Leading Effective Change: a Primer for the HR Professional

Leading Effective Change: A Primer for the HR Professional

This publication is designed to provide accurate and authoritative information regarding the subject matter covered. Neither the publisher nor the author is engaged in rendering legal or other professional service. If legal advice or other expert assistance is required, the services of a competent, licensed professional should be sought. Any federal and state laws discussed in this report are subject to frequent revision and interpretation by amendments or judicial revisions that may significantly affect employer or employee rights and obligations. Readers are encouraged to seek legal counsel regarding specific policies and practices in their organizations.

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15-0378 Table of Contents

iii Foreword v Acknowledgments vii About the Author 1 Leading Effective Change: A Primer for the HR Professional

2 Part 1: Change and The HR Professional 4 Part 2: Prescriptive Change Models 7 Part 3: Guidelines and Techniques for Facilitating Change 7 Phase 1: Designing Change 10 Phase 2: Enacting Change 13 Phase 3: Sustaining Change 17 Conclusion 19 Endnotes 23 Suggested Readings

Leading Effective Change: A Primer for the HR Professional

FOREWORD

Change—especially major change—affects employees at every level of an organization. A recent SHRM survey found that 82 percent of organizations had been involved in a change management initiative involving the HR function over the previous 24 months. Clearly, managing change has become an essential part of many managers’ jobs. This report is written for the HR professional who wants to better understand the dynamics of organizational change and seeks guidelines for implementing change effectively. “Change management” is defined as a structured approach to transitioning individuals, teams and organizations from a current state to a desired future state. It can be applied to situations such as downsizing, introducing a new internal process or adding new technology. Research shows that actively managing change can increase the success rate of these initiatives. This report will provide you with tools to do that.

The SHRM Foundation’s Effective Practice Guidelines series now includes more than 20 titles. Created in 2004 for busy HR professionals, the series integrates research findings with expert opinion on how to conduct effective HR practice. It provides the tools to successfully practice evidence-based management. Other recent reports include Evaluating Worksite Wellness, The Aging Workforce, and Leveraging Workplace Flexibility for Engagement and Productivity. To ensure the material is both practical and research- based, the reports are written by subject-matter experts and are then peer-reviewed by both academics and HR professionals.

SHRM Foundation educational resources are now used in hundreds of college classrooms worldwide. A major funder of original, rigorous HR research, the SHRM Foundation also awards multiple scholarships annually to support education and professional certification. And all this good work is made possible by the generous support of donors like you.

We encourage you to learn more. Please visit shrmfoundation.org to download other complimentary resources and to find out how you can get involved with the SHRM Foundation. Thank you!

Mark Schmit, Ph.D., SHRM-SCP Executive Director SHRM Foundation

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Leading Effective Change: A Primer for the HR Professional

ACKNOWLEDGMENTS

The SHRM Foundation is grateful for the assistance of the following individuals in producing this report:

REVIEWERS PROJECT MANAGER Pawan Budhwar, Ph.D., MCIPD, FBAM, Dorothy Mebane, Ph.D. FAcSS, FHEA Manager, Foundation Programs Professor of International HRM SHRM Foundation Editor-in-Chief, British Journal of Management Aston Business School, Aston University Alison Eyring, Ph.D., MCIPD, FBAM, AcSS Chief Executive Officer Organisation Solutions Mel Fugate, Ph.D. Associate Professor Cox School of Business Southern Methodist University Kenneth Kungu, Ph.D., PHR Assistant Professor of HR Management College of Business Tennessee State University

Leading Effective Change: A Primer for the HR Professional

ABOUT THE AUTHOR

John Austin works at the intersection of research and practice as the president of Three Translation Leadership. Prior to his current position, Dr. Austin was a principal at Decision Strategies International and a management professor at Penn State University and University of Washington. He continues to teach executives for the Wharton School, Georgetown University and The University of North Carolina at Chapel Hill. John has worked with numerous Global Fortune 500 companies as an executive development resource.

Dr. Austin has a B.A. in economics from Johns Hopkins University and a Ph.D. in management from Boston College. He is a thought leader in the areas of team leadership, organizational change implementation and strategic decision-making. His research on knowledge-based decision-making teams is widely cited in the academic literature, as is his work on the strategic actions of internal change agents. Dr. Austin’s work on knowledge transfer in managerial teams has been used to develop executive teams around the world.

Dr. Austin is an experienced facilitator and an award-winning teacher who has worked with practicing executives on six continents. He has developed leaders and led long- term projects in the areas of change management, scenario planning, team performance, strategic decision-making and strategy execution. His experience with individuals at all levels of organizations enables him to translate broad strategies and concepts into actionable, engaging programs.

Dr. Austin’s research has been published in leading management and applied psychology journals, including Journal of Applied Behavioral Science, Journal of Applied Psychology, Journal of Organization Design and Organization Science, as well as practice-oriented publications, including HR Magazine and The OD Practitioner. Dr. Austin’s work has been recognized with three Best Paper awards from the Academy of Management and has been mentioned in a number of media outlets, including CNN, The Wall Street Journal and Barron’s. Dr. Austin’s new book, Unquestioned Brilliance: Navigating a Fundamental Leadership Trap, will be published in 2015.

vii Leading Effective Change: A Primer for the HR Professional

Rapid and regular organizational change is the new normal in many industries today. Leading Effective Change: A Primer for the HR Professional

LEADING EFFECTIVE CHANGE: A PRIMER FOR THE HR PROFESSIONAL

Leading the process of change is an essential part of any manager’s job. A 2007 Society for Human Resource Management (SHRM) survey found that 82 percent of organizations had been involved in a change management initiative involving the HR function over the previous 24 months. In fact, organizations reported more than four major change initiatives on average. Clearly, change management is now a core skill for HR in a majority of organizations.

