Leading Large-Scale Change

What It Means Many of the forces that impact change are common to both smaller and larger change initiatives. However, as the size and complexity of the change increases, additional factors enter the mix that must be addressed. These include the challenges of dealing with diverse teams that may have competing interests, cultural norms that may be difficult to identify and reconcile, and communication challenges that undermine the messaging needed to make sure everyone in the larger organization understands why they are changing. Why It Matters

• The larger and more complex the change initiative, the more that can go wrong.

• Understanding the differences inherent to leading large-scale change initiatives is important when evaluating the pros and cons of different change tools you may consider.

• Communicating effectively during large-scale change requires more structure than communication during team-based change.

“Every time you have a success and pass a milestone along the way of a change process, stop and celebrate so people can see it’s worth it.”

Jack Welch

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Leading Large-Scale Change

SIMILARITIES AND DIFFERENCES OF LEADING CHANGE IN TEAMS AND LEADING ENTERPRISE-WIDE CHANGE

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“Firms that try to juggle twenty change projects today by using the methods that successful companies applied to the same problem three decades ago always seem to fail… The process fails for two interrelated sets of reasons. First, the management approach back then was usually too centralized to handle twenty complex change projects. If a few senior managers try to get involved in all the details, as was often the practice then, everything slows to a crawl. Second, without the guiding vision and alignment that only leadership can provide, the people in charge of each of the projects wind up spending endless hours trying to coordinate their efforts so that they aren’t constantly stepping on each other’s toes. Running twenty change projects simultaneously is possible if (a) senior executives focus mostly on the overall leadership tasks and (b) senior executives delegate responsibility for management and more detailed leadership as low as possible in the organization…More important, the leadership provided by senior executives helps give those other people the information they need to help coordinate their activities without endless planning and meetings.”

Leading Change, pp. 147-148 Despite numerous common threads, there are a number of additional complexities that come into play when dealing with an enterprise-wide change initiative. Some of these are obvious, and others are a bit subtler. First, let’s clarify what we mean by enterprise-wide change. When we use the term, we typically mean a change initiative that meets one or more of the following criteria:

• Is undertaken in a large organization • Involves multiple business units or geographical locations • Redefines or significantly reorganizes the business

This brings us to the challenge of interdependencies.

“Now and in the foreseeable future, most organizations need to be faster, less costly, and more customer focused. As a result, internal interdependencies will grow. Firms are finding that without big inventories, the various parts of a plant need to be much more carefully coordinated, that with pressure to bring out new products faster, the elements of product development need much closer integration, and so on. But these new interconnections greatly complicate transformation efforts, because change happens much more easily in a system of independent parts.”

Leading Change, pp. 140-141

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“Few if any of us grew up learning how to introduce major change in highly interdependent systems. That, in turn, makes the challenge in organizations today more difficult. Without much experience, we often don’t adequately appreciate a crucial fact: that changing highly interdependent settings is extremely difficult because, ultimately, you have to change nearly everything…Because of all the interconnections, you can rarely move just one element by itself. You have to move dozens or hundreds or thousands of elements, which is difficult and time consuming and can rarely if ever be accomplished by just a few people.”

Leading Change, p. 142

Despite the challenges of interdependencies, large-scale change can deliver large-scale wins. Kotter summarizes what a successful large-scale change initiative looks like:

• More change, not less The guiding coalition uses the credibility afforded by short-term wins to tackle additional and bigger change projects.

• More help Additional people are brought in, promoted, and developed to help with all the changes.

• Leadership from senior management Senior people focus on maintaining clarity of shared purpose for the overall effort and keeping urgency levels up.

• Project management and leadership from below Lower ranks in the hierarchy both provide leadership for specific projects and manage those projects.

• Reduction of unnecessary interdependencies To make change easier in both the short and long term, managers identify unnecessary interdependencies and eliminate them.

Leading Change, p. 150

He offers further guidance on the leveraging opportunities in a large-scale change initiative to set the stage for more effective future change initiatives.

Cleaning up historical artifacts does create an even longer change agenda, which an exhausted organization will not like. But the purging of unnecessary interconnections can ultimately make a transformation much easier. And in a world where change is increasingly the norm rather than the exception, cleaning house can also make all future reorganizing efforts or strategic shifts less difficult.”

