solution to this need to focus on the detail of culture. It’s an inclusive approach which is capable of creating real and sustainable change, and I can only endorse this approach from my own experience. She calls it: ‘Circles of 10’.

In summary:

  • Include and engage as many employees as possible in small teams (‘Circles of 10’).
  • Within these small change circles, get people to work on the WHAT and HOW of change
  • Help them to take ownership of their own role in making it happen (instead of just obeying top-down orders)
  • Ensure they receive the peer support they need to really make the changes and stick with them, even when it’s easier to go back to old habits.

‘Circles of 10’ works by including and engaging people from across the organisation in groups which are small enough to foster real dialogue, but large enough to be able to make a real difference. Ten people in the group know more than one and working in groups means being able to take the time to solve obstacles or reflect on objections and create true commitment, because no-one can hide in a small team. If you don’t really agree, your co-workers will notice. There’s no hiding in the back of a large hall and listening to the ‘sage on the stage’ – the group IS the sage and the stage, and everyone is involved. A good facilitator will ensure that everyone is participating, talking TO each other, not talking ABOUT them behind their backs.

Together, the team has a good chance of solving the ‘how-to’ puzzle and overcoming the obstacles. One person’s objections will trigger innovative solutions. Beliefs will be changed and commitment will grow. If done right, it can work like magic!

Once co-workers have agreed to the WHAT and HOW of change, they will support each other to commit, take ownership and really DO it.  People tend to copy, coach and correct each other and they will support their colleagues if they trust one other, so the ‘Circle of 10’ can help them change “the way we do things around here”. Changing together is easier than moving alone toward new behaviours and beliefs.

And if the group is able to (and allowed to) sustain its momentum, it might really DO what it agreed on – and, even more important, keep doing it. The mutual support provided by the Circle of 10 will help to ensure that people PERSIST, even when it’s tempting to go back to old routines. Any tendency to fall back will trigger discussion on why it is so hard and the group will come up with new ways to overcome the problem.

Culture is “the way we do things around here” including all of the tacit assumptions and automated group interaction patterns and is a big reason why organisational change programs disappoint or fail. By working with and on culture, you address the way people do things around here; make people more aware and help them change tacit beliefs and actual behaviours. A successful change circle has the core competency of change built within it, enveloping all its members.

Tools and further reading

The Organisational Culture Assessment Instrument (OCAI), based on the Competing Values Framework by Cameron & Quinn, is a useful tool to help people be more aware of the underlying values, assumptions, criteria, beliefs and behaviours in their organisation. It provides a useful basis for people to start working on culture and change, first in OCAI Workshops (discussing the outcome of the OCAI outcomes), then in ‘Circles of 10’ as the teams evolve and start taking ownership for developing their own teams.

By rating six key aspects of organisational culture that were found to determine success, the OCAI tool assesses the current and preferred organisational culture. The outcome is based on the Competing Values Framework and consists of four culture types: Clan Culture, Adhocracy Culture, Market Culture, and/or Hierarchy Culture.

You can try the OCAI assessment online FREE : OCAI One, or assess your organisation’s culture online: OCAI Pro. If you want to know more about Marcella Bremer’s approach, read her book: “Organizational Culture Change: Unleash your Organization’s Potential in Circles of 10”.

The Change Readiness Assessment (CRA) is the result of 3 years research and development by Peter Duschinsky into identifying and quantifying the risks and barriers to change and their impact on the ROI of a change project. Based on a set of Change Equation principles and methods published in 2009 and now available as an e-book: The Change Equation, the CRA can be used to focus senior management attention on the gap between the project’s complexity and the organisation’s capability for change. These findings can provide the basis to improve the outcomes of a change project, or more usefully, build Change Readiness into the organisation’s project planning process, to deliver consistently improved project outcomes.

