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Transformational change requires collaboration of nine different management systems. Change leadership is essential, but not sufficient. The Change Diamond® sets out the necessary interactions. You can investigate the collaboration involved by rolling the cursor over each of the facets.
Change is unlikely to stick unless you consider both organisational and individual change.
Strategy
Operations
Strategising
Developing a
benefits case
Selecting a
portfolio
Implement portfolio management
Optioneering
Developing
a business case
Managing change
Defining
a change
Sponsoring projects
Implementing governance documents
Managing a project
Defining a change
Realising benefits
Managing the transition
Operational
management
Benefits & impacts
tracking
Transfer to
operations
Convert PIRs
to lessons learned
Strategy to operations
Translating a strategic vision into an operational reality demands leadership that co-ordinates changes to organisational and personal capabilities.
Setting the vision, making the solution desirable, and mobilising the current capability of the organisation are all part of Making it wanted. Not only a fundamental first step but one that needs to continuously revisited throughout the entire change process.
During Making it happen, the structuring and focusing resources to deliver the outputs takes significant governance effort as delivery can be costly and risky. But the greatest loss that typically happens at this stage is the failure to successfully adopt the changes that create value.
Making it worthwhile is the result of the changed organisational and personal capabilities becoming an unconscious part of the way things get done. Implementing the project outputs is not the same as embedding them as operationally effective outcomes.
Visioning
A business vision is a compelling view of a desirable future state of an organisation that personifies the core values of the organisation.
The difference between a 'dream' and a business vison is that the vision has:
- an executive sponsor who champions and accepts personal accountability for the change
- a change team whose members show commitment to the future 'to-be' state by their actions
- a consistent and compelling story that energises its different audiences
- an agreed set of key performance indicators (KPIs) that unambiguously 'signpost' what 'good looks like'
- mechanisms to manage the emotional responses that changing peoples' power bases trigger
Fear can also be used to cause business change, and is often quicker in creating impetus, but it is much harder to control the outcomes achieved and momentum is easily lost, as the changes are begrudged.
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Strategising
Projects are most valuable when they contribute towards the strategy of the organisation. This sentiment is often abused in practice as translating strategic intent into implementable actions is subject to stakeholder bias.
When reviewing strategy it is useful to distinguish between:
- Deliberate strategy - that set out by the mission and planning of the board
- Emergent strategy - that which arises from the way the organisation actually deploys its resources
The simplest way to establish the strategy of an organisation is to review the investments decisions it takes when selecting projects. In general: "Show me your portfolio and I'll show you your strategy", is a truer rubric than "Tell me your strategy and I'll predict your portfolio!"
Developing a benefits case
The motivations for proposing a candidate project essentially arise from a problem or an opportunity being identified. Before either is submitted for approval to a portfolio selection committee a benefits case should be developed.
The contents of a benefits case are:
- a concise statement of the problem or opportunity the project is to address
- the type of benefits anticipated and an indication of the likely value and possible risks to achieving them
- why 'now' is the right time to implement the project
- the key stakeholders that have expressed an interest in the implementation of the project (both supporters and detractors
It is inappropriate to suggest solutions or costs at this stage as the decision should be based on desirability, and it is for the committee to determine the price it is prepared to pay to achieve the outcomes.
Premature proposing of solutions slows the process down considerably and can create bias in favour of selection due to the increased levels of personal commitment.
Make it wanted
There are always more opportunities and problems than there are resources available to address them. Choices have to be made. The best decisions balance the desirable with the do-able.
Establishing this balance is the function of the three management systems: visioning, mobilisation and portfolio selection.
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Selecting a portfolio
Selecting the correct mix of projects for an organisation's project portfolio is of crucial importance - it ultimately determines what that organisation's emergent strategy is.
The selection can be reduced to 3 decisions:
- As every organisation wants to invest in what it desires most - 'Which of the candidate projects are most desirable?'
- As you shouldn't do what you can't do - 'Which candidate projects demand resources that are scarce?'
- From simple prudence: 'Is the spread of risk appropriate?'
With the answers from these questions organised as sorted lists the process of selection is a relatively simple matter. The problem is how do you get those organised lists?
Implementing portfolio prioritisation
There are three significant management challenges to face when managing an enterprise-wide project portfolio.
They are:
- selecting the 'best' portfolio - identifying the set of projects that return the most value to the organisation within the current constraints
- maintaining the optimum portfolio - dealing with changing business priorities and the resulting resource contention culling projects - terminating projects that are no longer valuable enough to be continued
- The value and role of a PMO that has sufficient stature, and the necessary processes, to support senior management decision-making at this level of governance cannot be overemphasised.
Mobilisation
Many projects are slow to start. It is right that commitment is tested before initiating expenditure, but it is also worth remembering that until there is something real; people are often very slow to commit.
During mobilisation therefore:
- put in place a governance structure that recognises the differing needs of the nine management systems
- encourage 'optioneering' - selecting 'best' solutions from the stakeholders' perspectives
- engage stakeholders and get 'behavioural' commitment
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Optioneering
Optioneering is the process of appraising different solutions that have been designed to address a problem or opportunity.