Although change can be hard to control, it does not have to overwhelm an organization. With disciplined thinking and flexible implementation, change leaders can clarify and focus complex organizational change. A skilled HR team can increase perceptions of fairness, early employee engagement and trust—all of which will improve employees’ responses to change.

This report is written for the HR professional who wants to understand organizational change and seeks guidelines for implementing change. Part 1 places the skill of leading change within the context of the HR profession and considers how organizational change affects individuals. Part 2 examines some representative prescriptive change models and considers how managers can use models of change to clarify a complex situation. Part 3 includes guidelines for practice that can improve the effectiveness of almost any change process, as well as case studies and suggested techniques for translating the guidelines into behaviors.

1 Leading Effective Change: A Primer for the HR Professional

PART 1: CHANGE AND THE ■■ See themselves as resilient. management has moved to the HR PROFESSIONAL ■■ Believe their change capabilities core of the HR profession, and Rapid and regular organizational are greater than those of their subsequent surveys supported change is the new normal in many competitors. that conclusion. Between 2008 and 2012, “managing change industries today. In an American ■■ Communicate their vision and and cultural transformation” has Management Association/Human values often. Resource Institute survey of consistently appeared among the ■■ Put training resources toward approximately 1,400 executives, top five HR topics assessed in the improving managers’ change- Creating People Advantage report 82 percent of respondents said management skills. that the pace of change in their by Boston Consulting Group/World organizations had increased over Embracing change as an Federation of People Management 3 the previous five years. And 69 opportunity rather than as a Associations. Simply put, managing percent reported that their firms had burden can help organizations change is a core HR skill needed experienced severe shifts during the grow and thrive. And nurturing across the globe in the present and past year.1 skills of change management can the future. help HR professionals lead their Responses to the increasing rate organizations through the difficult Types of Change and intensity of change vary, but transitions often associated with Generally, the most change occurs high-performance organizations are major changes. in large, publicly traded, for- more likely to: profit organizations, but smaller A 2007 study by SHRM, Change ■■ organizations report an average of View change as a manageable Management Survey Report,2 opportunity. more than three planned changes demonstrated that change

Figure 1: Changes Planned or Implemented During the Past 24 Months

New/revised performance management process 58% Facilities change 57% Organizational culture change 54% New/revised HRIS 53% New/revised IT systems 51 % Organizational repositioning or re-alignment 45% New/revised financial/accounting systems 41% Major staffing changes 40% Diversity or cross-cultural communication initiatives 38% Operational changes in response to legislation/economic conditions 33% Product rebranding 26% Acquisition 25% Offshoring or outsourcing 16% Merger 10% Initial public offering or corporate ownership change 8%

0% 10% 20% 30% 40% 50% 60% 70%

Source: Benedict, A. (2007). 2007 change management survey report. Alexandria, VA: Society for Human Resource Management.

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per year. Change management is an Prior to a change, HR managers reduce job satisfaction and increase important skill to develop regardless often assess organizational his or her intent to leave. Supportive of the size of the organization. A readiness for change, analyze the HR leadership and the perception change in a smaller organization impact on key stakeholders, design that change is well planned can may seem easier because it involves training, and plan and coordinate reduce psychological uncertainty. fewer systems and people. But communication about the change. Uncertainty will increase if change to complete the process, a small Later in this report we will consider becomes more frequent or if the organization usually has fewer staff ways to expand HR’s role during and change fundamentally alters an available and few, if any, outside after implementation. individual’s work.4 consultants—and this brings its own challenges. HR’s Role at the Individual Stress Level: Guiding Employees There is no denying that change The most common types of Although HR professionals creates stress. Researchers have change identified in the SHRM must work at the macro level to found that if individuals view a survey mentioned above are listed implement organizational change, change as equitable, are engaged in in Figure 1. Most HR managers it is vital to understand the effects the change process, have accessible reported that in the previous 24 on employees at the individual leaders and feel connected through months their organizations had level as well. The processes a communication about the change, revised performance management firm’s HR team puts in place to stress can be markedly reduced.5 systems, changed facilities, guide employees through major addressed organizational culture organizational changes can Commitment to the change changes, implemented human influence many aspects of each Commitment to a change increases resource information system individual’s response, including job employee retention, compliance and (HRIS) changes or made other IT satisfaction, stress and ongoing job satisfaction. An HR team can help system changes. With the possible commitment to the change. increase commitment by improving exception of facilities changes, all quality of communication about the of these are complex, multisystem Job satisfaction and change, perceptions of justice, trust transformations. Such initiatives intent to leave in management and employee input require careful change management Often, an employee’s feeling of in the change process. Individual processes, in which HR plays a uncertainty around a change will differences play a significant part in central role.

HR’s Role at the Organizational Figure 2: HR Involvement in Major Changes Level: Driving Change Human resource management is a boundary-spanning function, both vertically and horizontally. This uniquely positions HR professionals 5% to drive change initiatives through 22% Prior to change being introduced any organization. However, as Figure During the implementation 2 illustrates, this role does not 73% After the change goes into effect always translate into involvement throughout the change process. HR tends to play a larger role prior to the implementation of change and a much smaller role during and after Source: Benedict, A. (2007). 2007 change management survey report. Alexandria, VA: Society for implementation. Human Resource Management.