The CRA process usually takes no more than 5-10 days, depending on the size of the project. An organisation-wide CRA audit is a more substantial programme, but this will build a Capability for Change into the organisation’s standard practice and core values, providing it with the resilience it needs to cope with the ever-increasing pace and complexity of change that it faces into the future. For more information, read about the CRA at www.imaginist.co.uk

February 4, 2013 Posted by | business change management, change capability, workshops | Leave a comment

SAQs: SHOULD ASK questions

We are used to seeing FAQs, Frequently Asked Questions, on websites. Last week I heard about an interesting variation: SAQs, SHOULD ASK questions.

FAQs are the questions asked over and over again by customers. But are these the questions customers SHOULD be asking?  Typically, FAQs deal with the basic, practical information customers might need, but what they DON’T do is trigger a higher level dialogue with you about the added value your product or service provides them.

So, unlike an FAQ, an SAQ is a question you WANTyour potential customer to be asking, but they might not know they need to be asking.

In the area of business change, one of these Should Ask questions might be:

  • Is my project too complex for our people to cope with the changes?

Another might be:

  • Is there sufficient commitment to making the change on the part of the people involved?

Both key to the success of your project, I’m sure you’ll agree. But the reason you haven’t asked them, is that you probably didn’t know that there are useful answers available.

We can offer an approach which provides quantified, practical answers to these questions – questions you should be asking before investing in a project.

  • Is my project too complex for our people to cope with the changes? This means measuring the complexity of the project and the capability of your organization to handle the changes. Once these are known, a gap analysis will answer the question.
  • Is there sufficient commitment to making the change on the part of the people affected by the project? This requires three measured inputs:

a)    the amount and effectiveness of preparatory consultation and engagement

b)    a measure of the level of trust between people in your organisation

c)    the degree to which local managers are accountable for the improvement expected as a result of the project.

Combined, these will tell you whether your project will be pulled through or hindered by your people.

To arrive at objective and useful answers to all these questions, we use our Change Readiness Assessment tool. Based on Peter Duschinsky’s Change Equation methodology, published in 2009, this tool is used to measure the complexity of a project, and identify and quantify the cultural and process barriers to change in your organization.

It only takes a couple of days to carry out this assessment.

Can you really afford to invest in change without knowing the answers to these Should Ask Questions?

Contact us!

November 10, 2012 Posted by | business change management, change capability, complexity, mergers and acquisitions, Project Readiness Healthcheck | , , , , , , | Leave a comment

What are the key things I need to do to motivate people to accept and embrace change?

The other day someone asked me: “What are the key things I need to do to get people to accept and embrace change?” It made me think back to the behavioural theory I absorbed while researching my book The Change Equation. So I sat down to list them and came up with five. I’m sure there are at least the same number again, but these were the ones that came to mind:

  1. Design the change so that the ‘default’ choice is the desired one – 80% of people will take that route. (Make the right choice more difficult and 80% will continue to behave as they did before, or revert to that unproductive behaviour over time.)
  2. Make the change simple, personal and easy to understand and build in cues to remind people to take the non-habitual action until it becomes habitual.
  3. Don’t use fear to motivate people. Fear is only a productive, sustainable motivator when people feel personally vunerable and think they are in a position to control the threat. Mostly, fear triggers a ‘fight or flight’ response – the defensive, inward-facing ‘survival’ stance which leads to denial and hiding from the threat and suppresses the creativity and innovative thinking needed to solve complex problems.
  4. Positive reframing of the threat to emphasis the opportunities and benefits can motivate people to act, provided the positive outweighs the negative by a ratio of 3:1 (Lasaro) and that the benefits are immediate and not set in some distant future.
  5. But loss aversion is an even more powerful motivator than gain, so the reframing can include opportunities to avoid penalties and personal loss (embarrassment, loss of status etc as well as financial).

So there they are… practical strategies which seem to work. Let me know if you have any more.

How you apply these strategies is up to you, but I’d recommend that before you do, you read Marcella Bremer’s great new book: Organizational Culture Change: Unleashing your organization’s potential in circles of 10

Good luck!

February 4, 2012 Posted by | business change management | , | Leave a comment

What makes an organisation good at managing change?

In a recent McKinsey’s article, management consultants Scott Keller and Colin Price summarise their forthcoming book: ‘Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage’. The message is clear: organisational health is the “ultimate competitive advantage” and organisations need to build the capacity to learn and keep changing over time, if they want to achieve and sustain high levels of performance.

