Change Management Work for You

7/30/2019 Change Management Work for You

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1. Making Change Work Graham Kittle Managing

Partner, Global Business Services IBM Insight Forum

09 Make change work for you

2. Agenda g 1. Future perspectives from CEOs

2. 2 Current climate driving us to be smarter smarter 3.

So how do we Make Change Work? g IBM Insight

Forum 09 Make change work for you

3. We spoke to 1,130 CEOs and conducted in-

depth analysis to determine the characteristics of the

Enterprise of the Future 33% 36% 31% Global 1,130

interviews 40 NATIONS 78% private sector 22%

public sector 32 DIFFERENT INDUSTRIES A/NZ 69

interviews % 70% private sector 19 OF

ORGANISATIONS HAVE MORE THAN 50,000

EMPLOYEES 30% public sector 30% % OF

ORGANISATIONS HAVE FEWER 22 THAN 1,000

EMPLOYEES Source: IBM Global CEO Study IBM

Insight Forum 09 Make change work for you

4. Analysis from the CEOs commentary has led

us to five core traits of the Enterprise of the Future Core

Traits of the Enterprise of the Future 1 2 3 4 5 Hungry

for Innovative Globally Disruptive Genuine, not change

beyond integrated by nature just customer generous


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imagination IBM Insight Forum 09 Make change work

for you

5. Although CEOs are more confident about

managing change, the gap between the capability and

the challenge ahead is growing The Change Gap*

Triples Gap 2006 2008 % 8 % CHANGE GAP* 22

CHANGE GAP* 13% 12% 6% 19% We have seen

more change in the 11% 22% 31% last ten years than in

the previous 90. 83% Ad J. Scheepbouwer, CEO, KPN

Telecom 20% 65% 61% 57% Change Needed Past

Change Success No/limited Change No/limited Success

Moderate Change Moderate Success Substantial

Change Successful S f l Change Needed Past Change

Change Needed Past Change Success Success

Source: IBM Global CEO Study 2008 * Difference or

gap between expected level of change needed and

past success in managing change IBM Insight Forum 09

Make change work for you

6. CEOs say the gap is widening because of the

accelerating pace of change The rate of change has

The The k t Th key to successfulf l increased

dramatically. transformation is changing our Customers

are demanding mind-set. For large companies, radical

change in product g p it is easy to be complacent

innovation. Our company will we have to change this.


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Our need to greatly increase its company culture must

have a capabilities to deal with these built-in built in

change mechanism. mechanism demands. Masao

Yamazaki, President and CEO, Dennis Jnsson, CEO,

Tetra Pak West Japan Railway Company My

organisation has not been Change in our organisation

is quick enough; change is hard. A not happening fast

enough few years ago we were a the gap is opening

up. national company, now we're a CEO in Australia

global company. CEO in USA IBM Insight Forum 09


7. Companies that delivered higher revenue p g

growth managed change more successfully

Underperformers** Outperformers** % 29 4% CHANGE

GAP* 19 % CHANGE GAP* 24% 5% 17% 13% 10%

CEOs of organisations with outperforming revenue

growth are 85% 17% 83% more confident about their

ability to 22% implement change 66% 54% Change

Needed Past Change Success No/limited Change

No/limited Success Moderate Change Moderate

Success Substantial Change Successful S f l Change

Needed Past Change Change Needed Past Change

Success Success ** Performance based on industry

comparisons within survey y p y * Diff Difference or

gap b t between expected l t d level of change needed

and past success i managing change l f h d d d t in i h


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sample of revenue CAGR 2003 to 2006 Source: IBM

Global CEO Study 2008 IBM Insight Forum 09 Make

change work for you

8. Agenda 1. Future perspectives from CEOs 2.

Current climate driving us to be smarter 3. So how do

we Make Change Work? IBM Insight Forum 09 Make

change work for you

9. Today we face a different kind of downturn

traditional responses will not suffice ad o a espo ses o

su ce Unprecedented constraints on Long and L d

access to credit and capital; Difficult Typical cost

unwinding of over-leverage management will Falling

demand increased price demand, NOT be enough

sensitivity as consumers and enterprises cut back Firms

must examine Disruptions in supply chains, working

capital & ki it l partner and customer investment -

arrangements identifying opportunities opport nities to

Transformative Restructuring of industries - restructure,

reduce, firms fail, sold off overnight and preserve capital

as well as streamline New regulatory regimes

operations Stress on global inter- dependencies IBM


10. Yet some broader forces are at work Our O

world has become ld h b Smaller & Pervasive


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connections and communications Flatter Fl tt Emerging