3 Leading Effective Change: A Primer for the HR Professional

Table 1: Prescriptive Change Models Model Change phase Value to HR manager Similar models Leadership Model: Kotter Enacting Leadership development GE Change Acceleration Leading Change resource Process; Kouzes and Posner Leadership Challenge Systems Model: Burke-Litwin Designing Assessing readiness & Senge; Leavitt’s Diamond; Change Drivers identifying gaps McKinsey’s 7-S Stakeholder/Skills Model: Enacting/ Sustaining Communicating & identifying LaMarsh Managed Change Prosci ADKAR skills Recovery Model: Kübler-Ross Enacting Managing resistance and Bridges’ Managing Transitions; Change Curve facilitating acceptance Salerno and Brock’s Change Cycle

determining commitment. Cynicism, guidance, or “prescriptions” for are worth examining if applicable to a external locus of control, lower action, allowing HR professionals to specific organization. tolerance for ambiguity and low learn from others’ experience. self-efficacy can lower an employee’s A Leadership Model: In this section, we examine four commitment to a change.6 Kotter’s Leading Change prescriptive models, each with Leadership change models address In general, researchers have specific details of value to most the audience of senior leaders, demonstrated that fostering trust, organizations. These models are used explaining how they can push perceptions of fairness and early widely, but not all are considered a change through an organization. employee engagement will improve “best practice” in every situation. In Kotter’s is the best known of these employees’ responses to change. Table 1, the last column lists other models.7 change models that are similar to In the next section, we will focus each of the models highlighted and Kotter’s Leading Change Model is a on specific models of change and how HR managers can use them Figure 3: Kotter’s Model effectively to improve and expand their roles in the change process at the 1. Establish a Sense of Urgency organizational and individual levels.

2. Create a Guiding Coalition PART 2: PRESCRIPTIVE CHANGE MODELS 3. Develop Both a Vision and a Strategy Change dynamics are intimately tied to context, and every context offers unique interpersonal, structural, 4. Communicate the Vision cultural and competitive dynamics. Despite these different dynamics, 5. Empower Employees to Act HR professionals can benefit from looking at some systematic studies 6. Generate Short-Term Wins and models of change. Exposure to various models, combined with years of practical experience, 7. Consolidate Gains to Build More Momentum will help change leaders define and refine their points of view. 8. Institutionalize the New Approaches Prescriptive models are particularly valuable because they offer specific Source: Kotter, J. P. (1996). Leading change. Boston: Harvard Business School Press.

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top-down model of change that starts Figure 4: Burke-Litwin Model with the assumption that a proposed change has already been designed. External This model gives little attention to Drivers assessing the need for change.

Its primary aim is to guide leaders • Mission and strategy through the implementation phase. Core levers • Leadership • Culture Kotter’s model (see Figure 3) and • Structure other leadership models can be • Systems (policies) Alignment levers most helpful to the HR manager as • Managerial practices & local workplace climate guides for leadership development. • Skills If a firm will be undertaking changes • Needs and values Individual levers in the future, leadership models • Motivation provide ideas about the capabilities senior managers and executives Organizational will need to develop to make Change those changes successful. Two other models with audiences and Source: Burke, W. W., & Litwin, G. H. (1992). A causal model of organizational performance and intentions similar to the Kotter model change. Journal of Management, 18(3), 523-545. are GE’s Change Acceleration Process8 and the Kouzes and Posner Leadership Model.9 Figure 5: Prosci’s ADKAR® Model A Systems Model: Burke‑Litwin Organizational Awareness of the need for change. Performance A Systems models draw attention Desire to support and participate in the change. to the interconnection of various D organizational systems. Much more Knowledge of how to change. K than other change models, systems Ability to implement the change. models focus on situational A analysis and data collection. Reinforcement to sustain the change. They are valuable aids during the R designing change phase because they help guide data collection, Source: Hiatt, J. M. (2006). ADKAR: A model for change in business, government, and our gap analysis and initial action. community. Loveland, CO: Prosci Learning Center Publications. Systems models start with the assumption that the beginning levers.10 Understanding these levers A Stakeholder and Skills point of any organizational change will help an HR manager design Model: Prosci’s ADKAR is a well-grounded understanding readiness-for-change assessments Prosci’s ADKAR Model14 (see Figure of the current situation. Barriers and guide conversations. Senge’s 5) is one that focuses the change to change can often be traced to Learning Organization Framework leader’s attention on identifying misalignment between systems. is probably the most widely known stakeholders, motivating them to 11 The Burke-Litwin Model (see of the systems models. Others support the change and giving them 12 Figure 4) identifies and links are Leavitt’s Diamond and the the skills needed to succeed when 13 12 organizational and individual McKinsey 7-S model. the change is implemented. Like

5 Leading Effective Change: A Primer for the HR Professional

for resistance to change. Models Figure 6: Kübler-Ross Change Curve similar to Kübler-Ross’s are Denial Bridges’ Managing Transitions Disbelief; looking Integration 16 for evidence that it Model and Salerno and Brock’s Changes integrated; 17 isn’t true a renewed individual Change Cycle. Frustration Recognition that Decision Applying Prescriptive Shock things are different; Learning how to work Surprise or shock sometimes angry in the new situation; Change Models at the event feeling more positive None of the four prescriptive change Experiment Initial engagement models described here, nor any with the new others, will perfectly fit a given situation Depression situation. Organizational change is Morale and competence Low mood; lacking in energy a complex system problem. Each change has unique dynamics and will require a specific change design. Time

