Managing Through Change

1. Managing Through Change 2009 Endeavor Entrepreneurs Summit: Opportunity in a Time of Crisis May 7, 2009

2. businessstrategy hr service delivery strategy • an organization’s business strategy is driven by numerous dynamic factors: • external market factors that create demand and shape the competitive environment for products and services • organizational factors including core competencies, products, structure and composition of the business units, the cultural and political environment within the organization • people factors including leadership and management competencies, the ability of the organization to develop and retain talent • the hr function delivers a range of consulting and program administrative services based on the organization’s needs. hr’s service delivery strategy must be: • responsive to the organization’s business strategy • explicitly aligned to support the implementation of the organization’s human capital strategy The Role of HR Within an Organization • human capital strategy – that is, the people side of business design centered on the selection, deployment, motivation, and management of people – is a key driver of business success: • almost any significant changes in market dynamics or business design will require changes in a firm’s human capital strategy

3. Human Resources  Drives the Employee Value Proposition

4. Leading People Through Change Tools and Techniques for Driving and Supporting Sustainable Change

5. Perspectives on Change • “It is natural for any system, whether it be human or chemical, to attempt to quell a disturbance when it first appears. But if the disturbance survives those first attempts at suppression and remains lodged within the system, an iterative process begins. Finally, it becomes so amplified that it cannot be ignored.” Meg Wheatley • “Whenever a discrepancy exists between the current culture and the objectives of your change, the culture always wins….When countercultural changes are introduced, you must alter the existing culture to support the new initiatives.” Daryl Conner • “It’s not so much that we’re afraid of change, or so in love with the old ways, but it’s the place in between that we fear…it’s like being between trapezes. It’s Linus when his blanket is in the dryer. There’s nothing to hold on to.” Marilyn Ferguson, Futurist • “Visionary companies display a powerful drive for progress that enables them to change without compromising their core ideals.” Jim Collins, Built to Last • “Culture change gets real when your aim is execution.” Larry Bossidy

6. When Do Organizations Experience Change? • When creating something that does not exist, e.g., a new business • When shifting states from current to future, e.g., redefining business processes, a re-organization, a culture change • When dismantling something, e.g., selling off a business or canceling a product. • When else? • (Exercise #1 – 5 mins: Write down the top 3 changes are you experiencing or anticipate this year?)

7. Why Build Organizational Change Capacity? Effective Change Management = Impact on Productivity • Decreases the depth and duration of the performance dip • Increases the speed to achieve a higher level of performance

8. Obstacles to Change • Past Success • Past Experience with Change • Structures/Jobs • Reward System • Lack of Leadership • Decision Processes • Information Systems • Funding • Little Slack • What Else?__________________

9. Formula for a Successful Change Initiative Resistance Why? What ? How ? • Resistance • Reduce Stakeholder resistance by creating a Communication Plan that incorporates all the elements of the formula • Implement the Plan • Plan • When will the change take place? How can I support the change? • Clear timeline to help Stakeholders see what’s being done and how it’s getting done • Timely information about key dates (i.e. meetings, Brown Bags, testing, training, Go Live) • Dissatisfaction • Why is the change necessary? • Why is this change happening now? • Correlate dissatisfaction of the current state as a motivator to change • Vision • What’s changing? • Help Stakeholders see the future clearly • Repeat the Vision often, so everyone has a shared understanding D V P R

10. Change Capacity Model A Way to Think About Initiating, Designing and Executing Sustainable Change Pace, sequence & navigate change Lead through change Compelling Roadmap Agile Change Leaders Push Pull Aligned Systems Ready Stakeholders Design, manage & Integrate change Own & sustain change

11. Sustainability Awareness Commitment Future Past Understanding Acceptance Focus on Self Change Engagement Curve Levels of Engagement Required Need to own and improve on the change once its implemented Focus on the Change Need to role model and advocate for the change to be successful Need to know the change is happening Need to support the change and take action for it to be successful Need to understand why and how the change is happening Page 11

12. Sustainability Commitment Awareness Understanding Acceptance Awareness How to Recognize the Stage • KEY FEELINGS AND BEHAVIORS • Indifference, disbelief, avoidance, withdrawal • Minimize and/or dismiss the impact of change • WHAT PEOPLE SAY…WHAT PEOPLE DO... • Nothing - silence is golden • Avoid the topic • “It will never happen” • Appear unconcerned • “It won’t happen to me” • Refuse to take initiative • “All we need to do is…” • Act like nothing is happening • • Do only routine work • THE PURPOSE OF THE AWARENESS STAGE • A way to preserve the success and comfort of the past • Understanding what people are going through may help to minimizes anxiety and disruption • during the early part of change • May be disruptive if people continue to refuse strong evidence that change is necessary