markets Open trade Systems-level complexity Riskier

Viral spread of information Widening g p between

information available, and g gap , information effectively

managed Interconnected Smarter Instrumented

Intelligent g IBM Insight Forum 09 Make change work

for you

11. In 2005 there were 1 3 billion RFID 1.3 tags

in circulation by 2010 there will be 33 billion. IBM


12. An estimated 2 billion people will be on the

Web by 2011 ... and a trillion connected objects

cars, j appliances, cameras, roadways, pipelines

comprising the "Internet of Things." IBM Insight Forum


13. Organisations must consider four critical

questions My infrastructure is Our resources Data is

exploding New business & inflexible and costly costly

are limited and it i silos d its in il process demands

demands I Need to Work I need to respond I Need I

Need Insight quickly Efficiency Smart How can we take

How do we drive How can we work How do we create

advantage of the greater efficiencies, smarter supported

an infrastructure wealth of compete more by flexible and


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that d i th t drives ddown information effectively, and

dynamic cost, is intelligent available in real respond

more quickly processes and secure, and is time from a

by taking action now modeled for the just as dynamic as

multitude of on energy, the new way people todays

business sources to make environment, and buy, live &

work? climate ? more intelligent sustainability? choices?

Smart Dynamic Green & New Beyond Intelligence Work

Infrastructure IBM Insight Forum 09 Make change work

for you

14. Enterprise data is projected to explode at

60% growth annually through 2010 Managers spend 2 h

M d hours a d searching f i f day hi for information ti

50% of what they find does not meet their needs

Information management Predictive capability New

Intelligence Engaging the value chain Business

optimisation B i ti i ti IBM Insight Forum 09 Make change

work for you

15. 70% of CEOs plan major business model

changes Gap between CEOs who expect change and

those who have the ability to handle change has

widened sharply nearly 3 times Agile business model

Connected customers Smart Work Dynamic business

p processes IBM Insight Forum 09 Make change work

for you


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16. While 83% of CEOs expect substantial

change within their enterprises, only 61% feel confident

in their ability to manage it This change gap

challenges CIOs to transform highly distributed,

fragmented, labor-intensive infrastructures and assets

Reduce costs Dynamic Improve Infrastructure service i

Manage risk Manage IBM Insight Forum 09 Make

change work for you

17. 80% of CEOs view sustainability as i f CEO i t

i bilit impacting b d value ti brand l Information

technology energy use will double in the next 2 to 4

years Finding the value in green Green & Smart

systems Beyond Societal shifts and corporate and

social responsibility IBM Insight Forum 09 Make change

work for you

18. An analysis of early winners points to

strategies for success Top performers during 2008

f ..exhibited three strategies Average Stock Price

Change 2008 30% 24% 1. Focus on Value 52 Week %

Change 20% 10% C 0 -10% 2. Exploit Opportunities

+64% -20% -30% 3. Act with Speed -40% -40% Overall

Top Performers S&P 500 (n=61) Criteria for Top

Performers: Market Cap >$1.4B 52 week stock price

change >5 0% k t k i h >5.0% Source: Google Finance,

IBM S&C analysis, Performance period is 12/27/07 to


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12/18/08 IBM Insight Forum 09 Make change work for

you

19. Organisations need to do three things Exploit

Focus on Value Act with Speed Opportunities Do more

with less Capture share Manage change Cash/capital

focus Disrupt weak competitors Clearly communicate

simple Flexibility Acquisitions goals Seek and leverage

Focus on the core Build future capabilities experience

Businesses Protect & acquire talent Initiatives Develop

required assets Leadership Get the information to act

Re-align relationships Change your industry Set the

agenda Financial solidity of Bold moves suppliers,

partners and Position globally Risk & Transparency

customers Business performance Revisit/renegotiate

management & analytics Risk management IBM Insight


20. Agenda 1. 1 Future perspectives from CEOs

2. Current climate driving us to be smarter 3. So how

do we Make Change Work? IBM Insight Forum 09


21. Making Change Work Closing th Ch Cl i the

Change Gap G IBM Insight Forum 09 Make change

work for you


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22. Sample and demographics - A/NZ

participation The Making Change Work study

investigated real-life experiences of practitioners

worldwide from organizations of all sizes, across

industries Making Change Work Study 2008

Demographics Methodology Job roles Organizational

size OTHERS UP TO 100 6% MORE THAN 7%

SUBJECT MATTER EXPERT/REVIEWER 100,000 100

000 Key attributes of the sample 7% PROJECT 14%

MANAGER 100-1,000 PROJECT TEAM MEMBER 38%

15% - 1,532 experienced 7% project practitioners

CHANGE 10,000- MANAGER 100,000 100 000 - 15

countries worldwide 17% 32% 1,000-10,000 32%

INITIATOR/PROJECT - 21 different industries

SPONSOR 25% - Companies of all sizes Geographic

regions Breakdown by industry y y OTHERS 7%COMMUNICATIONS AMERICAS 29% 17% Methods