Source: Kübler-Ross, E. (1969). On death and dying. New York: Macmillan. However, prescriptive change models offer a useful starting point for designing a change process Kotter’s Leading Change Model, organizational change, the Kübler- (see Table 2). The change models ADKAR is most relevant during the Ross Model (see Figure 6) primarily help leaders identify potential phase of enacting a change and describes how individuals react to the missing pieces in their plans. The has little to contribute during the demand to change and addresses role of any change team is to adapt design phase. Unlike Kotter’s model, individuals’ resistance to change. models to fit a real-life situation. ADKAR offers some guidance The team members should identify for sustaining a change. Models One drawback of recovery models a change model that best matches like Prosci’s ADKAR that address is that they assume resistance their specific initiative and then stakeholder identification, framing to change, which can become a modify the model to fit the context. and communication provide value self-fulfilling prophecy. Recovery One common approach is to: throughout the life of a change models identify the introduction of 1. I dentify a “close match” change initiative. change as a trigger for negative reactions. They do little to inform model. Motivating others to support the the design of the change, but try 2. Conduct a situational change often falls to the HR to minimize barriers and resistance assessment. manager. Prosci’s ADKAR and to the implementation of a change similar models, such as the LaMarsh initiative. 3. Look for the blind spots in the Managed Change Model, can help chosen model while matching it HR managers design appropriate The strength of recovery models to the situation. skills development initiatives to is that they invite and facilitate 4. Find a secondary change model support a change. discussion of the emotional that can address the blind spots consequences of organizational or modify the initial model to fit A Recovery Model: change. Many employees have an the context. Kübler-Ross Change Curve emotional response to change, Numerous change models evolved even if they do not express it By the end of the process, a newly out of Elisabeth Kübler-Ross’s openly. Recovery models give created custom-fit model can be classic work on the stages of legitimacy to these emotions, used as the scaffolding around grief, describing how people make them easier to address which the change team builds a confront death.15 When applied to and help HR managers prepare specific action plan.

6 Leading Effective Change: A Primer for the HR Professional

Table 2: How to Apply Change Models companies are comfortable sharing their challenges publicly. Even Model Useful for Focus changes that are deemed successful Leadership Model/ Senior leaders • Guides implementation of change have probably upset the status quo. Kotter driving change • T op-down model initiatives As one HR executive noted: • P oints to capabilities needed to lead change Systems Model/ HR managers • Shows interconnectedness of “Organizational changes can Burke-Litwin assessing organizational systems never be categorized as just readiness for • Emphasizes situational analysis and data successful or not. Reality is not change collection that binary. In every change, some • Guides gap analysis and planning things work as expected and Stakeholder/Skills HR managers • Helps in identifying and motivating some things don’t. You just work Model/ADKAR supporting change stakeholders hard to make sure it is the high and motivating • P romotes communication and provides priority outcomes of the change others to support it skills for success that fall on the more successful • Off ers guidance for sustaining a change side.” Recovery Model/ HR managers • Addresses emotional consequences of Kübler-Ross preparing to handle change resistance to • Explains individual reactions, resistance Phase 1: Designing Change change to change A surprising number of change • Helps in reducing barriers and resistance models start with the assumption to implementation that the change itself has already been defined. Even models that PART 3: GUIDELINES most cases, these guidelines are start with a step called “define the AND TECHNIQUES FOR revisited repeatedly throughout a change” provide little guidance. But FACILITATING CHANGE change initiative. clearly defining the change is an Organizational change can be We present these phases as a essential part of the process. complex and confusing not only linear progression for the purposes Ensuring that changes are pursued for ordinary employees but also of clarity, but in reality most for the right reasons from start to for those trying to facilitate the organizations cycle through each finish and that they are the right process. In this section, we divide phase more than once. For example, sorts of changes for the organization the process into three phases an organization will often reconsider should not be an afterthought. HR and look at each in detail: 1) the a decision made during the design professionals should revisit the designing phase, 2) the enacting phase while a change is being question of whether a change fits phase and 3) the sustaining phase. implemented, and then reconsider it their organizations’ goals several These three phases coincide with again as the change is extended to times throughout the process, not three “translation moments,” when new contexts. just at the beginning. strategic leaders turn abstract ideas 18 Three case studies detailed on pages into action. Barriers to designing change 8, 10 and 14 are drawn from real Generating a well-designed change For each of the three phases, we change initiatives in process. HR is not as simple as sitting down identify specificcommon barriers, executives from these companies and brainstorming with a group of useful techniques and guidelines for agreed to tell their stories, revealing executives. Predictable traps can get practice. Guidelines for practice are the good and the bad, provided in the way of this first phase: specific actions that change leaders, the examples remain anonymous. especially HR professionals, should Change is often a sensitive topic ■■ Limited mindsets. Every include in any change process. In within organizations, and few decision is filtered through the

7 Leading Effective Change: A Primer for the HR Professional

assumptions and experiences of the decision-making group. Unfortunately, these assumptions Case Study 1 and experiences are usually not Elegant Design Is Not Enough discussed openly. Reliance on an The training and development Several months into the rollout industry’s or a firm’s conventional group of a global technology of this initiative, shifts within the wisdom and a lack of diverse company took on the task industry and strategic changes experiences among members of of redesigning leadership in the organization led to the the decision team can contribute to a limited mindset.19 If the development programs to create realization that one job category change design team is not alert an industry-leading executive was no longer mandatory for to its blind spots, members will bench. The design team started future success. The steering limit their options even before by running a scenario-planning committee decided to shut down considering them.20 workshop to identify the work the design plans around this job roles essential for success in the category, to shift resources and ■■ Overconfidence. Overconfidence can mean that future. This process engaged to add more emphasis to a job the change team members believe stakeholders from across the category that was increasing in they know more than they really organization and a select group importance for the organization. do, or that they are unaware of of external industry experts. Pilot programs and subsequent the multitude of things they do The workshop identified seven impacts on targeted employees not understand. Overconfidence job categories that would be saw mixed success. Several causes leaders to believe they the focus of the transformation initiatives thrived, and several can predict the future and to effort and also future-focused struggled to get started or were ignore the uncertainty embedded skills to target for development. in any change process.21 An not well received by stakeholders. Finally, the team conducted a overconfident team will: For job categories in which the rigorous benchmarking study change was successful, there is ●● Fail to include contingencies to find current weaknesses in now evidence that new skills are in a change design. leadership development. It framed taking hold. ●● Underestimate the time the change initiative as a way of needed to execute a change. fixing those weaknesses. The largest barrier to sustained ●● Ignore data that suggest the success in this project seems to By engaging a wide range of change will not succeed. be the tension between a large- stakeholders in the planning In one company, the change scale transformation of jobs and process, the training and team members recognized that short-term pressure to manage development group was they did not have the answers costs. Even though the project able to identify some natural needed to drive a cultural change, has a five-year time horizon, change champions across the so they designed the change to project leaders must defend emerge from conversations with organization. Engaging these its value on a quarterly basis. other members of the firm. They individuals turned out to be Identifying an active senior-level resisted the temptation to assume crucial, especially as the training change champion and continuing the team had all the knowledge and development leader worked work with stakeholders are necessary to make the change to secure funding for the change the primary activities that are work. initiative. Including industry sustaining at least part of this ■■ Lack of quality data. Design experts made sure the team initiative. Still, company leaders teams can be so eager to work was not limiting its assumptions continue to question the need for on the details of a change that about available skills within the this change initiative. they gloss over holes in their organization. understanding of the current state of affairs. Without good data,

