Don’t Forget about Change Management

In today’s business climate, almost every organization pays at least lip service to governance, risk and compliance management. The companies that care, usually the best-run enterprises, are taking it to the next level and reviewing their compliance obligations. Part of the review process involves formalizing their approach to compliance with the assistance of computer systems that ensure an organization can easily report on compliance or prove it to an auditor.

However, all too often what is overlooked when these projects are being planned and implemented is the people aspect. Many projects fail because they only gather support from senior management who sign the purchase agreement but don’t actually use the technology. Technology introductions succeed or fail based on how effective the organization is at getting the end users to change their way of working and how the organization supports that way of working.

Policies and procedures can be set up with compliance, human resources and other related departments, which then turn to software systems to support and monitor the resultant compliance program, but the human element is ever present. If you don’t have senior management and the end users buying into the new program, the project ultimately will not be a success. To truly embed a new way of working and realize your planned benefits, you will at a minimum have to tweak the organizational culture and at worst change it entirely.

This is where change management comes in. Change management works in conjunction with the other elements of any project, whether it be implementing a new technology or new ways of working due to a change in legislation, etc. By undertaking a structured approach to change management, you are ensuring that it is planned, managed, reinforced and, above all, focused on delivering sustained business benefits.

Like most disciplines that involve human beings, change management is not an exact science; rather, it is an art form. There are recognized principles for introducing change, but the application of those principles depends on the situation. A brief list of the general guidelines for a successful change management program includes:

• Developing the vision and the case for change.
• Reviewing and capturing how this change contributes to the business’s strategies, goals and their measures, and the ongoing imperatives in “business as usual” to ensure competitive advantage.
• Knowing and managing your stakeholders.
• Managing communication - message management and refinement, channel management and feedback loops.
• Reviewing organizational design and culture against new requirements and refining accordingly.
• Reviewing people performance systems, reward and recognition, recruitment and induction, retention and succession planning against new requirements and refining accordingly, focusing on how to reward new behaviors.
• Identifying and developing change leaders.
• Reviewing current and future learning and development needs.

From a strategic level, any change strategy should align with the business goals and project objectives. All streams of work on the project should work to deliver or support the delivery of the same vision/target state and associated set of benefits. One trick that works well is to list the planned benefits in tabular form, with an owner allocated to each benefit, as an appendix in all key project documentation. The author is required to capture how the content of the document, whether it was a strategy or a plan or a requirements document, contributes to the achievement of each individual benefit. This allows the advantage of reviewing the direction of the project at logical intervals and of also ensuring the whole project team is very familiar with the planned benefits and vision.

On a tactical level, to support good project management, the activities to be completed by the change management team should be broken down to align logically with the existing project work-breakdown structure. The team should include all relevant business functions so it encompasses all areas it needs to. Treat change management like any other stream of the project. Have defined deliverables, and clear actions and timelines.

Your Change Management Program

Step 1 - Documentation: Review the benefits outlined in the business case to the business goals defined in the organization’s strategic documentation. You had a business case and benefits in mind when you decided to institute change; now you need to think about how you want to articulate that vision. Not every organization will go through the process of developing a formal business case, but every organization should capture the rationale, drivers and benefits for a project in a form in which the benefits of the change are defined against the business goals and their measures. Review those benefits, business goals and measures, and build your vision for the change.

This should align with and support the stated targets every financial organization will have, i.e., “As an organization we are compliant with the requirements of Basel II” or, “Our know-your-customer [KYC] initiative will meet our KYC requirements and deliver streamlined customer management processes, resulting in higher quality customer data and better customer experiences.”

Note: While one-line statements can be very powerful, you need to make your case for change as compelling as possible by providing the background and rationale for why things need to change. Sometimes this takes more than a few sentences. The use of real-life scenarios, expected behaviors and example benefits/consequences here are essential to help staff begin to build their own understanding of what the vision will look and feel like and what it will mean for them. These scenarios can also be tailored to different roles and different levels within the organization.