Lean ChangeManagement2nd Edition

A Feedback-driven Approach toChange

Jason Little

Lean ChangeManagement 2ndEditionA Feedback-driven Approach toChange

Jason Little

This book is for sale athttp://leanpub.com/leanchangemanagement

This version was published on 2013-10-14

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Contents

1 Preface . . . . . . . . . . . . . . . . . . . . 11.1 Lean Change Management in 30 Seconds 11.2 Acknowledgements . . . . . . . . . . . 3

2 Introducing Lean Change Management . . 42.1 Where LeanChangeManagement Comes

From . . . . . . . . . . . . . . . . . . . 42.2 Why Lean Change Management? . . . 112.3 The Lean Change Management Cycle . 162.4 Chapter 1 Summary . . . . . . . . . . . 242.5 Complete 2nd Edition . . . . . . . . . . 26

1 Preface1.1 Lean Change

Management in 30Seconds

Lean Change Management is a feedback-driven ap-proach to change management and applies CustomerDevelopment and Lean Startup practices to changemanagement. Many industry studies come to the con-clusion that change initiatives fail because compa-nies don’t use structured change processes. We thinkchange fails because organizations push change instructured, linear ways that are typically executed bya change team that is isolated from the people ulti-mately being asked to change. Change is complex andunpredictable. Flexible, feedback-driven techniquesachieve change better than plan-driven programs. Wehave developed a technique for generating Insights,cultivating Options for change, then preparing, in-troducing and evaluating Minimum Viable Changes.This lets you advance change incrementally while

Preface 2

learning about the organizational system, allowingyou to improve your practice and your outcomesbased on experience. We describe this practice, andillustrate how existing change management modelscan be integrated with it. The result is a book that youcan use to change the way you change, and the wayyou facilitate change in your own organizations.

Video OverviewCheck out a 4-minute video introducingLean Change Management¹!

Lean Change Man-agement BlogFind more information aboutLean Change Managementwww.leanchange.org²!

¹http://www.leanchange.org/the-book?utm_source=LeanChangeBook&utm_medium=Print&utm_campaign=2ndEditionTeaser

²http://www.leanchange.org/the-book?utm_source=LeanChangeBook&utm_medium=Print&utm_campaign=2ndEditionTeaser

Preface 3

1.2 Acknowledgements

Our approach to Lean Change Management is stillevolving. It was initially based on our work withJeff Anderson and his LEAN Service Offering teamat Deloitte, but has been transformed in the lightof our ongoing experience. Everyone listed in theCredits section of this book played a role in thedevelopment of our ideas. The content of the bookitself was put together by myself and the team ofAgile Coaches that I worked with in 2012 and 2013:Andrew Annett, Bernadette Dario, Ardita Karaj andBilal Iqbal. We’ve been blogging and writing aboutour experiences since May 2012.

As I learned more and connected with people in thetraditional change management and organizationaldevelopment communities, I found others who havebeen experimenting with feedback-driven approachesto change.

The references section at the end of the book containslinks and information from many change practition-ers who have tried alternate methods to bringingchange into their organizations and with their clients.

2 Introducing LeanChangeManagement

2.1 Where Lean ChangeManagement ComesFrom

Its Roots in Lean Startup

Lean Change Management is a flexible, feedback-driven approach to helping organizations change. Itwas inspired by the Lean Startup movement¹ thattook the technology world by storm in 2012, after thepublication of Eric Ries’ book, The Lean Startup: HowToday’s Entrepreneurs Use Continuous Innovation toCreate Radically Successful Businesses.

In that book, Ries pointed to a problem with thestartup industry that everybody knew about. He was

¹http://www.theleanstartup.com

Introducing Lean Change Management 5

sick and tired of the industry’s well-earned repu-tation for spectacular failure, with people investingheavily to build products nobody wanted. He knewfrom personal experience how wasteful and painfulthis process was. Surely there had to be cheaper andfaster ways of determining if people really wanteda product or service. Instead of investing millions ofdollars in “stealth mode” for years before launching acomprehensive product, Ries suggested that startupsrun small “experiments” with customers in the mar-ketplace instead, building the most minimal productthey could use to measure and test their riskiest as-sumptions (Minimum Viable Products - “MVPs”). The“validated learning” that resulted from those experi-ments could be used to detect and improve product-market fit.

