Sample: Engaging Change

“An essential manual for all change managers.”

Professor Ian Wallace, Pro-Vice-Chancellor, Defence and Security, Cranfield University

Based on the underlying principles of social psychology, Engaging Change offers practical solutions to exploring, envisioning, engaging and executing successful change initiatives. Any significant organizational level change initiative is dependent on the engagement of the people working in that organization. Without engagement, change will falter and ultimately fail. Engaging Change goes behind the scenes of change management to help managers, consultants and practitioners understand why some things work and others don’t.

Engaging Change addresses current challenges such as how to understand the environmental context driving the need for change; how to initiate and sustain momentum throughout the change programme; how to institutionalize structural and behavioural change; and how to create compelling visions. With case studies from Sony, Nestlé and the British Army, amongst others, the text provides practice-based insights into the realities of leading sustainable change.

Mark Jenkins enjoyed a 38-year career in the British Army before joining Cranfield University at the Defence Academy of the United Kingdom where he was the lead for Through Life Capability Management on the MSc in Defence Acquisition Management. He established Capability Management Consulting in 2011 and since then has advised public sector, commercial and not-for-profit organizations on how Capability Management, an innovative, systems-based approach to organizational development, can help organizations generate and deliver sustainable competitive advantage.

Kogan Page London Philadelphia New Delhi www.koganpage.com

Engaging Change A people-­centred approach to business transformation

MARK WILCOX MARK JENKINS

Mark Wilcox is a business change expert with over 30 years’ experience in some of the world’s biggest companies, including a Director role at Sony Europe. He currently runs Change Capability Consulting Ltd where he has worked with clients such as Microsoft, the British Army and Balfour Beatty. He has contributed to the MBA teaching at Bradford School of Management, Manchester Business School, Warwick Business School, Cranfield Business School and the International Master’s in HR Leadership at Bocconi University, Milan.

Engaging Change

“There are lots of experts and models around change, but few seem to focus on harnessing the energy and wisdom of the people most impacted by the change.

Wilcox and Jenkins give a great illustration of how doing this is the only way to successfully implement real change.”

Roy White, Senior Vice President, Human Resources, Sony Mobile

ISBN: 978-0-7494-7291-7

Change management

MARK WILCOX MARK JENKINS

Co N T e N T s Foreword x

01

introduction and context 1 Introduction 1 The beginning 2 Not as successful as planned = failure! 3 The alternative to failure 3 Positive change 5 Context 7 The elevator pitch for engagement 10 Change: what does it mean? 11 The four key capabilities 11 Structure 20 Notes 24

02

Leadership 25 Introduction 25 What do we mean by leadership and leaders? 27 Leaders 40 Assumptions and conclusions on leadership 52 Tools, techniques and models 55 Conclusions and reflective questions 59 Notes 60

03

exploration 61 Introduction 61 Learning to explore 62 Exploration: why you should do it 68 Exploration: the process 73 Internal and external factors: possibilities and penalties 75 Exploration, engagement and people 80

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Contents

Exploration: the underpinning psychological principles 80 Tools, techniques and models 84 Conclusions and reflective questions 96 Notes 97

04

Envisioning 99 Introduction 99 Do we need a vision or envisioning? 100 Practitioner priorities 104 Stress testing assumptions and ideas 107 Strategic aims: more for less or different and divergent 108 The envisioning process 110 Sense making: what business are we in? 111 Visualization, where we are now and where we want to be 113 Strategic planning 120 Envisioning – the outputs 124 Tools, techniques and models 125 Conclusions and reflective questions 131 Notes 132

05

Engagement 133 Introduction 133 Leadership congruence 135 Power, conflict and influence 136 Stakeholders 140 Purpose and pain 143 Resistance – who’s responsible? 144 Tensions, transparency and trust 145 Engagement: the fundamentals and why you should do it 147 Engagement: the process 149 Engagement: the underpinning psychological principles 151 Tools, techniques and models 156 Conclusions and reflective questions 170 Notes 171

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ix

Execution 173 Introduction 173 Failure to deliver change 174 Resources 175 Engagement and relationships 177 Building the team and developing a change capability 179 First steps 181 Perspectives, problems and decisions 182 Behaviour, culture and symbols 184 Transition, change and ‘business as usual’ 186 Reflection and learning 188 Portfolio, programme and project management 190 Collaboration and technology 194 The underpinning psychological principles (motivation, measures and monitoring) 195 Tools, techniques and models 202 Conclusions and reflective questions 217 Notes 218

07

Conclusions and reflections 221 Bibliography and suggested further reading 227 Index 231

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introduction and context

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introduction There is a wealth of materials available on strategy, leadership or change. So what then can we add that hasn’t already been said? It is our experiences of attempting to make change that provide a unique standpoint. We make no apology for highlighting or discussing topics covered elsewhere. On the contrary, we hope the book positions these frequently conflicting theoretical models, conceptual frameworks, change tools, techniques and approaches in your reality: the reality of the change practitioner. We are only able to do this positioning because, with varying degrees of success, we have attempted to use these models and frameworks in anger ourselves. It doesn’t matter if you are a member of the senior leadership team, a newly appointed line manager or an internal consultant tasked with leading change within your organization; if you have previously struggled or are currently having difficulty in delivering change in your organization, then this book is for you.

