A CIO Perspective on Change Management
Managing change often ranks among the top 10 concerns of the 3,600 senior technology professionals who belong to the Society for Information Management (SIM). Robert Keefe, the president of SIM International, says that although change management ranked seventh in SIM's 2007 survey, the percentage difference between each ranking was very close.
Keefe, who is also the CIO of the $1.8 billion Mueller Water Products, has had a great deal of experience managing both technology change management in setting up several ERP systems, and in participating in a cultural change for an acquisition and a divestiture.
The BTM Institute recently sat down with Robert Keefe to get a CIO's perspective on effectively handling technology-related change management and organizational change management. Here's what he had to say:
Q. What did you learn from your technology experiences handling change management?
I carried out change management for a distribution center and a manufacturing facility that needed to be up and running on time and delivering the right type of profitability for the company.
It's a learning experience for everyone. People need to understand the change that's going to occur. They need to participate in this initial process. For example, whenever I worked on an ERP implementation, we made sure that all of the people who would be touching the system knew what we were doing, and why we were doing it. We got their input ahead of time so they felt like they owned a part of the system. We then went back and told them the types of suggestions we incorporated into the new system and the new procedures.
Change management isn't about the implementation of the new system, which can be relatively easy to do. It's about improving business processes through change management. This task involves getting people to buy into the new system, making sure they get up to speed quickly, and providing support so they can perform at the same level of efficiency, if not better, as they did with the prior system. To this end, if you recognize this requirement from the outset, you can staff and budget for both formal and informal training.
Q. Can you briefly describe the challenges of working on the business side of change management?
Change management with acquisitions or divestitures focuses on cultural change where people have to do things differently from what they have done before. Like a system implementation, we needed to make them part of what we were doing and why we were doing it. People respond well to being included in the process.
When a prior company I worked for was building an offshore manufacturing facility, we got the offshore people involved in the process. In fact, we trained some of them to use our on-shore techniques so we could then take some of those processes offshore.
Q. What was the role of the senior leadership in the change management processes you've participated in?
Most of the senior management teams understood the magnitude of each project, whether it was constructing a new plant or incorporating a new business. We didn't have to worry about getting support if we run into a problem.
Senior management actively needs to participate in the change management process by setting the direction and developing the charter for what you're doing. They need to solicit and to answer questions people might have. They need to make sure that the staff leading the project understands that it might take longer to get everyone up to speed. They need to have a clear picture of the upfront work required and to budget for this work.
Q. Can you describe some of the glitches that put a wrinkle in the change management process?
During the construction of the new plant, we had instances where equipment didn't arrive on time or things didn't go as well as we had envisioned it from an engineering standpoint. Retrenching and doing things over affected our budget, our timeline, and the people working on the project. Moreover, it also put a dent in our credibility of whether or not we could accomplish the company's goal.
With one of the ERP systems, we didn't have a smooth implementation when we carried out a pilot test of parallel systems. We had many things missing. People had envisioned better results than what we had achieved.
Because we had a hard deadline for the divestitures, we make sure we had a contingency of many manual processes. We didn't have the time to correct things.
Q. Did hiring a consulting firm simplify the technology change management process?
For some of the larger ERP systems, we hired a consulting firm. Some of the firms brought their own change management methodology and had team members trained in organizational behavior or in organizational development. In these cases, the systems implementations went very well. On the other hand, doing things according to the way the consulting firm worked added to our frustration at times.
Q. Can you go into more detail about working through the change management process with a new acquisition?
We spent most of our time figuring out how to bring two different cultures together harmoniously. The parent company had a very process-oriented culture where people carefully looked at each step and its related contingencies. Management wanted to make sure it had a solid strategy for growing the business. The acquired company, which had achieved much success, had a highly entrepreneurial and patriarchal culture. People in this company weren't as analytical as those in the other company. They operated more on their gut feelings, not thinking twice about any risks. Unfortunately, the person who started the company had left, leaving everyone floundering around. No one had a good sense of the marketplace or the customers' needs. The company, however, had a good product line, but the competition had started to eat at it.
Because of the cultural clash between the two companies and because of the strength of acquired company's product line, we decided to hire an organizational development consultant to help us work out a reasonable comprise between the two companies.
We went through the process of determining what the value proposition was, how we could make customers happier by migrating them to newer products, and how to make the acquired company's employees feel welcome by the new leadership team.
Q. What do SIM members have to say about handling change management?
Our members feel the pressure of being a change agent for their organization. They work hard to improve processes and to gain compliance where necessary. This's why our annual survey always shows change management as an important concern for our members.
SIM members talk a lot about motivating and training people in the new wave of doing things, whether it's an ERP system or a CRM. During the past five years, SIM members have expressed interest to how to get people to document things that they didn't document before. This scenario gets back to how do you keep the training ongoing for people who do something on a casual basis.
Each year, the various SIM chapters will have someone speak about change management. We encourage the chapters to talk to its members about the importance of nurturing and monitoring any changes so they are efficient as they can be. After all, you can't put a major change process to bed for quite a while.
Q. What is the biggest mistake that technology professionals make in the change management process?
They’ll put in a new call center system, train everyone how to use it, and then walk away leaving supervisors to do more handholding and retraining than they anticipated. It's both a budgetary dilemma and attitude dilemma on their part. We approach a project that requires much change with the idea of beginning the project on a certain date and wrapping in up by certain date. I've fought against this mindset for many reasons. If people have been using one system for 10 years or 15 years, you need to allow for a reasonable timeframe for them to get comfortable with a new system. Let me stress that you must factor this training component into the departmental budget. More importantly, you need to emphasize that the training and mentoring could go on for several months or several years after the system implementation. This training is part of the ROI.
Q. How do you measure the effectiveness of change management?
I use the soft measurement of what degree do people continue to engage in the process. Have they made strives and headway or are they frustrated and saying: ‘Look, I'm doing my best?’ I also look at the reasonable success of the project. How close did it come to being on time and on budget?
The BTM Institute (www.btminstitute.org) brings together the academic, corporate, government and thought-leadership communities as a multidisciplinary research think tank to address the need to integrate business and technology. To read more interviews, please visit www.btmexchange.com.
© 2008 BTM Institute. All rights reserved. The above material is copyrighted by the BTM Institute and may not be reproduced without written consent from the institute.