So what is Change Management? We get this question a lot. Actually there are two kinds of change management: one technical and one organizational. In this article, we will focus on organizational change management: what it is, when you need it and how to find a change management consultant that meets the specific needs of your company and your project.
The Importance of Change Management
Why do we care? In a word: Money. How many times have you seen your company try to implement a new system or adopt some sort of process change only to see individuals or entire teams avoid or outright block the implementation? It happens a lot – and sometimes for perfectly rational reasons. Regardless of why, how, or what is blocking the implementation, it costs money. Sometimes a lot of money – especially if the financial business case and return on investment is pinned on changing how people do their work. Entire companies have been driven into the ground because they couldn’t successfully implement change.
Given the current economic climate, effective change management has never been more important to organizational success. In fact, if statistics have shown that over half of business initiatives fail because insufficient time and resources were dedicated to Change Management, our current state of disruption, externally and internally, will increase that percentage substantially in the coming months and years.
What is Change Management?
Change Management does not exist on it’s own. It is the set of management processes, activities and tools that works with management, alongside other business initiatives, and aims to realize the benefits that were identified in that financial business case. As an example, let’s say you’re implementing a new systems solution that will allow you to automate part of a process that is currently being done manually. You’re planning to invest $1.2 million in this solution, but have estimated that you will save $1.5 million annually in headcount savings. About 50% of this headcount savings will come from a reduction in force and the other 50% will be trained to work differently in their current roles, but eliminating the need to recruit to support the business growth initiatives. It’s a classic case of doing more with fewer people and saving money by automating processes. If the project is about people, then the risk is there too. Aside from the risks inherent in a reduction in force, there is significant change risk that can erode or eliminate the financial gains that were used to justify the investment. If the impacted population doesn’t willingly share information on how they work today, the system cannot be configured to replace that work. If they don’t test appropriately, there is no way to know if the system is doing what it needs to do. Finally, if they don’t embrace their new job roles and training that comes with it, the organization will not be able to manage it’s growth plan – and will probably revert to hiring outside talent at a higher price tag.
Change Management, or People Change Management, is all about getting to the front of that bus and driving it, rather than letting it drive you. Much of the work we do is a structured approach to communications – why, how, what and which frequency as well as the much needed supporting documentation around organization and job change, learning and development, etc. Each project is different. The goal always is benefits realization.
Why An Organization Needs Change Management
Rather than tell you why, we will share a specific example that shows you why. If you are implementing an initiative in your organization that is going to change how people work, Change Management may make all the difference.
The Client
We were hired to work with a professional services organization that was struggling to get their people to perform and communicate effectively after several years of exponential growth. Their management team had grown the company from the ground up and had few role models for leadership or prior experience in managing large teams. They had reached a point where their inability to communicate was affecting their productivity. As a professional services firm, their time was their inventory and as productivity slipped, so did profit. They were about to embark on a major hiring plan to augment their workforce and build out a new service line for their client base. It was a sizable investment and one that they could not afford to make without a clear change in behavior across the organization.
We were called in through a referral from a large software company that we had worked with while on a similar project at another client.
What We Did
The client’s communication problem was at all levels of the organization and was affecting their business processes, their organization, their people engagement and their information. We book-ended our work by simultaneously working with their teams to review and articulate real life stories for their Core Values. These stories brought their values to life with specific examples and people who modeled them. The values were described in some detail and reviewed with the executive team so that they could be used as part of the performance conversation later on. Once completed, we shifted to the employee handbook, where we included information about the values in the first section of the handbook and revised policies to ensure up-to-date legal compliance and ensure that the policies, procedures, and even the tone of voice reflected those values and the overall employer brand.
From there we moved onto leadership conversations with the executive team and then managers that focused on helping them understand their personal communication style and how it presented to others. Then we used this newly acquired information to help them navigate confronting conversations in the workplace. This in class session was complemented by an online compliance and anti-harassment training that was specifically tailored to their employment policies.
Once we had our ‘book-ends’ completed with both people and information activities completed, we shifted to business process and organizational needs. We worked with the client to overhaul job descriptions to meet the needs of their business change, redesign their recruiting and onboarding process, and shif the focus to behavioral interviewing. We provided additional training for hiring managers to support reliable, decentralized hiring decisions, and finally a review of compensation structures and variable pay to tie rewards to the goals of the project and overall business growth objectives.