13. Sustainability Commitment Awareness Understanding Acceptance Understanding How to Recognize the Stage • KEY FEELINGS AND BEHAVIORS • Complaining, skepticism, glorifying the past, reluctance or unwillingness to participate • Surfacing of issues and concerns, however, no suggestions or solutions are offered • Focusing on what they will lose, rather than on what they might gain • WHAT PEOPLE SAY… WHAT PEOPLE DO... • “What about these issues” • Do not participate or become • “I’d like more data” passive • “Whatever” • Express frustration • “It won’t work” • Are exhausted and overwhelmed • “It used to be…” • Become preoccupied w/change • THE PURPOSE OF THE UNDERSTANDING STAGE • A way to vent negative reactions about the change • Slows down the process and gives people an opportunity to express reactions to change • Gives people time to learn they can be successful in the new way • May surface issues that need to be resolved before the change can be successfully implemented

14. Sustainability Commitment Awareness Understanding Acceptance Acceptance How to Recognize the Stage • KEY FEELINGS AND BEHAVIORS • Energy, risk-taking • Tentativeness • Overwhelmed • Chaos or lack of focus as new skills and approaches are applied • WHAT PEOPLE SAY… WHAT PEOPLE DO... • “I’ve got an idea” • Experiment, take risks • “Let’s try...” • Generate ideas • “What if...” • Accomplish intermediate goals and • celebrate milestones • • Have trouble staying focused • THE PURPOSE OF THE ACCEPTANCE STAGE • Provides time to plan, learn and form a new picture of the future • Allows people to discover how to make the change work for them • Enables people to become more open to new members of the work group • May accomplish short-term goals that incorporate the changes

15. Sustainability Commitment Awareness Understanding Acceptance Commitment How to Recognize the Stage • KEY FEELINGS AND BEHAVIORS • Co-operation, future orientation, initiative, confidence • Sense of pride and accomplishment • Connection and shared mission with new work team • WHAT PEOPLE SAY… WHAT PEOPLE DO… • “How can I contribute?” • Take action to move the change • “Let’s get on with it” forward • “We can do it even better” • Become comfortable and excited • • Take time to affirm and recognize efforts • • Reflect on what they have learned • THE PURPOSE OF THE COMMITMENT STAGE • It is the time to reward people for going through the change • Offers people an opportunity to take note of the things that helped them get through the • change successfully • Enables people to think about how to build on the lessons of successful change for the next • time they need to change

16. Commitment Awareness Understanding Acceptance Sustainability How to Recognize the Stage • KEY FEELINGS AND BEHAVIORS • Confidence, ownership, accountability • Consider themselves peak performers • Want leadership role • WHAT PEOPLE SAY… WHAT PEOPLE DO... • “We can do it better” • Take initiative to train others • “We can handle it” • Plan for continuous improvement • “What’s next?” • Start looking ahead to the next change • • Take ownership, ready for project team to move on • THE PURPOSE OF THE SUSTAINABILITY STAGE • • Ensures a sustainability plan is in place • Encourages the project team to let go, and allow employees to take over • Helps employees look ahead to new situations and further changes on the horizon Sustainability

17. Understanding Acceptance Commitment Awareness Sustainability Change Leader Actions at Each Stage – An Overview • Help others see the need for change: • Create a vision • Tell them what to expect and what actions need to be taken • Provide consistent messages and info about the why’s • Place change in a broader context • Clearly state what is and is not changing • Focus on the opportunities and benefits • Address rumors and misinformation • Be accessible and willing to talk • Initiate the sustainability plan: • Provide support and guidance, as needed • Encourage team to implement goals and accountability for continuous improvement and ongoing training • Check in and assure change is sustained • Encourage team to look ahead to new situations and further changes in the future • Engage people in the change: • Listen and acknowledge feelings • Ask open ended questions • Probe for underlying concerns • Clarify the vision and articulate the plan • Help people see “What’s in it for me” • Establish firm expectations • Provide opportunities for participation • Invite people to create solutions • Create directions for change: • Acknowledge efforts and encourage people to explore possibilities • Celebrate endings and milestone accomplishments • Encourage visible advocacy • Provide opportunities for participation and contribution • Encourage new ideas, then use them • Focus on priorities and provide training • Implement the change: • Provide guidance, support and recognition • Validate and acknowledge progress • Encourage the team to reflect on what went well, and what could have been done better • Create opportunities for leadership • Enroll advocates to assist other • Establish “metrics” to sustain new behaviors • Look ahead and set long term goals