Building on concepts originally outlined in Re-Energizing the Corporation (2008),1 this book explores approaches that successful organizations have taken to deliver change. What we have sought out are ways of making change leadership a more positive experience for all those involved in change. We want to share our combined 50 years of experience, in both the public and private sectors, to enable you to make a positive difference to the way you manage change.

In the book, we: â—?

explore the fundamental principles of organizational psychology, business economics and systems thinking, so that you will be able to understand why things work as they do;

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examine a range of interventions you can undertake to plan and deliver significant organizational-level change; provide guidance and advice to help you select, modify and apply approaches to change that will engage, rather than alienate, people in the organization; help you understand, at all levels of the organization, the role and responsibilities of the change leader; and use real-life case studies of change projects from across the public, private and not-for-profit sectors to inspire you with what works, what clearly doesn’t and the lessons to be learned from both.

The beginning What do Sony, the Japanese electronics giant, and the British Army have in common? At first glance, nothing! But a chance encounter in 2005 between Mark Jenkins, at that time a serving Lieutenant Colonel in the British Army, and Mark Wilcox, who had recently left his position as director of people and organizational development at Sony Europe, provides the genesis for this book.

As the lead consultant on the largest British Army organizational change programme in 60 years, Mark J had come to a conference on leadership and change to hear other people’s experiences and to get some practical tips on how to lead and manage large-scale organizational change. When he heard Mark W deliver a keynote conference presentation on how he had led a successful transformational change initiative in Sony Europe, he experienced a powerful insight. As incongruous at first glance as it appears, there were clear parallels between what Mark W had achieved at Sony and what the British Army aspired to achieve with its change programme. Following a brief discussion at the conference and a subsequent short but challenging presentation by Mark W to the upper echelon of the British Army, Mark J managed to convince his superior officers that Mark W should be contracted to deliver a senior leadership intervention as a key element within the army change programme: Project Hyperion.

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Not as successful as planned = failure!

By our, perhaps exacting, standards, the Project Hyperion senior leadership event was not the success we expected or desired. Our efforts were received well in some quarters but met with cynicism in others. Against some rigorous, independently assessed, performance criteria, the intervention was judged to be an 80 per cent success.

The 20 per cent that wasn’t a success, ie the bit that failed to deliver the expected outcome, and our feelings about the way we ran the intervention have, over the last eight years, been a constant topic of review, analysis and post-hoc explanation. With the wonderful benefit of hindsight, we really cannot believe we made some of the assumptions we did or, indeed, that some of the army’s senior leadership would behave in the way they did. Project Hyperion was, in different ways, a career-defining moment for both of us.

In the following years as we have worked together as colleagues and consultants on assignments across the globe, our free time, often at 30,000 ft, has been spent discussing the interventions that we have used: those that worked, those that didn’t and the reasons why.

We share a mutual curiosity about theory and models of strategy, leadership and change but, being engineers by our early training, these models and theories need to be grounded in the practical reality of ‘execution’ or ‘implementation’ in order to get our attention.

The alternative to failure Our experience over the last eight years and this constant reflection, discussion, searching for answers and the crafting and refining of interventions have convinced us that both in the public sector, where accountability and ‘value for money’ are paramount, and in the private sector, where profit and shareholder value rule, there is an alternative approach to lead and deliver successful change that is better than traditional approaches.

We call this approach Engaging Change – the principles and practices of which are outlined in this book. If you apply these principles

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we believe you will develop the ability to lead and deliver organizational change that produces positive results for all stakeholders.

Engaging Change is about the art and science of delivering signi­ ficant organizational change with the full participation of people, rather than enforcing the ideas of the organization onto the workforce.

We believe it is a more effective way to lead change in organizations large and small, as it is designed to engage all those involved in the envisaged change. Of necessity, it requires engagement with those people that have the power to influence and those influenced by the outcome of the proposed change. Effective application of these principles will help every stakeholder understand the reasons underpinning the need for change, ie what needs to be undertaken and completed successfully for the change to be effective and enduring, and how the change will be practically implemented. Most importantly, their part in and what they can expect from the change must be explicit and compelling. This approach is about inviting people to accompany you on the change journey; it is not about telling people where they should go or how they should get there.

In our view, there is no excuse for poor execution. It is bad pre­ paration and a failure to adapt to the challenges presented which typically result in unsuccessful change. In this chapter, we will discuss the Engaging Change principles that will allow you to make good leadership decisions on your change programmes. In the rest of the book we explore the practices of Engaging Change: the tools and techniques that will help you become a master practitioner and a skilled and successful change leader. Finally we want to share with you some of the ideas from across a range of disciplines that impact on the sort of change intervention you craft for your organization.

Too much has been written in the past about change fatigue, resistance and failure. We don’t believe that people are resistant to change, just reluctant to having it imposed upon them by someone else. We all elect to change elements of our life every day; sometimes these changes have a negative impact on our personal or professional lives but we accept change because we understand the rationale behind it; we have calculated the impact it will have and, in the final analysis, have arrived at a conclusion, for whatever reason, that to embrace the change is the thing to do. We discuss the symptoms of change

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fatigue and ways to counter them in Chapter 5. If you apply the Engaging Change principles outlined in this book we believe you will acquire the knowledge and skills necessary to empower people to adopt and accept a positive cognitive, emotional and behavioural approach to organizational change.

The original case made by Jonas RidderstrĂĽle and Mark W for a re-energizing approach to business change is still valid. Their belief is still that organizations should refrain from even more restructuring, re-engineering and repositioning to allow people to become re-energized about their work. Over the last two decades much of the focus of change has been about altering organizational structures and not enough has centred on the involvement of people. In this book we want to help change practitioners involve more people in more successful change programmes. In this way the organization wins, by executing change more successfully, and people engaged in the process are more involved in their own future.