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the team may treat assumptions and limitations in frames of necessary considerations.24 and hunches about employee reference can help ensure that Many change managers perceptions, structural issues or a change is both actionable and advocate that the change team competency gaps as if they were realistic. continually assess the macro facts. environment and adjust the ■■ Outside-in planning assessment throughout the A change team should begin the techniques, including scenario change process. design initiative with in-depth planning and uncertainty data collection, not with an offsite analysis, can help a team ■■ Design change for the future, meeting of executives. Asking address planning for the future not for the present. A well- whether data exist that would rather than for the present.23 designed change does not assume prove the team wrong is a good that the external world is static. way to assess the quality of Guidelines for The external environment will likely data being used. Data should be designing change have already changed between collected from multiple sources, Phase 1 includes three guidelines the design and implementation especially when assessing gaps in for good practice (see Table 3): phases of the change. Factoring in competencies. high-impact uncertainties during ■■ Conduct a current state the design process will make it ■■ Limited stakeholder outreach. assessment. The role of the easier to implement the change Limited mindsets, overconfidence HR department is to ensure that if those uncertainties occur. In and lack of quality data can all members of a change design team addition, the design team should contribute to lack of engagement are operating with an accurate use a future-oriented framework with key stakeholders during understanding of organizational when discussing what capabilities the change design process. If capabilities. Just as it is impossible are needed and potential gaps to the design team thinks it already to set driving directions in a GPS be addressed. In Case Study 1, knows what it needs to know, without knowing one’s current for example, the design team lacks data or is not aware of its location, the change design examined scenarios to identify own biases on an issue, the team team cannot create a map for future needs, not just current ones. is unlikely to seek the perspective organizational change without a of a diverse group of stakeholders. clear understanding of the starting ■■ Create prioritized, actionable It may use common rationalizations point. and realistic goals. Returning to justify a lack of stakeholder to the GPS analogy, anyone Before conducting any detailed engagement, including a need for setting off on a journey needs discussion of a change, the secrecy, a belief that speed is of a destination. Creating a clear design team should have a clear, the essence or a desire to avoid description of where the design comprehensive and accurate burdening people.22 team wants the change to take snapshot of the current state of the organization makes change the organization. The assessment Techniques for execution easier. Describing what can include capabilities, designing change the organization will look like once resources, committed strategies, The HR professional is well situated the change has been successfully competitive assessments and to offer organizationwide data and implemented sets the destination gaps. An HR professional is expertise in facilitating the process in participants’ minds and often best situated to provide of designing change, particularly in allows the team to generate these data. Organizational history small and midsize organizations. actionable goals. In visions of and standard timing cycles for the future, change teams should ■■ Employee surveys and action within the firm are also pay attention to language, outreach efforts can help gather the data needed for a Table 3: Designing Change Guidelines strong assessment of the current state of affairs in a firm. 1. Conduct a current state assessment. 2. Design change for the future, not for the present. ■■ Facilitation techniques designed to uncover assumptions 3. Create prioritized, actionable and realistic goals.

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organizational timing and practical limits. Examining capability gaps Case Study 2 will help ensure that goals are Recovering from a Change Disaster: Flexible Plans and realistic and actionable. Deep Sponsorship Some aspects of the future state The HRIS initiative was perhaps “sponsorship spine”—the collection of the organization will always be the largest change project the of people who enthusiastically unknown, so building in flexibility construction materials company backed the project—was weak. is crucial. The change team should had attempted in the past five Without strong internal champions, prioritize and keep the primary aims years. With operations in 16 the project was adrift. of the change front and center. countries and more than 100,000 The senior VP of HR, who was employees, leaders knew that Phase 2: Enacting Change relatively new to the company and bringing in a new system would not Many books and articles about not part of the initial decision- change management focus be easy. Installing the HRIS was making group, stepped in to almost exclusively on the enacting only part of the change. Country convene the full executive team change phase. Organizations often managers needed training to use it, and other key internal stakeholders. transfer responsibility for a change recruiting had to be aligned to take During a two-day meeting the process from a design team to advantage of new features, and an implementation team at the group deconstructed the projects, employees had to adjust to a new beginning of this phase because assessing initial goals, examining way of accessing information. the skills and time commitment costs, exploring alternatives, required for enacting change are The process started with a robust debating opportunity costs of significantly different than those project plan. For a full year, the action and inaction, and discussing required to design a change. Enacting a change often demands team set goals and priorities, invited relationships with external a long-term commitment from stakeholders to troubleshoot design stakeholders. In the end, they reset a dedicated team. During some issues, and debated potential future the plan. Three senior leaders large systems changes, such as uses of the system. An outside committed to championing project. the implementation of a new HRIS, vendor helped manage the process, The overall goals shifted slightly the number of full-time people and a valuable executive champion from efficiency and consistency engaged in the change initiative drove it forward. When it was time to preparation for improved global can surpass the size of entire for the rollout, the initial pilot went competition after the industry departments. In such initiatives, the change leader must have as smoothly as planned. But six downturn. team leadership, motivation and months into the rollout the entire Today the new HRIS has been budgeting skills, in addition to project was on the edge of failure. rolled out in 12 countries, and the change management skills. The industry was experiencing project leader expects to complete Barriers to enacting change one of the deepest downturns the final four rollouts by the end of Enacting change requires vigilance in memory, and the company this year. Each rollout started with to make sure the change team struggled to keep its costs under a local assessment of the current is properly prepared and that control. The HRIS was creating state of affairs and modifications the organization’s employees sustainable efficiencies, but was of the plan to fit the needs of each are receptive. HR professionals also the most expensive short-term country. The senior VP of HR says can help avoid some of the most initiative in the works. Pressure the project was “close to death” common pitfalls: to delay or suspend the rollout at the time of the senior team ■■ Missing expertise. The built, and at a critical moment, meeting. She believes that lack composition of a change team the change champion left the of flexibility in the initial plan and is a crucial consideration. Teams company for another opportunity. limited sponsorship almost doomed with the correct skills and Leaders suddenly realized that the the change. knowledge will be best equipped

