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February 04, 2012
Enterprise Program Leadership

“Ch-ch-ch-ch-changes – Turn and Face the Strain” (Change Management and its Historical Ramifications)

David Bowie was right when he sang about change being a powerful experience.  Even in the context of project management, the phrase change management elicits an emotional response.  A well devised and executed plan for change can help to elect a president, shape history or revolutionize an industry, while a poorly executed change management plan can have catastrophic impacts. With so much riding on the ability to manage change, it is remarkable how often the discipline is an afterthought when organizations take on major initiatives.

Every day, organizations commit significant dollars to take on projects with goals of improving productivity and fattening bottom lines.  As a project traverses its way through an organization’s defined life cycle, the numbers are crunched, funding gets allocated and the scope is defined. This paves the way for documenting requirements, architecting and developing a solution and executing detailed test plans all in hope of recognizing a positive return on investment through achieving the defined benefits.  Then something horrible happens.  Key users reject the new processes or technology and refuse to use the new solutions.  They decide they would rather maintain business as usual, and the organization ends up caught between conflicting processes or forced to support two technologies, neither of which solves the original business problem.

It is important to note that the best Change Management can’t save bad processes or products, but a well defined process or an otherwise good product can certainly fail because of a poor change management plan.    Below I briefly discuss the five phases of a well defined and executed change management plan.  Along with brief context of each phase, I give examples of key moments in political, sports and business history where successes and failures in each of these phases have lead to amazingly successful changes or catastrophic failures.

Phase 1 – Establish and/or Gain Consensus on the Need for Change:

The first phase in the execution of change is to get buy-in that change is necessary and beneficial for an organization.   The most effective way to do this is to either paint a future state picture where the organization and its people benefit from the change, or conversely describe a much more bleak future where the organization and its employees are worse off without changing.  Either way, it is imperative to the success of a project to get buy-in that change is a strategic imperative.

Success: Obama’s 2008 Election CampaignIn 2008, Barack Obama ran for President on a platform of “Change”.  With financial markets plummeting, unemployment numbers rising and the wars in Afghanistan and Iraq showing no signs of promise, achieving consensus that change was necessary was not a difficult task.  Obama’s campaign even distributed a 64 page pamphlet entitled “The Blueprint for Change.”  With the country ready for change, the one-time long shot went on to win the election.

Failure: Wartime ProhibitionIn June of 1919, Wartime Prohibition went into effect banning the sale, manufacture and transport of alcoholic beverages.  Very quickly it became clear that Americans weren’t ready for and/or didn’t agree with this change and began rebelling against it. Instead of realizing the presumed positive benefits of making alcohol illegal, negative impacts took center stage including a dramatic increase in organized crime.   Eventually these laws were repealed, but the costs associated with this failed change were significant.

Phase 2 – Determine and Communicate the Appropriate Means of Change:

This phase of a project is often referred to as Business Requirements Gathering and Solution Definition.  One of the most common problems organizations have with this phase of the SDLC is that often the wrong people are involved in defining requirements and/or requirements are bypassed completely in favor of jumping directly to a solution.  When this occurs, the groups or individuals who will be affected most by the change may not feel as though their ideas were considered or incorporated into the solution. This can lead to a solution that doesn’t meet organizational needs and/or causes end users to fight adoption.  By communicating early and often with all stakeholders, you can help pave the way for success when implementing a change management plan.

Success: Republican’s ‘Contract with America’ – Introduced six weeks before the 1994 Congressional election, the Contract with America was a way of communicating with the nation a series of promises made by the Republican Party if they won a majority of seats in the House of Representatives.  When the Republican’s indeed went on to win a majority of seats, the drafting of ‘The Contract with America’ was deemed as one of the key reasons, and was widely considered an overwhelming election success.

Failure: Netflix- In 2010 and early 2011, the Netflix business model and well defined processes were making the company a case study in innovation.  Subscribership was on the rise, and Wall Street was rewarding shareholders with steadily rising stock prices.  In late 2011, the company decided to make a change by splitting the company into two distinct business units, one for DVD rentals and another for streaming content.  Unfortunately, Netflix failed to communicate this change or the associated impacts to its customers, namely the changes to pricing.  Not surprisingly, customers left, and the negative residual effects of this lack of communication continue today.

Phase 3 – Document a Flexible Plan for Change:

Once a solution or a means for change has been defined, it is imperative to document a plan for implementing change.  The change implementation plan should be separate from your core project plan, but the structure is similar.  A good change plan should include (but not be limited to) roles and responsibilities, a detailed communication plan and a training strategy if necessary.  It is also critical to document issues and potential risks, which often become catalysts for revisiting your plan at a later point.  A change management plan should be a living, breathing document that is constantly reviewed and updated as new roadblocks are uncovered and resolved. A well documented Change Management Plan should act as your roadmap to begin facilitating change.