Positive change Given the recent global financial crisis, any approach to getting employees to trust and support you and commit their effort in changing the organization for the better should be front and centre of your thinking. We sincerely believe most people in the organization want to do a good job. Nobody wakes up in the morning intent on creating problems or making a deliberate hash of their work. What typically happens, particularly in the midst of significant organizational change, is that poor leadership, misguided management, inappropriate policies, sloppy processes and ineffectual execution conspire to create problems. These problems then constrain or inhibit the ability of people to perform their work to the standard they or the organization would prefer. Well planned, communicated and executed change removes the causes of these problems – in short it gives you more positive results.

Re-Energizing the Corporation made a rallying cry for a more considered and humane approach to the engagement of people in the process of change. In this work, we want to go further by providing the necessary detail for you to deliver positive change, and particularly

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Engaging Change

F i g u r e 1.1 The 3E leadership model

Envision

Engage

Execute

es

ut

b tri

At Competence

Confidence

Courage

t

At Context

Relationships

n

io

t en

Capacity

ns

io ct

A Challenges

Commitments

Capability

about how you select from the vast range of change methods and models available the approach that will work for you and your organ­ ization as you face your unique change challenge. This, in essence, is what Engaging Change is all about: a people-centred approach to business transformation where Leadership + Engagement = Positive Change.

Engaging Change builds on the 3E change leadership model, origin­ ally proposed by Mark W in Re-Energizing the Corporation (Figure 1.1).

We know that much of the effort to deliver change is frequently wasted through a loss of focus; ineffective contingency planning; poor or insufficient communication; slow implementation of new processes; or a failure, up front, to free up sufficient time to execute the change.

We hope to deal with these and other issues associated with executing complex change in organizations large and small. We don’t proclaim to have the answer to every single issue that might arise in your situation, but we do think we can equip you with the right principles and some sound practices to enable you to be successful.

In the 1940s, one of the founders of organizational development, Kurt Lewin, stated that ‘there is nothing as practical as a good theory’.2 We fully agree – hence the focus of the book is not only what to

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do, but why, based on insight into the psychology of change, you should do it in the first place.

All change happens at three levels: individual, group and organ­ ization. This book reflects this multi-tiered approach. It considers individual change from both your perspective (change leader) and also that of the people who can influence or are influenced by the change initiative. It also examines what is necessary to effect grouplevel change, be that in the work team, business unit or department.

Finally, it explores how you create sufficient critical mass at the group level to successfully implement change at the organizational level. After many years of experience of planning and leading change, we have found that it is almost impossible to implement successful and sustainable change unless you start with the individual and progress through the group to the organization. On that basis, and starting with individual concerns, we will guide you through interventions that deal with change at these three levels.

Context If you want to understand something, try to change it.

(Kurt Lewin, 1890–1947)

We live in an age of extremes where the fate and fortune of individuals and organizations can change overnight: this is a world where the ‘haves’ can rapidly become ‘have-nots’. This is an age where businesses, their people, products and services can find themselves unexpectedly ejected from the category of ‘wanted’ and cast into the company of the ‘unwanted’. The reverse is also true – the speed at which change now happens means that companies and individuals can find themselves rapidly elevated to heights undreamt of previously.

Instagram is a good example of this phenomenon. From its launch in October 2010 till its acquisition by Facebook in April 2012, active users of Instagram grew from zero to 100 million. By incorporating photo and video sharing into a variety of social network platforms, it has arguably changed the social networking landscape forever.

We also live in a world where the expected time between these seismic changes is shrinking rapidly. Recent experiences in the banking sector serve as a timely reminder of how unexpectedly and quickly change

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can happen and how quickly an individual or an organization can fall from grace and be destroyed: Barclays and its CEO Bob Diamond provide a very real example. Who, even in the days and weeks preceding the event, would have predicted the collapse of one of the world’s largest investment banks, Lehmann Brothers, or, indeed, the speed at which other banks and then countries around the world followed suit or found themselves mired in a world of increasing uncertainty, debt and civil disorder? Similar events, for example the Arab Spring and the Japanese earthquake and ensuing tsunami, have all laid the foundation for recent, unexpected and significant change.

If there is one thing that the events above tell us, it is that the stability and sustainability of any institution can no longer be guaranteed or taken for granted. Organizations can, however, become more resilient by developing the capability to anticipate, prepare for, withstand and recover from the effects of seismic change; this ability to survive is directly related to their ability to adapt, modify and transform their structures, systems, processes and, above all, to engage with and develop the capability of their people. In the following chapters, using the Engaging Change principles, we show you how to develop this capability.

Why then, when literally millions of words, hundreds of thousands of articles and thousands of books have been written on the subject of change, do we continue to hear and read of the continuing failure of leaders to successfully transform their organizations?

What we suspect is that people are trying to find the perfect tool that works for their organization. We aim to develop your mastery of change by offering you a choice of tools and techniques and will help you to understand how to use them to create results of which you will be proud. Of course, you will need to practise to achieve mastery but at least you will be equipped to do the job.