10 Leading Effective Change: A Primer for the HR Professional

to lead complex projects.25 ■■ Lack of inducements changes is invaluable for a Time spent at the beginning of and employees’ belief in change team. For example, an the project thinking about what themselves. Employees’ organization that is recovering capabilities will be most valuable confidence in their own ability from a painful period of can speed the process and to succeed interacts with downsizing will react differently mitigate risk. organizational inducements in to a new team-based structure complex ways. Reward systems than will an organization Often members of the change and employee confidence with a history of growth and team do not even recognize that both play a role in motivating collaboration. In Case Study 2, they are missing an essential bit employees to shift behaviors and the new HR leader started to of expertise. Asking the team to adopt a change.30 Rewards can see the beginning of fatigue and create an expertise inventory early be used to encourage employees called the senior team together in the process will help members to make the initial behavioral to address the problem head-on. use all available expertise and changes required as part of identify missing pieces. an initiative. However, once Techniques for ■■ Lack of readiness. Employees the initial behavioral change enacting change may not be properly prepared is complete, the individual’s Techniques for enacting change for a change, which can lead confidence in his or her ability focus on maintaining momentum to ambivalence or disinterest. to succeed becomes more and ensuring an easy flow of Ambivalence is quite often important than an external communication. interpreted as resistance to reward. If employees make ■■ 26 Expertise assessments can change, and expectations the behavioral changes but help identify needed skills when that there will be resistance do not believe that they are assembling a change team. may create a self-fulfilling developing competency in the ■■ prophecy in which simple new behaviors, they are likely Stakeholder mapping sets disinterest is misinterpreted as to revert to their old behaviors the stage for the communication active resistance.27 Conducting or reduce their efforts.31 Efforts plan and helps identify a detailed assessment of the should address both reward individuals who should be part of current state of the organization systems and employees’ belief in the team. Stakeholder mapping during the design phase can themselves. can also help the change team help avoid this barrier. One identify potential champions for ■■ Initiative fatigue. A culture assumption for the team to keep the initiative. of inaction or a track record in mind is that what initially looks ■■ of failed initiatives can create Project management like resistance to the change strong headwinds and slow expertise is a skill that is needed may actually be a lack of interest adoption of a change in regardless of the content of the or confusion. any organization. Just as change. ■■ Organizational routines. past successes can lead to ■■ Communication planning Habits can be harnessed to overconfidence, past failures is often built into the project 28 reinforce a change. Often, can lead participants to expect management plan and links employees are oblivious to the failure. Employee withdrawal stakeholder mapping to project routines that drive their daily from the change initiative is a management work. interactions. Hidden routines can frequent challenge. In addition, a ■■ Environmental monitoring slow or prevent implementation perception that change initiatives of a change.29 Understanding are too frequent and that can be connected to some of the why routines exist and how they distract employees from uncertainties identified during they relate to a change initiative completing their jobs can slow the design phase. The change can help participants focus on implementation of change and team should periodically check in changing relevant behaviors, but contribute to ambivalence. with the change sponsor to share not become distracted by trying new information gathered about Knowledge of organizational to change behaviors that are the external environment as it history related to large-scale peripheral to the initiative. relates to the initiative.

11 Leading Effective Change: A Primer for the HR Professional

Guidelines for Table 4: Enacting Change Guidelines enacting change 1. Prioritize expertise over availability when selecting members of the change team. There are five guidelines for practice in the enacting change 2. Secure a senior-level change champion. phase (see Table 4): 3. Identify and engage key stakeholders. 4. Use project management best practices. 1. Prioritize expertise, not availability, when selecting 5. Monitor the environment for changes and align with other initiatives. members of the change team. Selecting members responsibility for overseeing the 4. Use project management of a change team based on change. A change champion is best practices. The field criteria such as who has time, someone who believes strongly of project management has who needs extra development that the change is needed and developed a robust toolkit opportunities and who is is willing to advocate for it based designed specifically for moving 33 between projects is tempting. on that belief. HR professionals forward with complex projects. But before considering whom to can play a central role in A change team should have an select, leaders should identify identifying the best change experienced project manager the expertise that will be needed champions. HR can connect and should give that manager on the team. The choice of team executive personal development the power to keep the change leader should be driven by a goals and organizational needs on track. discussion of expertise, too. The so that the identified sponsor process can be simple: 1) define has the potential to be a It is important to balance the the task, 2) identify needed passionate change champion as pressure to meet deadlines expertise and capabilities, and well. Case Study 3 highlights the with the commitment to ensure 3) choose the individuals who risk of having just one change the change will accomplish have the needed expertise and champion. Multiple champions its objectives. Completing capabilities. are always preferred. the change as if it were just a checklist helps no one. For 3. Identify and engage key One executive interviewed for this reason, most change stakeholders. Stakeholder this report noted that carefully teams separate the role of management is a vital task for selecting the members of the project manager from the role enacting organizational change. team based on expertise sends of overall team leader. The Conducting a stakeholder a message to the rest of the demands of those two roles mapping exercise early in the organization about priorities. If can create tensions that lead process will pay dividends later. the team is simply a collection to better implementation plans HR should carefully identify of available people, others if managed constructively. If individuals and groups that will assume the change is not the project manager is also are interested and influential. important. the change leader, underlying These people may offer tensions may be harder to 2. Secure a senior-level valuable expertise, design discuss and manage. Successful change champion. A change engagement plans or even map project management, while process that does not have a out the most effective path for often overlooked in prescriptive senior executive championing shepherding the change through change models, can continually it will struggle from the the organization. Cohorts of resurrect focus and energy start and is unlikely to gain employees or customers can around the change. momentum. Being a change be stakeholders during rollouts champion is not the same thing of large-scale changes. Each 5. Monitor the environment as being a change sponsor. cohort is a different stakeholder for changes and align with A change sponsor has formal group with different interests. other initiatives. The external

