Copyright © 2014 Prosci Inc. All rights reserved. “Double” ABC Tree Services Company...

Copyright © 2014 Prosci Inc. All rights reserved.

“Double” ABC Tree Services Company

Sales/Lean/Safety Improvement Initiative:

The need for Change Management

1


Who Am I?

• Jill Kelby

• Focus on Human (People) and Business (Systems) performance

• Tools of my trade: Lean, Human Factors, Ergonomics, Six Sigma, Systems Thinking, Change Management, …

“I’m the glue that holds the gears in alignment and the grease that keeps the business and projects moving”

2

Copyright © 2014 Prosci Inc. All rights reserved. 3

Project description and background

• Double revenue (15M to 30M) and increase profit margin within 3 years

• Total scope is entire company; however focus of this presentation is with the production team

• Current profit margin is 1-2%; Goal for production group is to increase to 10%

• Assumed allocation of improvements is: 50% increase in sales, 35% increase in work efficiencies and 15% improvement in safety

• To do this will require significant changes in the way people work—from executive team through frontline employees


What is Expected to Change?

• New Sales bid process

• New CRM software

• New order entry software/process, reduction in CSRs

• New scheduling process

• Change in production staff foremen, crew members and staff numbers

• Training on Lean methodology, safety practices/behaviors, new work processes/systems

• New hiring/onboarding process

• New performance evaluations & accountability

4


Organizational attributes

• “Culture of Same”: organization is very change resistant

– And we are asking for a high level of change (perceived as very disruptive and/or unnecessary)

• Several long term employees (executive team through frontline employees) who think “why fix what isn’t broke”—lack of awareness

• Only one effected group has desire (however has little influence on business systems)


Change characteristics

Groups Num

ber

of e

mpl

oyee

s

Deg

ree

of I

mpa

ct

Deg

ree

of I

mpa

ct S

core

Org

aniz

atio

nal A

ttri

bute

s

Spo

nsor

initi

als

Spo

nsor

Let

ter

/ N

umbe

r D

esig

natio

n

Challenges and risks for this group

Tree care production staff 28 79%

Tree care sales staff 12 38%

Scheduling 4 13%

HR 3 0%

Maintenance 2 38%

CSR (order entry) 5 75%


3 Primary Anticipated Points of Resistance

• Production group: Find 1-2 employees who are change ready and train them to help with CM with their co-workers

• Long term employees (production and sales): partner with change ready (less time with company) employees who have been exposed to other work flows; be sure to address WIIFM

• Sales manager: Need to convince him the solution is “his” idea and that it won’t lead to much, if any “additional work” and won’t interrupt their selling


Risk Assessment Findings

Medium risk High risk

Low risk Medium risk

Change characteristics

OrganizationalAttributes

Changeresistant

Change ready

SmallIncremental

LargeDisruptive

Low risk

Medium risk High risk

Medium risk

LargeDisruptive

Summary:Organizationally we have LOW readiness for change;

However,

We are asking for LARGE scale change and disruption


What’s Missing From The Current Project Plan?

• The proposed way to achieve the results currently lacks any inclusion of change management

• All Successful projects include 3 things:

1. Leadership/sponsorship

2. Project management

3. Change management

• Research has shown that by including CM into the project the likelihood of meeting project objectives on time or ahead of schedule increases significantly


PCT Assessment Results

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Scores:•L/S: 20 out of 30•PM: 15 out of 30•CM: 10 out of 30


What Is Change Management?

Managing the People Side of Change

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Research Finding

The number one obstacle to success for major change projects is employee resistance and the ineffective management of the people side of change.

Data from 327 companies undergoing major change projects;Prosci Best Practices in Business Process Reengineering benchmarking study.


Why Include Change Management?

1. Increase probably of project success

1. Meet project objectives, on time/on budget, ROI

2. Manage employee resistance to change

3. Build change competency into the organization

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Copyright © 2014 Prosci Inc. All rights reserved. 13 13

16%

46%

77%

96%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Poor(n=244)

Fair(n=653)

Good(n=834)

Excellent(n=165)

Per

cent

of r

espo

nden

ts t

hat m

et

or e

xcee

ded

proj

ect o

bjec

tives

Overall effectiveness of change management program* Data from 2007, 2009, 2011 and 2013

Copyright © 2014 Prosci. Best Practices in Change Management – 2014 Edition.

Correlation of change management effectiveness to meeting project objectives

Copyright © 2014 Prosci Inc. All rights reserved. 14 14

16%

32%

54%

72%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Poor(n=293)

Fair(n=793)

Good(n=1032)

Excellent(n=181)

Per

cent

of r

espo

nden

ts t

hat w

ere

on o

r ah

ead

of s

ched

ule

Overall effectiveness of change management program* Data from 2007, 2009, 2011 and 2013

Copyright © 2014 Prosci. Best Practices in Change Management – 2014 Edition.