We decided to use our collective experience of leading, managing and consulting on change to write this book. You may well ask what we can add that hasn’t already been said. Firstly, the book reflects our insights and experiences as ‘practitioners’. Although, where appropriate, we make reference to the academic literature, the book is not an academic tome offering yet another ‘new’ model of change nor is it a critique of existing models and theories; it is our distillation

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of decades of grappling and sometimes succeeding, sometimes not, with the complexities of delivering successful organizational change.

We want to present things to the reader that we have found work in our experience or help us to understand change better.

Underpinned by extensive teaching and research into theories and models of change, the book reflects many years of leading and managing change in the public and private sectors. In addition, we have both taught on postgraduate courses on change and leadership where the students demand practical advice as well as academic underpinning.

Our experience of testing theories and models of change in real organizational change situations has given us an insight into what usually works and, just as importantly, what typically doesn’t. The book reflects our successes and failures; what we did and what we didn’t; what went well and what didn’t go quite so well do and, critically, what we learned from these efforts. It is, as far as we could make it, a true ‘warts ’n’ all’ account of our endeavours.

The book is written by practitioners for practitioners and whilst it cannot foresee what waits unseen and unexpected around every corner, it provides through the Engaging Change principles practical advice and guidance to help you negotiate successfully the challenges and opportunities that change creates. We want the book to help you have a positive change leadership experience.

We’re sure you will be familiar with the following scenario. Your boss informs you that you have been ‘selected’ to lead an organ­ izational change initiative. After the initial thought of ‘Why me?’ you hurriedly dig out and re-read all those books on change management that you acquired during your time at university or college. You then scour the internet for the latest thinking by this week’s favourite change management guru. But, having digested the plethora of models and theories, you are still none the wiser about how, exactly, you should lead or manage this change project. Although the various models and their explanations are clear, none of them actually reveals the practical steps, the things you need to do, to start, let alone successfully deliver, organizational change.

So where do you get this information? Where are the cases, the ‘how-to guides’ that explain in simple clear terms how to deliver change? This book provides a starting point to answer that question.

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We cannot and do not profess to know everything there is to know about delivering change, but we have planned, managed and led several organizational change programmes. As already indicated, some of these have been very successful whilst others have failed to deliver all the expected benefits. Throughout the book, supported by vignettes and insights offered by those actually involved, we use case studies of some of these programmes to highlight factors that we believe are critical for delivery of successful change. In some cases, the vignettes reflect the opinions of senior leaders, sponsors, or manager of the change initiative; in others the views of individuals who were either involved directly in implementing the change or, conversely, were affected by the outcome of the programme. It is the voice of these people that provides the bedrock for the book; their insights provide a very clear understanding of the good, the bad and the ugly of change.

The elevator pitch for engagement The trite ‘people are our most important asset’ that accompanies most businesses’ annual reports belies an approach to people management that frequently smacks of disdain and an organizational contempt for the value of people. We sometimes wonder if there exists a ‘reality’ gap between the leadership of some of the organizations we have dealt with and those charged with day-to-day operations and change.

For example, people who do not experience a tangible, worthwhile investment in their development soon perceive themselves as unappreciated. If demotivated enough by this neglect, individuals begin to exercise their freedom of choice. If they can, they seek alternative employment in organizations that offer a more receptive and appreciative environment. Those who, for whatever reason, can’t leave, remain to become a thorn in the side of the organization.

At best they exhibit mere compliance whilst delivering the minimum acceptable output – they seldom, if ever, go the extra mile. At worst, the disenfranchised set out to deliberately sabotage organizational initiatives and outputs. An organization cannot have snipers taking pot shots at their processes and initiatives for long and disenfranchised

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staff slowing down the pace of implementation. Engagement is not a ‘nice to have’; it is an essential prerequisite for positive change and sustainable competitive advantage.

Change: what does it mean?

When we talk about change we are talking, primarily, about a programmatic approach to large-scale organizational change. Within any such programme, there are, of course, usually a myriad of smaller, subordinate and interdependent change initiatives or projects. For a change practitioner, it is the ability to understand the impact of each small project on the overall organizational change objective that is important.

By integrating our experiences with those involved in and affected by change programmes covered in the book, we have concluded there are four key capabilities that you need to develop and execute well if change is to be delivered successfully and all expected organ­ izational and individual benefits are to be fully realized.

The four key capabilities It is not necessary to change. Survival is not mandatory.

(W E Deming, 1900–93)

What we outline in this book represents the core of our beliefs: that engaging others is the right and most effective way to enable change in an organization. Effective engagement of others is, however, also a task that requires the most preparation, the most determination and the deepest integration into the way the organization does business.

We know, from our research and experience, you need to approach change from and develop organizational capability in, four perspectives: exploration; envisioning; engagement; and execution.

Although we dedicate a whole chapter of the book to the issue of engagement, it is the core thread running throughout the book. As you grapple with the challenge of leading or managing change, you

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will discover, irrespective of which element of the Engaging Change framework is the focus of your attention, that engagement is the critical factor in delivering successful change. Effective engagement binds the other capabilities into a coherent approach to positive change. Its absence from a change initiative indicates very clearly that whoever is leading the change does not truly understand its importance and, more importantly, that the probability of success is not very high.

Centred on the unquestionable requirement for strong and positive leadership, we believe these distinct, but interdependent, cap­ abilities need to be developed and deployed for change to be delivered successfully. We also believe that the ability to explore, envision, engage and execute are acquired, developed and institutionalized through the integration and socialization of individual capabilities, ie the knowledge, skills and experience possessed by each individual.