18. Change Capacity Process The Fundamental Tools of Change Management • Engage Stakeholders in the Change • “Execution & Control Phase” • Plan for the Change • “Plan Phase” • Define the Change • “Initiate Phase” Making Change Happen What’s Changing and Why? Who’s Impacted and How? Communication and Action Plan Leadership Action Plan Stakeholder Readiness Checklist Organizational Check In Sustainability Checklist Current vs. Future Change Definition Change Roadmap Decision/Responsibility Matrix Stakeholder Identification Plan Organization Impact & Engagement Plan Level of Change Impact? Building Skills Complexity Assessment Training Plan

19. Current vs. Future: Define the Change Drivers Change Elements Definition • Changes to organizational design and lines of reporting (often depicted in the organization chart) that will be prompted by the new strategy • Changes to the processes, procedures and workflows guiding the organizational operations that will result from the introduction of the new strategy • Changes to information systems (such as CRM, Enterprise Solutions, Internet, etc.) and systems infrastructure that need to occur to support the new strategy • Changes to the roles, responsibilities and skill sets of individuals in the organization that result from implementing the new strategy • Changes to the norms values and beliefs in the organization that are necessary for the new strategy to be implemented • Changes to systems and processes that impact customers and/or vendors and are aligned to support the new strategy • Exercise #2 – 5 mins – Rewrite the top 3 changes you are experiencing or anticipate. Organizational Structure Business Process Technology People Leadership & Culture Customers & Vendors

20. Current vs. Future: Creating a Vision A compelling vision is a high-level goal that galvanizes people to change. It provides a picture of the future that inspires action. • The Compelling Vision: What’s changing and why? • Aligns with the mission, strategy and values of your company • Serves the interests of the company and its key stakeholders • Is memorable. You can tell others outside your team and they will “get” what you are working on • Provides a shared purpose for members of the change team and stakeholders • Is measurable. You know when you have reached it • (Exercise #3– 5 mins – Explain to the person sitting next to you – your vision for your number one listed anticipated change this year – are you compelling?)

21. Change Capacity Process Fundamental and Additional Tools • Engage Stakeholders in the Change • “Execution & Control Phase” • Plan for the Change • “Plan Phase” • Define the Change • “Initiate Phase” Making Change Happen What’s Changing and Why? Who’s Impacted and How? Communication and Action Plan Leadership Action Plan Stakeholder Readiness Checklist Organizational Check In Sustainability Checklist Current vs. Future Change Definition Change Roadmap Decision/Responsibility Matrix Stakeholder Identification Plan Organization Impact & Engagement Plan Level of Change Impact? Building Skills Complexity Assessment Training Plan

22. Decision/Responsibility Matrix: RASCI • How do we define the change? We must first DECIDE what we are changing and what ROLES each stakeholder has in the decision. • What is RASCI? • RASCI is: • A framework for decision-making (sometimes formal, sometimes informal) • A common language for determining the ROLE of stakeholders in decision-making • A mechanism for ensuring action/outcomes

23. Decision Making Standards for Excellence: • Make the Decision Point Explicit • Make the Decision Maker Explicit • Agree and Commit or Disagree and Commit, but COMMIT • Always Do What’s Right for your company. Decision/Responsibility Matrix: RASCI 1. WHAT Define the decision to be made and the timeframe 2. WHO (Delegate?) Determine who needs to be involved 3. HOW Go through the process 4. ACTION Define next steps and communicate 1. Identify the issue 2. Understand priorities 3. Choose an approach: Direct (informal) OR Consult (formal) 4. Target the timeframe Responsible Approver Supporter Consultant Informed 1. Brainstorm 2. Propose 3. Debate 4. Decide 1. Implementation plan 2. Communication plan 3. Action 4. Process Improvements

24. Step 1: What is the decision to be made? • Identify the issue: Clearly define and articulate the issue to be resolved A crisply articulated decision statement describes the outcome of the decision in terms that are: • Specific – Use precise language that is clear to everyone. • Objective – Use facts. Include relevant data. Avoid opinion. • Measurable – Describe the desired outcome in terms that are achievable and measurable. • Understand the priorities: Consider the context for this decision • Choose an approach: Direct or Consultative • Direct – The decider makes a unilateral choice • Consultative – The decider seeks input and involvement from others • (Change Management is always a consultative process) • Regardless of approach, consensus is not required • Target the timeframe • A timely decision is critical • Make sure you understand what other projects, decisions or outcomes are depending on your decision • Identify the Stakeholders

25. Step 2: Who is the decision maker? Assign RASCI Roles: • Responsible - for making it happen. The single decision maker. Involves appropriate parties up-front, develops alternatives and timeframe, ensures consultation, tracks progress, makes recommendations ensuring all points of view are considered. Accountable for quality and timeliness of process, agreements, relationships, deliverables, and decisions. Responsible for accurately identifying “C’s,” “S’s,” and “I’s” and communicating outcomes. • Approver - required for info/context/charter, resources, budgets, final sign-off or veto. Individual to whom “R” is accountable in the decision-making process. Coach for “R.” May also be a consultant. Not necessarily “R’s”Manager. • Supporter - for implementation after the decision has been made. Accountable to “R” for agreed upon work, timeframe, deliverables, and/or resources. • Consultant – input sought by “R” during the decision-making before plans are finalized, decisions made, and actions taken. “C” is not the decision-maker, but has the opportunity to influence “R’s” plans and decisions. A stakeholder. Provides substantive input to decision. • Informed – these are the people who are communicated to after the decision is made. • (Exercise #4 – 5 mins - For your top anticipated change this year “RASCI” this decision.)