The Result
Change management is often an iterative process and we continue to work with senior executives as they implement the change. We have already seen measurable results that have allowed them to move forward successfully with their new service line, namely:
- Reduced employee turnover
- Increase in productivity and utilization rates
- Reduction in time to hire (number of days from job posting to offer)
How to Source a Change Management Consultant
How do you find the right Change Management Consultant or Company for your organization? Do you look for a Certification or not? Do you hire someone directly or outsource? Do you bring on an individual or a firm? And, how much is it going to cost?
A Note on Certifications:
Certifications are helpful in ensuring that the consultant you hire has acquired a certain body of knowledge related to the topic. They don’t demonstrate competence or skill level, however. We don’t certify our consultants in Change Management, partly because we use our own methodology and tools and partly because we focus on learning on the job rather than in a classroom. We do certify in several assessment tools, including DISC with our vendor partner, TTI Success Insights, and MBTI, which we can use for both individual and organizational change activities.
Our Recruiting Process
To put it in context, when we post a job opening, we get anywhere from 50-100+ applicants. Of those initial applicants, we typically interview 3 or 4. Don’t forget that in-person interviews are expensive, especially if you’re bringing someone in for a panel interview where 2 or more people are interviewing the candidate.
If you’re looking to source and select an Organizational Change Management Professional to work with your project teams, take a look at our process at Red Clover and feel free to adopt and adapt what works for you.
- Job Posting – Our job ads explain three key things: who we are, the work that we need done, and candidate profile that we’re looking for. Sometimes we list a salary range, sometimes not, but we are crystal clear on two things: our Core Values and the Behavioral Competencies that are required to get the job done. Want to know what we don’t ask for? A college degree.
- Resume Review – We review all resumes for content, spelling and grammar, and the candidate’s ability to complete the application correctly. For us, this means writing a contextually appropriate cover letter so we can judge their business writing skills.
- Video Interview – After a short call to clarify and confirm salary expectations, we invite candidates to complete a recorded interview with SparkHire, our vendor partner for online interviews.
- Assessment – Candidates who are selected to move forward with the selection process are then invited to complete an assessment that evaluates their observable behaviors, motivators and behavioral competencies against a job benchmark that we have prepared. We use the match against the benchmark to identify those candidates who are the best fit to the job requirements – so that we are in a position to set them up for success. We also use the report to identify better interview questions to ask during the live interview.
- Live interview – The last step in the process is the live interview. This is a panel interview with two of our Consultants interviewing the candidate, followed by a final interview with the Managing Director. After the interview, the team reviews the interview notes and data and then discusses whether an offer should be made or not.
The Choice Between Hiring and Contracting
Inevitably, there is a point in the project planning process where you will need to decide whether to hire a change management consultant directly as a permanent employee or to source through a consulting firm. There are advantages and disadvantages of each.
The direct hire offers the primary advantage of developing a resource that is attuned to the needs of your organization over the long term. They can tailor processes and plans to meet the needs of stakeholders – better and faster because they know you from the inside. Chances are that they’re also cheaper than an outside firm, but this is sometimes offset by the productivity differential, particularly if the external consultant is fractional. Lastly, the direct hire knows your people, and if they’re great at what they do, have street cred that could carry you over the finish line.
The consultant, and in particular the consulting firm, offers the advantage of perspective. They specialize in their field and have demonstrated success across a range of industries and projects. They’ve been there and done that. A consultant can be viewed as a gun for hire who can say things and present issues that internal employees cannot because the consultant doesn’t have a dog in the fight. They play above the politics and can push through change in circumstances where an internal hire might not have a loud enough voice in the room. However, all this comes at a price, so look for firms that offer fractional or blended solutions to average down costs and eliminate non-productive time on the clock.
For the record, we don’t advise hiring CM consultants as a direct contractor. Aside from the fact that it’s probably a misclassification of a W-2 employee, you get the worst of both worlds – the additional cost of a consultant, plus the political limitations of an employee.
Bottom line, if you have a number of business initiatives taking place sequentially that require change management support and you place a high value on someone who is really going to know your organization, then hire someone. One the other hand, if your needs are immediate, require scalable resources, or you’re looking for someone with an outside perspective and ability to say what needs to be said, then go with an external firm.
Human Resources Role in Change Management
Human Resources plays an important role in the development of change management strategies and implementation of those management plans. These plans range from workforce planning and layoffs, internal communications, employee relations, process design change and implementation, and organization analysis and design to meet the needs of the new model.
Any business process transformation project will require Human Resources support with the people transition aspects of the change and, depending on the organization, the change management resources may also be sourced from the HR function.
