Major projects always involve complexity, for example when implementing a large IT system or conducting a lengthy procurement process. Perhaps because the people implementing these projects are professional specialists, and often working very hard to achieve punishing deadlines, there is a tendency to get caught up in these complex disciplines and lose sight of the end goal for the project. This can prove costly in terms of time, resources and quality, and can turn a fundamentally sound project into a failure.
Debbie Bondi, Strategic Project Director at Sharpe Pritchard Strategy, explains how employing a planned and structured approach to business change is an essential ingredient to ensure your project remains on track.
Business change needs to start early
All too often, business change is considered in the later stages of a project when there is a realisation that a new service provider or computer system will require staff to work in different ways. In reality, business change plays a role throughout the project, as shown in Figure 1.
An early task of the business change team is to take a facilitative role in ensuring that senior leaders can share the vision and objectives of the project to be understood by all concerned. This is anything but simple as stakeholders often need the chance to question and challenge the vision and objectives before they can truly commit to it. This is an important step that should not be under-estimated.
For change to be planned effectively, it is essential to understand both the current state of the organisation and its desired future state. Business change teams often use the terms ‘current operating model’ and ‘target operating model’. Armed with these models, realistic plans can be drawn up to move from one to the other. At their simplest, operating models consider people, process and technology perspectives, although they can be extended to include information, assets, suppliers and so on.
This type of structured approach helps to ensure that all elements of the project are considered holistically. It is common for the people and process elements to be overlooked until the procurement is nearly concluded or the IT system has been installed. This almost always causes problems because, without thinking through how the people and processes will work, there is likely to be a mismatch between the newly procured service provider or IT system and what is actually required. Solving these problems causes delays, additional expense and untold frustration on the part of staff.
Case study 1
In a large not-for-profit education business, senior leaders had decided that the only way to get costs under control was to reduce drastically the number of different services being offered and to standardise on a smaller core. They were convinced that without a radical change the organisation would be forced to close. They developed a new vision on that basis but, because they never engaged with the subject matter experts on whom they relied, there was active resistance every step of the way. After a number of years, the organisation had spent millions of pounds but had very little to show for it because key stakeholders did not understand, let alone accept, the vision and objectives. When the project was eventually relaunched, a fresh approach to business change ensured active engagement.
Case study 2
A local authority decided to dispose of a number of expensive-to-run offices by making better use of space in those buildings that it retained. This included the introduction of hot-desking. The business change team engaged at the outset with a cross section of departments to understand how they thought they would be affected by the changes. That work resulted in new technology and processes which increased staff acceptance and smoothed the transition.
Case study 2 demonstrates how a programme had relatively high levels of support because everyone understood that saving money on office space was preferable to cutting more jobs.
However, those who had to give up a permanent desk in favour of hot desking felt that they had lost something, and indeed almost all change programmes create winners and losers. The change team has a hugely important role to play in acknowledging these concerns and helping with the difficulties where possible. Planning for business change early allows for a much broader consideration of the change and its impact, and ultimately leads to projects that are more likely to stay on track and have better outcomes.
Forming a business change team
It is important to select members of the business change team with care. If the emphasis on externally sourced consultants is too great, they will lack the inside knowledge of the organisation. Staff affected by change may feel let down rather than essential participants who have been consulted and engaged. Conversely, if the team is made up entirely of internal staff, they may lack the in-depth skills of the business change professional.
There have also been a number of situations where internal staff have the relevant skills but are too close to the situation and struggle to be objective about the changes required.
In general, the best balance is to have a mixed team, either led by an external business change professional or with access to those skills on a consultancy basis.
Case study 3
A director in a large service provider had experience of successful business change in a previous organisation but realised that none of the available internal resources had the relevant skills or experience. She therefore hired a consultant to define a suitable business change plan and approach for the transformation programme, and to assess the suitability of the in-house staff. Within six months, a small business change team made up of permanent staff was operating successfully, with the consultant providing occasional support when required.
Planning for business change
It is important that attention is paid to business change early enough to be able to influence other aspects of the project. In some organisations there is a tendency to focus on elements that are perceived to be more tangible, such as IT or construction. It can be hard to convince the project sponsor that business change needs to be thought about in parallel.
There are a number of ways to address this:
- make sure that the sponsor understands what business change means in practice;
- focus on the tangible outputs of business change, such as changes to job descriptions and new procedure manuals, as this can be very effective in regulated industries or where quality is paramount; and
- use examples and case studies, such as those above, to explain the benefits of business change and the risks of inaction.