Use of a Consultant

Let me make a suggestion that I feel will significantly increase the effectiveness of the Managing Change Process. This would be by using an effective consultant to guide the leadership team through the process. The consultant does not need to know anything about the business. The consultant does need to be very familiar with this or some other effective change process. There are several advantages for using one:

One is that it is a very difficult assignment for the leadership team leader to effectively lead the meetings and also effectively participate in the discussions. Most think that they can but in reality most cannot.

A good consultant can challenge members of the leadership team, including the leader. One example is when the leader starts to dominate the discussion and/or force their opinion on the team. This will not produce good results and needs to be challenged. A good consultant can do this effectively.

They can bring a variety of tools, techniques and methodologies that can assist with accomplishing the objective.

Facilitate the team through difficult situations such as conflicts between team members.

Provide teambuilding that can greatly assist effectiveness. This can be through formal teambuilding or through strong facilitation.

Consensus decision making is very important for an effective change process. It is rare for a leadership team to be able to consistently reach consensus on critical decisions without either extensive training or facilitation. Consultants can assist in this area.

Should the consultant be a part of each regular session, it has been found as a means to "keep the process going". It can prevent the team from canceling sessions because "other things come up".

Lastly, the leadership team should determine just how much potential exists with effectively implementing an ongoing process for Managing Change and compare that with the cost of using a consultant. Using an effective consultant greatly increases the likelihood that the process works.

Revisiting Vision and Strategies

Let me make some additional comments regarding the model for Managing Change. Should this be your first time to this site and you want to understand the model that I use for Managing Change, I suggest that you go to the January 2008 Blog entry and start reading the next five monthly Blogs that explain each step in the model.

Let me explain the arrow at the bottom of the model. Note that a solid line goes from the Monitoring process back to the Measurement step in the model and a dotted line that goes back to the Vision. What this represents is that at each monthly meeting the session starts by going back to Monitoring where the results of the process can be observed. This should happen each month and then follow through with the appropriate review of the Initiatives and Implementation plans. The mechanics for doing so is spelled out in the Blog comments for those steps in the model.

Note that the line is dotted extending back to the Vision. It is not appropriate to go back each month to revisit the Vision and Strategies, as something is wrong if those need to be changed on a monthly basis. You should go back occasionally to remind yourself of them. However, annually the Vision and Strategies should be reviewed and revised where appropriate. This review should also take place if something significant should take place, like a 911 event, that should cause the organization to revisit its high level guidelines of its Vision and Strategies.

This process should continue forever.

Monitor

The Monitoring section of the model represents the ongoing meeting process of the leadership team to monitor the overall process and make changes as appropriate to ensure that the plan works and the Vision is achieved. This is the most important section of the model.

This is typically a monthly meeting for half of a day. The meeting starts by reviewing the KPI graphs and comparing current performance against goals. Should progress toward goals not be adequate either the appropriate Active Initiatives have not been selected or Implementation of the Active Initiatives is not progressing appropriately. Leadership should determine which it is and take the appropriate action. The list of Initiatives should be reviewed to see if list of Active Initiatives is appropriate. Leadership could decide at this time to start another Initiative. However, remember to not start more initiatives that you have resources to support. A small number of things done well is better than doing an incomplete job on many. Many organizations are not effective with Managing Change because they attempt to make too many changes at once. The majority of the time in the meetings is spent reviewing the Implementation plans of each Active Initiative. The Sponsor for each Initiative is responsible for providing the update and should include a review of the updated Gantt chart. The Sponsor could determine to have the team leader provide the update. Leadership must hold the teams accountable for accomplishing their objective. Should leadership feel they are not on target for accomplishing the concerns should be shared with the team. Discussions should take place to determine what needs to be done to get on track.

Effective teamwork on the part of the leadership team is critical. Training is usually needed but the leaders frequently feel that it is not important. Having a consultant or facilitator is also critical. The leader needs to be engaged in the discussion and that is difficult to do and also manage the meeting process. Meetings should close by conducting a Process Check. This is a technique to determine the effectiveness of the meeting. The process works as follows. Each team member is to silently make notes in the following three areas. 1) Rate the overall effectiveness of the meeting from 1-10 with one being a waste of time and ten being an outstanding meeting. 2) Identify 2-3 things that were good about the meeting. 3) Identify 2-3 things about the meeting that could have been done differently to have made it a more effective meeting. Then the information should be gathered and discussed with conclusions made regarding how what will be done at future meetings to improve their effectiveness. Conducting a Process Check is most effectively done by a facilitator. Should the leader attempt to do this, the members are less likely to be honest.

