Most business leaders are fully aware of the need for organizational change.
Globalization of markets, mobile technologies, and hyper-connectivity are just a few of the dynamics continually reshaping the competitive landscape for every organization.
In this article, we’ll focus on the engagement of and between various layers of management, and how adopting a company-wide process or framework can play a defining role in successful transformations.
The seniority gap
Over 900 senior executives from multinational companies were asked in a recent survey1 to classify themselves along a spectrum of transformation. Those with some form of defined, company-wide change management process were much more likely to identify themselves as Innovators/First Movers, while the majority of those without a formal process identified as Laggards.
But of course, change is not as easy as simply identifying yourself as a First Mover. Another global study done of 587 senior executives by the Economist Intelligence Unit for the Project Management Institute2 corroborated the importance of senior-level engagement. And yet it found that “only half of those surveyed could claim that strategy implementation as a whole receives appropriate C-suite attention.” The findings go on to state the key to successful business transformation:
“This entails involving corporate leaders in high-level decisions on the selection and prioritization of such initiatives as well as the allocation of resources to them—the core of strong project-portfolio management. Yet interviewees for the report warn that the C-suite needs to lead a structured process rather than micro-manage execution,” the report states.
In my experience managing business transformations, I’ve found that one constant indicator for success is continuing executive sponsorship of the whole change management programme. That is, above and beyond individual projects, senior leaders are steady champions of the whole process. It’s only natural that a change management framework should encompasses executive sponsorship — but a formally adopted and supported enterprise-wide process also solidifies executive commitment to a program of continuing change within the organization.
Take this common scenario: The IT department is called upon to be an agent of change. However, in this case, the technology manager doesn’t have the authority to insist upon or enforce a change to how Line of Business managers operate. It’s critical to get — and keep — executive engagement involved. Those at the top level need to communicate the need for change to middle management and continue to drive that change on an ongoing basis. A recognized, company-wide change management process can help support executives and middle management to sustain engagement during individual projects — and beyond.
A recognized, company-wide change management process can help support executives and middle management to sustain engagement during individual projects — and beyond.
Leadership in action
For an example of the intrinsic value of a formal, company-wide approach to change, the KPMG researchers looked at a leading distributor of electronic components and technology. Since 2005, a global change management programme at this company had achieved more than $100 million in benefits, including:
- Employees in Europe suggested a change to the floor plan of one of the company’s warehouses, which ended up saving almost one month of labour per year
- Another team in Asia collaborated with a major supplier to implement inventory management, reducing inventory by millions of dollars.
These are fantastic benefits, but it bears repeating: they were not realised in a vacuum. The CIO singled out executive sponsorship and a framework for change as the cornerstones of ensuring success. From the KPMG study:
“…we have a formal and successful change management approach. This focuses not only on communications and training, but also sponsorship, coaching and managing the inevitable resistance that comes with change.”
A formally adopted change management process should be an integral part of any business transformation. There are many pieces to a well-designed process, from clear communication to effective training, as well as meaningful and ongoing metrics to define success.
Most importantly, underpinning all the individual components, is an upfront commitment demonstrated by the creation and adoption of a formal process itself.
Ready to create a plan for meaningful and measurable change in your organization to drive successful transformation? RICOH can help. Learn more about our consulting practice here.
1 Source: “Business Transformation: People. Process. Results.” KPMG Transformation Survey by Forbes Insights. October 2014. http://www.forbes.com/forbesinsights/kpmg_transformation_ppr/index.html
2 Source: “Why good strategies fail. Lessons for the C-suite.” A report from the Economist Intelligence Unit, 2013. http://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/why-good-strategies-fail-report.pdf