Creating The Essential Fifth Element Action Plan together

• Stakeholders include people at every level of the company – front line employees, supervisors, line managers, senior management, board members and trade union representatives, all of whom may be affected but in different ways. Relevant stakeholders may also include customers, suppliers or even members of the local community. It is important to remember that people in each of these categories can offer valuable resources in terms of knowledge and commitment to change – or they can become serious obstacles.
• Dialogue is central to engaging stakeholders. Thinking about change is often easier away from the pressures of day-to-day firefighting, hence the value of time-out sessions both for management and for front line teams (whether overnight events or even meetings in the local pub!). Such sessions should explicitly avoid discussion of immediate issues and focus exclusively on the longer term horizon.
• There are several innovative methods of stimulating dialogue about change. Interactive theatre is an effective technique that enables managers and employees to engage safely with each other in critical reflection of current practices in their own company through interaction with characters facing comparable problems and challenges in a ‘fictional’ organisation.
• Personal networking can also be highly effective in engaging stakeholders. Building relationships with individuals at all levels of the organisation who are opinion formers, influencers or simply have an ear to the ground offers invaluable insights into potential issues, obstacles and allies.

• Having won support for the need for change, there will be a need to identify what to change. In practice these two elements may be tightly intertwined, but it is usually helpful to undertake some form of Change Audit or Change Needs Analysis as a means of identifying precise targets and opportunities for innovation or improvement.
• One of the simplest and most common tools is the SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis, which can easily be conducted as a self-appraisal exercise. Allow different stakeholders to conduct their own SWOT since they will generate quite different perspectives depending on where they sit in the company.
• There are several methods used in systems theory to assess the scope for improved efficiency or customer responsiveness across the organisation. Process modelling for example analyses the current system of producing goods or services and provides a clear articulation of how it might be different, recognising that different actors have different experiences and expectations. The throughput of any multi-phase process is determined and limited by the speed of the slowest step. Therefore the method analyses the process as a whole, identifying and addressing bottlenecks (‘constraints’) preventing increased output.
• Managers and employees at different levels inevitably experience the company in different ways, and will have a different understanding of what works and what can be improved. Stories and anecdotes about working life offer valuable insights into organisational culture and practice, and ‘collective remembering’ methods such as Group Recall are effective methods of accessing such experience.
• There are many tools for change needs analysis or change audit available on the market and care must be taken to ensure that an approach is selected that suits the specific needs and circumstances of each company. A people-centred approach however must be multi-voiced, drawing on the insights and knowledge of managers and employees at all levels and in all functional areas.

• Change often feels like a low priority when there are so many more immediate tasks to address. But delaying change may be offering a real advantage to your competitors. Senior management has a key role to play in conveying unambiguous messages to the whole organisation about the need to create time and space for change, and about its importance in securing competitive success.

Castolin Eutectic. The manufacturer of metal powders put the proposal of relocating to a new plant to employees two years before the move happened. The old plant was unsatisfactory and the possibility of a move was first mooted at a meeting of all staff to discuss the dilemmas and risks the company faced. The staff could see value in relocating and how it would increase the protection of their manufacturing jobs in Ireland. Employees were involved in the full relocation process. This ranged from site selection to deciding on the internal layout and how to maximise automation and coordination around the production process.

• Once again the need for dialogue with stakeholders provides the key. Allowing everyone the opportunity to be involved and to make their own contribution pays dividends in ensuring their subsequent ‘buy in’ and encouraging them to contribute ideas and initiative.
• Searching for ‘win-win’ outcomes is at the heart of a sustainable vision. For employees, the ‘win’ is not necessarily financial but may be realised in terms of greater job satisfaction, enhanced trust and recognition, or healthier working.
• Scenario planning is a highly effective tool for imagining different futures as a means of making strategic choices; this is an approach used to great effect by many companies.
• Dialogue (or Search) Conferences are a well-established way of creating productive dialogue between management, employees, trade unions and other stakeholders around longer-term challenges, strategic choices and their immediate implications. Change conferences begin by imagining a successful medium-term future, identify the obstacles to securing that future and agree the actions needed to address those obstacles.
• Whether or not such methods are used, the important issue is to keep dialogue going, ensuring that the Vision remains fresh and relevant. Partnership forums or committees, where they exist, obviously play a valuable role in achieving this end.

• The Essential Fifth Element stresses the need to look at the organisation as a whole, and to consider the effects of change in one area on the rest. The Vision clearly needs to reflect this broader perspective. The use of process modelling or other systems-based methods at the change audit stage will help to provide insight into these interdependencies. Likewise the engagement of partnership forums or committees representing trade unions and employees can also be an effective means of identifying and addressing wider issues.