Correlation of change management effectivenessto staying on schedule


1st communication or1st rumor

Incr

easi

ng r

esis

tanc

eD

ecre

asin

g pr

oduc

tivity

Time

Dept. A

Dept. B

Dept. C

Dept. D

Prosci® Flight Risk Model

Turnover of valued employeesTangible customer impactActive resistanceOpt-out of the change

Turnover of valued employeesTangible customer impactActive resistanceOpt-out of the change

Productivity lossEmployee dissatisfactionPassive resistance

Productivity lossEmployee dissatisfactionPassive resistance

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We Want to Prevent—the Valleys of Despair!

a

Prosci® Flight Risk Model


ADKAR Model of Change Management

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ADKAR Analysis: Production Staff• A: Awareness of the need for change is very low

– Building awareness of the need will be difficult due to entrenched perception that they are doing all they can do and the current state is good

• D: Desire for change

– Motivating factors: methods to make their work easier; have accurate sales bids

– De-motivating factors: no improvement in their work or by sales

• K: Knowledge gaps

– Efficiency is seen as working fast and decreasing safety; lack of knowledge and skills for different ways to work (latest technology & equipment/techniques); Overall gaps between now and future is moderate

• A: Ability for change

– Older employees may not be physically capable for performing increased work demands

• R: Reinforcement

– Celebrate success meeting new production goals and implement corrective action for gaps; change may not be sustained if staff reverts back to the old ways of doing things

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Who “Does” Change Management?

Each ‘gear’ plays a specific role based on how they are related to organizational change

Middle managersand supervisors

Changemanagement resource/team

Executives andsenior managers

Project team

Projectsupport

functions


How does Change Management fit in with Project Management?

19


Integration of Project Management and Change Management

20

Solution is designed, developed and delivered effectively

(Technical side)

Solution is embraced, adopted and utilized effectively

(People side)

+

Project management and change management have a joint value proposition oriented toward business results.

= Success

Project managementProject management

Change managementChange management

Currentstate

Transitionstate

Futurestate


Our Company’s Unique Risks and Challenges

• AA (Accountability Avoidance):

– Lack of clearly defined project milestones and performance expectations for all levels of employees

– Therefore; no one is held accountable for performance

• Lack of change management included as part of project

• 2 Groups being asked to change the most are Production and Sales

– Note: both groups blame the other for the revenue/profit margin issues

• High Risk for Unsuccessful Project completion


Potential consequences to the organization if this change is poorly

managed

• No ROI—outcomes of project won’t be achieved

• Lowered moral and increased disgruntlement from frontline employees with executive team

• High performers may leave company

• If revenues/profits do not increase, may result in company being taken over by rivals


Proposed Combined Team Structure/Sponsor Model including CM

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Project team

Mid-level manager sponsor

Executive sponsor

CM


Change Management Team Preparation Strategies

• Propose the project team take on the responsibilities of CM with the facilitation of a consultant

• Largest gaps:

– Varied business influence

– Majority have fair communication skills

– Minimal, if any CM experience

– Little training and skills in leadership, coaching and managing resistance


Sponsor Assessment Diagram

SalesProd Sched Main CSR HR

NG JG

AMA1BC

GK

TC

TW

BC

DM


Unique Sponsorship Challenges

• Lack of knowledge of the benefits of CM to project success

• Sponsors have AA (culture of “do your job however you want to do it”)

• High level sponsors have not mentored low level sponsors on leadership, coaching and managerial skills to lead change

• Greatest resistance will be from Sales sponsors


Steps for Educating Sponsors

• High level sponsors:

– Sponsorship training

– Direct coaching

– Provide messaging assistance

• Low level sponsors:

– Course on change management which includes coaching, resistance management, communication

– Provide tools & templates

– Provide messaging assistance


Target Audiences for Communications Plans

• Production Staff

• Sales Staff

• Scheduling

• CSRs

• Maintenance

• HR


Communication plan for Production Staff

Timing Message content

Delivery mechanism Sender

First indications of change

General information about business performance & potential for upcoming changes

Verbal—All employee meeting Primary Sponsor (COO)

Early stages of the project

Business issues and opportunities to create a need for change High level overview about the project, goals, objectives, and timeline

Verbal—all production employees meeting

Primary Sponsor (COO)

During the design of the change

Initial information about scope, who is involved, what groups within company will be affected, what changes are possible/probable Review of current state, the vision of the future state and the gaps between where we are today and the future

Verbal—townhall for production staff

Secondary Sponsor/Project team (Production Manager)

Before implementation Why is a change needed, what is the change, how will change impact me, what training required

Verbal—production staff meetings (weekly)Emails

Production Supervisor

During implementation How change impacts you, training requiredEarly success stories

Verbal-production staff meetings & emails, staff room posters

Production SupervisorCOO (early success cheerleader)

Post-implementation Successes, continued challenges, Lessons learned

Verbal—all employee meetingEmail

COO


Sponsor roadmap for Next 8 weeks (Start Up)

Target Group Activity

with the project team

Select best project team members and leaderProvide required funding for team, including trainingProvide clear direction and objectives for project, what does success look likeEst. a commitment to CMJointly develop high level view of future state-link to bi strategyMeet weekly with proj team until implementation

with managers

Educate biz drivers for change and risks for not changingCreate a coalition of sponsorsWork directly with mgrs. Who show early signs of resistanceProvide training on CMDefine accountabilities for mgrs./supervisorsSolicit & listen to mgr feedback

with employees

Describe current state and share issues/opportunitiesExplain why change is needed and risk of not changingShare vision for futureAnswer WIIFM, how will change affect meBe visible—”GO SEE”


The Question:

Do We Have Alignment on Adding Change Management to the

Project?

31

Date post:	13-Jan-2016
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