More investment is wasted due to too early a commitment to a solution before alternatives have been assessed than by poor implementation of the appropriate solution.
Once it has been agreed that a problem or opportunity is probably worth investing in, technical evaluation of potential solutions should provide information on:
- Initial costs and any cost risks likely to be incurred
- Functionality
- Whole life cost
- Value for money
Stakeholders always have a voice in every aspect of a project. However, provided the selected solution satisfies the acceptance criteria and sits within the constraints set out by the stakeholders, optioneering is the province of the technical experts.
Developing a business case
The business case is the principal governance artefact. It is used throughout the project life cycle to support decision-making by the governance group.
Based on and inheriting the details from the initial supporting benefits case including the problem statement, benefits and impacts, and the key stakeholders, a full business case sets out:
- The solution options considered and the recommended option
- The project strategy to be adopted
- The costs and cost risks
- The constraints and major assumptions made.
Some projects, particularly 'enhancement' projects may not need a full business case as there are rarely genuine options to consider.
Adoption
Adoption is the orderly implementation of new and altered processes and behaviours. It is achieved by combining organisational changes with personal change.
Going from the 'as is' model to the 'to be' model involves transitioning tried and trusted practices to a different mix:
- of things no longer done
things done differently new things There may be dips in performance. There will be a need for leadership. There will be apparently irrational outbursts as emotional and power-based impacts are released - and the vision of the future state with its promised benefits will be tested.
The threat from non-adoption may be so severe that it may be necessary for change governance to take precedence over project - or delivery - governance
See these for more:Managing change
Change processes can be difficult to manage with often unpredictable results.
Challenges include:
- How to motivate for change
- How to overcome possible resistance
- How to manage the transition process so that the result is improvement and not chaos
Change managers with their change plans form only one component of the management process. Others include the emotional content of change, the process of change and the role of the change leader and change agents.
Defining a change
The change brought about by a project or programme is the combined outcomes of the impacts on processes, behaviours and attitudes triggered by the outputs delivered by a project.
A change definition plan is thus a document that sets out:
- What the impacts should be
- Who and what is affected
- When the impacts are expected
- The sequence of events
The change definition plan is normally developed by a change manager, but its execution involves the change leaders and the change agents, as well as the change manager.
Make it happen
As resources get committed, management responds by implementing controls and direction. The most obvious costs and risks arise from the projects, so most management is typically focused there, even though the greatest threat of loss is from the failure to adopt the new capabilities now available.
It is by the close coupling of the three management systems of delivery (project management), adoption (change management) with governance - the direction of investment and its recovery - that the cost-value equation is solved effectively.
See these for more:Sponsoring projects
The main accountability of a project sponsor is to ensure that the value that led to the investment in the project is recovered. This means that the critical responsibilities lie not with the conduct of the project itself but with the adoption by the outputs from the project into the business-as-usual community.
The other responsibilities of a project sponsor can be summarised as:
- Owns business case
- Accountable for the project
- Mobilises management capability
- Generates confidence
- Acts as a figure head
Different types of projects make different demands on the sponsor - mainly in the area of the degree and intensity of stakeholder involvement and engagement.
Implementing governance documents
Governance starts before the project or change activities commence, and extends long after they have completed - though the responsibilities may merge with the overall corporate governance process.
Governance is about:
- Having the right people
- Make the right decision
- At the right time
During change, particularly transformative change, governance roles can be very demanding and with tight schedules.
Ownership of issues and benefit risks can be especially difficult and onerous task to discharge. The safe delivery of the change ultimately resolves itself into how well the various stakeholders have been engaged.
Delivery
Portfolios of projects and programmes are management vehicles to deliver changes to the evolving operating model of the organisation.
Being transient structures, projects and programmes do not have a natural powerbase or authority within the organisation, and require appropriate sponsorship from senior management to function.
Projects are relatively high risk endeavours. A number of important artefacts have proven to be important including:
- Project initiation document (business case)
- Project plan
- Issue, risks and dependency logs
- Progress reports
The governance of programmes to manage complex change and Agile approaches to handle rapid change has only demonstrated that the demand for good governance of change remains undiminished. Typical value propositions in this area are:
Managing a project
Project management is not a skill that anyone with 4-5 days of training can acquire. Predictable project performance remains elusive. Having good processes help but they're not sufficient. The right attitude, good judgement, and people skills are also necessary. But perhaps the most important is for the organisation to foster a business environment supportive of project management.
This involves:
- Actively promoting open and honest reporting
- Requiring clarity and commitment to accountability and responsibilities
- Valuing planning over crisis management
These cultural competences arise from senior management commitment to the use of directed change to achieve business goals.
Defining a change
Projects are management vehicles to deliver relatively unique outputs, or to use relatively innovative processes, or to manage transient teams within a set of constraints.