Ries based his work in part on the Customer Devel-opment philosophies of Steven Blank, described in hisbook The Four Steps to the Epiphany. Blank challengednew product developers to “get out of the building”,to find real customers for their core value offering,and then to further develop the product in dialoguewith customers, while remaining driven by a coherentproduct vision. This appealed to Ries. By learningfrom fast, cheap market failures early in development,startups could avoid the catastrophic, late, expensivefailures of the past. Ries observed that this was a

Introducing Lean Change Management 6

“leaner” way to work, and he was also inspired by thevalues of waste-reduction and customer-value fromLean with a capital “L”; the body of organizationalknowledge emerging from studies of the Toyota Pro-duction System. From these roots, Lean Startup wasborn.

Lean Startup took the tech world by storm, and Agilecoaches were involved from the start. Lean Startupprinciples fit naturally with Lean and Agile softwaredevelopment practices, so we were a willing audience.Also, many of us work with both startups and estab-lished companies, so we were immediately exposedto this conversation as it swept startup industry. Itwasn’t long before some of us began considering howthese concepts from the startup world might apply inmature companies, especially in our work of helpingenterprise teams adopt Agile practices.

Lean Startup for Change

Jeff Anderson, creator and leader of theDeloitte LEANService Offering, was one of the first people to developa process for doing this, which he initially called“Lean Startup for Change” or “LS4Change”. Andersonlater evolved his model, and renamed it Lean ChangeManagement. Angel Del Maroto also applied LeanStartup methods for Agile adoption. His presentation

Introducing Lean Change Management 7

at Lean Software 2012 in Estonia was a key momentin the early application of Lean Startup principles toAgile transformation. While there have undoubtedlybeen more pioneers in this field than we know of,these are the forerunners of the specific Lean ChangeManagement processes we built our own practiceupon.

I myself began working with a team practicing LeanChange Management in May 2012, primarily in thecontext of helping the IT department in a large publicservice organization “go Agile”. We were privilegedto work with Jeff Anderson and his team from De-loitte at the start of our project, and we benefittedgreatly from various tools, models and techniqueshe made available to us. We then began adaptingthe framework for our specific context, adjusting andtransforming it to help the change effort ultimatelysucceed. Lean Change Management as we describe itin this book is the result of this adaptation. I believeorchestrating change is an art as well as a science andas a result our approach has evolved to include moretools and models from psychology, neuroscience andprofessional coaching.

Creative adaptation is always needed when you arehelping an organization change. Organizations arecomplex, and change agents need to exercise judge-ment in how they work with stakeholders. Tools de-

Introducing Lean Change Management 8

veloped by experts are valuable, but in the end allpractices need to be adapted to fit local needs. Thisobservation applies to our own book as well. We arein no way suggesting that our version of Lean ChangeManagement is definitive. What worked in our situ-ation may not work for you. Our goal in this bookis simply to stimulate discussion about Lean ChangeManagement; especially about how Agile coaches cancombine Agile, Lean Startup and traditional changemanagement knowledge to boost the odds of sustain-able transformation when “going Agile” is used as thetrigger for change.

Agile as the Trigger for Change

The above point needs explanation. Lean and Agilecoaches and consultants are often asked to help a team“adopt Agile”. However, Agile is not something withcrisp boundaries that can be brought in and installedlike a machine. Organizations are complex, inter-connected systems. Small initial changes can havehuge unintended (or intended!) consequences. Fur-thermore, every change you introduce to an organiza-tion creates a new reality you have to deal with. Thatnew reality may not be limited to helping the team“go Agile”. Once you start changing previously stablebehaviours in an organization, you will encounter

Introducing Lean Change Management 9

reactions and obstacles that extend well beyond theboundaries of the team you are coaching. That be-comes the reality you have to manage if you wantto help the team really succeed in its Agile trans-formation, and it is going to be different in everyorganization you engage.

