Decision TreeBy Howard Baldwin | Posted 08-01-2001
Trends: Being More Than a Change Agent
When Justin Yaros left 20th Century Fox to become the CIO of Sony Pictures Entertainment in December 2000, his first look at Sony's IT department convinced him that a major reorganization was in order. Like most Hollywood studios, Sony is split into lines of business with considerably different IT needs: television, motion pictures and home video. But the IT department Yaros found was set up as a single, monolithic unit. A vice president of IT headed up a group that handled both application development and application support, and collectively served each line of business. To obtain the strongest possible IT support, Yaros was convinced, each division needed its own dedicated IT group.
But insisting on a change that would affect not only his own department, but every division of the company, was no small matter. And Yaros' boss, Bedi Singh, the studio's CFO, wasn't convinced that a reorganization was necessary. To build his case, Yaros set out to determine if his staff would support his ideas and was capable of carrying them out. For several weeks, he conducted one-on-one interviews with both IT and business staff. "I started off with an initial observation: IT did not seem to be aligned with business," recalls Yaros, "and that was the jumping-off point for our conversations."
What Yaros discovered was that IT staffers were frustrated and, in fact, eager for a change. Even the vice president, who stood to lose his dominion, felt his charter was impossible to fulfill. Confident that the move would work, Yaros argued that the staff was willing to embrace change and capable of meeting the challenge. Singh was convinced, and the changes were initiated.
Many CIOs, academics and consultants believe that the need to assess change readiness has become more important than ever. The days of three-year technology deployments, whether ERP, supply-chain or CRM applications, are over. As IT becomes more closely aligned with business, CIOs have been forced to adjust to the speed of business. As a result, CIOs are looking at breaking down projects into three- to six-month iterative chunks, with roller coaster-fast feedback loops. "You've gone from an era of contiguous change, with space between projects, to one of continuous change," says Daryl Conner, founder and CEO of ODR Inc., a change management consultancy in Atlanta. "Today, business is operating in a state of perpetual unrest."
Meanwhile, technology has become so intertwined with business practices that virtually every strategic shift requires the involvement of IT. Considering an organization's readiness for change, says Ranjay Gulati, research director of the Center for Technology, Innovation and E-commerce at the Kellogg Graduate School of Management at Northwestern University, "is becoming even more important today as IT solutions such as CRM and supply-chain-management technologies come closer to a firm's fundamental sources of competitive advantage."
Do your people have the stuff it takes to thrive during a shift to a new technology platform, or a new way of doing e-business? Are the necessary resources, attitudes and skills present within your organization? How might your corporation's history or culture adversely affect the outcome of a change? To answer these questions, you need a snapshot of your IT organization. Is it ready for changedoes it have the resources, time, money, staff and attention to do the job? Is it willingare your people committed to the project? Is it abledo your people have the skills and talents required?
There is a school of thought that stresses communication and building motivationnot assessmentin the early stages of a change effort. Indeed, assessing change readiness can be counterproductive, notes M. Lynne Markus, a professor at Claremont Graduate University who is currently visiting the City University of Hong Kong, because it "types" people.
"Change-readiness assessment usually involves giving people feedback on where they are," Markus says, "and this process can create a self-fulfilling prophecy: 'Oh, I guess we're not very ready for change, so let's not try anything very radical here.' You need to assume that people can and will change. The goal is to get them to move rather than spending a lot of time and money figuring out where they are now."
But Gulati, for one, believes that skipping the assessment step is a major reason strategic IT and e-business initiatives fail. Be it an IT group or a function affected by an IT initiative, "the implementation of an IT solution becomes a hit-or-miss scenario" if leaders don't know whether the organization is ready for the change, he says.
Consultants concur. "You get a lot of leverage from early upfront work," says Jeffrey Herriman, a principal in A.T. Kearney's enterprise transformation practice. It's almost a domino effect, because what you find out during assessment affects planning, and planning naturally affects implementation. "The assessment gets everything to go a lot more smoothly," says Herriman.
Ready, Willing and Able
Ready, Willing and Able
Because change has always been with us, CIOs and consultants have had plenty of time to develop methods for assessing it. Assessing change readiness falls into two categories: the micro level (looking at the skills and attitudes of team members) and the macro level (looking at the corporation's culture and history).