How could the overall process for Managing Change fail if this step in the process is working properly?

Implementation

Implementation is how to go about successfully implementing an Initiative. We are finally to where change actually takes place. The following are the steps in the process:

1. Leadership develops a “Charter” for each Initiative

2. A team is formed and the Charter explained

3. The team develops a “Plan”

4. The plan is presented to leadership for approval

5. Team Implements the plan and achieves objectives

6. Team is recognized, rewarded and disbanded

Now more details will be offered about each step:

1. Leadership develops a “Charter” for each Initiative

a. A Charter is a document developed by leadership that makes it clear what is expected, by when and who is to be involved for Implementation of the Initiative. The following are the sections of the Charter to be filled out with a brief definition of each.

i. Initiative: A small number of words that can be used as a reference to the project

ii. Objective: One or two sentences that describes at a high level what is expected

iii. Scope: What is to be included or excluded

iv. Boundaries: Guidelines regarding time and finances

v. Deliverables: A list of what is to be provided upon completion of the project

vi. Measurement: How success will be measured

vii. Team Leader: The person that will lead the team

viii. Team Member: 6-7 people that represent the appropriate groups needed for a successful project

ix. Resources: Persons or organizations that could be of assistance in some way to the team but will not be on the team

x. Sponsor: A member of the leadership team that will oversee the team’s activities and serve as a link to the leadership team

xi. Facilitator: A person with skills for assisting groups with achieving their task

xii. Date: The date the Charter was developed or updated as sometimes changes are made

2. A team is formed and the Charter explained

a. The Sponsor meets with the team to ensure expectations are clear. Team members are to ask any question they might have and share any potential barriers they could anticipate.

3. The team develops a "Plan"

a. The facilitator plays a very active role. The plan works best to be in a Gantt chart format which lists all actions that must be done to accomplish the objective along with who is responsible for each and by when.

4. The plan is presented to leadership for approval

a. Leadership either accepts the plan or makes recommendations for changes

5. Team Implements the plan and achieves objectives

a. The team establishes an ongoing meeting process that will accomplish the task on schedule. Updates on progress are to be presented to Leadership on a regular basis.

6. Team is recognized, rewarded and disbanded

a. The closure process should include having the entire team make a final report to the entire leadership team.

The reward should not be of significant financial value. Now is the time to consider starting a new Initiative.

Initiatives

Now that the Vision, Strategies and Measurement System are established it is time to identify Initiatives. Initiatives are the most important changes needed at this time to make progress toward achieving the Vision. Initiatives could also be thought of as projects. Once implemented the Initiatives will bring about improvements that will be reflected in the Key Performance Indicator graphs with progress toward goals.

The process for selecting the Initiatives is as follows. All members of the leadership team should identify the “three most important” changes needed at this time. The reason for choosing only three is that this is the start of a process for prioritization. A key reason many organizations are not successful with Managing Change is that they try to make too many changes at the same time. Typically, they do not have the resources needed be that people or funds. The result is Initiatives that are only partially implemented. A small number of things done well is much better that several things done half way. The individual members of the leadership team should do this without dialogue with others. Things to consider when developing their list are:

-Vision documents

-Strategies

-KPI graphs and comparing current performance against goals

-Customer needs

-Employee needs

-Processes needing improvement

-Current or possible future government regulations

-Competition actions or possible plans

-Resource development needs

-Organizational needs

-Culture changes needed

-System needs

-Assessments that might have been done

-Other

When all of the leadership team members have finished selecting their top three, a compiled list should be developed. There should be no discussion at this time. It is not time to start discussing which are the most important. Now duplications should be eliminated resulting in probably a long list of possible Initiatives. Next it is important to ensure all team members understand what each possible Initiative means. Anyone that does not understand a possible Initiative should ask the person that suggested it to explain what it means. This is to be done for understanding only and not debating on its priority. Once everyone understands each Initiative it is time for discussion. The discussion should prepare the team to make the most appropriate decision regarding which are the most important. The discussion needs to be conducted so that a few do not dominate and everyone participates. A good technique for doing this is to go around the table and let each team member have time to give a “sixty second commercial”. This is their time to lobby for which ones are the most important in their opinion. They could use this time to indicate why they feel some Initiatives should not be considered. There is to be no discussion at this time. Each person should speak uninterrupted. Once every person has had their time to present their viewpoints it is time to start prioritizing. Everyone should pick out what is now their top three realizing that this may not be their original top three since they possibly did not understand other candidates. The leader or facilitator should determine how many votes each item received. Then the list should be sorted with the ones at the top that received the most votes. Discussion should continue until a consensus is reached on the top three which we will call the Active Initiatives. The others should be kept on a list that could be called Possible Future Initiatives. Once an Initiative is completed others can be added to the Active Initiative list.