This confirms what we’ve been telling anyone who will listen for the past year: it’s what we call the organisation’s Capability for Change and it’s a crucial core value, if you want to survive in the face of the accelerating pace of change and rising levels of business complexity.

I took my definition of Capability for Change from Rebecca Henderson (Harvard Business School): “Attention and resources focused on people and processes, developing the organisation’s stock of capability and resilience”.

I also like this one:

Resilience: “The attitudes, skills and strengths, that enable individuals, and teams to thrive within organisational change” (The Taylor Clarke Partnership)

But like all aspects of an organisation’s culture and values, its resilience and capability for change requires continual investment and maintenance, or it will erode through natural entropy. In our opinion, any transformation programme needs these core values at the heart of its core deliverables, but in our experience, most don’t go there.

So, how do you know if your organisation has resilience and capability for change? How do you know whether it is good at managing change as a normal part of ‘how we do things around here’?

Try our ‘starter for ten’ list. Does your organisation have these characteristics?
  1. Strong, visible, empowering, leadership
  2. Clearly articulated and shared vision
  3. Attention paid to supporting core values
  4. High level of trust between managers and staff – decision-making devolved wherever possible
  5. People allowed to stop doing stuff when taking on new initiatives – overload issue managed well
  6. Innovation encouraged and well managed
  7. Good communication between departments
  8. Good communication/collaboration with customers and suppliers
  9. Adherence to standard ways of doing things
  10. HR benefits and rewards aligned to business objectives.

Yes? Then you are likely to have a good capability for managing change, i.e:

  • High level of involvement and commitment
  • Low resistance to change
  • Resilience in the face of challenges
  • Able to bring in changes rapidly and effectively in response to need.

No? Then you, like most organisations are probably on a ‘downward spiral to disaster’:

  • Senior management is taking a short-term view and focusing on cutting costs and hitting revenue or output targets
  • This may be succeeding in the short run, but it has diverted resources away from supporting your people and processes – your capability to manage change
  • As a result, it is actually becoming more difficult for the organisation to sustain its revenue performance – everyone is under so much pressure that even normal routine stuff doesn’t get done any more

Only reinvesting in your core capability will correct this downward trend and give the organisation a fighting chance to successfully manage the accelerating pace of change and rising levels of business complexity.

July 27, 2011 Posted by | analysis, business change management, change capability | , , , , | Leave a comment

How to Improve your Organisation’s Resilience and Capability for Change

I recently asked a senior director in a large multi-national corporation whether he was satisfied that they were building the resilience and the capability to handle the increasing pace of change and rising complexity of the challenges that his organisation faces today and in the future?

And he had to admit that they weren’t.

This is a question that all executives face, but most will (privately) agree that the answer is a resounding NO.

But those that fail to do so will not survive.

A recent IBM survey of 1,500 CEOs across the world confirmed that complexity is the single biggest issue for businesses and more than half doubted their ability to manage it.

In this blog, I want to explore how you can benchmark and improve your organisation’s capability to respond quickly, effectively and sustainably to these challenges – your Capability for Change.

In the past, this meant understanding your customers, knowing what your competitors were up to and putting in place the appropriate strategies to meet the challenges as they arose. You relied on your managers to run the operation, keep costs under control and implement the strategies (often in addition to their day jobs).

In fact, most organisations performed poorly in responding to the challenges that they faced. The need for change was often recognised too late and managers found themselves unable to galvanise their lumbering, bureaucratic organisation to respond quickly or effectively. However, the relatively slower pace of change allowed some degree of catch-up and the huge financial investment and sometimes sheer waste of skilled resources that were sacrificed because of the ‘too little too late’ response were rarely chronicled.

It is clear that the margin for catch-up and profligate spending and waste is far narrower in today’s more demanding competitive and economic climate. The organisation needs to build resilience into its core values and its infrastructure.

But how?

First you need to benchmark your organisation’s Capability for Change.