What you're fundamentally trying to learn at the outset is the readiness, willingness and ability of both individuals on their own and the staff as a whole to tackle change. How flexible are they? How adaptable are they? How well do they balance multiple responsibilities? The immediate problem is discerning the difference between what they say and what they mean. Some may say they're ready, but are they really able yet? Some may say they're willing, but you have to determine whether they're telling you just what you want to hear.
The CIO is like a doctor hitting a patient's knee with a rubber hammer, checking reflexes. "Is the group so preoccupied with day-to-day firefighting that the mention of change makes them barf on the floor?" asks John Keast, former CIO for PG&E Corp. in San Francisco and now an executive vice president at Asera Inc., a Belmont, Calif.-based consulting firm focusing on b2b projects. "If someone is snowed under, they're never going to have the mental bandwidth to wrap their mind around the new thing."
Barbra Cooper, group vice president and CIO of Toyota Motor Sales USA Inc., has spent years sharpening her techniques for eliciting the information she wants. If she's trying to determine how well her team can deal with rapid change, for instance, she'll inquire about their hobbies. Someone who's a weekend soccer coach will adapt differently to being on a team than someone who's a chess player. She also gets into the experiential, asking about how they reacted to challenges they encountered previously. "I ask about times they felt they didn't have enough information or resources and how they worked through the situation," she says. "I try to get them to talk through it, and by doing that, I get them to elicit commentary about how much fortitude they have."
Charles Goldwasser, a partner with PricewaterhouseCoopers, concurs with Cooper's tack, but suggests a follow-up step. After determining attitudes, create a map that shows how individuals are impacted by the change, what their level of support is and what level of influence they have in the organization. Then target your activities on influential supporters who can win over those who don't support the change.
Willingness is more than a matter of one's eagerness to do something; it's also the enthusiasm for learning what's required. Says Bruce Blitch, CIO for Tessenderlo Kerley, Inc., a Phoenix chemical firm: "It's not what they know; it's what they're willing to learn." But he never blatantly asks if his staff is willing to learn, because "everyone's going to say yes. They're going to have to prove it." He'll tackle the question in a roundabout way, asking about a new technology rather than commanding someone to learn it. He'll ask: "What if we tackled such-and-such? You might have to learn so-and-so. What do you think?" If people are willing to test their boundaries, he says, they're infinitely more valuable than those who say they have their Microsoft certification and believe that their lives are complete.
Blitch cautions CIOs against having preconceived notions about who'll respond. "I've been surprised and continue to be surprised by who steps up to the plate. Sometimes it's who you least expect, and you never know until you make the overture."
Because part of the job of assessment is understanding the skills your staff and managers have, it's critical to get the HR department involved. If you're new to the company, HR will be a key source of information on who's been trained and certified in what technical skills. You'll also want HR's input regarding management skills among higher-level IT staff.
Ralph Loftin, a Newton, Mass.-based consultant and former CIO of Blue Cross and Blue Shield of Massachusetts Inc., evaluates readiness by evaluating an IT organization's capabilities. In workshop settings, IT staff members rank their priorities by importance, identify the capabilities needed to achieve those priorities and then assess their current level of performance. "Then we can think about what we have to do to bring our level of performance up to the level required. It might be training, upgrading skills or a different organizational structure," he says.
Since no IT department is an island, CIOs recommend expanding the assessment process to include the business people you'll be working with. Finding out their concerns is especially important today, when more traditional business processesprocurement, supply-chain management, collaborationare relying heavily on software applications. This means sitting down with key executives, not just those in the executive suite, to assess their position and listen to their concerns, cautions Toyota's Cooper. "It's in the middle-management trenches that you have to solicit support," she says. Although the top brass may be gung-ho on a project and insisting everyone fall in line, that doesn't mean everyone will.
"You may not be able to change them or their thinking," notes Cooper, "but as a strategist, you're able to meter what you're able to do. You can navigate your plan more effectively if you know what level of readiness these gatekeepers have."
History Isn't Bunk
It's not enough to focus solely on the present. Understanding the company's history and culture is critical to determining whether it's likely to support or hinder change. "What an organization has been through in the past deeply influences how it responds to future efforts," says Helene Uhlfelder, director of the People and Organization practice at Answerthink, a consulting firm in Miami. "If a group has had difficulty making changes, they will have a higher level of resistance. At the same time, past successes will lead them to be more flexible."