12 Leading Effective Change: A Primer for the HR Professional

environment will have shifted as a technology shift, with a clear Leaders will feel pressure to between the time the change endpoint, the focus turns to data remove some of the resources is designed and the time it is collection and monitoring outcomes. allocated to a change as it enacted. The change team should If the change is being replicated progresses. The organization put processes in place to monitor or expanded to new parts of the may even have a new set of leaders who were not part of the the external environment and organization, the focus usually initial change design process. make adjustments as needed turns to assessing the new settings These leaders may not only to account for these shifts. and looking for evidence that the be less passionate about the initiative needs to be modified to fit Environmental monitoring should change, but they may also come the new context. be an explicit, systematic task, with new ideas to implement, not one done casually. Monitoring which will compete with the Barriers to sustaining change is easier if the change is originally current initiative for leadership Sustaining a change requires careful designed with an eye toward attention and organizational monitoring, mindful processing of future environmental shifts. resources. As a change becomes the situation and attention to data. part of the status quo, change Several common barriers can get in Monitoring and aligning with leaders will experience pressure the way of sustaining a change in other organization initiatives is to reduce implementation costs the long run: so resources can be shifted to a specific aspect of monitoring other newer initiatives. This result the environment that should not ■■ Lack of data collection to can limit the ability of the change be overlooked. Useful overlaps assess momentum and leader to make necessary change. Successful initial between initiatives, and some adjustments to the initiative change pilots can hinder the potential conflicts, will be when applying it in new settings. ability to replicate the change by discovered. It is possible to maintain flexible creating the assumption that the organizational routines and use initiative will work everywhere. Phase 3: Sustaining Change the strength of those routines to Managers may decide not to 35 Sustaining a change is more track success beyond the initial the change team’s advantage. complex than simply maintaining pilots. Expectations that things ■■ Conflicting cultures. Every a steady state. Over time the will work well, just like “last organization has multiple environment, within and outside the time” can set up “confirmation subcultures.36 Eventually, an organization, shifts. The initiative bias,” in which change leaders initiative that is introduced from must adapt. The change project overemphasize evidence outside one of these subcultures that change is working and will require modifications as it is will conflict with local work undervalue evidence of struggles norms. Efforts to translate a extended into new parts of the 34 related to the change. change into local work behaviors organization or expanded to link with Confirmation bias can be a and routines can limit this barrier. adjacent projects. Often the change greater risk if initial successes Unfortunately, time constraints team is disbanded, and the change exceeded expectations, causing and simple frustration can champions shift to other tasks the change team to reset its pressure change leaders to when implementation is considered baseline for success. In Case force a change without making complete. The HR professional may Study 3, managers avoided an effort to link it to local work be left alone to ensure systems are confirmation bias by actively routines. Lack of flexibility can still aligned and the original aims of seeking market-level data before trigger a negative dynamic settling on a plan for centralizing the change initiative are met. of blame and counter-blame some functions in Europe. among members of an “outside” If a change is long term, such as ■■ Short -term pressure, lack of change team and employees a culture change, HR focuses flexibility. Trade-offs between experienced in the local context. on maintaining momentum. If the short-term targets and long-term In Case Study 3, the apparel change is a discrete one, such initiatives can hobble change. company team was able to

13 Leading Effective Change: A Primer for the HR Professional

Case Study 3 Design the Structure, Evolve the Culture: Sustaining a Change by Setting It Free A privately held Italian apparel The initiative started with two work change teams as local initiative company had a great problem: streams. The first stream began translators or full-time members It could not keep up with global assessing the organization’s current temporarily relocated to Europe. demand. The company had long structure and identifying ways to The teams soon realized that the enjoyed a strong U.S. market, align work and to gradually move restructuring initiative could be and in recent years had become toward more centralized marketing managed as a centrally driven successful in Japan, Korea and and design. This change team had change initiative, but that the parts of Southeast Asia. Now the permission to design a process culture change would have to be company found unexpected new sensitive to individual country more organic and motivated by demand in South America and differences and flexible in speed of champions at the local level. India, too. implementation, but also consistent HR managers involved in this with the message that the company The executive team, guided by the change overwhelmingly believe was committed to centralizing first CEO hired from outside the it is sustainable and progressing marketing and design decisions in company, decided to centralize better than they had hoped at Europe. The second work stream operations in Europe and reinforce the beginning. They attribute the began exploring options for building a culture of quality and employee success of both parts, structural a stronger corporate culture around pride. Historically, the company and cultural, to consistent quality and pride. This change had let each country run its own communication, alignment of team initially focused on internal marketing campaigns and design the parts and local ownership of stakeholder workshops in each products to fit its culture. Although the cultural messages. Change country to help identify the core this approach had contributed to champions in each country often company culture in each. company growth, the executive talk with each other and share team was concerned that it was The change was implemented stories they tell to reinforce the shift hurting brand quality and risked based on data collected in the from the past to the future. Country- turning the company’s products first phase. As the change teams level HR managers acknowledge into high-volume, low-margin collected information, they also that the cultural shift will move more commodities. The centralization discovered individuals with slowly in certain countries. Speed is initiative was partially designed innovative ideas working in other not a primary measure of success to shift to a lower-volume, higher- countries. In several cases, these in this case, as long as there is quality product business model. individuals were added to the evidence of progress.