Success: US ConstitutionThere is no greater Change Management Plan than the United States Constitution. The Constitution replaced the Articles of Confederation as the governing document of the United States in 1788. Like most great plans for change, it clearly defines the roles necessary to affect a defined change, and the responsibilities they must carry out to fulfill the plan. In the subsequent years since its publication, the true brilliance of the Constitution proved to be its flexibility, allowing for amendments that have kept it a relevant guide for America through changing times.

Failure:  UAW contracts – In the 1980’S, the United Auto Worker Union used their significant leverage to negotiate a thirty year contract with the Big 3 US Automakers.  Locked into an inflexible plan, the Big 3 paid inflated wages and benefits, and had difficulty terminating union workers even when production decreased.   This document was neither fair nor flexible and made it possible for Japan and other car producing nations to close the gap with the Big 3.  Toward the end of the contract, US automakers were so limited in their ability to make changes; two of the three required a bailout by the US government to save them from a total collapse.

Phase 4 – Build the Team and Provide the Tools Necessary to Facilitate Change:

No two change management plans are created equal, so the tools necessary to execute on a plan can differ greatly as well.  Some things to consider when building a team and creating the tools necessary to execute a change management plan include finding appropriately skilled resources , ensuring that they have enough capacity to meet the needs of the plan and finally provide the budget and tools necessary to navigate the change waters.  Without the right leadership, skills or tools, the best laid plans for executing change will likely fail.

Successful:  2004 Boston Red Sox – In 2002, the Boston Red Sox were bought by New England Sports Ventures, and principal owner John Henry immediately began to assemble a team of players, coaches and front office personnel who could help realize his vision for change.  Henry’s plan called for an increasing reliance on a philosophy known as sabermetrics, where statistics and empirical evidence are used to evaluate talent to build a winning team.   Henry hired Theo Epstein, a Yale Graduate with little baseball experience as the GM, and Bill James, the father of sabermetrics, to build a team based on the principals of sabermetrics.  With the appropriate team in place, change went smoothly and efficiently and in 2004, the Boston Red Sox won their first World Series in 86 years.

Failure:  Katrina Relief – When Hurricane Katrina struck, change was forced upon New Orleans and its neighboring states.  People all over the world were quick to act opening their hearts and their wallets.  While the necessary resources and tools were available, there was a severe lack of leadership to define and execute the plan by organizing the numerous resources at their disposal.  As a result, actions were slow, resources were wasted and used inefficiently, and the Katrina relief effort has been widely viewed as a colossal failure.

Phase 5 – Proactively Recalibrate the Plan for Change

By the time the team is built, the tools are in place and the means for change is ready to be introduced to an organization, it is very likely that a Change Management plan will require recalibration. Internal and external stimuli often invalidate earlier decisions.  In these cases, it is in the best interests of the organization to evaluate options and take a new path for change.

Success:  Apple Computer Inc. /Apple Inc. – In the early 2000’s, Apple Computer Inc. executed a strategy of change that returned the computer maker to prominence and profitability.  With a nice niche in the personal computer market, Apple could have maintained its defined path and been successful.  However in 2007, they decided to recalibrate their strategy for change to avoid direct competition with Microsoft while still taking advantage of their core capabilities in software and product development.  They changed the name of the company to Apple Inc. and shifted their focus from computers to consumer electronics.  Apple’s ability to execute a strategy for change, but also to recalibrate their vision based on internal and external stimuli has made them one of the premiere brands in the world today.

Failure:  Blockbuster LLC. – In the late 1990’s and the early Twenty-first Century, Blockbuster was the market leader in the VHS and DVD rental industry. However, their failure to recalibrate their business strategy quickly enough and change with the times has been attributed to their recent downfall.  Competitors such as Redbox, Netflix and video on demand services found faster, cheaper and more user friendly ways to get videos to customers.  Blockbuster’s failure to alter course has led them to file for Chapter 11 bankruptcy.

Conclusion

The history of Business, Sports and Politics is  full of wonderful and inspiring stories of successful change, and an equal number of instances where failed change management lead to unfortunate outcomes.    The same can be said for most organizations that undertake significant business process and IT projects or programs.  While it is true that no two change management efforts are ever the same, if an organization implements the five phased approach documented above, one can remove the ambiguity associated with change and set an organization on the right path to success.

 

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