I am not talking about the capability of your programme and project management teams. It almost doesn’t matter how well-managed they manage the projects and programmes, if the people affected by the project do not have the capability to learn and embed the new ways of working. I am talking about the capability of the organisation as a whole to cope with the huge task of making change happen. And then do it again, and again.

Typically, CEOs underestimate the complexity of change and overestimate the capabiity of the organisation to cope with change. It’s the gap between these two variables that you need to understand.

How can you tell how wide a gap there is in your organisation?

A quick way is to look at how the organisation deals with overload. Are your managers working effectively? That means they are probably loaded beyond their ability to do everything in the day, but not so overloaded that nothing gets done properly or well. Or are they struggling to cope?

That probably means that change initiatives have been passed down for them to cope with on top of their day job. Sometimes this is disguised by redefining the day job to include the initiative, but the key question is: did you allow them to stop doing other stuff to make the time for the extra work? If not, the initiative won’t succeed.

Research over the past few months suggests that there is a tipping point, beyond which initiatives, however good they may be, cannot ‘stick’.

Conclusion: Unless one of the first things you do in planning a change project is working out how to allow key people to stop doing other stuff (‘the day job’), they won’t be able to give the initiative the time and attention it needs, so it will fail. That usually comes down to budgets and resourcing decisions, which are under serious pressure in today’s competitive and economic climate. So the only way an organisation is going to be motivated to build sufficient resource into supporting their projects so that people can pass routine work across in order to concentrate on a change initiative, is by making this a core value for the organisation. And the only argument for making it a core value is if you can clearly quantify the financial benefits of doing it this way – and the financial consequences of not doing so.

So when we talk about the gap between the level of complexity of the project and the capability of the organisation, that gap has to be quantifiable and its impact on the bottom line profits of the organisation has to be demonstrable.

That’s where the Change Equation tools can help.

By applying the Change Equation models and tools in a Change Readiness Assessment (CRA) process, we can:

  • Calculate the complexity of the project and understand the level of organisational capability needed for the project to succeed
  • Assess the actual cultural and process management capability in the part of the organisation affected by the project
  • Measure the gap and quantify its impact on the project’s ROI

The CRA takes very little time, but delivers significant benefits. If you undertook a CRA as part of the initial planning for all your projects, you would achieve a consistent improvement in project outcomes, raise your return on time and resources invested and see the financial benefits on the bottom line.

 But that’s just the beginning… Now improve your organisational resilience!

You can do something even more important with these tools. By carrying out an audit of a selection of past projects across the organisation, you can begin to define the common barriers to change inherent in the your culture, systems and processes.

Analysis of these barriers allows you to develop an enterprise-wide transformation programme that focuses on bridging the gaps, building capability into how you undertake projects, building resilience into the core values and infrastructure of your organisation.

So a large corporation – or public sector organisation – could integrate the Change Equation methodology into its standard practices at two levels:
  1. At Project level – build the CRA into your project planning processes to ensure Change Readiness and deliver consistent improvement in change project outcomes
  2. At Programme level – use the Change Equation principles, Route Maps and Action Plans to provide the framework and content to deliver organisational Capability for Change as a core value.

Now that you have a clear change strategy, you need skilled people to help you work through the change process. I have just read Marcella Bremer’s new book: Organizational Culture Change: Unleashing your organization’s potential in circles of 10 and can recommend the OCAI Online team.

 

July 5, 2011 Posted by | analysis, business, business change management, change capability, project and programme management | Leave a comment

Developing “Change Capability” in the face of ever-rising complexity

As I recorded in my 2011/03/13 blog, the world’s private and public sector leaders have reported to IBM that a rapid escalation of “complexity” is the biggest challenge confronting them (Capitalizing on complexity – IBM Global CEO Study 2010).

“Events, threats and opportunities aren’t just coming at us faster or with less predictability; they are converging and influencing each other to create entirely unique situations. They expect this to continue – indeed, to accelerate – in the coming years.” As one CEO said: “The complexity our organization will have to master over the next five years is off the charts — a 100 on your scale from 1 to 5.” (Edward Lonergan, President and CEO, Diversey, Inc.)