• Change needs to be supported from different places within an organisation. A coalition of people with the right levels of knowledge and influence, working together as a team, can guide and drive change much more effectively than a reliance on the line management structure alone. Effective coalitions are often based on a ‘diagonal slice’ representing all the main functional divisions and levels involved, including trade unions.
• Facilitating meetings of the coalition needs care at first, especially in organisations which have traditionally had a hierarchical or relatively authoritarian culture. People need encouragement to speak, to challenge constructively, and to share their knowledge and ideas. Think about using an external facilitator – or someone other than a line manager.

• Members of the coalition need to bring the rest of the management team and the workforce with them. This is why it’s important that they are broadly representative of those involved the change, but representatives also have a responsibility for maintaining dialogue with their particular ‘constituencies’. They may need help, mentoring and a reasonable time allocation away from mainstream duties to do this effectively.
• Communicating the vision and its associated changes also needs to be driven at corporate level. Keeping the company’s partnership forum or committee up to date is crucial, as are regular briefings through the usual mechanisms such as newsletters, intranet, team meetings and so on.

• Clearly the different elements of the vision need to be translated into action, defining what will be achieved, by whom and by when. However these change strategies do not need to be rigid or excessively detailed. Bear in mind that everyone will learn more about the vision, the process of change and the company itself as their involvement grows. Strategies should always be evolving and open to constructive questioning.
• It is important to examine the degree of overlap, convergence and conflict between change strategies and other policy areas – IT, HR, CRM, and so on. What needs to change to ensure that the different areas support each other?

• Project management provides an overall approach to the defined change process and a set of tools that help structure and impose control. Explicit engagement of key stakeholders should be a core component of the project plan.

Ulster Bank Group. At the end of 2006 when the Ulster Bank Group (UBG) crystallised their ambition to become the number one bank on the island of Ireland by 2012, it realised that this could only be achieved through culture change. UBG introduced a process founded on the belief that the new culture could only be delivered if business leaders and senior managers demonstrated the values and by teaching others to be leaders. Their role as Leader-Teachers was to share the goal of UBG at 2-day workshops, connecting to their employees, sharing their insights, helping employees sieve through the information, and answering questions. The process emphasised that each person has knowledge to share, and is a leader in their own right. Each Leader-Teacher had to share their own believes and aspirations with the group, within a framework of Ideas, Values and Emotional Energy. Over 6,000 employees participated in these 2-day workshops and identified inefficiencies which could be immediately removed or changed.

• Change is most effective when it draws on the knowledge, experience and commitment of managers and employees throughout the company. But many people may not have had such opportunities before, and may need reassuring that it is ‘OK’. Senior management has to give the lead here, though people elsewhere in the line management chain also need to be delivering positive messages and creating specific opportunities for involvement by their teams in change. Relaxing or changing targets to create some ‘slack’ for involvement is usually an important factor. Trade union stewards and officials can also provide a valuable source of reassurance and encouragement.

• In most companies it is difficult to step back from everyday tasks to think creatively about new ways of doing things, or about how to make change happen. Formal time-out sessions are valuable (see Engaging Stakeholders above) especially when considering major change thresholds. However ‘stepping back’ to improve efficiency, quality or the rate of innovation is being seen as a core part of everyone’s job in a growing number of customer-focused companies. This is encouraged by giving teams control over work planning and scheduling, training, reward schemes and the provision of dedicated on-site rooms for individual reflection or team discussion.

• Much of the change management literature advocates clearly defined change leadership roles linked to detailed implementation plans. Yet we also know that change often works best when it is a team effort. The people best placed to think constructively or to innovate around diverse issues will be located in different parts of the organisation, and at different levels. As things get more and more complex, it is doubtful that anyone can ever know enough to be in complete control. Rather it may often be better to accept a fluid set of roles involving a wider group of people in which responsibilities migrate between them over time as circumstances evolve. Crucially however, this extended group needs to maintain close communication based on common goals and standards, and grounded in high levels of trust.

• Leadership is not the only role that can drive effective change. People at all levels of the company can, when conditions are right, seize opportunities to make a difference in areas which concern or enthuse them. ‘Change entrepreneurs’ often feel unconstrained by traditional roles or responsibilities and can forge creative and unpredictable solutions, often in the spaces between formal organisational structures and protocols. They are likely to be natural networkers, bringing unusual combinations of people together to look at problems in novel ways. Part of the skill of the entrepreneur is to pass ownership of the change process throughout the organisation, to embedding new ways of working into day-to-day practice.
• Senior management support, organisational structure and the system of performance management are amongst the most important conditions which enable individuals to identify themselves and to emerge as entrepreneurs. Entrepreneurial behaviour may be found in the absence of these three conditions, but it is often at the expense of great stress for the individual who can find him- or herself in a very contradictory position.