Leading Change, pp. 149-150

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MODELS FOR LEADING LARGE-SCALE ORGANIZATIONAL CHANGE As explained previously, we have chosen to focus on John Kotter’s model not because it is the only viable perspective on change, but because it is among the most widely used and has a track record of research supporting it. In fact, it has become such a mainstay of modern change management, many alternative models draw heavily on it. GE, for example, developed a model called the Change Acceleration Process (CAP). It shares many elements with Kotter’s model, but just as they did with Six Sigma, Jack worked with GE leaders to adapt the model and make it their own. CAP has seven stages to it:

1. Leading Change Establish a committed leadership team that will champion and guide the change process through to completion.

2. Creating a Shared Need Address the inertia and complacency that resists the change, and build a broad base of support that accepts that change is needed to make the organization stronger.

3. Shaping a Vision Create a clear and compelling vision of the future state that is easily understood and shared, and that presents a roadmap for how the organization will get there.

4. Mobilizing Commitment Begin the rollout by leveraging early adopters or a targeted subgroup of the organization; identify pockets of resistance and make improvements based on early feedback.

5. Making Change Last As the change takes hold, identify the threats that could cause business to revert to the old ways, and implement safeguards to defend against this.

6. Monitoring Progress Track the effectiveness of the change using specific, quantifiable metrics that can be evaluated, shared, and used to make further refinements.

7. Changing Systems and Structures Change the systems, workflows, and other structures to support the new way of doing business and further anchor the change.

In your readings this week, you will find an article by Robert Miles called “Accelerating Corporate Transformations” (2010). One obvious connection between this and the Change Acceleration Process is the focus on speed. This is a helpful counterpoint to what is, somewhat unfairly, a takeaway from Kotter that change must be undertaken slowly. What is occasionally lost in Kotter’s focus on a methodical approach is the importance of keeping momentum going. Miles argues, “The biggest barrier to corporate transformation was getting organizations to execute their bold new ideas quickly.” He identifies six barriers to speed that most organizational transformation efforts encounter.

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1. Being overly cautious and placing too much emphasis on not making mistakes rather than on taking bold action.

2. Allowing business-as-usual to extend the time frame to get work done. He advocates a no-slack approach focused on tightening the timeline.

3. Initiative gridlock that comes from trying to tackle too many initiatives at once, and not being willing to abandon initiatives that show signs of going down the wrong path.

4. Recalcitrant executives who are not confronted about their behaviors. 5. Disengaged employees who aren’t brought into the loop. He suggests a “rapid-high-engagement-

all-employee-cascade” not unlike a Work-Out. 6. Loss of focus during execution.

This model is not wholly different from Kotter’s, but the focus on speed and the willingness to make some mistakes is a bit different. As you consider his arguments, think about how the two models balance, and which elements of each can be best leveraged to drive people-first change initiatives. STAKEHOLDER MAPPING The stakeholder map is an effective tool for understanding who will be impacted by a large-scale change initiative, and how that can influence both process and communication.

1. Identify your key stakeholders. The first step is to develop a list of all the players who will participate in or influence the outcome of the change initiative. Who may need to lead parts of the effort? Who will it affect most? Whose expertise is critical to success? Your list may include executive team members and other managers, board members, specific individuals or employee groups, key customers, regulators, and so on.

2. Create a map that depicts the relationship among the stakeholders. A map is not a traditional organization chart. It is a picture of how the key stakeholders are positioned with respect to each other and the work to be done, and how they interact with each other.

3. Analyze relationships. The third step is to discuss the implications of your map. What does it tell you about where support is most needed, possible sources of resistance or conflict, current involvement in the change effort, and lines of communication? A map helps you decide where to focus your mobilization efforts and who must be engaged.

While stakeholder maps may be created by one person, when you design them with other members of the guiding coalition, they become powerful tools for building a shared understanding of the change initiative and ensuring its success. Stakeholder mapping will not only help you identify key people or groups who must be mobilized in support of the change initiative. It can also help you clarify their current level of support, their reasons for resistance, where to focus your mobilization efforts, and who might be available to help you. Its real power lies in the discussion that it can generate among members of the guiding coalition.

