Organizational Change Management: Capacity

August 6, 2012 | by Allen Young

Like maturity (see previous post here), capacity doesn’t always come up as a significant factor in Organizational Change Management (OCM) discussions but in my experience it is equally as important. Capacity actually has to be considered from two perspectives: individual and organizational capacity. Neither is typically pliable, easily adaptable and ready for change.

At the individual level, most people reach a level of proficiency that, over time, becomes a comfort zone. Preferences become habits, which are hard to break. Likewise, organizations are generally not built for change. Once written and unwritten rules are established and procedures, tools, equipment and trained personnel are in place, the organization’s preference is to go into production mode and stay there. This is because changes that impact people, process and technology simultaneously are usually disruptive and significantly reduce productivity. Publicly-traded stock exchange companies, who have to report profits every quarter, are especially sensitive to this.

Human beings are also political animals by nature—whether we wish to admit it or not—which further reinforces keeping the status quo and power structures in place once they are established. Only the most forward-thinking individuals and companies, such as “life coaches” and “bleeding-edge” technology firms, tend to welcome change or reinvent themselves on a recurring basis, because it keeps them at the forefront of new opportunities which they believe they can’t afford to miss.

Individual Capacity
Measuring an individual’s capacity involves assessing his/her stress level, work load and skills. Of these three measures, stress level is the most critical. If the stress level is relatively low, he/she will be more willing to take on additional work or disruptive changes and learn new skills. When stress levels are high, getting people to commit to change becomes an arduous task. Stress levels can be gauged both by formal assessment and informal observance.

A formal assessment—the science—can be in the form of an online questionnaire, where individuals rate themselves on stress, workload and skills. You can tally the results of all staff who will be affected by an upcoming change, and quickly get an idea of how much resistance you’re likely to encounter. For example, I used a brief individual capacity survey for implementing an enterprise project management tool for a financial services firm a few years ago. I quickly learned that the principal users of the tool—the project managers—scored as high risk on stress and workload, while their skill level was superior/low risk (most were certified Project Management Professionals, and had used other tools before). All were working 50 to 60 hours per week on average just to keep up, with high pressure to deliver on time from management that imposed end dates before the projects could be properly estimated. They had little time to attend classes to learn how to use the new tool, never mind spend extra time each week performing the additional project accounting tasks that would soon be required. The decision to implement the tool was still going to be a “go” from the sponsors no matter the results of the survey. That prompted us to put heavier emphasis on online computer-based training that could be taken at the students’ convenience (although a time limit to complete it still had to be imposed). I also provided some education  to the executives that they should consider bringing in some project controllers—who would be shared by the larger group of project managers—to perform the bulk of the project accounting tasks, thereby freeing-up the project managers to actually “run” their projects and potentially take on more projects sooner. [Note: employing project controllers is common practice in certain industries such as construction or refinery maintenance & turnaround, but not so in other industries like information technology or financial services; the latter of whom usually expect the project managers to be able to “do it all, even though in practice it isn’t realistic.] The online training was a success, but our recommendation to hire project controllers was not adopted. Within six months after the implementation was completed, we were called back to conduct a “health check.” By that point the project managers were almost in revolt due to the added project accounting workload, which was essential for valid data roll-ups to the program and portfolio levels for management views. This ratcheted their stress levels into the stratosphere! All we could do was put the same recommendation that they needed some project controllers. As the saying goes, “you can lead the horse to water…”

Informal observance—the art—takes some patience and practice. I can always tell when not to ask my wife to do something extra for me because she wears her stress load on her face. Even if she’s not really overworked, if she’s had a high-stress day (usually the combination of her high-stress job plus dealing with family issues), I’ll do it myself or save it for another time. Every person handles stress differently, so you have to learn how to recognize the cues. Individual or small group interviews are often a good way to gauge stress levels. Observation can also help you determine workload levels, but be aware that there are usually differences between what’s considered high workloads in the private vs. public sectors, and in different industries.