• The more inclusive, open and thorough the process of dialogue, the more likely it is that potential obstacles will be identified and the risks averted.
• Stakeholders should be actively involved in identifying potential risks and setbacks. For example Danish companies have used Employee-driven scenario planning based on models and life-size floor plans to enable engineers to test their assumptions about the design of new plant with the people who will be operating it.
• Force Field Analysis is a technique to identify systematically areas of resistance. It involves creating a force field of driving forces, which aid the change or make it more likely to occur, and restraining forces, which are points of resistance or things getting in the way of change (Lewin).

• Research evidence on line managers and change draws us in two opposing directions. On the one hand there is an extensive body of evidence which reveals managers as a “barrier reef” to organisational change. In this analysis, enlightened policies and approaches adopted at Board or senior management levels are dissipated by the inertia and resistance of middle and line managers who may have a strong psychological investment in the status quo.
• Lack of positive engagement with change can take several forms including explicit dissent, excessive focus on compliance with change targets at the expense of embedding new ways of working in organisational practice, and occasionally even active sabotage. This is particularly evident where change embodies a commitment to active employee involvement, either in the process or as a sought outcome. In brief, sources of resistance to change may well be found amongst managers who feel that their status and authority are threatened by initiatives designed to empower employees.
• Evidence and experience suggest that line managers are often resistant to change as a result of being:
• • overwhelmed by emails and paperwork with little differentiation between ‘priority’ and ‘routine’ communications;
  • given little indication of how to resolve conflicting objectives and to prioritise between competing demands on limited resources;
  • given too little information on the rationale for new policy initiatives making it difficult to appreciate their importance;
  • little opportunity to bring their knowledge and experience to the policy design process;
  • poorly briefed by senior management on effective approaches to policy implementation;
  • risk-averse through fear of blame and poor performance ratings;
  • deprived of opportunities for peer support in discussing common problems, sharing successful practices and raising issues of concern with senior management;
  • deprived of the training and competence required to manage change successfully.
• On the other hand, when the design of change initiatives both anticipates and addresses these issues, unpredictable but beneficial responses such as the emergence of entrepreneurial behaviour can be found. Such entrepreneurial behaviour is associated with the alignment of three principal factors: Board-level and senior management support for empowered or unconventional behaviour; sufficient slack or ambiguity in organisational procedures to allow for individual problem solving and initiative; individual experience of work as empowering and developmental, promoting creative and entrepreneurial self-identities.
• Structural solutions to the role of managers may be appropriate. This can involve flattening traditional hierarchies and moving former line managers horizontally into internal consultancy or development teams, thereby retaining knowledge and experience but not standing in the way of empowering frontline workers.
• Where line managers’ roles need to change substantially, individuals should be provided with appropriate training and support, and reassured of their continued value in the new structure.

• Learning from academic knowledge (through courses or links with local universities), business networks, professional groups or even social contacts can be an enormously valuable source of ideas and support for problem solving. Successful change is typically designed as a hybrid, drawing inspiration from multiple sources but always with a critical eye and an instinct for ‘what will work here’.
• Most people within the company can contribute to this process of learning, not least from their previous work experience, out of work activities or knowledge of how things are done elsewhere. The task is to create a collective resource for change from the sum of what individual employees’ knowledge.

• The need to keep effective, inclusive communication and dialogue fresh and alive at all times cannot be overstressed! Communication and dialogue structures need to be reinvented on a fairly regular basis if they are to keep their edge.

Novartis. Once the corporate decision had been made by the pharmachemical company Novartis to move to a process oriented organisation in Ireland, a vision of the organisation as four production units was presented to staff and design teams were set up for each. Each design team brought together operators, crafts people, quality assurance and HR to create the right design for each product area. At their off-site workshops each multi-level group addressed the unit’s:

• capability requirements;
• roles and responsibilities;
• organisational structure;
• required changes and improvements and how these would be achieved.

The teams set up design rooms to provide employees with a guided tour of the proposed changes. The involvement of employees as design team members was seen as critical as they became advocates for the changes and reinforced the message that the changes did not threaten job security. With enabling projects, nearly half of all employees had a direct input into the new design. This process was backed by ample consultation and communication. Employees came together during the design phase to meet their new production unit team, for a planning day prior to going live and for off-site reviews afterwards.