The envisioning, engagement and execution capabilities are identified and examined in detail in the 3E Leadership model published previously in Re-Energizing the Corporation (2008). Our experience of trying to implement the 3E model within organizations led us to conclude that delivery of successful change would be enhanced significantly if an additional capability – the organizational capability of ‘exploration’ – was added to the model.

Exploration The ability to rigorously and objectively examine the environment to identify the key issues and factors that will or could, plausibly, impact on the organization in the short, medium and long term is absolutely essential. Without an understanding of the environment and the challenges and the opportunities that it may generate, it is difficult to see how any organization can develop a strategy that will ensure its survival and sustainability. If within the organization, you, or someone who will be assisting you does not have the capability to undertake this task, then stop right now. Without this capability, you will be organizationally blind. If you don’t truly understand the environment within which your organization operates then you

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cannot hope to identify and understand the factors that will influence and shape organizational strategy and which might, therefore, drive the need for change.

We are constantly amazed at how little those charged with developing the organization’s strategy or delivering organizational change know or, indeed, even care about the environment within which the institution operates. We are not just talking about the external, operating environment but also the internal, cultural and behavioural organizational environment. Sometimes the major opportunities and threats facing an organization are those lurking in the deep recesses, eg those frequently unseen ‘back-office’ functions that set and manage an organization’s regulatory and governance frameworks. Here again, we need only look at the banking sector to see the numerous unethical and, in some cases, illegal practices that had become institutionalized over the years. Ongoing revelations about the banking industry’s LIBOR (London Interbank Offered Rate) rate fixing and the misselling of credit card protection schemes provide a clear example of how pernicious, once started, these practices can become.

The capability to explore and understand fully the organization’s environment is not just about your ability to populate a PESTLE (political, economical, social, technological, legal and environmental) matrix and then assume that you have produced a comprehensive understanding of potential opportunities and threats. You need to be able to conduct what we call deep environmental scanning. A full explanation of how to do this is described in Chapter 3. At this stage, it is sufficient to say that the ability to do this requires you to think more creatively, analyse more fully and question more critically than is typically demanded when conducting market, customer or competitor analysis.

If your deep environmental scanning is effective, it enables you to not only identify possible threats and opportunities, it also helps you to develop a range of viable, alternative actions that might be deployed to counter or exploit them. Critically, however, evaluation of the alternatives provides the initial input into the second of the four organizational capabilities required for successful change: envisioning.

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Envisioning The organizational capability to ‘envision’ is an essential precondition for development of a robust and realizable organizational strategy.

A good strategy should include the actions that the organization intends to deploy as a response to identified and defined opportunities or challenges. As Richard Rumelt in his book Good Strategy Bad Strategy (2011)3 observes: A good strategy includes a set of coherent actions. They are not ‘implementation’ details; they are the punch in the strategy. A strategy that fails to define a variety of plausible and feasible immediate actions is missing a critical component. (2011: 6)

If the capability to explore enables you to identify the key issues affecting, or likely to affect, the organization and potential alternative responses to these issues, then the capability to envision provides the means to evaluate the responses and decide whether to retain, modify or discard the organization’s current strategy. Only in the first of these three options is there no requirement for organizational change. We also suggest, with the current state of global conditions, that retaining a strategy for long periods of time is, perhaps, not the wisest thing to do. Whereas as far back as the 1980s or even, arguably, the 1990s, the assumptions underpinning an organization’s strategy were likely to remain relatively stable for long periods of time, the rate at which we now experience change means that the assumptions we make about the world, our competitors, our customers and even our employees are likely to be invalid very quickly. Retail businesses such as Comet, Jessops, Woolworths and Borders Books were all long-established fixtures on the UK high street until change overtook them. Similarly, Saab and Kodak were both manufacturing titans who, as a result of persevering with what they had always done, became victims of changes that had rapidly reshaped their operating environments. Even the corporate behemoths, such as Sony, Hewlett Packard and Dell, that previously ruled the personal computer world are in turmoil; this is arguably because they remained wedded to a business model where users own and/or operate PCs and laptops with proprietary software installed on them. They either missed, or saw and dismissed, the arrival of cloud storage, the now ubiquitous

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tablet, smartphones and apps. They also underestimated the speed at which these new devices and services would become the preferred choice for the tech-savvy X and Y generations. It is only recently, due to the unavoidable pressure of the market and the consumer’s willingness to switch to free, alternatives, that these companies have reviewed their mobile device and cloud strategies.

C a s e S t u dy Winds of change For many years, personal computers and in particular laptops were devices of choice for business people and home users alike. 98 per cent of these devices ran on one operating system and, with few alternatives in use, were the prerogative of experts or technically confident computer enthusiasts. The business model for a very small number of large software providers was to sell operating licences along with the computer build. It was a very lucrative model. In 2014, with PC sales having dropped by over a fifth over the previous year’s total, this dominance and hence their core business was under serious threat. The consumer’s love affair with the tablet computer, smartphones and other mobile devices was not only challenging the supremacy of the PC but also changing the way people viewed and used software. Consumers no longer wanted to buy and own productivity suites combining word processors and spreadsheet packages; they just needed to be able to access and use software stored in the cloud. The increasing number of cloud service providers also meant that data storage on your own device was no longer necessary. You could now hire the exact tools you needed to do your specific job and not pay for things you didn’t need packaged as part of a suite.