The respondents to IBM’s study are also agreed that their organisations are not equipped to cope effectively with this rising level of complexity. They need to “invent new business models based on entirely different assumptions”.

David Snowden, CEO of Cognitive Edge, sees this as a shift from a world where we can predict probable risks and use risk management systems to make our plans robust, to one where we need to accept that complex and interdependent risks will occur, and find new ways to cope, building ‘resilience’ into our organisations.

“Moving from a system designed for robustness to one that supports resilience represents a significant strategic shift. Whilst systems have commonly been designed to be robust – systems which are designed to prevent failure – increasing complexity and the difficulty it poses to ‘fail-proof’ planning have made a shift to resilience strategically imperative. A resilient system accepts that failure is inevitable and focuses instead on early discovery and fast recovery from failure.” (Risk and resilience – David Snowden, Cognitive Edge)

This requires a shift from deductive and inductive methods of managing risk, to placing greater reliance on skilled managers’ sensitivity to emergent behaviour and their ability to use abductive reasoning – identifying relationships between factors that would not normally be considered linked. As it happens, that’s what humans do best!

So we need to apply new skills in our management of change projects and programmes. to focus on developing and maintaining an infrastructure that supports continuous innovation and transformation – I call it an organisation’s Change Capability.

In the Change Equation’s Organisational Culture Evolution model, this is described as an ‘Imaginist’ culture. But an Imaginist culture has to be built on a solid foundation – it can’t just be grafted on. To quote Mary Douglas: “If you want to change the culture, you will have to start by changing the organization”.

See our slidecast on this: http://www.slideshare.net/peterd35/inpact-slidecast-2

As the IBM study says, avoiding complexity is not an option – the choice comes in how you respond to it. Will you allow complexity to paralyse your already creaking organisation, reduce your responsiveness to customers, create corporate burn-out among your managers and eventually kill you off entirely? Or do you have the creative leadership, a focus on sustaining your people and the right calibre of managers to develop the change capability and operating dexterity you need to turn complexity into a strategic competitive advantage?

It requires a separate, continuous thread of capability development to reflect, transmit, embed and maintain the organisation’s core values and Change Capability infrastructure  – but that is the recipe for sustained growth and survival in these complex times.

Is that what your organisation is doing?

June 6, 2011 Posted by | business change management, change capability, complexity, innovation, project and programme management | | Leave a comment

How to measure the impact of distrust on your project

Trust is the ‘oil’ that helps people to accept change in an organisation. It empowers them to remove the barriers that block change, with a minimum of friction. (That’s why having a highly visible senior manager at change project meetings is so important – they don’t even have to say anything!)

An absence of trust between managers and staff and between parts of an organisation will slow down and even stop a project. The higher the levels of distrust, the more time and effort the project will require and the higher the cost. So if you could measure trust in the group that is to be affected by a change project, you could develop a useful predictor of the additional time and cost involved in implementing that change project.

I looked for in vain for an approach that would allow me to measure trust. Stephen Covey Jr wrote a useful book about “The Speed of Trust – The One Thing that Changes Everything” but one thing he failed to do in that book was to suggest ways to measure trust – and other authorities on the subject shed no more light.

So I dreamt up my own approach. How does one measure trust? By asking a few key questions…

There are essentially 3 key relationships anyone has in an organisation:

1. Relationship with my manager

2. Relationship with my staff

3. Relationship with my peers

That gives a 3-dimensional model. For each dimension, I used a four-point scale to score the relationship, where 0 is the lowest and 3 is the highest:

3 =  excellent relationship – high levels of trust and respect

2 =  quite good relationship, reasonable levels of trust and respect

1 =  poor relationship, low levels of trust and respect

0 = non-existent relationship, no trust or respect.

Then using a simple questionnaire, I solicited the responses from a sample of the people involved in the change project. Adding up the scores gives me a figure with a maximum score of 9. I turned this into a percentage and inverted it  (deduct from 100%) to obtain the % of distrust – because it is the shortfall in trust that acts as an drag on the time and cost of change. And I found that applying the distrust % directly yo the planned time and cost of a project gave me a pretty good idea of the potential impact of distrust on the ROI of the project.