Understanding the history of an organization is the hardest part about assessing change readiness, says Kep Vadnais, director of IT benchmarking at Hackett Benchmarking & Research (the research arm of Answerthink). "When we benchmark an IT organization, it's a snapshot of the current state, but it tells us nothing of how the organization got there. Understanding where it's been is how you get to the next destination," he says. If you try to initiate a change that's already been tried and failed, your chances of success are only half of what they would normally be.
Goldwasser recommends a two-step process for coming up with an IT group's history. First, engage people in a dialogue about what worked and what didn't in previous projects. "It only takes about fifteen minutes to get a good list of what got results and what didn't. But the issue is, what's being done about them? In many cases, they're not learning the lessons, so they're reliving the problems over and over." After compiling the results, call a meeting and share the summary in order to check its accuracy. Finally, brainstorm with the staff about how to mitigate the concerns they've aired. But if you find an IT group that thinks it's been stellar at change, Uhlfelder suggests doing a reality check with other parts of the company. "A group will sometimes see itself as more change-ready than the rest of the organization," he says, "and as the CIO, you're going to have to deal with that perception gap."
The culture clashes that emerge during mergers and alliances can provide some of the toughest change-management challenges for CIOs. Find out what kind of an organization you're working with, whether you're acquiring, being acquired or working on a joint IT venture, cautions Pete DeLisi, president of Organizational Synergies, an Alameda, Calif.-based IT consulting firm. "Watch out for situations where the culture is solely reactive. If standing out and taking a risk involves getting hit on the head like it's a Whack-a-Mole game, you're not likely to find people who will like the idea of change."
Unsurprisingly, CIOs and consultants frequently disagree on who should conduct assessment interviews. One consultant derided the variety of CIOs' assessment methods as "snowflakesno two are alike." Consultants argue that outsiders bring objectivity. Staffers may be more willing to talk to a third party about concerns they have than to their boss. Tom Gmitter, CIO of Cone Mills Corp., a Greensboro, N.C., textile firm, concedes that "most employees feel more comfortable sharing bad news with a third party in a confidential environment than with in-house management." That third party could also be the internal HR organization.
CIOs argue, on the other hand, that first-hand research is crucial, so they need to be their own field researchers. "When you get information through a filter," says Sony's Yaros, "other biases get in the way."
But how can CIOs tell for sure whether they're being told what the employee thinks they want to hear? As in any survey, look for multiple data points and verification. "We'll ask others in the company about previous efforts to get a systemic perspective," says Claudia Saran, director of business consulting for Chicago-based Andersen. "We ask end users to see if they think IT is ready."
Because the staff, culture and history of every company is different, what each CIO chooses to emphasize in a change-readiness assessment will differ as well. What's important is to ensure that each of the five facets of assessing change readiness are dealt with. When Blitch deployed an ERP system at Tessenderlo Kerley, he began by creating a sense of ownership for all involvednot only for those in his IT department, but also for the employees of the company as a whole.
Blitch proceeded to systematically conduct interviews with executives at each level of the company, starting with the CEO, to determine their readiness. Because most of his firm's business is seasonal, with half booked in the early spring, Blitch decided that the succeeding nine months would be the least disruptive time to install ERP.
To help ensure his staff would be ready for the project, he confirmed with the CEO and the other executives that there was no other project the company might want to do in that nine-month timeframe that would be more important than the ERP installation. Blitch then set up a three-day series of facilitated meetings with department heads and about two dozen employees from each of the company's departments. By asking them what they needed, he was able to address their concerns. At the same time, he was able to assess the company's ability to deal with the changes a new ERP system would bring. He then chartered the department heads to choose the ERP package they felt best suited their needs. Both of these steps served to increase their sense of ownership and, not coincidentally, their willingness to contribute to the project.
Culturally, Blitch felt he had a staff that could roll with change, because he had already seen evidence of its flexibility in the past. When he came onboard, one of his IT staffers was a few weeks away from getting his Novell certification. "I said congratulations," remembers Blitch, "but we're moving to NT." That staffer tackled the NT environment, and now is a key member of the SAP teama "go-to" person.
The system went live on schedule, and when Blitch conducted a post-mortem, he says, the most consistent reaction was "we thought it would be much worse than it was."
CIOs and consultants stress the idea of a post-mortem, and doing regular assessments on projects. Setting milestones, checking progress and making improvements is also crucial, insists Toyota's Cooper, especially in light of the shorter cycles of projects. But doing this requires a commitment to documentation. "You have to take notes on what works and what doesn't as you go. You can't do it at the end, because by that time everybody's exhausted."