The recent acquisition of mobile phone manufacturers by two of these giants, Microsoft and Google, was a clear signal of a change of strategy for players in the computer software industry. Mobile devices and cloud storage were the future for computing. What was not clear, however, was how the change in consumer behaviour was going to impact them both in the long term.

As a small step towards gaining clarity on this issue, senior leaders from one of the largest software organization’s consumer business, representing the developing markets in Europe, invited us to help them envision the future of their business in this new world. Within their organization, the global strategy and core product portfolio are rightfully generated from the company’s headquarters in the United States. The regional team wanted to be able develop a local strategy and product portfolio that were aligned to the new strategy, reflective of the

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emerging change in the global business model and which would also be capable of satisfying regional consumer demand.

Over an intensive three-day event, we worked with a group of 70 managers, which was a representative cross-section of the regional senior team. Using a modified version of the transformation mapping process (see Chapter 3), we helped them explore the current operating environment; gain a better understanding of the likely direction of the region’s business over the next two to three years and develop a vision of what the future might look like for them.

As a direct result of tough discussions about the challenges and opportunities that lay ahead, the participants generated a number of projects that they believe will prepare and support their transition to a mobile devices and cloud-based services company in their region.

Whilst it was not easy to look into the future of a huge organization in the midst of the most challenging time in its history, the clarity and reduction in confusion that the engaging change approach provided were highly valued. When things are in turmoil and anxiety starts to take hold, a process that provides clarification and reassurance that, as a group, you are all going the right direction is invaluable, if not a necessity.

When the environment is changing around you and no matter how important it is to continue to focus on the day job, an organization must take time to examine the opportunities or threats to its future.

It must also share this with its people. If the software companies caught in the current market upheaval and maelstrom of change cannot give their employees a vision of where they are heading, then many will take their valuable skill sets elsewhere. These people are talented employees with the ability and freedom of choice to decide where they want to work. A workforce needs a clear, shared view of where its future lies, and we believe that envisioning provides a process for developing this.

Envisioning is about creating a new, or modifying an existing, strategy as an organizational response to the challenges and opportunities identified during deep environmental scanning. It is not just a matter of creating a vision; it extends into affirming what business you want to be in and how you wish to compete. Once the vision has been set, the objectives agreed and priorities established, it will

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all fail unless everyone in the organization is on board and committed to deliver the change required. Unfortunately, this is the point where the processes, systems and procedures of today’s organization are used to shackle and constrain the organization of tomorrow.

Managers at all levels run into the immovable barriers called company policy or operating procedures. To overcome or circumnavigate these obstacles on your own is usually very difficult. Your best chance of success is by persuading those who control or manage these policies and procedures to help you; this requires you to persuade or influence them to help you. The ability to secure the support and commitment of others is the third and, in our opinion, the most important of the Engaging Change capabilities. It is only through effective and sustained engagement that the commitment of all those involved in or likely to be affected by the change can be secured.

Engagement How do you engage people and secure their commitment to change?

Almost invariably, the articles and books on change express the need for communication; but how, when, with whom, how often, using what medium? In the military, and many large organizations, the senior leadership of the organization frequently relies on the use of cascade briefings to ‘communicate’ the reasons behind the need for change. The senior leadership brief their direct reports who, in turn, brief theirs and so on down the chain until the message, by now interpreted, distorted and reinterpreted by successive management layers reaches those at the coalface. The naive presumption by the senior leadership is that through this process, the initial message will be contextually interpreted, cleanly communicated and clearly understood at each level of the organization. They also assume, as a consequence of receiving this undistorted vision of the future organizational state, that employees throughout the organization will be galvanized into action.

Our experience suggests this detached, top-down approach seldom works, as the message gets distorted, communication does not happen and those likely to be affected by the change become disillusioned, disenfranchised and, ultimately, disengaged from the vision. Without

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an engaged and committed workforce, it is difficult to see how implementation of organizational change can be successfully pursued and delivered. The ability to execute change and deliver benefits is the one capability that, over the years, we have observed is a noticeable deficiency in most organizations. It’s an engaged workforce that delivers change and drives results. Buckingham and Coffman (1999),4 citing their research whilst working for Gallup – the commercial survey and employee relations organization – found that in average organizations as many as 18 per cent of people are actively dis­ engaged, that is at best cruising in neutral or at worst working against the organization’s intended direction. With good management and a process to build engagement the statistics change dramatically to favour aligned employees. They found that world-class organizations have over 65 per cent of their employees working towards their goals and positively engaged in the business. Their conservative estimate is that disengaged workforces cost the US economy over $300 billion a year. It follows that engaging the workforce positively in change is good for your business and good for your people.

For communication and therefore engagement to be successful, it needs to be targeted; this means that, first of all, you need to craft an ‘engagement strategy’ that outlines with whom you need to engage, why and what the impact of non-engagement will be for your change endeavour. If you accept that engagement and communication go hand in hand then this means that you need to be able to identify and send specific messages at different times of the change to all those who can influence or will be influenced by the outcome of the process. The important thing to remember about these stakeholders is that they do not all have equal stakes in the project. Some stakeholders will have a huge personal and professional commitment to ensuring the change happens. Conversely, there will be others who will have a similarly significant stake in ensuring that the status quo is preserved. Other stakeholders may only have a marginal interest.

Again the important thing for you is being able to distinguish between the various types of stakeholder and then constructing the message and the means of communication that are applicable and appropriate to each and every one; this is not simple or an easily accomplished task.

