How to build the capabilty to manage change
David Miller, April 15, 2010
We are gradually emerging from 18 months of painful recession. During this time we saw organisations taking some rather obvious tactical actions. They focused on increasing efficiency, reducing costs, restructuring operations and generally looking for ways to improve their competitiveness. As we emerge from the toughest markets for 70 years, we are seeing that organisations are beginning to think strategically about how they develop capabilities to improve their performance.
One of the biggest capability-building challenges is the need for organisations to become better at managing change. The last IBM Global CEO Survey reported the gap between expected change and the ability to manage it had almost tripled since the previous survey.
So a key action for HR directors charged with improving business performance is to create effective change management capabilities in their organisations. In a separate 2009 survey, 85% of respondents said that internal teams were the most effective way of implementing change in their organisation. And an earlier report suggested those that built change management capabilities in their organisations outperformed companies that did not by as much as 400%.
But there is a downside here, one that we have evidence of and one that McKinsey nails in its 2010 Client Survey. This indicated that nearly 75% of companies do not believe their companies are effective at building the capabilities they need. In particular, it pointed to the failure of training programmes to build the capabilities that organisations need.
And this gets to the nub of the problem facing HRDs: how to build effective change capabilities and drive the processes through the business at every level. To help solve these challenges, HR directors can focus on five steps.
Build HRD leadership for change management
If HRDs set and lead the capability building agenda then three benefits happen. First, people see the capability building much more explicitly tied to business goals. Second, the budgets are higher and finally, you get better results from your capability building efforts.
Design training to be action-centred
Employee training must focus on real change projects. When people apply what they learn to a specific project issue, learning retention increases from about 25% (after 90 days) to as much as 65%. Conversely, poor training can effectively throw 75% of your training investment straight out of the window.
Coach people to apply the skills and processes
The very heart of embedding a capability is for your own people to be able to sustain and transfer that capability to others in the organisation. So it is vitally important that HRDs lead managers and change coaches to support people in the early stages of application. This avoids two common problems: people getting stuck on some fairly basic steps that an experienced person can quickly ‘un-stick'; and implementation - if people do not use the capability within 30 days of the training the likelihood that they will ever use it drops, significantly.
Training must equip employees with effective tools and resources
Employees need help and reminders to make them effective, so providing resources where they can ‘self-service' best practice examples, coaching tips and presentations is essential. Through e-change we provide a complete set of online change tools and resources that can be accessed on-demand.
Build change management capabilities into other processes
Capabilities prosper in organisations when they are woven into the fabric of the organisation. They fail when people have to keep on making the links for themselves. Our most successful clients link into other organisational processes. Examples include Six Sigma, Lean, Prince2, PMI and project approval policies.
In summary, effective change management is about 'using or losing it'. Employees need to learn by practice and ultimately, by being accountable for results from the organisation's investment in the capability. HRDs must drive the organisation, creating the cocktail of leadership, user-support and effective training that makes the difference between an entertaining training course and capability building. As any HRD who has led an effective change programme will attest, the rewards are worth the efforts.
David Miller is managing director of Changefirst