Too much concurrent change exacerbates things. At the individual level, it is a medical fact that your likelihood of becoming ill or dying increases when you have to deal with multiple high-stress events at the same time, such as marriage or divorce, changing employers or losing a job, bringing newborns into the world or sending a child away to college, meeting someone new or losing a loved one, and so forth. The human body can only take so much change before it becomes overloaded and begins to shut down, and everyone’s capacity is different.

Organizational Capacity
Organizational capacity should also be assessed before change is implemented. This can also be done via formal surveys or questionnaires, usually sent to a random sampling of each part of the business that will be impacted by the change. The key questions to consider are:

• Does the organization have employees who can be dedicated to the change initiative? If the answer is “none” and it is expected that consultants alone will usher in the change, a huge red flag should go up and a critical risk added to the Risk Register. Changes implemented by third parties where the company itself has no skin in the game will most likely not be adopted.
• Does the organization have the right people with the right skills to support the change? If not, it may mean bringing in consultants in the short term, but sooner or later the firm will need to hire or train internal staff to carry on once the consultants leave.
• Will the change work in concert or be in conflict with the current organizational structure?
• What other changes are going on at the same time? In the workplace, too much concurrent change causes multiple projects to fail, bottlenecks to surface repeatedly, frequent escalations, a culture that becomes misaligned with corporate strategy, reduction in employee morale, and eventually burnout and resignations.
• Will the change affect the infrastructure of the organization? When I was a college student at the University of Pennsylvania’s Wharton School, we reviewed and discussed business cases prepared by Harvard Business School on a regular basis in our management classes. One of my favorite cases was about Harley Davidson motorcycles, which was a classic example of quality improvement practices imported from Japan. Harley Davidson had strong brand loyalty for years, but when the quality dropped to the point that approximately one third of the bikes that came off of the assembly line were defective and had to be repaired, loyalty (and thus sales) dropped significantly and internal repair costs skyrocketed, to the point that it was on the verge of filing for Chapter 11. It was change or die! The company knew that it had to do something drastic in order to survive, so it brought in an entirely new way of manufacturing the bikes from Japan, with quality checkpoints and gates throughout the assembly process. This not only affected the people, but the entire production operation (process and technology). Harley Davidson gradually reclaimed its strong loyalty, and is now one of the top selling motorcycles in the world.

I’ve often been asked which OCM tactic or deliverable is the most important. While I believe they are all important, if I had to pick just one, it would be a tie between the sponsor assessment and the communications/marketing plan. Without adequate sponsorship, you have no chance of success. Without the communications/marketing plan, you can’t manage the change.

I hope you’ve found this multi-part series on OCM informative and helpful from personal, project and organizational perspectives. OCM has forever altered my personal and professional life for the better ever since I was introduced to it, and I hope it does for you as well!

[Editor's note: To read the full series in order, start here.]

About the Author

Allen Young

Allen Young manages existing client account relationships and assists Business Development staff during presales and proposals with new prospects. He oversees all consulting engagements in his region, including formal program reviews and informal checkpoints with clients and consultants. Allen is a veteran project, program, PMO, and portfolio subject matter expert, covering the entire gamut from basic project scheduling to Earned Value. He has worked in multiple industries, including IT/software development, banking/financial services, insurance, government, retail, telecommunications, manufacturing, oil & gas, and construction.

Prior to PM Solutions, Allen held Director of Training and Consulting Engagement Manager positions at Primavera Systems (now part of Oracle). . Prior to that, he successfully established and operated PMOs for companies including Alliance Data Systems and Electronic Payment Services. He is also experienced in maturity advancement practices. As a Managing Consultant with Electronic Data Systems (EDS), his achievements included improving the maturity and project delivery capabilities of groups within the California State Automobile Association and the Navy & Marine Corps Intranet Program.

Allen holds a BBA (Business Administration) from the Wharton School, University of Pennsylvania. He has earned the designation Project Management Professional (PMP®) by the Project Management Institute (PMI®),. Allen has authored several project management and PMO-related articles for PMI’s PM Network magazine, and has presented numerous project, program, portfolio, and PMO subjects at various industry events.

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