EUROPE PUBLIC 34% 21% DISTRIBUTION - Face-to-

face interviews 13% A/NZ participation

PROFESSIONAL - Survey SERVICES 12% 8%

FINANCIAL ASIA PACIFIC SERVICES (n=183) 37%

INDUSTRIAL 16% 18% Source: IBM Global Making

Change Work Study, 2008, (n = 1,532) IBM Insight


23. On average, only 41% of projects were

considered successful. But the top 20% th Change M t t


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20%the Ch Mastersreported an 80% success rate. t

d t Average Project Success Rates Change Masters vs.

Change Novices PROJECTS THAT EITHER MISSED

ALL GOALS OR WERE STOPPED Share of successful

projects 15% 80% A/NZ PROJECTS THAT FULLY 17%

MET THEIR OBJECTIVES 41% PROJECTS THAT DID

NOT A/NZ Average = 35% 41% 95 % SUCCESS RATE

INCREASE MEET EITHER TIME, BUDGET OR

QUALITY GOALS 8% A/NZ 44% 48% Only 11%

BOTTOM 20% AVERAGE TOP 20% Change CHANGE

CHANGE Masters in NOVICES MASTERS 44% of all

projects failed to meet either time, A/NZ budget or

quality goals, while 15 % either stopped The top* 20%

of organizations reported p g p or failed to meet all

objectives an average project success rate of 80%,

reflecting a 95% increase above the Source: IBM GlobalMaking Change Work Study, 2008, (n = 1,532) average

share of successful projects Success rate increase is

the relative difference * Top and bottom organizations

of sample as defined by project success rates IBM


24. The critical barriers to change involve people

- what is generally considered the soft stuff is hard

Major Change Challenges Soft Factors Hard Factors

Changing mindsets and attitudes 58% Key barriers are

changing Corporate culture 49% mindsets & attitudes,


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Complexity is underestimated corporate culture, and

35% A/NZ underestimated complexity Shortage of

resources 33% 43% Lack of commitment of higher

management 32% These soft factors are rated Lack of

change know how 20% more important than resource

A/NZ Lack of transparency because of missing or 18%

34% constraints, illustrating they wrong information are

inherently hard to manage 16% Lack of motivation of

involved employees and measure even with Change of

process 15% sufficient resources Change of IT systems

g y 12% Technology barriers 8% Leaders are

unrealistic about how change is going to happen. They

move ahead anyway and get into problems. Source:

IBM Global Making Change Work Study, 2008, (n =

1,532) Change Manager, Energy and Utilities

company IBM Insight Forum 09 Make change work foryou

25. Top management sponsorship, employee

engagement and honest and p g p p, p y g g timely

communication are critical for successful change

Factors for Successful Change Soft Factors Hard

Factors Top management sponsorship 92% Change

Masters have realized Employee involvement 72% that

behavioral and cultural Honest and timely

communication 70% change are crucial to project

Corporate culture that motivates and 65% success and


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are considerably promotes change 55% tougher to

address than the Change agents (pioneers of change)

so-called hard factors, such Change supported by

culture 48% as structure, performance Efficient training

programs 38% measures and incentives Adjustment of

performance measures 36% Efficient organization

structure 33% Practitioners place a key Monetary and

non-monetary incentives 19% responsibility for

successful change right at top managements dt door If

you dont have leadership support, youre doomed

Project Manager, U.S., Media and Entertainment

Source: IBM Global Making Change Work Study, 2008,

(n = 1,532) IBM Insight Forum 09 Make change work for

you

26. Making Change Work is covered in four

broad categories IBM Insight Forum 09 Make change

work for you

27. REAL INSIGHTS REAL ACTIONS A realistic

awareness of the change challenge and project success

are strongly correlated Challenge and Complexity

Awareness Lack of early insight leads to a Percentage

of successful p j g projects high risk that complexity will

be underestimated or even 52% overlooked 43% 35%

In particular, the complexity of particular behavioral and

cultural change is 25% often underestimated in the early


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project planning and scoping stages YES TENDING

TENDING NO TOWARD YES TOWARD NO Project

success rates drop as Within your organization, do you

think there is sufficient awareness of organizations

awareness levels the challenges associated with

implementing and sustaining change? change?

decrease Source: IBM Global Making Change Work

Study, 2008, (n = 1,532) IBM Insight Forum 09 Make

change work for you

28. SOLID METHODS SOLID BENEFITS Formal

change management methods F l h t th d improve

project success when applied consistently Having a

structured approach to change management alone is

insufficient if not applied consistently. When used

regularly, the likelihood of project success increases to

52%, compared to less than 40% in other instances.