Managing change is a key skill, but planning for change is just as essential. Change is difficult enough without assessing ahead of time who will help and who's going to hinder. But because change is ongoing, so too should be assessment. If CIOs know not only their resources, but where the pitfalls lay, they increase their chances of success.
HOWARD BALDWIN is a freelance writer whose articles have appeared in such publications as CIO and Corporate Computing. Comments on this article can be sent to email@example.com.
The Culture Gap
The Culture Gap
Human Synergistics Inc. has developed a tool that Cap Gemini Ernst & Young uses to predict how a workforce will respond to a change initiative. By comparing an organization's self-assessment of its culture [chart 1] with the behavior needed to reach its objectives [chart 2], CIOs can learn which "constructive" behavior styles need encouraging and which status quo-defending "aggressive" and "passive" traits need quelling [chart 3]. The charts show a benchmark of an actual company; the rings represent increasing percentilesthe dark circle is the 50th percentile and show how the company compares to others.
COPYRIGHT 1989 BY HUMAN SYNERGISTICS, INC.
REPRODUCED BY PERMISSION.
Decision Tree: The Risks of Change
Once you've decided on the change you need to make, Cyrus Gibson's methodology for assessing change readiness can help you respond to the risks involved during implementation. Gibson, a senior lecturer at the MIT Sloan School of Business, says this decision tree was originally designed to address the risks involved in IT applications, but has now been expanded so that it can be applied to any kind of change, including new processes and organizations. Each branch has its own implementation strategy; as the eight branches in the far right move down, the change becomes riskier and more difficult to implement. CIOs should conduct this assessment twiceapplying it first to their own organization and then to the other parts of the company to which the change applies.
One way to assess your organization's ability to change is to see if it has the capabilities of high performance companies. The "Agility Diagnostic," developed by Harvard Business School professor Lynda Applegate, consultant Doug Beaven, and Elise Lelon of General Electric, is such a tool: it presents characteristics of high-performing organizations drawn from over a decade of research, and asks employees to state, on a seven-point scale, the extent to which they agree or disagree with statements that express these characteristics. Many of the questions relate to the organization's capacity for change. To check out this tool, download the PDF below:
(download Adobe's free Acrobat Reader)
For more information about this tool, contact Doug Beaven, CEO of Agility Management Partners, Inc. in Cambridge, Mass., firstname.lastname@example.org or check the company's website (www.agilityservices.com).
Makes fast decisions and handles crises well
Accepts stress and tough workloads
Solves problems in innovative ways
Deals well with uncertainty
Picks up new tasks and processes
Adjusts to other work styles easily
Works well with people from different cultures
Endures grueling tasks
SOURCE: SUSAN GEBELEIN, EXECUTIVE VICE PRESIDENT, PERSONNEL DECISIONS INTERNATIONAL CORP., MINNEAPOLIS
Five Coping Mechanisms
Five Coping Mechanisms
The five most common ways IT organizations cope with rapid technological change are:
EDUCATIONKeeping up-to-date by attending classes and conferences
Insisting suppliers help with problem resolution and customization
Gaining insight by working through problems
Developing processes to evaluate and implement proven technology
Engaging external professionals for planning and problem-solving
SOURCE: "HOW IT ORGANIZATIONS HANDLE RAPID IT CHANGE: FIVE COPING MECHANISMS," BY JOHN BENAMATI, MIAMI UNIVERSITY OF OHIO, AND ALBERT LEDERER, UNIVERSITY OF KENTUCKY. INFORMATION TECHNOLOGY AND MANAGEMENT , VOL. 2, ISSUE 1, 2001.
by John P. Kotter. Harvard Business School Press, 1996.
Leading at the Edge of Chaos: How to Create the Nimble Organization
by Daryl R. Conner. John Wiley & Sons Inc., 1998.
Building Change-Readiness Capabilities in the IS Organization: Insights from the Bell Atlantic Experience
by Charles E. Clark, Nancy C. Cavanaugh, Carol V. Brown and V. Sambamurthy. MIS Quarterly, 21:4, Dec. 1997
An 10-question change-readiness assessment tool from The Software Engineering Institute at Carnegie Mellon University.
The CEO Refresher Web site offers a 9-question assessment tool.