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This is important for ensuring that you are able to work quickly by not getting bogged down in the wrong sorts of communication. This is less of an issue in team-based change projects, but it becomes critical in larger-scale initiatives. A popular way to categorize stakeholders has become known as RACI.

• Responsible The individuals or groups that are entrusted with executing certain activities

• Accountable The person or group which is ultimately in charge of the activities

• Consulted Those who have a say in how the initiative is executed – for example, because of their expertise or their vested interest in the initiative

• Informed Individuals and groups that should be kept abreast of the developments, but are not actively participating in managing the initiative

Using consistent terminology, like RACI, is important in supporting clear communication. If everyone understands and uses common language, it reduces the likelihood that key steps or people will be missed, or that there will be misinterpretations of expectations.

CHALLENGES OF EFFECTIVELY COMMUNICATING CHANGE IN LARGE, DISTRIBUTED ORGANIZATIONS

In a large and complex organization, some people or divisions will be motivated and able to change before others. The wise change leader takes advantage of these pockets of readiness to get started with the change effort while others are still making up their minds. When these early movers are successful and that success is publicly recognized, it will act as a powerful motivator for the slower movers. Frequent and clear communication is essential.

“…most human beings, especially well-educated ones, buy into something only after they have had a chance to wrestle with it. Wrestling means asking questions, challenging, and arguing. This, of course, is precisely what happens when the vision is first created by the guiding coalition.”

Leading Change, p. 102

Consistency in messaging is critical. If one groups hears one thing (whether you intend it that way or not) and another group hears something different, the change will be undermined. The takeaway will be that there is a lack of focus and leadership. Perhaps resisters will say that someone knows what’s going on, but it’s not them, so they’ll just check out.

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Another risk is that if there are tensions among the different groups impacted by the change, an inconsistent message may be taken as “spin” where one group is being told something to make them happy, whereas a different group is told something different. Kotter leaves us with the following advice on the role of leadership around communication during large- scale change initiatives:

…good leadership from above helps everyone understand the big picture, the overall vision and strategies, and the way each project fits into the whole. Here the people working on different activities all aim for the same long-term goal without ever having to meet…With good leadership from above, these lower-level managers will also be committed to the overall transformation and will thus do what is right with a minimum of parochial political silliness.

Leading Change, pp. 148-149

Leading Large-Scale Change

• Examine the similarities and differences between leading change in teams and leading enterprise-wide change As you explore what it takes to lead more complex change initiatives, it is helpful to examine your own place of work in order to identify real-life examples of the challenges that scale brings with it. Identify a change initiative the HR team could lead that would impact the entire organization, or at least several different functional and/or geographical units. This could be a change in compensation models, retooling the way performance reviews are conducted, or revising policies on working remotely. Map out the interdependencies that need to be addressed to implement the new way of doing things. What other changes need to be made either simultaneously or in quick succession to allow the change to be rolled out? What communication or other challenges do these changes bring to the surface?

• Review additional models for leading large-scale organizational change Spend some time doing a web search for other change models. Some will be proprietary and be marketing tools for consulting or training firms. Others will be models developed by academics or authors. Download the literature and map out the similarities and differences between these models and what we have covered in this course. Which ones bring something useful to the process? If you are launching a change initiative at work, share the different models with your colleagues and get their feedback on what they like/dislike about each.

• Analyze the challenges of effectively communicating change in large, distributed organizations Develop a stakeholder map for a large-scale or complex change initiative you are considering at work. Use the RACI categories to group stakeholders and add additional information on what you know about the level of support and resistance these people/groups have for the initiative. In what ways do your communication processes need to be the same for all groups, and in what ways do they need to be different? Why?

What are the similarities and differences between leading change in teams and enterprise-wide change?,
What are the key models for leading large-scale organizational change?,
What interdependencies must be addressed when implementing enterprise-wide change?,
What are the challenges of effectively communicating change in large distributed organizations?,
How can stakeholder mapping (using RACI) support successful change initiatives?

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