I believe many Agile transformations fail becausepeople do not appreciate this. Focusing narrowly onan Agile practice, like Kanban or Scrum, preventsyou from noticing peoples’ reactions to the disruptioncaused by the change, and other connected reactionsdeveloping in the broader organization. These chainreactions can make or break the Agile transformation.That is why in my own work, I have actually learnedto shift my focus from managing the change itselfto managing the response to change. Agile adoptionis just the trigger for a larger organizational changejourney that needs facilitation. That journey is goingto be different in every case, because every organiza-tion responds differently to the trigger. My job as aLean Change Management agent is to help make thatwhole journey happen as constructively as possible.If I just focus narrowly on teaching new practices todevelopers, I won’t engage the human and organiza-tional consequences of change, and the initiative ismore likely to fail as a result.

Lean Change Management is thus not a process of

Introducing Lean Change Management 10

“going Lean” (e.g. getting a team to practice Kan-ban or Value Stream Mapping more meaningfully).It is an approach to change that uses Lean Startupand Customer Development ideas for making smallchanges, finding out how they impact people, andadjusting our change facilitation work based on feed-back we obtain throughout the process. The LeanChange Management tools and practices we presentin this book enable that process. We hope you canmake them ingredients in your own success, as youdevelop your own evolving version of Lean ChangeManagement practice.

Agile Change or All Change?

Lean Change Management evolved through experi-ences with Agile transformations but its application isdefinitely not limited to such changes. As stated ear-lier, I believe Agile Transformation is simply a triggerfor organizational change and as such, Lean ChangeManagement can be applied to any organizationalchange.

I say that because whether it’s Agile change or anyother organizational change effort, people will reactin an unpredictable way when they’re asked to dosomething differently and Lean Change Managementprovides a better approach for orchestrating change

Introducing Lean Change Management 11

within organizations.

2.2 Why Lean ChangeManagement?

Dowe really need another changemanagementmethod-ology? There are so many existing models to choosefrom. However, we think there is a need for LeanChange Management. My objective with this bookis to change how people think about and approachchange, not to create yet another framework ormethod.

I believe that the incremental, learning-driven prac-tice of Lean Change Management is superior to exist-ing change management frameworks. Existing frame-works try to reduce change management to a pre-dictable, repeatable process, which we think is fun-damentally impossible. You can’t control change, forseveral reasons:

• You can’t control how peoplewill react to change.The best you can do is to learn about differentways people react, and prepare yourself to re-spond to what happens.

• Organizations are complex, interconnected sys-tems. When you start disrupting routines and

Introducing Lean Change Management 12

introducing new behaviours in such systems,you set off chain reactions you cannot predictin advance.

Traditional management practices based on planningand controlling do not really apply to this kind of suchdynamic, unpredictable work. Lean Startup practices,on the other hand, are specifically designed for learn-ing quickly in uncertain circumstances. By takingactions and then constantly reading feedback fromthe system, Lean Change Management primes youto respond to patterns as they emerge. The iterative,learning-driven emphasis of Lean Change Manage-ment improves your ability to “dancewith the system”as it undergoes change. It is much better suited formanaging uncertain reactions than older, plan-and-monitor approaches to managing change initiatives.

The best available evidence supports the need for anew approach. Traditional change management has alousy track record! Studies from 1995 onward indicatethat only around 30% of organizational change initia-tives succeed. Why this low rate? In our view, all thetraditional answers to this question are wrong. Com-mentators often blame the low success rate on changeagents’ failure to use systematic change managementmethodologies, on “change resistance”, and on humanunpredictability. It is as if they think change manage-

Introducing Lean Change Management 13

ment would be easy, if not for all those people screw-ing everything up along the way. But the whole pointof change management is to help people change theircollective behaviour! So if people are unpredictable,we need a change management framework that isdesigned around that, instead of trying to force peopleto fit a linear model of change.

