Only the foolhardy, heedless of their own peril, fail to marry technological advances with cultural change. Pretty much anyone who has spent time in a modern enterprise can think of one or two major initiatives that struck out because the implementers failed to capture the hearts and minds of key stakeholders.

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.

Step 2 - Vision: Plan how you will approach the change. To ensure change management is properly embedded in the project scope, it must be done as part of the overall planning stage for the project. You need to develop a good understanding of what is going to need to change as a result of the project and communicate this early, consistently and in a manner that supports every small increment of improvement as the change occurs. Take a step back, review the objective of the project and develop a strategy/approach for managing the changes that need to occur to meet the objective and maintain the target state, i.e., what needs to be done to make the change stick.

Once developed, your vision for change and your change strategy/ approach should be presented to and endorsed by the project board/steering committee. You will be using all of the tools in your change toolkit, and the project board/steering committee is one of them. It is vital to communicate what needs to be done, why it needs to be done and to get a steering committee’s support and input early on in the process.

Step 3 - Plan: Develop your change (action) plan. As before, this should be aligned with other project activities that will be happening in parallel, and the development of your change (action) plan fits in neatly with and will be influenced by the requirements and analysis stage of most projects. By working closely with your project team members, you are building up a more detailed picture of the new way of working after the project is live, i.e., how the new IT solution will work, or how the new legislation has been interpreted and what new processes are required to support its application. You are getting into the real detail behind what needs to change to bring your current situation - the “as is” - to the new target state, the “to be.” Things to think about include:

  • What target behaviors do you need to develop and reward?
  • What job descriptions will be impacted?
  • Which organizational structures need to be reviewed to leverage the new technology or the operational policies?

All of these actions will combine and contribute to building the organizational culture you want, i.e., one where the people, the processes, the organization and the supporting technology all contribute toward compliance.
Getting the end result you desire is a real challenge, and depending on the impact of the change you are introducing, you may encounter a wide variety of behaviors and unanticipated reactions. These may range from people not attending communications sessions to senior managers not releasing staff to participate in project-related meetings. This is when you will need to do two key things:

First, review your change action plan. There is a world of difference between merely introducing a change plan and ensuring that a successful change plan takes root. The devil is not in the details; it’s in the execution. You absolutely must review your plan and its individual components at regular points during the project and also at the end of the project.

Projects can resemble organic creatures at times and, like unruly teenagers, change over time, particularly in reaction to stimuli. Just like reviewing a policy or a procedure, each thread of your change management strategy and all the actions outlined in your change management plan should be monitored, reviewed for effectiveness, refined or updated as required and certainly evaluated upon completion.

If you are encountering resistance from management, look at your stakeholder management plan. Ask the following questions: Was the senior manager in question informed about the project? Did your sponsor actually speak to the manager in question as she had promised? Was your sponsor clear on the message she was to provide?

Breaking through resistance is key. You encounter resistance to change for many reasons: people may be too busy to attend sessions, meetings were scheduled at short notice or maybe email is not the best way to communicate with certain groups. You should try to remember that behind every behavior is a good intention.

Second, get creative. One consultant was having difficulty getting input from her end users who were busy consultants working in a hospital. Without their input, they couldn’t proceed, so she got creative. She baked cookies at home in the evenings and spent her mornings in a number of break rooms scattered throughout the hospital. While you probably won’t find that approach in any change management textbook, she got the input she needed and was able to move on with the project.

At every opportunity, communicate. For change to be effective, everyone needs to be involved. It may seem excessive for some, not enough for others and the wrong medium for yet others. It doesn’t matter - communicate many times in as varied a number of media as is possible.

There will be many measures to assess every project and the role of change management within the project; however, there are only two key measures that will really matter - did the change stick, and are the planned benefits being realized and recognized consistently? Proper planning ensures affirmative answers to both questions. Like changing tack in an America’s Cup yacht, change works best where all hands are working to the same end result and can see a positive benefit or are at least willing to follow orders. And like the champion boat in the America’s Cup regatta, change management requires lots of diligence, hard work and willingness to change tactics to meet the prevailing winds.

But change management is not a race; it is an endurance test. In the America’s Cup there is a clear winner, but change management has to be constantly evaluated and modified over a lifetime to guarantee the company remains on the proper track. Good, well-run companies recognize that change management is a constant driving force for the betterment of the organization.

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