That means that the need to define what a project has to deliver is paramount. There are six perspectives to consider:
- The problem or opportunity that needs addressing
- The objective - what 'good' looks like at the project's end
- The CSFs - those things that must be got right for it to achieve success
- The scope - the set of outputs needed
- The benefits - why it is worthwhile to do the project
- The risks - the threats to success
Setting out the mission of the project in this way gives clarity and allows validation. Ignore one and the project is unsafe.
Realisation
The compelling vision drives the transition into business-as-usual. The change manager is replaced by the change agent and the change leader is vital.
Unless the impacts of the project are translated and managed into beneficial changes of capability in processes, in people, and ultimately in performance, the project - or at least the investment decision - is a failure
There are three key aspects to work through:- Address and resolve residual stakeholder agendas - directly
- Establish signpost KPIs that show that things are going the right way
- Never waver
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Realising benefits
Benefits are realised through the deliberate management of the changes and impacts caused by the outputs delivered by projects.
Changes, even improvements, are not necessarily benefits. Each organisation should establish a catalogue of those outcomes it regards as a benefit, and these used when the business case is agreed.
Most organisations will establish between 6 and 15 benefit categories and these will fall into one of:
- Financial benefits
- Strategic benefits
- Risk (reputation risk) avoidance
The realisation of benefits involves collaboration of the key stakeholders and is the principal accountability of the sponsor.
Managing the transition
There are three phases to manage when transitioning an organisation or a group of people from one state of business-as-usual to another.
It's best to start with 'endings' - letting go of old ways, giving permission to not to do things. There is then a neutral zone where previous ways of doing things are modified and realigned to achieve the new patterns of behaviour required. Finally there is the new beginning where new identities are formed and new ways of achieving success are established.
The management tasks are thus:
- Mark the ending of 'old' ways
- Encourage creativity and evolution during the neutral zone
- Launch the new beginning
The sequence is important - launching a new beginning before deal with the past is a common cause of false change.
Make it stick
Making it worthwhile involves the corporate memory and the emotional tone of the organisation becoming once again in a groove of 'normality'.
The composition of the operating model will be different, the power bases and relationships between people and processes may well be different, but for real change to have happened there are no 'flashbacks', and no pining for things lost; just a steady 'heartbeat' of the new business, confident that the 'new' is now 'how we do things around here'.
See these for more:Operational management
In the end it all boils down to how effectively and efficiently operations handle the everyday business of the business - including how well it adopts and adapts to changes - whether caused by external factors or internal projects.
Operations are natural power bases within an organisation; they are typically process and exception-based management systems and are designed to resist changes as they represent a form of disorganisation.
There are a number of techniques to incorporate planned change into operations without disruption. Some of the most important involve using the way operational management works and include:- Modifying values in standing KPIs
- Changing the competences in career frameworks
- Altering job descriptions and their associated responsibilities
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Tracking benefits & impacts
Projects are worthwhile because of the outcomes - the impacts and the benefits - that the outputs trigger. As impacts and benefits are both future states they are always subject to uncertainty and benefit risk.
Monitoring the project's execution provides no guarantee that the investment made will return the benefits or impacts anticipated - it merely is a way of controlling variances and cost risks.Tracking benefits and impacts can be done by establishing a profile for a set of key performance indicators (KPIs), which identify:
- The timing of the of onset of the expected performance
- The expected value over time
- The shape of the changing value over time
For some impacts it can be helpful to measure signpost KPIs that indicate how well the change is progressing. These are replaced by operational KPIs when the transition was complete.
Implementation
Sustaining the change, to make it stick, also requires changes to the operating model to be appropriately supported. Almost inevitably, further modifications will be identified that are necessary to achieve the expected benefits; it may be that enhanced benefits realisation may be possible as a result of further refinement of the operating model.
Typically, this requires commitment of cost and resource on an ongoing basis, and particularly in any 'warranty' period. Once business-as-usual resource has sufficient confidence and capability to be self-supporting, support is withdrawn - the change appears embedded: under stress, the business may start to revert to previous methods, and further external support may be required until the strain is relieved.
See these for more:Transfer to operations / Implementation
Transferring outputs developed within a project into operations essentially involves a change of ownership. Many organisations have adopted the commercial practice of requiring a warranty period to ease the transition.
In part this is in recognition of the likelihood of 'teething' difficulties, a need to make adaptions to achieve the expected impacts and value, but underlying it is the allaying of fears arising from taking ownership of something.
Thus successful transfer to operations is focused on addressing:- Clarity on expected performance of the transferred outputs
- Clearly set out lines of responsibilities and communications
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Converting PIRs to lessons learned
Over 80% of companies do have formal mechanisms to practice some form of post-implementation review - however less than 20% actively make any use of this organisational learning.
Making in part of the process - and part of the project culture - to insist that any project proposal is accompanied by an annotated list of previous projects with similar attributes goes a long way towards lessons learnt influencing decision making.
The key factors to capture are:
- Who was involved
- Lessons taken away not descriptions of what happened
- Tagging the lessons learned to optimise retrieval not storage