Furthermore, from a Lean Change Management per-spective, “change resistance” is actually a signal ofimportant information that a change agent can learnfrom. You can only help the system change if youengage it. So when you make plans and expectationsabout how easy change may be, and then encounter“change resistance”, that is information about someaspect of the system you did not know about, orappreciate enough. You need to probe that resistanceto obtain new insights about the organization you aretrying to help change, and then fold those insights intoyour next change facilitation activities. Lean ChangeManagement is flexible enough to allow this learningto happen. Earlier change management frameworksare not.

Introducing Lean Change Management 14

Change Management Has a LousyTrack Record

Failure rates in change management have been exten-sively studied. Several studies reviewed in an Onirikcase study of change initiative outcomes² all indicatea success for change initiatives of roughly 30% (so a70% failure rate).

• 1995, Kotter: 30%• 1998, Turner and Crawford: 33%• 2005, Procsi: 29%• 2008, McKinsey: 30%• 2011, Standish Group: 34%

Now, take these results with a grain of salt. ChangeManagement consulting firms use these stats to selltheir services and models claiming all the other mod-els fail . . . but their model doesn’t. Here’s a curve ballfor you. Is it even valuable to measure the success andfail rate of change initiatives? More-so, is it possible?Can something as dynamic as organizational change

²http://www.onirik.com.au/media/Whitepapers/Cracking%20the%20Change%20Code%20White%20Paper.pdf

Introducing Lean Change Management 15

be boiled down to a black and white ‘success or fail-ure’ answer? I’ve been around the block long enoughto see the change project charter updated after theproject to match the actual ROI with what happenedin order to check the box in the ‘successful change’performance scorecard.

Lean ChangeManagement differs from earlier changemanagement methodologies in another way too. Itis extremely focused on change facilitation “on theground”, within peoples’ day to day work. Traditionalchange management models are more focused onpreparing for a change, and not on the implementingit. This reflects their origins in part. Many tradi-tional frameworks were developed by academics andstrategic consultants to C-suite executives, insteadof workers and coaches at the implementation level.There is a great deal of quality material from tradi-tional change management that we can adopt in ourLean Change Management practice, but Lean ChangeManagement helps us bring that material down toearth. It is a coaches’-eye-view of change, not a seniormanagement view. It helps you actually do things tomove the change effort forwards, among the peopledoing the productive work of the organization.

So Lean Change Management has something veryvaluable to offer the change management world. Italso offers unique value to Lean and Agile coaches. It

Introducing Lean Change Management 16

is a way to enable change that fits in well with otherAgile processes, regardless of the specific methodol-ogy you favour.

There are different camps in the Agile community.Some say Kanban is better, some say Scrum is. Somesay you can’t be successful with Agile unless youchange your organization’s culture and mindset. Thisbookwill not debate themerits of any of those stances.Whatever your specific goals Agile goals are, LeanChange Management helps you get there. It is anopen-ended, discovery-driven process for engagingthe specific team or organization you serve. It pro-vides a frame of reference for integrating Agile withtraditional change management ideas. So whetheryour goal is to help a team master Kanban or Scrum,or you want to create an “Agile culture”, Lean ChangeManagement can help you get results.

2.3 The Lean ChangeManagement Cycle

This book is organized following what we call theLeanChangeManagement Cycle. The cycle is a cleaned-up description of our overall workflow. It involvesthree key steps, one of which contains its own three-step sub-cycle. Don’t worry, this isn’t as compli-

Introducing Lean Change Management 17

cated as it sounds. In a nutshell, the process beginswith Insights about the system we want to change,from which we derive Options for action. We pickan Option to launch experimentally, called a “Mini-mum Viable Change” or “MVC”. We Prepare for thatchange, Introduce it, and Review the results (this isthe three-step sub-cycle). The MVC Review generatesnew Insights, and the cycle continues. We discuss thecycle in detail in Chapter 3, but summarize it brieflybelow.

Lean Change Management Cycle

Introducing Lean Change Management 18

Check out the VideoIf you prefer, check out the 4 minutevideo introduction³ of Lean ChangeManagement. It’ll give you a high-leveloverview, then come back and start atChapter 2!