Consistent application of solid methods vs less

consistent or none at all Formal change management

approach Informal change management approaches

There are specific and formal change management 52%

procedures which are always followed Although there

are specific and formal change Alth h th ifi df l h 39%

management procedures, they are often not followed I

know someone I can ask 38% Actions are improvised

according to the situation 36% Following a good solid

methodology that integrates with the project really helps


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to make a quicker start Source: IBM Global Making

Change Work Study, 2008, (n = 1,532) on the change

journey g j y Change Management, Australia,

Government IBM Insight Forum 09 Make change work

for you

29. The Methods Gap: The difference between

the perceived level of SOLID METHODS SOLID

BENEFITS formal methods required and the actual level

being applied Despite almost 90% of practitioners

recognizing th value i using f D it l t f titi i i the l in i

formal changel h management methods, in practice the

consistent use of a systematic approach is low There is

a wide gap between what is thought to be required and

what is actually being applied. By employing formal

change management methods and using them more

consistently, organizations can close this methods gap

and increase the chances of project success The M th d

G Th Methods Gap Percent answering yes 87% Need

Formal 63 % Methods METHODS Use Formal GAP

Methods 24% IBM Insight Forum 09 Make change work

for you

30. BETTER SKILLS BETTER CHANGE Change

Managers improve the rate of project success Deploying

experienced and skilled change managers on projects

helps to increase the chances of project success The


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32. Mastering Change: Greater focus on the four

facets of the Change Diamond drives project success

By concentrating and acting on all four facets of the

Change Diamond, Change Masters achieve project

success rates of nearly twice the average Change

Masters: Greater focus leads to project success 80%

The Change Masters g consistently utilized the success

factors markedly 95 %SUCCESS RATE INCREASE

41% better than the average organization and were g

able to report much higher 8% success rates. Bottom

20% Average Top 20% Change Novices Change

Masters 46% 61% 79% Real Insights - Percentage of

organizations The Change Novices in having a clear

understanding of the change contrast consistently

challenge 12% 24% 37% under-utilized the four Solid

Methods - Percentage of organizations using formalmethods consistently facets driving change 73% 79%

84% Better Skills - Percentage of organizations using

success and had to report change managers for change

projects an 8% success rate. Right Investment -

Percentage of project budget 10% 11% 13% invested in

change management Source: IBM Global Making

Change Work Study, 2008 IBM Insight Forum 09 Make

change work for you

33. The Change Diamond - Greater than the sum

of its parts Although action on individual facets brings


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benefit, only in combination do they result in an

outstanding increase in project success success. The

individual vs. joint effect of the four facets 19 % 80%

Project success rate of Increase in project success

Increase due individual facets due to synergy effect of

all to synergy four facets together 52% 52% Sum of the

four individual facets 43% 43% 41% Average project

success When they combined the rate facets, Change

Masters attained an 80% project % success rate, a

marked Real Insights: Solid Methods: Better Skills:

Right Investment: Change increase over the sum of

Champions: Awareness of Consistent use of

Professional >11% Change Combining All their

individual effects Change Challenge Formal Methods

Change Managers Budget Four Facets F F t Source:

IBM Global Making Change Work Study, 2008, (n =1,532) IBM Insight Forum 09 Make change work for you

34. Lessons from the Change Masters Filling

the diamond with life Consider money spent on change

Hook into the history management as an investment

Provide change leaders with access to Understand

which types of focused historical data, people surveys,

culture spending can offer the best return, in terms

assessments and war stories, and of greater project

success and use these people involved in previous


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projects, if investments to minimize the risk of troubled

possible. projects. Get the right skills everywhere

Enable rapid development of internal Drive consistency

skills to keep pace with changes in the Develop and

promote a standard change external environment.

