Michał Grela (MG): Hello, and welcome to yet another episode of IT Insights by Future Processing. Today, the topic of our conversation is the challenges of change management. Today’s the most volatile and uncertain time for business worldwide. It’s definitely a fact we can deny. Moreover, if you expect things to get quiet or peaceful again, I doubt and probably you’re most likely wrong. VUCA is the new normal, and it’s here to stay. Bearing that in mind, it’s good to understand how to stay on top of change and manage the disruption because the pandemic only accelerated the need for change management, forcing companies to go for digital transformation in their organizations in order to stay on top of the situation and not to lose their market positions.

Today with my guest, we’ll discuss what factors are crucial in the change management process, how IT and operations should be aligned there too. And hopefully at the end of our conversation, we’ll arrive at some answers on how to avoid common mistakes related to change. My guest today is Graham Kennedy, change and transformation consultant. I’m happy to have… Thank you for being through with me, Graham. I’m happy to have you. Can you please introduce yourself?

Graham Kennedy (GK): Yeah. Well, thank you very much for having me as well. In particular, having me talk about a particular area of passion. So, I’m an organizational development and change consultant with blue chip consulting experience. So, I developed my expertise working for the likes of Accenture and Carney. And what I do today is help software technology and professional services organizations to overcome their biggest business and organizational development challenges. One of those challenges centers around business transformation or business change. And so, was great to have the opportunity to talk about that today and what organizations can do to navigate change successfully.

MG: Definitely. I think it’s a very relevant topic looking at the current state of what’s going on in the market, but … that too. So, yeah. Let’s start with the questions. So, maybe a general one at the beginning. From your perspective and bearing in mind your extensive experience, how do organizations usually go through the change management process generally speaking?

GK: Well, I wish there was a normal route and the process often starts as not a process, I would argue. It starts a bit… It’s got to start with some sort of realization that change is needed. And just to be clear here, when I’m talking about business change, I’m not talking about incremental change. I’m talking about introducing a new way of doing things, introducing a new way of working. So, it’s quite an extensive change and it requires quite a lot of investment to introduce the new working practices that an organization needs to do at the end of the day and typically to survive.

So, to start off with, typically you’ll find that a leader, he’s got a problem that he’s trying to address, and he’ll start by pursuing various different lines of inquiry just to see if he can solve the problem perhaps in an incremental way and not in a transformational way. But at some point there will be a realization that he needs to do more if he’s going to deliver the outcome that he is looking to deliver. Normally that outcome is, it’s pretty material and pretty significant. And if we just talk a bit about… If I just touch on why, because transformational change is normally triggered by some sort of shift in the external environment that makes the current modus operandi or business model unsustainable. Okay. So, in other words, if you do nothing, something catastrophic will happen to you or your business.

Either your business will go out of business, or its profits will continue to decline. It will not be profitable or you as an executive risk losing your job because key stakeholder expectations, shareholder expectations on that. So, the typical trigger, as I say, for transformational change is a change in the external environment or that could result in your revenues being at risk or not being sustained, or that could be a significant opportunity in the market that your key stakeholders are expecting you to pursue, but you can’t pursue that opportunity unless you change your… Effectively, unless you change your modus operandi. So, yeah. So to start off with business leaders typically, try a few things out before coming to the conclusion that what they’re trying isn’t having a big enough impact. And then they realize that they need to do something a bit more substantial.

MG: Okay. That’s a good context for our conversation. Definitely a bigger picture. So, what aspect of this change management process is, in your opinion, the most difficult to tackle? That’s my second question. I wonder if not overseeing the trigger, you just mentioned, isn’t the tricky part.

GK: When you say overseeing, is that noticing?

MG: Not realizing, yeah.

GK: Yes. Well, I would say that is one of the difficulties is realizing the magnitude of the effort needed to take the business where it wants to be taken. Yes. But I would perhaps argue that what is even harder is almost in Niccolo Machiavelli’s words, it’s initiating a new order of things. Okay.

MG: Do you mean that people are hesitant or reluctant to accept change?