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A word of advice, and similar to just constructing a PESTLE matrix for exploration, there is little to be gained from merely putting together a stakeholder matrix. In Chapter 5 we explore a number of methods of determining who is actually a stakeholder and how often and by what means you might communicate and engage with them. Finally, remember that there are always more stakeholders than you first think; so once you think you have identified them all, we suggest you start again and unearth all those you missed first time around.

Leading and managing change programmes over many years inform us that even if you manage to develop and use the exploration, envisioning and engagement capabilities in an exemplary fashion, there is no guarantee your change project will succeed. The canon of empirical data on change indicates that the most difficult and, therefore, the least successful part of any change project is the actual execution of the changes desired.

Execution One of the commonly used approaches to organizational change is Kurt Lewin’s (1947) three-step, Unfreeze–Change–Refreeze model.5 The simplicity of the model is beguiling; it suggests that change is readily and easily accomplished if three simple stages are followed.

The problem, other than the advice to use the associated Force Field Analysis model to identify the barriers and enablers of change, is that Lewin’s model provides little guidance on how to Unfreeze, Change or Refreeze. Although the model is popular and has a degree of utility for simple change projects, we do not believe it is comprehensive enough to be of significant use in complex change situations.

A similar case can be made for probably the most widely cited and used model of change: John Kotter’s eight-step model.6 In this extension of Lewin’s model, Kotter advocates the completion of eight sequential steps. As sensible as this appears, Kotter fails to provide any guidance, for example, on how one creates a ‘guiding coalition’. How are the individual members of this critical entity identified and the coalition created? Kotter, similarly to Lewin, provides little guidance. He suggests that you find the ‘right people’, that is, those people with strong

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position power, broad expertise and high credibility.7 What he doesn’t explain is how you find these people. Why only seek people with position power? This approach appears to either ignore or dismiss other sorts of power. Kotter’s ideas are taught on most MBA programmes and are frequently cited by managers, consultants and other change practitioners as the basis for the change approach adopted by them or their organizations. Finding examples of its successful application in an organizational setting is not so easy.

If you are going to be successful in your efforts to convince, engage and commit people to your cause, you need to be able to identify who has the power to assist or resist your endeavours, regardless of whether they are internal or external to the organization. Lewin suggests the use of Force Field Analysis to conduct this exercise and, whilst this is helpful, does little to tell you where to focus your attention.

What sort of power can thwart your ambitions? Who has, or controls, this power? Charles Handy8 suggests there are five types of power than can be used to influence people’s behaviour: physical; resource; position; expert; and personal. He also suggests that ‘implementation of change is largely a matter of sources of power and methods of influence that organizations react psychologically rather than logically and that persuasion or rational argument is only a possible method of influence’.9 Execution is the legacy we leave in the organization as change leaders. We are rarely remembered for trying hard or for having a great idea that was never implemented. Whilst many books overemphasize the project management aspects of change at the expense of the people issues, we think that the optimum way to execute successful change is to engage people in the process.

Structure In Chapter 1, we have outlined the four key organizational capabilities for change. In the remainder of the book we examine these cap­ abilities in more depth. The examination is illustrated with evidence from real change initiatives with which we have been involved; we hope these examples provide useful insights into programmes that

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have been completely successful, those less so, and those that have failed. We have divided the book into seven chapters, which are represented in Figure 1.2. To aid your navigation through the book, a variation of this diagram, with the current chapter being read represented by a shaded portion, is positioned at the beginning of each chapter. Where we introduce a tool, technique or model in the text, we provide an explanation later in the chapter and use an example to illustrate the concept in use. We conclude each chapter with some reflective questions to highlight the key issues raised within the chapter.

In Chapter 2 we examine the centrality of leadership in delivering successful and sustainable change. Leadership is primarily about setting the conditions for others to succeed – creating the environment within which people can take ownership of and lead change.

Leaders are, by definition, leaders of change; their role is to inspire and provide people with the support needed to move from one organizational setting to another.

In addition we will explore what sort of courage it takes to lead change successfully and other key characteristics of leaders that

F i g u r e 1.2  The book structure Chapter 1: INTRODUCTION AND CONTEXT Chapter 3

Chapter 4

EXPLORE

ENVISION Chapter 2

LEADERSHIP

EXECUTE

ENGAGE

Chapter 6

Chapter 5

Chapter 7: CONCLUSIONS AND REFLECTIONS

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impact their effectiveness. Whilst courage is not a common term in business it neatly sums up an attribute that we believe is important for any change practitioner, whether they are the formal leader or not.

In Chapter 3 we explore the necessity for a deep and comprehensive exploration of the environment so that the opportunities and challenges can be clearly identified and the interdependencies between each of the contributing factors to the opportunity or challenge can be categorized, examined and a logical, evidence-based strategy for action can be formulated. Formulation of this strategy requires a strong vision of the future state of the organization. We hear many times in organizations of people being extolled to ‘think outside the box’. This call to be creative in strategy is admirable. If your organ­ ization doesn’t have a clear picture of its current capabilities and weaknesses, however, then looking outside may generate choices that require capabilities that are impossible to generate. We encourage exploration from a realistic starting point, ie where the organization is today; its current capabilities.

In Chapter 4, we reveal how this starting point is created when we explain the necessity of having a clear vision for the organization.

Without clarity of vision it is impossible to create a strategy for the organization or understand what needs to be changed. The chapter explores how this vision is created, who is involved in its creation and the practical steps required to establish a clear and easily understood sense of the organization’s change journey and final destination.

