Change

Managing Organizational Change

Background Information

The content of this white paper is based on information from ODR®, a consulting firm with more than 23 years of experience in helping organizations successfully implement change. ODR's emphasis is on giving organizations information about how to accomplish strategic and tactical change decisions on time and within budget.

More information about ODR is available at the company's Web site at www.odrinc.com.

Contents

Managing a World of Change 1

Defining the Terms 2

The Typical Approach 3

Objectives of Organizational Change Management 3

The Organizational Change Management Process 5

References 8

Glossary 9

Managing a World of Change

Why Organizational Change Management Is Important

Organizational change is a reality of the modern world, and that reality isn't likely to change anytime soon. If anything, organizations can expect to face the need for even more change in the future, at an ever faster pace.

Organizations have to deal with new technology and with upgrades for existing technology. They have to cope with reorganizations, process improvement initiatives, and mergers and acquisitions.

So, with all that change going on, how are organizations managing to cope?

Not very well.

The reality is that relatively few of the organizations that institute change--or are forced into it--realize the benefits they had hoped for, and, in fact, end up worse off than they were before.

That doesn't mean it's impossible to engage successfully in change. Many organizations do succeed.

How?

They succeed by integrating any technical solution that was part of the change mix with a thorough and proactive orchestration of the non-technical human aspects associated with the change.

In other words, the organizations that succeed at change do so by considering the people who are affected by, will have to live with, and are often crucial to effecting the change in question. Even better, not only does managing the human aspects of an organizational change initiative help ensure the successful implementation and use of the technical solution, it sets the groundwork for implementing future solutions.

This paper describes how organizations can be successful at change by using a framework for assessing and addressing the non-technical human aspects associated with organizational change.

ODR's experience has been that applying this organizational change management (OCM) framework improves the success of technical implementations and reduces the inevitable drop in productivity and quality that typically accompanies change. And, in ODR's experience, succeeding with the framework establishes momentum for success with future versions of a given technical solution.

Specifically, this paper covers the following topics:

 Defining the terms.

 The typical approach.

 Objectives of organizational change management.

 The organizational change management process.

Defining the Terms

What Are Organizational Change and Organizational Change Management?

"Change" has several meanings, but for the purposes of this paper, change--or, more precisely, organizational change--will be defined this way:

Organizational change is the implementation of new procedures or technologies intended to realign an organization with the changing demands of its business environment or to capitalize on business opportunities.

Organizational change typically encompasses the introduction of new and perhaps unfamiliar processes, procedures, and technologies, which represent a departure from what affected individuals generally view as the established, practical, and familiar ways of doing their work. Thus, at the individual level, change can engender emotions and reactions that range from optimism to fear, including anxiety, challenge, resistance, ambiguity, energy, enthusiasm, helplessness, dread, motivation, and pessimism.

Organizational change management is the process of recognizing, guiding, and managing these human emotions and reactions in a way that minimizes the inevitable drop in productivity that accompanies change.

The Typical Approach

Why Change Efforts Typically Fail

It seems inevitable that advances in technology, the maturation of markets in developed countries, the integration of international economics, and the economic fallout from the fall of communism have fueled, and will continue to fuel, an escalation in the amount and rate of organizational change. 1

But the success rate for organizational change is downright dismal. Consider these statistics:

 Fewer than 50 percent of companies undergoing restructuring, de-layering, and/or downsizing realize lower costs or higher productivity as a result of those changes. 2

 About 80 percent of Total Quality Management (TQM) initiatives fail to achieve tangible results. 3

 Roughly 90 percent of Business Process Reengineering (BPR) initiatives fail to produce breakthrough results. 4

 Approximately 30 percent of all mergers and acquisitions fail outright, while most fail to realize expected synergies. 5

 Between 55 percent and 90 percent of all technology initiatives fail to achieve their objectives because human and organizational problems are not adequately addressed. 6

More often than not, change efforts fail because organizations fail to recognize and manage the human components of change.

New technical solutions require involvement by individuals throughout an organization who are willing to alter their behaviors and ways of thinking. Accomplishing that takes time, motivation, skills, and practice.