Consider the method that can be applied establishment

of a sustainable change consistently. Communicate this

widely management capability within the and monitor its

adoption. organization. IBM Insight Forum 09 Make

change work for you

35. Is Your Organisation a Change Master or a

Change Novice ? Change Novice Change Master REAL

INSIGHTS, REAL ACTIONS No reflection or

understanding of the reasons past Good anecdotal

understanding of why projects have Structured formal

post implementation projects have failed or succeeded

failed or succeeded in the past assessments of change

initiatives and consistent No focus or emphasis placed

on the people or Adhoc attention is given to the people

& cultural integration of lessons learned into planning of

cultural aspects of change aspects of change with a

strong focus on the process new change initiatives

Change is viewed as a succession of individual and

technology Equal emphasis is given to the people,

cultural, separate projects There is some alignment

between the objectives of process and technological


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aspects of change change projects underway h j t d

Ch Change i viewed as a l is i d long-term

transformation t t f ti SOLID METHODS, SOLID

BENEFITS in support of strategy No change method is

available or used on projects Consistent, tried &

accepted change method that is Consistent, tried &

accepted change method that No approved business

case or identification of sometimes applied is always

applied on projects project benefits Approved business

case and adhoc measurement of Approved business

case and formal tracking of No formal change

management workstreams are benefits project benefits

(throughout project) established on significant projects

Formal change management workstream established

Formal change management workstream on all on

some significant projects significant projects BETTERSKILLS, BETTER CHANGE Dont believe theres a

need to invest in developing Skills are developed on

individual projects on an ad hoc Investment in the

development of a change change management skills

within the org for use basis are are not necessarily used

on future projects capability that is leveraged across the

organisation across projects j t S Some evidence of T

M id f Top Management leadership of t l d hi f A ti

Active, involved and visible T M i l d d i ibl Top

Management t Passive, hands-off and invisible Top


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Management project leadership of projects leadership of

projects Formal mechanisms (ie processes &

technologies) are Formal mechanisms (ie processes &

technologies) There is little to no involvement or

feedback sought used on an ad hoc basis to facilitate

employee are always used to encourage employee from

people affected by the change involvement & feedback

involvement & input RIGHT INVESTMENT, RIGHT

IMPACT , There is no investment in well trained

Change Change Management responsibility is usually

Money spent on Change Management Managers

assigned to a Project role is viewed as an investment

Change management expenditure is seen as a

Change mgmt budgets are often set as a % of the Well

trained Change Managers are utilised on cost and is not

separately budgeted for in projects total project budget,rather than relative to project projects complexity & risk

Change management budgets are set relative to a

project s projects complexity & risk IBM Insight Forum


36. IBMs Better Change method supports the

four facets of the Change Diamond Focus on Strategic

Execution Program Leadership and Governance

Program Organization Strategy Design and

Management Value Realization Stakeholder Culture

Engagement and Transformation Communications Skills


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& Knowledge Achieved by Focus on People Change

IBM Insight Forum 09 Make change work for you

37. Thank you Questions? IBM Insight Forum 09


38. REAL INSIGHTS REAL ACTIONS

However, b i merely aware of change complexity i H

being l f h l it is insufficient Does Awareness Lead to

Action? Within your organization, do you think there is

sufficient awareness of the challenges associated with

implementing change? TENDING TOWARD NO

TENDING TOWARD YES 26% 33% Yes Tending

toward yes NO Tending toward no 13% No Does this

awareness of the challenges of implementing change

normally lead to the YES introduction of specific

measures to 18% 8% support the change? 30% 55%

13% 2% Change Masters take advantage of awareness

and insights to better guide actions Source: IBM Global

Making Change Work Study, 2008, (n = 1,532) IBM


39. SOLID METHODS SOLID BENEFITS

However, change management methods are H h t th d

usually informal, ad hoc or improvised Use of formal

methods in Change Management vs Project

Management Formal methods used consistently


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Informal approach (formal methods not used

consistently, ad-hoc or improvised) 24% 76% Change

Management Project Management 51% 49% Source:

IBM Global Making Change Work Study, 2008, (n =

1,532) IBM Insight Forum 09 Make change work for you

40. Each Better Change enabler supports a facet

of the Change Diamond Value Realization identifies

benefits, tracks Stakeholder Engagement and

Communication benefits and realizes benefits

spanning the project identifies, classifies, aligns,

engages, and effectively lifecycle as costs,

requirements, direction and communicates to

stakeholders benefits all change to a greater or lesser

extent as Culture Transformation aligns an

organizations the project progresses culture to support

the desired end state Program Strategy & Management

sets the change strategy and manages the

implementation Program Leadership & Governance

builds and Better Change - assembles discrete activities

as sustains support among executive leaders and

needed for the particular change and provides

stakeholders and provides guidance and governance

overarching enablers and modules that skilled

mechanisms t promote program success h i to t

practitioners, creatively using t h l titi ti l i technology,


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craft t fit ft to Skills & Knowledge - provides a framework

to assess the circumstances and implement required

skills and knowledge Organization Design aligns the

organization with new or existing business models and

strategies to maximize effectiveness IBM Insight Forum


Documents

Change Management Work for You