• Milestones are places where you can pause and look back at how far you’ve come, and reflect on the journey so far. They are also useful for co-ordinating future efforts (‘by this time we will have . . .’). Identify dates for having achieved certain successes in the change journey, but do not be afraid to rethink them at regular intervals. There may be very good reasons for taking a detour.
• Balanced Scorecards are used to translate a company’s vision and strategy into implementation from four perspectives: financial, customer, business process, learning and growth.
• It is generally considered that targets need to be SMART (Specific, Measurable, Achievable, Relevant, Time-related), and this makes sense for change processes too. However there are two caveats:
• • Firstly make sure that the targets are SMART for all stakeholders: achievability and relevance may look different from different positions in the company.
  • Secondly don’t let the targets become ends in themselves: ‘ticking boxes’ spells the death of effective or sustainable change.
• Plan for and create short−term wins, including visible performance improvements; achieve those improvements and recognise and reward employees involved.
• Observe patterns of activity and the results of unrelated incidents. Reflect back to people what is happening by capturing and spreading stories of change as they emerge.
• Use lessons and experiences of change to challenge established norms.

• Kipling’s advice to:
  

  ‘. . . meet with Triumph and Disaster
  And treat those two impostors just the same’

  has particular resonance for those involved in organisational change. This guide presents change as a process of experimentation and learning. Experimentation opens the possibility of really successful innovation but runs the risk of failure. Both success and failure generate new knowledge, perhaps in equal measure.

• Setbacks are completely predictable and will happen, but should rarely be used as an excuse for delaying or abandoning the change project.
• Success in one part of a change project generates valuable knowledge about ‘what works’, and this should be captured and celebrated. However it does not create a blueprint that can be replicated again and again throughout the organisation. Share the findings with others, but let them test their relevance for themselves and adapt practices to suit their own situations.

There is more about Monitoring & Reviewing in the Evaluating the Impact of Change section below.

Ulster Bank Group. The UBG Leader, Teacher and Learning initiative was one of the largest cultural change programmes ever undertaken not just in the bank but in Ireland. As well as impacting on the bottom line, the initiative secured several target deliverables for the business:

• 6,500 people were taught;
• 90,000 hours of teaching and learning delivered without external consultants;
• 1,103 business improvement ideas generated through J21, and more than 50% implemented;
• Annual employee opinion survey results improved and leadership was perceived as increasingly effective.

• Once the momentum of change disappears there is often an inexorable tendency to revert to old behaviours. Crises and unexpected problems often lead people to revert to the security of ‘traditional’ ways. New employees not involved in the transition may lack understanding of the rationale for the new ways of working.

• Dependence on change leaders and entrepreneurs can produce sustainability problems when agreements end and when people move on.
• Ignoring traditional change management advice, there may be situations where it is advantageous not to appoint a dedicated change agent or project manager, deliberately encouraging the fluid, ambiguous and perhaps more lasting conditions which support ‘distributed leadership’.
• However where dependence on a key individual has emerged, the change coalition should identify ways of distributing ‘ownership’ of the change process more widely, at least in the medium term.

• Those employees who have lived through a change process will have learnt a great deal, perhaps more than they realise, and will have changed their way of thinking and working in ways that are both perceptible and imperceptible. Moreover this experience is typically collective, shared with a wide range of colleagues.
• New members of staff will not have the benefit of this collective experience. This can make them feel somewhat isolated. Over time it may also mean that newcomers gradually erode the culture and practices that have been created – not necessarily intentionally but because they failed to gain the intuitive understanding of what the change was all about.
• Changing induction procedures to reflect the new culture and practices created during the change process is therefore an important dimension of sustainability. Employees at all levels may be able to help identify ‘what matters’ in terms of messages for new arrivals.

• Throughout this guide we have stressed the value of opportunities for reflection leading to improvement and innovation. Once major thresholds have been crossed, giving stakeholders the opportunity to reflect on ‘then and now’ enables them to recognise how far they’ve come, and helps to embed the changes as ‘the way we do things here’. Such spaces for reflection can quickly become an indispensable part of business development.

Novartis. The move by the pharmachemical company Novartis to restructure to a process oriented organisation in Ireland has been supported by a corporate process oriented organisation ‘university’. This provides the Irish site with a four year change implementation programme, including detailed steps along the way. The annual site assessment evaluates progress on transferring responsibility to those running the production process, and identifies the further steps to be taken.