In 2012, the French President Francois Hollande was elected under the campaign slogan “The Change is Now”; 2 years later, his popularity has reached an all-time low of 13%. Change is difficult. When an organisation designs any change programme, it needs to define realistic initiatives that will collectively support the achievement of strategic goals. In our previous post, we explained how to assess each component of the operating model. This assessment helps identify key areas for improvement and provides the foundation for identifying relevant change initiatives.
Too many managers have experienced this scenario: the chief executive announces a bold new corporate initiative aimed at generating dramatic performance improvements. The initiative calls for sweeping changes in the company’s processes, systems and culture. The change programme is launched with great fanfare and a substantial investment of resources. Several years later, however, the organisation has failed to improve and managers look back and wonder what went wrong.
Despite decades of study of change-management, the writings of leading scholars, and legions of consultants with change methodologies, this still happens all too often. Studies typically note that more than two-thirds of change initiatives fail.
We believe that there are two major components of successful change programmes:
- Rigorous selection and articulation of change initiatives at both the individual level (objectives, accountabilities, deliverables and budget) and the collective level (overall objectives, dependencies and key success/risk factors)
- Effective implementation that involves key elements such as building the right change environment, clarifying objectives and roles, testing before implementing, monitoring progress and adjusting plans when required
In this article we will focus on the first component, the selection and articulation of change initiatives, while the implementation process will be covered in the final instalment of this series.
Based on our experience, it is important to always follow three steps:
- Step 1: Identification of potential change initiatives
- Step 2: Selection of change initiatives
- Step 3: Clear articulation of change initiatives
Step 1: Identification of potential change initiatives
As illustrated in the figure below, the selection of change initiatives is the conclusion of a longer process. By first clarifying strategic objectives and assessing whether or not current capabilities can support the delivery of these objectives, an organisation will already have a clear idea of what changes are required to successfully deliver the strategy.
While it is important to align change initiatives to strategic objectives, another way to identify and validate the change initiatives is to determine the ‘value drivers’ of the organisation and identify where progress has to be made. Commercial organisations often use this model to decompose their total impact (economic and social) or return to shareholders.
A value driver is any variable that may affect the ultimate value of the organisation. The diagram below shows an example where the value drivers that affect the revenue of a commercial organisation are mapped out.
A similar approach can be used for mission driven organisations, where value drivers are all the factors that maximise social impact. Here is the starting point for a charity that wants to increase its income:
Following this exercise and the findings from the analysis of the operating model, there should be a list of key activities with an objective and an idea of timescales and resources required.
Step 2: Selection of change initiatives
The next step is to prioritise the change initiative based on the impact delivered (i.e. realising the strategic objectives) and the do-ability (assessed in terms of investment and resources required, likelihood of success and risks). The easiest way is to list all the change initiatives by area and give them a rating (high, medium, low) for both the impact delivered and the do-ability.
The initiatives with high impact and high do-ability should be automatically selected and the ones with low impact and low do-ability excluded. The others should be further considered as some could be more tactical and others could be potentially delivered differently.
Once the initial selection is done, it is also useful to validate that the change initiatives are all aligned to the strategic objectives. In the example below, change initiatives have been mapped against the strategic objectives and rated against their contribution. This helps not only to validate them, but also to better understand dependencies and to facilitate communication.
Step 3: Clear articulation of change initiatives
The final step is to clearly articulate the selected change initiatives, and detail how they will be implemented. The key areas to consider are:
- Team, roles and responsibilities
- Timeline with key milestones (e.g., deliverables, reviews, sign-offs)
- Budget and business case
- Risks and mitigating actions
- Governance process
It is helpful to use a simple template for all activities, so that meaningful comparisons can be made and the right level of detail is captured. Many organisations spend too long generating documents with a high level of detail – not only does this waste time and resources, but it compromises the degree of flexibility and dynamism that change programmes need to achieve their ultimate objectives. Clear, simple plans are preferable to hyper-detailed plans that try to map out every eventuality.
Using the input from various change initiatives, a high-level master plan should be put together so timing of activities, key milestones and dependencies between activities can be communicated to all stakeholders.