Insights:

• Generate insights from a variety of Agile meth-ods, like retrospectives, or from a classic changemanagement instrument such as a Prosci AD-KAR®⁴ assessment. ADKAR® is a core compo-nent of a larger change management method-ology created by Prosci which we review inChapter 2. However, using only the ADKAR®component of the model can still help you gen-erate Insights, as we demonstrate in Chapter 3.

• As you generate Insights, cluster them to lookfor patterns. Those will feed your list of Op-tions.

• Keep in mind you’ll likely generate tons of data.Filter this using use any technique that fits yoursituation.

³http://www.leanchange.org/the-book?utm_source=LeanChangeBook&utm_medium=Print&utm_campaign=2ndEditionTeaser

⁴http://www.change-management.com

Introducing Lean Change Management 19

• It’s important to consider insights frommultipleperspectives. This is best done by:

• Involving change stakeholders ahead of time,during feedback events like retrospectives, or;

• Scheduling and conducting explicit Insightmeet-ings with change stakeholders.

Understand the SystemInsights help you clarify what’s goingon at multiple levels in the organization.Equally importantly, involving changeparticipants in the Insight generationprocess helps you build trust. Peoplewill know you’re trying to make thingsbetter for them when you pay attentionto what they say, and base your work onthat.

Options:

• Insights must be transformed into Options fortaking action. There’s a value/cost trade-offdiscussion that happens here, e.g.:

• Options that are low value and high cost can betaken off the table right away.

Introducing Lean Change Management 20

• Options that are low cost, and high value arewhere we want to focus.

In the context of Lean Change Management, “cost” isa measure of the difficulty of implementing a change.A high-cost Option might be an action that requiresthe co-operation of people beyond our sphere of influ-ence, or one that requires participation from a fairlylarge number of people. These Options will take moretime and effort to implement, and carry a higher riskof failure than smaller, more local Options. An exam-ple of this could be a change that requires disruptionto multiple departments with an organization suchas implementing a new budgeting model for Agileprojects. In larger organizations the blast radius ofsuch a change can be quite wide.

Visualizing Options can help you compare their costand value. We put up sticky notes on a 2 x 2 grid,using the horizontal axis for cost, and the vertical axisfor value. This helps us visualize low-hanging fruit vs.big bang changes, and shows us the costly, low-valueOptions we can take off the table right away. Optionsthat seem to offer high value at low costs become ourMinimum Viable Changes (MVC).

Introducing Lean Change Management 21

Minimum Viable Change (MVC)

• A minimum viable change is a change youbelieve is small enough to be successful, andoffers high value relative to the disruption itwill cause in the organization.

• The process of selecting an Option from amongyour Insight(s) will have convinced you thatthis MVC is the right change to introduce rightnow. At this point you move into the MVC sub-cycle of Lean Change Management.

What’s “Minimal” ToYou…might not be for someone else. Aimingfor MVCs helps you get into a mindsetof trying to makemicro-changes insteadof big-bang changes, but you can neverknow for sure how disruptive a changewill be until you try it.

Introducing Lean Change Management 22

MVC Sub-Cycle (Prepare, Introduce,Review):

Prepare: In this step you can use any number of toolslike Kotter’s 8-Step change model⁵, a Change Canvas,an Lean A3 report, or a Lean Kata. We review thesetools and concepts in Chapters 2 and 3.

Preparing for the change is sort of like feature decom-position in software. You want to break the changedown into chunks, understandwhowill be affected bythe change, who needs to support it, where obstaclesmight come from, and a bunch of other things basedon which preparation approach you’ve chosen (A3,Change Canvas, etc.). As you figure out how youwantto implement the MVC, you will also clarify it. You’llspell out what your understanding of the current stateis, and what future state you expect, after the changehas been Introduced.

*Introduce:** This step occurs when you are activelyworking on the change: telling people about it, mod-elling new behaviours, getting them to experimentwith new tools and routines, or what have you. Somechanges will have dependancies and involve multipleactions. This step is the “Work In Progress” of LeanChange Management, so you don’t want to take on

⁵http://www.kotterinternational.com

Introducing Lean Change Management 23

too much at once.