Measurement

Once the organization has developed its Vision and Strategies the next step in the Managing Change Process is to develop a Measurement System. This is a means for making it clear to the leadership team whether or not the organization is on target for achieving its Vision. The objective is to select 4-6 Key Performance Indicators (they will be referred to from this point forward as KPIs). The process for selection is very important. The first step is to select the three to four most important “areas” for measurement. The areas will vary according to the business. Areas frequently selected include: Customer, Employee, Operations and Financial. Other areas could include: Safety, Innovation, Environmental as well as others. Many organizations have too many KPIs. Limiting the number of areas is the first step in selecting the critical few KPIs. After the critical areas have been selected options to consider for KPIs in each area need to be identified. It would be good for the leadership team to brainstorm possibilities and discuss each. I would describe selecting the appropriate KPIs as a critical decision so the leaders should reach consensus on the ones chosen. Being limited to selecting no more that 6 KPIs means that only 1-2 KPIs can be selected in each area. A KPI is something that is measurable and for which numerical goals can be established. These are things that would be plotted on a graph that would be updated monthly. When selecting KPIs thought needs to given to several factors. Is the data available or reasonably simple to obtain? Will the data really tell you what you need to know? An example would be a score on a customer or employee satisfaction survey. My experience is that surveys can provide a lot of good information. However, it is very difficult to have meaningful data that can be plotted either monthly or quarterly and truly show a trend in true in satisfaction. I would like to share examples of what KPIs could be to assist with understanding what KPIs are. The following are possible KPIs by areas:

Customer

-Sales

-Customer complaints

-Products delivered on time

Employee

-Turnover

Operations

-Equipment uptime

-Equipment utilization

-% Yield

Financial

-RONA

-Inventory days

-Gross profit

Safety

-Serious injury frequency

Innovation

-Sales from new products

Environmental

-Number of citations

-Emissions violations

Once the 4-6 KPIs have been selected, graphs need to be developed for each. The graphs need to indicate history, a place for monthly performance for the current year to be placed along with short and long-range goals. Please contact me if you would like to see sample graphs that could be used. The leadership team will use these graphs monthly to monitor progress toward achieving the Vision. Goals should be reviewed and updated annually and this is usually best to do during January when the final numbers for the previous year are available.

Strategies

The second box in the model on the right represents Strategies. Strategies are high-level guides for the achieving your Vision. They can best be explained through examples. One area to consider and examples of what the Strategies could be:

Geographic Market Serviced:

-The south east only for 2008-9

-Throughout the US by 2012

-We never plan to service the international market

Since decisions regarding Strategies are major decisions. The leadership team should reach consensus on what they are. They can be changed at any time but only when there is agreement that a valid reason exists. For example a proposal could be made by a salesman in 2008 with what they feel is a great west coast opportunity. The Geography Strategy should not be changed without examining all implications. You might have to take resources away from existing clients to service this expansion and hurt the business overall.

The following is a list of other areas to consider for Strategies. Obviously, some will not apply for some organizations while others should be added. I am including examples to assist with understanding.

Products and Services

-Will your fundamental products and services be viable in the future

-Any fundamental changes that might be appropriate

Technology

-Our products must be on the cutting edge in our field

-7% of our budget will be allocated to R&D

Size

-Grow sales between 10-20% annually

Marketing

-The Internet will be our primary marketing tool

-1% of our sales will be focused on business journals

Distribution

-We will have distribution centers in each major region we serve and they will be outsourced

Suppliers

-A partnership relationship or the low bid gets the work

(Which approach is more appropriate for your business; do not try to do both)

Acquisitions, Alliances and Partnerships

-We will be aggressively looking for opportunities to buy small companies producing compatible products

Outsourcing

-We will outsource food services and legal services

Supply Chain

-Low inventories are required

Manufacturing Facilities

-Short set up times

-Processes are in control and capable

Offices

-We will always lease our offices and they should be located in major cities

-They will be very comfortable to our staff

Pricing

-We may charge more that our competitors but our products will demonstrate their value

-Gross margins must be between 50-80%

Organization

-Flat

-All groups are focused on a common Vision and linked measurable goals

Cultural

-An involved and empowered workforce

-Oriented toward change

-Teamwork

Personnel

-All employees will have a career path plan, an annual training plan and annual performance reviews

Compensation

-Base salaries will be in the mid range of our industry

-Large bonus potential for all employees based on organizational performance

-Total compensation will be in the top 25% of our industry

Value

-Choose the main reason people will choose to do business with you versus your competitors: Produce, Price or Customer Intimacy

(Suggest reading Discipline of Market Leaders by Treacy & Wiersema for a full understanding)

Other

When you finish identifying your Strategies go back and see if they are all compatible.