limit this type of backlash by ■■ Scheduled situational team anticipate some of the engaging country-level managers snapshots with each local area places the initiative mway face and employees. affected by the initiative will help barriers as it ages and expands. the change team keep the focus A pre-mortem is an exercise in Sustaining change techniques on local issues. which a team envisions failure Techniques for sustaining change of a project as a way to identify ■■ Leveraging current HRIS and focus attention on creating a clear potential barriers and proactively employee surveys can provide address them before they understanding of new contexts, timely data about the momentum derail the project. Techniques collecting useful data for monitoring and impact of the initiative. momentum and assessing the need that focus attention on the ■■ Periodic project pre- to adjust the initiative. specific context can help the mortems will help the change change team look for contextual

14 Leading Effective Change: A Primer for the HR Professional

differences and shifts in the Table 5: Sustaining Change Guidelines environment that may slow 1. Track the impact of the change and engagement of stakeholders. momentum of the change. 2. Find opportunities to tell the pre-change story. Guidelines for 3. Look for evidence that the initiative does not fit the situation. sustaining change 4. Keep working to translate the overall design goal into local behaviors. In Phase 3, there are four important guidelines to keep in mind (see became an opportunity to tell 4. Keep working to translate Table 5): the pre-change story and get the the general design goal initiative back on track. into local behaviors. 1. Track the impact of the Each part of an organization change and engagement of 3. When expanding to new establishes unique work stakeholders. At some point settings, look for evidence routines. The change manager a change initiative becomes that the initiative does not should understand differences part of the status quo, but it is fit the setting.W hen leading an among various departments important to keep monitoring initiative, everyone tends to look and work to translate change perceptions and behavioral shifts. for evidence that things are going goals into behaviors that will fit If the organization administers an well and to downplay evidence each day-to-day routine. Only annual employee survey, it can that plans are off track. This is relevant routines will be changed, be used to assess the impact of known as the confirmation bias. thus lessening the impact on the change. HR professionals The change team should always participants and making change can reach out to stakeholders ask how the initiative does not fit less threatening. For example, with surveys and interviews any new situation to counteract in Case Study 3, managers built scheduled as part of the project the confirmation bias and identify enthusiasm by shifting culture management plan. Without these challenges before they become change work to the country level. assessments, managers may lose serious problems. sight of the change objectives or prematurely assume success or failure. Implications for Talent Management

2. Find opportunities to tell Developing talented change leaders is crucial for virtually any the pre-change story. As new organization. Successful change requires midlevel managers to have employees enter the firm and relevant team leadership, change process, communication and project others shift to new positions, management skills. And senior leaders must understand the complexity, organizational memory changes. time commitment, and need for active and visible sponsorship during Fewer people will remember change initiatives. the situation before the change If change is a significant reality within an organization, the topic should took place, and this can lead to be integrated into leadership development programs. Change initiatives a slowdown in momentum. HR are valuable learning opportunities for rising leaders. The ability to professionals should remind effectively lead change should also be a factor in recruiting executive people of the problems the talent and promoting employees. change helped resolve. This will keep the objectives of the Finally, leadership transitions may influence the success or failure of initiative front and center and change projects. Turnover can slow change initiatives while the new give participants a sense of leaders are brought up to speed. In some cases, the original change momentum and accomplishment. champion disappears from the scene. For long-term change initiatives, For example, in Case Study 2, it is wise to build in a leadership succession plan. the “crisis” senior team meeting

15 Understanding the motors that drive change can help HR professionals and their organizations anticipate and react to unplanned changes. Leading Effective Change: A Primer for the HR Professional

CONCLUSION

Change happens—whether planned or as a result of unplanned external events. Most organizations today are managing multiple change initiatives, so leading change is now a prerequisite for HR professionals. Figure 7 reviews basic steps to follow to establish a reputation as an effective change leader.

Understanding the motors that drive change can help HR professionals and their organizations anticipate and react to unplanned changes. Understanding general principles of change can help HR focus and prioritize during a change initiative.

The bottom line is that organizational change is complex and requires constant vigilance to manage. The guidelines in this report outline specific actions that HR teams can advocate as part of any change process. By playing an active role in an organizational change, the HR professional can ensure that all systems are aligned to make the change initiative successful and to keep it connected to the long-term organizational strategy.

Figure 7: Pathway for Developing Change Leadership Capabilities

1 Understand how individuals respond to organizational change.

2 Study prescriptive change models to develop personal change leadership principles.

3 Follow guidelines for practice, or make a mindful choice to stray from guidelines.

4 Research techniques for implementing the guidelines.

17 With disciplined thinking and flexible implementation, change leaders can clarify and focus complex organizational change. A skillful HR team can increase perceptions of fairness, early employee engagement and trust—all of which will improve employees’ responses to change. Leading Effective Change: A Primer for the HR Professional

ENDNOTES

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19 Leading Effective Change: A Primer for the HR Professional

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20 Leading Effective Change: A Primer for the HR Professional

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21 Embracing change as an opportunity rather than a burden can help organizations grow and thrive.

22 Leading Effective Change: A Primer for the HR Professional