GK: Yes, that’s right. That’s right. So, as a leader, you have to… If you’re going to instigate transformational change, you have to instigate a new way of working or in Machiavelli’s words, initiate a new order of things. And unless people in an organization are convinced that the new way of working will benefit them and the new way of working won’t be against their interests and they can see a path towards that new way of working, they will resist that change. That’s human nature. The current way of working is the easy solution after all and change is threatening, especially if you haven’t experienced the change before.

MG: Yeah, there’s this curve acceptance or curve attitude towards change. From your perspective, this buy-in is the most crucial aspect.

GK: Yes, it is because to initiate a new order of things, you’ve got to get buy-in. What I would say, first of all, the needs to be… So, how do you get buy-in? First of all, you need to have a very compelling rationale for change or case for change, which needs to clearly articulate not only the consequences of doing nothing which we’ve just touched on. So, what happens to your business if you just carry on doing what you’re going to do, but it also needs to lay out a compelling vision of the future. So, what will the new world look like and what difference will that make to the business? So, what tangible benefits can be expected both at a business level, but also at a personal level? So, why is this change going to be better for you as, let’s say, an executive, but then to get the change accepted throughout the organization, you really need to articulate the benefits for every individual employee in the organization as well to overcome that resistance.

MG: Okay. There’s always this saying… I mean, when it comes to large scale projects and from the picture you just painted, change management is a very complex and I would say a holistic process that you have to eat the elephant a bite at a time, but I wonder if there’s maybe a checklist to follow or rather… It’s always a bespoke process every time. So, from the organizational perspective, I mean, what factors are required for the change management process to be successful? What should you follow? What sort of process? Is there a recipe for success?

GK: Well, I would say there is a recipe although there are some success factors that need to be in place for a transformation to end up producing the outcomes that an organization wants, but you have to apply those factors or levers or whatever you want to call them to the particular organization. So, it’s contextual if you like. I mentioned a case for change earlier. You can’t just take a vanilla case for change out of a textbook as written and use it in an organization. You have to make it very relevant to that particular organization. So, yes. I mean, to my mind, there are eight or nine critical factors that need to be in place or you might say eight or nine critical things that need to be done for a transformation program to be successful. And there are… I mean, I suppose if I was to articulate one source, highlight one source, it would be Cotter from Harvard University and his change publications. They essentially lay out the success factors for a successful change program, but I’ve distilled those into nine critical success factors if you like that an organization needs to make sure it follows or puts in place to deliver change successfully. We can go through those if you like, but…

MG: Well, nine sounds like a lot, but if we can just only briefly browse, touch on them, then it would be definitely valuable for our audience definitely.

GK: Well, as I say, if anybody would like a copy of it, I’m sure… Well, I’ll be delighted to send it to them. So, please contact me afterwards. Graham Kennedy, Alexoria, let’s say that now, but you can find one on LinkedIn, but the top three or four, I would say, success factors. And we’ve already touched on the first one. The first one is have a clear and compelling rationale for the transformation or a case for change. So, that’s the first thing. Secondly, the needs to be visible executive sponsorship for the change or transformation. So, if the leaders of the organization aren’t investing in this, it’s probably not worth doing. You’re not going to get the resources that you need to affect the change that you’re looking to affect.

And then the third key point linked really to the second point is that all the leaders of the organization should really be supportive of the change and advocates of the change, both in terms of where the organization is trying to get to and how it’s going to get there. I’m sure what you and many other listeners of this podcast will have been involved in change programs that have kind of got off the ground, but then after two months, three months, they’ve suddenly been derailed because an executive becomes aware of what’s going on and objects to it for some reason. And the change program is either stopped or it has to be… Or the change initiative is either stopped or it has to be reshaped to take account of that particular stakeholder’s aspirations and points of view.

So, it’s really important to have the exec of the… Or all the key stakeholders, should we say, aligned with what’s being proposed. And there also needs to be a sense of urgency as well. So, a sense coming from the leadership that the status quo is not acceptable. A sense of, we must see some progress in the direction that we’re trying to go in, but those would be, I suppose, the four key things. Other things that make it a bit easier. I mean, clearly making sure that sort of adequate resources are applied. The initiative is important. Early wins are important because that gives people a sense that they are progressing in the right direction and that this isn’t impossible. It is a journey that we can undertake.