So, if the trust score is low, say 3, that gives me a trust % of 33%. Deducting that from 100 gives a measure of distrust factor of 67%. Applying this measure to a project with a planned roll-out of 1 year and an implementation cost of £40,000 would add 8 months and around £27,000 to the cost.

In my experience, this seems to correlate well with what happens in practice – the lower the level of trust, the longer it takes to implement the projects and gain the benefits.

Let me know if you find this useful.

A fuller account of this approach is contained in my book: The Change Equation.

April 28, 2011 Posted by | business change management, project and programme management, trust | , , , , , , | Leave a comment

Managing in Complexity – convergence of ideas

Do you believe in synergy and synchronicity?  I do.

Over the past few weeks I have been seeing a real convergence of ideas from companies, experts and people I meet, suggesting that there are some fundamental deep-seated differences between organisations that manage complexity and change successfully and those that don’t – and that we should be able to identify and measure these, for the benefit of our clients.

Those of you who follow my blogs will know that I have been saying for some time that complexity is not linear and managing complex projects successfully demands a move away from ‘command and control’ style project management to one that supports and nurtures emergent behaviour and new forms of organisation. (I took my original cue from the work of Eve Mitleton-Kelly who runs the Complexity Group at LSE).

It is encouraging that the recent IBM study (‘Capitalizing on Complexity’) takes a similar view of business complexity, suggesting that the ever-increasing scale of complexity in business places new demands on CEOs to be more creative. One CEO in the IBM study concludes that “The complexity our organization will have to master over the next five years is off the charts — a 100 on your scale from 1 to 5.”

And today’s Sunday Times actually has an article (Complexity may be inevitable but it must be managed) about the need for companies to simplify in the face of complexity. It also identifies the non-linearality of complexity and accepts that levels of complexity are rising.

So complexity is the ‘space’ within which I want to be able to offer help and support to clients, whether it’s project (narrow focus) or business (wider focus) complexity.

Convergence of ideas

In addition to the IBM study and the Sunday Times article, here are some of the other ideas that are converging:

1st and 2nd Order Project Management

Michael Cavanagh (http://mcavanagh.com/) has identified that managing complex programmes demands a different approach to that required to deliver simpler programmes – what he calls “2nd order PM”, focusing on some of the soft aspects of change, where 1st order PM focuses just on the project outputs.

Michael refers to “Bureaucracy – when you know what to expect” and “Adhocracy – when you don’t”. I have for some time used a similar distinction, first encountered when reading Thomas Docker’s white paper on project complexity (he is Chairman of CITI):

  • Complicated = not simple, but ultimately knowable (such as installing a new comms network)
  • Complex = not simple and never fully knowable (such as restructuring and merging two departments)

(Interestingly, a discussion about complexity on BBC Word Service Radio this morning with Nassim Nicholas Taleb (The Forum: 12/03/2011), used exactly those terms…more synchronicity!)

Michael’s 2nd order PM includes the use of “adhocratic” leadership, system thinking, outcome management and experiential learning – “learning in the experience, not from the experience” – a great distinction which fits well with David Snowden’s “Probe > Sense > Respond” approach to complexity, in his Cynefin framework. i.e. act in the uncertainty.

Overload tipping point

In the capability assessment that forms part of the Project Readiness Healthcheck, we assess the capability of the organisation to cope with change by looking at its culture and process management capability. But clearly another factor must be the sheer number of change initiatives being loaded onto the shoulders of the poor managers. I suspect that there is a tipping point, beyond which nothing new gets through.

A recent report from the Economist Intelligence Unit, “Leaders of change – Companies prepare for a stronger future” says that change programmes are “consuming ever more corporate resources” but adds that on average only 56% of change initiatives are successful. The report suggests that the limit of how many initiatives a company can absorb is, on average, just 3.6 changes annually. That average doesn’t tell us very much, unfortunately. It would be useful to know on what variables it was based – and to be able to assess an organisation’s overload factor as an indication of how well it would cope with further change.