Review: During the “Prepare” step, you formulateda hypothesis about how you would go from currentto target state. In the Review step, you assess yourresults. Are the benefits you achieved the ones youthought you’d get? We like to flag changes with green(it worked!), yellow (um, sorta worked) and red (ohman we were way off) so we can visually see howwell we are doing.

I don’t believe you can structure change efforts intopass/fail results. You also cannot quantify every aspectof it. Human behaviour and team dynamics involveall kinds of tacit, unspoken factors, as well as diffusefactors like the overall mood of the team, or a growingsense of trust in the change program. You often needto rely on your intuitions about these things whenReviewing your MVC.

The results of an MVC will either confirm somethingyou hypothesized, or reveal something new or puz-zling. Either way, it will stimulate new Insights, andthe Lean Change Management Cycle repeats itself.

That, in essence, is how we work.

Introducing Lean Change Management 24

A Quick Note about Measurements

Ah, measurements. Everything must be measurableright? I’m sure some folks would debate me on this,however as I hinted at above, I don’t believe every-thing can (or should) be measured in objective terms.The Lean Change Management Cycle is feedback-driven, so in a sense you are always “measuring” orevaluating the response to change, but that evaluationneeds to include your hunches and intuitions. Wedo use measurement instruments of various kindsin our Lean Change Management practice. However,for several reasons, we tend to use our measurementtools as diagnostics, not as overall evaluations of thesuccess of the change effort. Since the goal of thisbook is to lay out the actual methods we use, wewon’t debate the merits of various quantitative andqualitative measurement methodologies here. We willshare the actual practices that have worked for us.

2.4 Chapter 1 Summary

Organizations are complex adaptive systems, and theyreact in unpredictable ways to change. Traditionalchange management methodologies have a lousy suc-cess rate, and the creators of those methodologiesoften insist that if companies used a more structured

Introducing Lean Change Management 25

and planned approach to change, they would getbetter results. But plan-driven management is noteffective for managing a dynamic process involvinghigh uncertainty. We think that overly prescriptivechange methodologies may very well be a cause ofthe high failure rate for change initiatives, instead ofbeing the remedy for them.

However, there is a new approach for doing thingsin dynamic contexts of high uncertainty, namely theLean Startup movement. Lean and Agile coaches playroles in both the startup world and in larger, tradi-tional organizations, and as a result, some of us arestarting to apply Lean Startup principles to enter-prise changemanagement. The resulting Lean ChangeManagement frameworks are a much better fit for theunpredictable and messy work of facilitating organi-zational change. The nice bonus for Lean and Agilecoaches is that Lean Change Management fits nicelywith the rest of what we do, but that isn’t the onlyreason we should be excited about it. It truly is a morefitting way to manage the unpredictable process oforganizational change.

This chapter offered you the Lean Change Manage-ment backstory; how it came to be, howwe developedour own version of it, and how our version worksvia the Lean Change Management Cycle. Next, wewant to take you deeper into our understanding of

Introducing Lean Change Management 26

how change can be understood. While Lean ChangeManagement is our overall framework, we of courseborrow many ideas from traditional change manage-ment and behavioural science that help us understandand interpret reactions to change. We want to intro-duce you to those next. We also want to introduceyou to the real-life organization where we have doneour work. Together, these two areas of backgroundknowledge will give you the context you need tounderstand our detailed account of our tools and ourpractices, which fills up the rest of the book.

2.5 Complete 2nd Edition

Thank you for reading the first full chapter fromthe 2nd Edition of Lean Change Management! I amexcited to be working with Happy Melly Express⁶ onthe next edition! Join the crowd-funding program⁷and get early access to newmaterial, templates, videosand more!

I expect the 2nd edition to launch in late 2013 and youcan keep up to date with what’s happening by visitinghttp://www.leanchange.org⁸

⁶http://bit.ly/hmexpress⁷http://bit.ly/hmexpress⁸http://www.leanchange.org