I would say that the… Another thing that I often see not done particularly well is that these change initiatives are managed in a particularly structured way. And then people, execs, others in the organization wonder why it takes twice as long to deliver what was expected even when you take account of the fact that it normally takes twice as long. And typically it’s because the change initiative just isn’t structured or isn’t being managed properly.

MG: It sounds like really a relevant list of checkpoints to go through. Definitely agree that this early win strategy is something that is usually helpful in projects generally. And that creates this additional buy-in of the people that are already taking part in the process and also the stakeholder commitment or acceptance, call it as you may, is crucial because without their consent and cooperation, you just won’t get far. But I also in the intro to our conversation mentioned about this alignment of IT and operations. And I said that surely there must be this alignment in order to stay on top of the situation. And I’m curious if there is at least a partial overlap in this factors, in the checklist that you just mentioned. I mean, what business needs to do for an IT project or for change management project to be successful bearing in mind from the IT perspective?

GK: Well, I suppose the main thing that is going through my mind at the moment is not to treat the project as an IT project because that… I mean, it’s been said countless times before, but at the end of the day, it’s a business outcome that you’re trying to achieve or deliver. So, the business has a significant interest in whatever investment is being made in IT. So, the business and I do hate the distinction between business and IT because I just don’t think it’s very helpful, but there has to be business ownership of the initiative and of the rationale for the investment that’s being made and of the outcomes that the initiative is intended to deliver. And there has to be ownership of the changes that are needed in the business whether they be structural or process or skills related, it has to be ownership of that part of the change in whatever investment that’s being made in IT to realize the benefits that are expected.

So, one of my favorite expressions is new IT plus old ways of working equals expensive old organization. So, if you don’t change the ways of work when you introduce new IT, you’re not really going to get anywhere apart from investing a lot of money and not seeing much by way of results.

MG: We already talked about the success factors, the checklist to follow, but also it’s important to avoid some common mistakes. And what are the most common pitfalls that you would point out in this process of change management, both on the IT and organizational level? What are the usual mistakes?

GK: The biggest one that I see between business and IT is just not being joined up. So, it might be the business not understanding the benefits that IT can help deliver or the issues that IT can help address or it might be IT not understanding enough about the business problems that the overall solution is trying to solve or the outcomes that are trying to be delivered. That is what I would say is the biggest gap that I see or the biggest problem that I see.

MG: Yeah. I couldn’t agree with you more. This lack of dismissing alignment or lack of alignment or lack of… It does not go in together with these two topics is often a recipe for disaster.

GK: Yeah. So, if I may-

MG: Please do.

GK: I think Future Processing could do… And I don’t know if you do this, but one of my suggestions is… And this goes right back to the case for change, but if you can help your clients paint a compelling vision for the future, that will make it much easier for them to embrace the change, to sell the change effectively to their organization. So, if we look at… Digital is the hot topic at the moment. So, it comes down to, “Well, what difference will digital make to your business?” Now, in something like retail, it’s… Well, when shops are closed, it’s pretty obvious to my mind what difference digital can make because suddenly you’ve got a digital channel to market. Okay, you’ve got to invest in it, but by investing in digital, you can sustain your business whereas if shops are closed, you can’t sell anything. Yeah.

I mean, that’s not a particularly rich vision, but you could paint a vision just extending that a bit by saying, well, you’re almost at the point now with digital technology that it seems to me that if you’re a close retailer, that you can almost, not quite, but almost enable your customers to try their clothes on. The things that they’re trying to try online. Yeah. Now, that might be a vision that you paint. Okay. Try on your… Allow your customers to try on their clothes in a virtual environment at home before they buy them. That’s suddenly then a differentiator from your competitors. Now, that might be… We’re not that far away from a technology point of view, it seems to me, from making that happen, but that might be an example of a vision that you could paint.

MG: That’s a very good inspiration. I hope that you will not demand any patent rights or copyrights. That idea, if you see that implemented by us.

GK: Well, you can’t copyright ideas.

MG: Good to hear that. All right. Thanks, Graham. It was a very interesting conversation. I only feel like we just scratched the surface of this topic, but I guess we squeezed in as much as possible in this 15 or 20 minutes conversation. It was really good to have you. Thank you. It was IT Insights by Future Processing with Graham Kennedy.

GK: Well, thank you very much. Thank you very much for the opportunity.