26. Brainstorm If the decision warrants it, call a decision making meeting: Invite all critical players Publish agenda in advance Review the data, make sure everyone is on the same page in terms of the actual decision to be made and brainstorm ideas for potential solutions Propose one or several potential solutions Debate: Critique the options and allow sufficient discussion, but no more Contention is OK; the debate process yields the best thinking Narrow your options Decide – Choose the best solution Everyone doesn’t get to decide, but everyone should have a chance to be heard Make sure the quiet people are heard; pull it out of them Let the dominators be heard but when they begin to repeat prior points, move on Step 3. How will the decision be made?

27. Direct: A direct decision is one in which an individual makes the call using current information. The individual communicates the decision and the reasoning behind it, and expects others to support and/or implement. Choose Direct when: Others are not greatly affected by the decision You have enough knowledge/information to make the decision on your own Others are willing to support and/or implement the decision Others respect your competence as a decision maker The decision is needed immediately The issue is confidential Advantages Clear definition of responsibility Simple, fast, and efficient process Disadvantages Others’ potentially good ideas and suggestions are not included in the process Others’ lack of ownership and involvement may impede implementation Step 3. How will the decision be made? (Cont.)

28. Consult: The individual decision maker shares the decision process with others, and asks for informed opinions, suggestions, and ideas. RASCI is used to provide role clarity. The decision-maker makes a preliminary call and tests reactions to it. Once the final decision and reasons for it are communicated, the decision-maker expects others to support and/or implement it. (Involvement of others varies from one key person to a large group of individuals. The amount of participation depends on the particular decision.) Choose Consult when: You want to improve the quality of a decision by getting informed views and expert opinions You can reasonably assume others are willing to support and/or implement the decision You do not have the information or expertise that you need or would like. Time is a consideration. If you have less time, consult fewer individuals. With more time, a larger number of individuals can be included in the process. When you want to engage in a significant Change Management process. Advantages Gives decision maker useful and relevant information with which to make the decision Involves others in the process thereby helping to build commitment Disadvantages Others may expect that their suggestions will be included in the final decision. It is important, therefore, to be explicit about how you will be using the information. Step 3. How will the decision be made? (Cont.)

29. Step 4: Action • Define the Implementation Plan: • What should be done next? • Who is responsible for doing it? • When it will get done? • Develop a Communication Plan: • Ensure that the “I’s” have been identified and informed • Should be comprehensive: Better to over-communicate than to under-communicate • Execute on the decision/Prepare Change Management Stakeholders Plan • Process Improvements • Post Mortems - evaluate decision and process quality

30. Change Capacity Process Fundamental and Additional Tools • Engage Stakeholders in the Change • “Execution & Control Phase” • Plan for the Change • “Plan Phase” • Define the Change • “Initiate Phase” Making Change Happen What’s Changing and Why? Who’s Impacted and How? Communication and Action Plan Leadership Action Plan Stakeholder Readiness Checklist Organizational Check In Sustainability Checklist Current vs. Future Change Definition Change Roadmap Decision/Responsibility Matrix Stakeholder Identification Plan Organization Impact & Engagement Plan Level of Change Impact? Building Skills Complexity Assessment Training Plan

31. Stakeholder Identification Plan Identify Key Stakeholders

32. Organization Impact and Engagement Plan

33. Communication and Action Plan Template

34. Understanding Acceptance Commitment Awareness Sustainability Communication and Action Plan Recommended Engagement Activities and Events Examples: • Memos/email • Introductory presentations • Intranet article • Team meetings and discussions • Focus groups • One on one meetings • Talk sheets • Before/after scenarios (pictures) • Design sessions • Frequently asked questions (FAQs) • Question/answer box • Milestone maps (change roadmap) • Bright idea forums • Lunch and learn meetings • User training • Brainstorming sessions • Weekly briefing sheets • Newsletters • Surveys • Posters • Giveaways • Celebration events • Reward and recognition programs • Support network • Ongoing training • Scorecard reporting • Reward and recognition programs

35. Communication and Action Plan: Sample

36. Slide #31 – Exercise #5 (10 mins) Thank you!