Organizational Change Management

FAQ Query: When discussing transformation, you refer to Organizational Change Management (OCM). What is that all about?

If you are in IT, chances are that the only “Change Management” that you are familiar with is the ITIL process. OCM isn’t that.

Organizational Change Management is all about leading your organization though change and coming out the other end with a realized vision and energized workforce. Probably more business books have probably been written on Change than any other topic that I’m aware of  (I’m a big fan of Katzenbach, Kotter, and Senge) – but don’t expect this answer to be a scholarly treatise.

For me, OCM begins well before any change is on the table. It’s establishing relationships and credibility across the organization. It’s knowing and understanding a wide variety of stakeholder groups, their needs and concerns. It’s an investment of time. Without this investment, you will not be able to answer the first of three key questions asked of a change leader by people before they will support Change – Can I trust you?

In developing the Change, the first (and generally most neglected) step is development of a compelling vision of the “to be” state. It can be tricky to do this without trashing the current state – and, by extension, the people who got you there. It is far preferable to honor the current situation as what has made you successful to-date and position the vision as what is required to take you and the business to the next level of success, most likely due to market forces or other environmental change. This vision is the compelling goal that gets everyone though the gooey, sticky mess of transformation.

Components of the vision must be consistent with cultural values and be described in enough detail to make the vision real and meaningful to all your stakeholder groups. These components can include services, processes, organization structure, technology – whatever is important to paint a comprehensive picture. Being able to articulate the vision and what it means to “me” furthers trust that change leaders have been diligent and are being both forthright and trustworthy.

The next set of to-do’s in our Change has to do with answering the second key question asked of the change leader – Are you committed? In my experience, most of the objections raised by people impacted by change are of the “we tried that already and it didn’t work” variety. To me, this speaks to a lack of commitment by leadership in commitment of time, people or budget – not the capability of the organization.

At this point, we are getting into what most people would agree is an OCM framework: Development of communications, communications planning, stakeholder engagement, leadership alignment, assessment of barriers and enablers, monitoring and feedback loops, readiness assessment, changes to management systems, etc. The development and communication of the OCM program itself early on speaks volumes to the commitment of change leaders to the Change. Ongoing consistency by the change leaders in thought, word and deed re-enforces this answer.

All of these components of OCM are important and necessary for success, but they do not answer the third and most important question asked of the change leader – Do you care about me?

There are a few different models for the stages of change that people go though. Most seem pretty similar to: Denial, Anger, Bargaining, Depression and Integration. Morale and performance are largely dependent upon what stage a person is in at the time. People need time to move though these stages and will do so at different rates. The OCM program supports this process and must adapt to different stakeholder needs – it is not sufficient, though, to answer the third question.

Your people will judge your answer by how much time you spend working through this with them and how forthright you are in sharing information. No matter how well you have developed your OCM program and communications, you will not have all the answers. Some tips: Lay out the transformation process. Commit to target dates. Celebrate short-term wins. Be open and honest about what you know and when you will have answers to what you don’t. Don’t be afraid to adapt targets and modify decisions based on new information. Demonstrate a good moral compass and empathy. Treat your folks the way that you would like to be treated. Then they will know that you really do care about them and will fully invest themselves in the Change.

The bottom line: As stated in the beginning, OCM is the foundation for any successful transformation and time spent on it is well invested.  Don’t skimp on it. 

IT Costs – Everybody’s Favorite Topic

CEO Query: Every year, my IT costs rise. Why is that – especially considering that implementing technology is supposed to cut costs?

There are probably several reasons for IT cost going up each year. The first is internal demand. If your company is growing, IT supports more employees each year and although the unit cost of IT services is probably declining, it cannot decline at a rate sufficient to overcome the additional demand. One effective approach to reducing this type of growth is to have – and enforce – uniform demand policies for commodity IT services.

The second reason is a function of the company being in business over time. As you acquire more customers, even if new IT-based business capabilities are not added, data grows by the number of new customers and the ongoing transactions from existing ones.  One approach to reducing this type of organic growth is to have – and enforce – data and information retention policies.

The third reason is a function of investments in IT made by the business (a.k.a. “projects” or “new services”) as they become operational. Unless the solution delivery cost is shed, the service delivery cost will grow each year as these investments are delivered and the solutions delivery cost will remain the same, thus causing overall IT cost to grow and/or a greater percentage of it dedicated to the “run the engine” costs of service delivery.

The solution to this reason is fairly complex and can be addressed in the context of a managed services model where solution delivery cost is made fully variable and the service delivery cost unit cost has a guaranteed yearly decrease for commodity services and the new service cost is considered in the upfront business case. Both IT and the business must be diligent in ensuring that if this new investment replaces an existing one, that the work to retire the old service is completed to avoid ongoing redundant cost.

Also, be aware that projects having a large IT investment component tend to focus on that and neglect to track the post-implementation benefits side of the business case (e.g. If the IT investment enables the call center to cut 40% of its headcount and save $50M, did that actually occur? You might be surprised at the answer unless you ensure that the project has a mechanism in place for showing the benefit in next year’s budget for the call centers or customer service function.).

“IT STRAIGHT TALK” Introduction

This site is intended as a resource for executives who are accountable for the delivery of IT Services. This includes everyone from the person who the IT function reports into (CEO, COO or Head of Shared Services) to the individual IT Functional Leader – and everyone in between. The internal customer of IT may find the site of use in understanding the role of IT as a managed services provider and how this may change their current interactions.

IT STRAIGHT TALK is a site about the business of IT. If you are looking to solve a particular problem that you are having with your IT group, the site can assist you in finding a solution. If you would like help transforming your IT group, the site can help you with your thinking and assist you in the process.

IT STRAIGHT TALK is not a site about technology, but rather about the management of technology. I am technology agnostic and frame questions about the use of particular technologies within the context of business goals and objectives. 

As of today the site is live, with minimal content. Over the course of the next week, additional content pages will be added (generally presentations and white papers). Feel free to register as a user and comment or add questions to be discuss in later blogs. You must be registered to comment; comments are moderated and trolls will not be tolerated.

UPDATE 08/01/08: You no longer need to be “registered” (registered with WordPress) to comment. Thanks to Gary for the question.