What is the tipping point? 100% overloaded? 200%?

The strategy is obviously to get managers to STOP doing stuff…which fits with the idea that one answer to complexity is to simplify the customer and employee experience, i.e. simplify your processes… but that needs a strong, well-supported argument, based on research. Some work on overload was done by Rebecca Henderson at Harvard way back in 1981, but the details of this are not available and I haven’t seen anything since.  Time we focused on it again!

Investing in an organisation’s capability is key to longer-term success

That’s so obvious, it shouldn’t need saying, but how often do you come across organisations where they only really pay lip service to their Investing in People values? So it’s great when one comes across something that confirms the importance of consistently paying attention to developing and maintaining a strong set of core values and supporting people to trust, share and become empowered to ‘invent their own route to the future’. Following up the Overload work by Rebecca Henderson at Harvard produced this gold nugget:

When the CEO’s priority is to hit the revenue targets, performance seems to go up. So that becomes the strategy whenever the company comes under pressure. However, work done by Nelson P. Repenning and Rebecca M. Henderson at Harvard suggests that this apparent causality may lead to a “vicious cycle of accelerating decline”. Their (very technical) paper: ‘Making the Numbers? “Short Termism” & The Puzzle of Only Occasional Disaster’, suggests that the more the focus on revenue targets diverts attention and resources away from developing capability (i.e. their people and processes), the more the company risks disaster longer term. Again, there seems to be a critical “tipping threshold”.

So it seems that developing a strong, sustained cultural and process management capability enables an organisation to be flexible and achieve performance targets when the pressure is on, without detriment to its long-term survival.

That fits right in with our Change Equation principle that the management of change is not a subset of project management and cannot be achieved within the lifecycle of a change project – it has to start earlier, continue throughout and go on after the completion of the project. In other words it requires a separate, continuous thread of capability development to reflect, transmit, embed and maintain the organisation’s core values.  That is the recipe for sustained growth and survival.

So what do organisations who are good at managing change have in common?

They

  • Have strong, congruent values, embodied and disseminated from the top
  • Follow a ‘grow-your-own’ and ‘pick-the-best’ approach to talent and skills
  • Take care with their people – ‘they are our real assets’ (and mean it)
  • Involve their people in ‘creating their own route to the future’
  • Set performance targets from the ‘outside in’, taking a systemist and holistic view of the organisation, where individuals are recognised to wear multiple hats
  • Recognise the dangers of overload, manage out unnecessary processes and invest in change management
  • Understand how to cope with complexity, are able to simplify and build in flexibility and adeptness for change.

That’s my list, off the top of my head…what’s yours?

And what tools have you got to measure all this?

March 13, 2011 Posted by | business, business change management, complexity | | Leave a comment

Capitalizing on Complexity – important new study

I have just come across an IBM study (‘Capitalizing on Complexity’) which reveals that the world’s private and public sector leaders believe that a rapid escalation of “complexity” is the biggest challenge confronting them. They expect it to continue — indeed, to accelerate — in the coming years.

They are equally clear that their enterprises today are not equipped to cope effectively with this complexity in the global environment. And they identify “creativity” as the single most important leadership competency for enterprises seeking a path through this complexity.

As the chairman of IBM says: “events, threats and opportunities aren’t just coming at us faster or with less predictability; they are converging and influencing each other to create entirely unique situations.”

Those of you who have been following my blogs will know that I have been preaching the importance of understanding the exponential nature of complexity. Managers typically underestimate the complexity of their projects and overestimate the capability of their organisations to cope with it.

The IBM study includes the advice: “predict and act,” not just “sense and respond.”  I suppose I shouldn’t be too surprised to read what is almost a direct quote from David Snowden’s description of how to deal with complexity, in his Cynefin Framework – after all, he did that work while he was still at IBM…

Over the past few weeks I have been seeing a real convergence of thinking from companies, experts and people I meet, that draws me to the conclusion that there are some fundamental qualities in organisations that manage complexity and change successfully, and that we should be able to identify and promote these for the benefit of our clients.

More on that anon.

March 8, 2011 Posted by | business change management | Leave a comment