Jun 14, 2012

Organizational Change Management: A Primer

Posted by Allen Young in Culture & Change Management, Project & Program Management, Human Capital, Portfolio Management, Project Management Office (PMO), Strategy Execution | 0 Comments

Part One of a series: Organizational Change Management: An Essential Component to Successful Implementation of Enterprise Project, Program and Portfolio Management.

“Change Management” can mean differing and multiple things to many firms and the people who work for them. To the software developer, it usually means managing version control and scheduled promotion of new or modified software components from a test, quality assurance or staging platform to the production environment on the “go live” date. To the project manager, it typically means managing scope, and having a solid scope change management process in place to evaluate the schedule and budget impacts of scope change requests to the project, including review, approval and re-baselining steps, to help prevent “scope creep.”  While those types of change management are important, when implementing process or technology changes at the cross-functional department or enterprise level, the application of organizational change management (OCM) practices and techniques is essential for success. In my experience – which spans decades in the  project, program and portfolio management space –I would argue that, without OCM, the probability of failure lies somewhere between 50 and 75 percent, and in some cases it could be as high as 100 percent! And, as my colleague Johanna Mickel has pointed out, this view is shared by some of the top management research firms.

Why all the fuss about OCM, and why should management be concerned about it? While it isn’t a new concept, it gained considerable credibility during the 1980s and 1990s as many mid-size to large companies jumped headfirst into Enterprise Resource Planning (ERP) system implementations, only to run into excessive time and cost overruns, massive resistance to changing the way business had been conducted up to that point, and– in more extreme cases–project failure or abandonment of the ERP system after the implementation was deemed completed. Some companies decided that the software was the primary problem, threw it out, bought another package, and ran into the same implementation issues all over again! New consulting practices and boutique firms soon sprung up to help companies deal with these issues, and in time the ERP vendors themselves started incorporating organizational change management approaches into their implementation methodologies.

This cycle was unfortunately repeated by many firms (ironically enough, including by some who had previously experienced these same pains with ERP) starting in the late 1990s up to the present with enterprise-based Project Portfolio Management (PPM) tools. As the introduction of project management processes, PPM, Project Management Offices (PMOs) and related disciplines began to proliferate during the same time periods, the same issues arose. More often than not, the failures occurred not because the tools, processes or disciplines were flawed, but because they butted heads with the organizational culture—and no steps were taken to effectively deal with the inevitable resistance that arose. Without OCM, when change battles culture, culture always wins!

So what exactly is OCM? In its raw form, it’s a means of assessing the sponsorship, cultural resistance, maturity, and capacity of the organization to embrace and absorb the change; and where weaknesses are identified, employing best practices and techniques to correct the weaknesses to an acceptable level,  thereby significantly increasing the likelihood of successful adoption and utilization of the change.

That stated, OCM shouldn’t be conducted in isolation; it should be incorporated into whatever implementation methodology will be used for the change initiative. To the people being affected by the change, the practices and techniques should simply appear as part of the overall implementation — tasks that naturally belong within the major phases of a project schedule. OCM is not a phase unto itself. Each project phase should have OCM-related tasks within it.

Subsequent blogs in this series will focus on the sponsorship, cultural resistance, maturity, and capacity aspects of OCM.  For each, I’ll discuss the relative importance, when the assessment work should be done, what tasks (practices and techniques) to employ to improve weaknesses, and when those tasks should be performed in the project life cycle.

Stay tuned for the second post in this series on OCM, where I’ll share insights on the most important priority, sponsorship (without it, you have zero chance of success!).

Editor’s note: Readers might also be interested in looking at the PM College course on managing organizational change, or our new white paper, “Creating a Change-Ready Organization.”

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