Vision

The first step in starting the Managing Change Process is to be sure the right leadership team in place. It is not appropriate here to go into the details, as that would require a lengthy article. A brief description would be that the leadership team has the right structure, capable individuals in those positions and the group truly functions as a team. Functioning as a team requires reaching true consensus on major decisions and using a facilitator as examples. Managing Change without teamwork makes successfully implementation very difficult. Many organizations fail because key people fail to truly support the plan.

The model on the right indicates that the first step in the process of developing a Change Process is to develop a Vision. Multiple documents collectively make up the Vision. Many different ones can be used but I have found three that seem to be the best for most organizations. They are a Mission, Values and a Vivid Image. There are no standard definitions in the business world for these terms. For example what some organizations call a Mission others call it a Purpose and others a Vision. I have definitions that I use and will share them at this time.

Ø Mission: Why an organization exists; what it is striving to achieve at a high level; one to two sentences. Examples can be found by looking at documents from public companies.

Ø Values: How work is to be conducted; behavior guides; expectations of everyone in the organization; no more than 5-7; all personnel must be held accountable to these. Examples could include: honesty & integrity, creativity, teamwork, hard work and continuous improvement.

Ø Vivid Image: What organization will look like in 3-5 years if the mission was achieved and the values truly describe the culture. It is written in the present tense as though it has already happened. Descriptions in areas of customers, employees, processes, community, change and performance should be considered. Doles not include how to get there. Limited to one page.

The process for developing the documents should start with just a draft at the initial leadership team meeting. No final decisions should be made before members have time to think about and discuss these very important decisions and solicit input from others. Obtaining input from others would bring about possible additional good ideas to consider and even more importantly obtain understanding and support. Ultimately the leaders have the responsibility to make the final decision. Leaders need to be aware that when they describe their Vision they must be realistic. Do not develop documents that just look good. That is easy to do. Remember the higher the bar is set the more effort that will be required to achieve. The worse option is to have a Vision and it is clear to the organization that you are not making progress toward achieving it.

The next steps in this Managing Change Process will develop a plan for achieving this Vision. The next update will be in two weeks.

Keys for Successfully Managing Change

All organizations must be making changes in order to survive. Being very successful today does not mean that they will be successful in the future as the world is rapidly changing. So, even a profitable business today will be will eventually be loosing money if it is not effectively managing change. The only choice a business has is to be either proactive or reactive. The proactive approach is a much more desirable approach. The key is how to be proactive and effectively manage change.

The first step is for the leadership team to decide that pro actively managing change is a very high priority. Leaders devoting the appropriate amount of time to the process demonstrate its priority. Most organizations can accomplish this in one day per month if done on a consistent basis. You cannot afford to wait until you “have time”. Setting a standing time each month for the work and adhere to the schedule is critical. Many leaders so busy fighting fires that they feel they do not have time to pro actively manage their business. They take the reactive approach.

Teamwork on the part of the leadership team is critical. Without it the process will not work. All leadership teams feel they function like a team. However, most are in denial. If a leadership team has not gone through formal training and does not use a facilitator the team would likely fail any formal assessment of teamwork effectiveness. As just one example, if the leadership team cannot reach a true consensus of the vision they want to achieve, the chance of achieving it is zero.

A structured process is required. The Managing Change Process model on this page is a visual representation of a process that could be used. It has been in use for more that ten years. The process has withstood the test of time in that initial clients are still using it. A very brief description of the process is as follows:

Vision: Documents that describe at a high level what the organization is trying to achieve

Strategies: High-level guides that will assist the organizations with achieving the Vision

Measurement: How will progress be measured; a report card

Initiatives: The small number of most important changes to make

Implementation: How to successfully implement each Initiative

Monitoring: The ongoing meeting process for the leadership team for guiding the change process

This Blog will be used to share the details of the Managing Change Process referenced above. It will be updated every two weeks. Questions can be sent to me and all will be answered unless I am overwhelmed.

Jim Rose

EQ Consulting Services