In Chapter 5 we look at how you engage with and gain the commitment of people to participate and deliver change. We examine how commitment is created, consensus achieved and success planned from the outset. As we discuss these issues we again provide concrete examples of how to engage with and secure the commitment of all stakeholders and, in particular, those who have the ability to delay, dilute or derail the intended change. We also identify some of the practical steps you can take to ensure you do get the buy-in required and then maintain and sustain it for the duration of the change and beyond.

In Chapter 6 we scrutinize the problem of actually delivering or executing change. We examine the relationship between motivation,

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measures and monitoring and explain the relationship between effective performance and programme management. We explore the relationships between the goals we set people, as individuals, and the goals of the organization. The mechanism to link the two, performance management, is also examined as part of the means of measuring and monitoring progress for the organization.

The final chapter of the book, Chapter 7, presents our conclusions and reflections on change and offers some advice and guidance you may wish to use to assist you on your change journey.

There is no need to read the book chapters sequentially; you can dive in and select the bits that are relevant to your current challenge or task. If you are faced with the need to identify what’s going on in your operating environment and the challenges and opportunities presented by these events, then read Chapter 3. If you are tasked to develop a strategic response to these challenges and opportunities, read Chapter 4. Alternatively, if you are struggling with how to connect and engage with all stakeholders who either influence or are influenced by the outcome of the change, start with Chapter 5.

Chapter 6 provides guidance on how to deliver change in a robust and assured fashion, so read this chapter if you are having difficulty in deciding which alligator is nearest your canoe. Finally, Chapter 7 is where we share a number of our conclusions regarding what makes a practitioner effective and how they might build on that success to become a master craftsman. Learning from others’ mistakes and successes never ends, and the pursuit of mastery is a lifelong task.

This book is about the practical ways you, as a change practitioner, can assist an organization to deliver change successfully. It is built on sound theory, tested principles and extensive industry experience.

Whilst the book doesn’t purport to be the answer to all your change needs, it does provide real guidance on what works and why. We know that engaging people in change is both the right thing to do morally, and a better way to achieve business transformation. We hope the following chapters guide you to solutions to your own engaging change.

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Notes 1 For a detailed explanation of the 3E leadership model, see p 114, Ridderstråle J and Wilcox, M (2008) Re-Energizing the Corporation, How leaders make change happen, Jossey Bass, Chichester.

2 Lewin, K (1951) Field Theory Social Science: selected theoretical papers (ed Cartwright, D) Harper, Oxford, England, p 169.

3 Rumelt, R (2011) Good Strategy, Bad Strategy, The difference and why it matters, Profile Books, London.

4 Buckingham, M and Coffman, C (1999) First Break All the Rules: What the world’s greatest managers do differently, Simon and Schuster, New York.

5 Lewin, K (1947) Frontiers in Group Dynamics, method and reality in social science, social equilibria and social change, Human Relations, 1.5.

6 www.kotterinternational.com/our-principles/changesteps.

7 Kotter, J (1996) Leading Change, Harvard Business School Press, Boston, MA, p 66.

8 Handy, C (1993) Understanding Organisations, 4th edn, Penguin Books, London, pp 126–131 9 Handy, C (1993) Understanding Organisations, 4th edn, Penguin Books, London, p 329.

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“An essential manual for all change managers.”

Professor Ian Wallace, Pro-Vice-Chancellor, Defence and Security, Cranfield University

Based on the underlying principles of social psychology, Engaging Change offers practical solutions to exploring, envisioning, engaging and executing successful change initiatives. Any significant organizational level change initiative is dependent on the engagement of the people working in that organization. Without engagement, change will falter and ultimately fail. Engaging Change goes behind the scenes of change management to help managers, consultants and practitioners understand why some things work and others don’t.

Engaging Change addresses current challenges such as how to understand the environmental context driving the need for change; how to initiate and sustain momentum throughout the change programme; how to institutionalize structural and behavioural change; and how to create compelling visions. With case studies from Sony, Nestlé and the British Army, amongst others, the text provides practice-based insights into the realities of leading sustainable change.

Mark Jenkins enjoyed a 38-year career in the British Army before joining Cranfield University at the Defence Academy of the United Kingdom where he was the lead for Through Life Capability Management on the MSc in Defence Acquisition Management. He established Capability Management Consulting in 2011 and since then has advised public sector, commercial and not-for-profit organizations on how Capability Management, an innovative, systems-based approach to organizational development, can help organizations generate and deliver sustainable competitive advantage.

Kogan Page London Philadelphia New Delhi www.koganpage.com

Engaging Change A people-­centred approach to business transformation

MARK WILCOX MARK JENKINS

Mark Wilcox is a business change expert with over 30 years’ experience in some of the world’s biggest companies, including a Director role at Sony Europe. He currently runs Change Capability Consulting Ltd where he has worked with clients such as Microsoft, the British Army and Balfour Beatty. He has contributed to the MBA teaching at Bradford School of Management, Manchester Business School, Warwick Business School, Cranfield Business School and the International Master’s in HR Leadership at Bocconi University, Milan.

Engaging Change

“There are lots of experts and models around change, but few seem to focus on harnessing the energy and wisdom of the people most impacted by the change.

Wilcox and Jenkins give a great illustration of how doing this is the only way to successfully implement real change.”

Roy White, Senior Vice President, Human Resources, Sony Mobile

ISBN: 978-0-7494-7291-7

Change management

MARK WILCOX MARK JENKINS