Using the model in planning and managing change
Step 2: developing a change management plan
The change management plan should not be a separate plan. Instead, it should be embedded in an organization’s overall written strategic plan.
In fact, organizations that are effective at strategic planning are con-tinually managing change in the context of their planning processes.
The Pyramid of Organizational Development can be used as the framework for developing these plans – which, more properly, might be called “strategic organizational development” plans. In brief, strategic plans constructed around the pyramid include the following elements.
Current business model assessment. A brief overview of key findings from the environmental scan and organizational assessment (described in Step 1) – that is, the most significant environmental opportunities and threats, as well as the organization’s most significant strengths and limitations. It should also include an assessment of the extent to which the current business foundation supports the company’s long-term development and success.
Business foundation. The business concept, core strategy, and strategic mission on which the organization will focus as it looks to the future (three to five years out). Detailed examples of how to do this will be provided in several of the case chapters in Part II. 26
Six building blocks design/definition. A description – typically in the form of strategic initiatives or objectives – of what each building block should “look like” in the long term (three to five years out) to support the business foundation effectively.
Strategies and tactics. How the organization will move from the current state to the future state – as defined by the business foundation and definition of six building blocks.
26See, for example, chapter4on Countrywide Financial Corporation.
The process for creating a strategic organizational development plan is shown graphically in exhibit2.3. This process is different from typical strategic planning in a few subtle, yet critical ways. First, the typical strategic planning approach tends to focus only on markets, products, and strategy, rather than the entire set of building blocks necessary for organizational success over the long term. Second, the pyramid pro-vides an explicit lens to view the integrated development of the entire enterprise – from the business foundation through the development of corporate culture.
It should be clear that this approach to planning very much supports change and change management. The “end state” of the change pro-cess will be reflected in the plan in how the business foundation is defined and/or in how one or more levels in the future Pyramid of Organizational Development are designed. In addition, it is fre-quently useful for those involved in the change management process to
Environmental scan
(5) Develop strategies and tactics to
move to “end state”
(3) Design Pyramid of
Organizational DevelopmentTM required
for future business
Exhibit 2.3 A model for planning change
classify the nature of the changes that they are making in the context of their planning process – using, for example, the change typology pre-sented in chapter1. This can assist the leaders of the change process in understanding what will be involved in moving from the current to the desired state.
Transformational, strategic, organizational changes, for example, occur most often when the target of change is the business foundation.
In brief, changes in this component (particularly changes to the business concept) can lead to the organization becoming a signifi-cantly different entity. Further, changes in the business foundation typically require changes in each of the six building blocks.
In the special case of companies making the transition from an entrepreneurship to a professionally managed firm (illustrated in several cases throughout this book), the focus of the changes will typically be on the top two building blocks – management systems and culture. This type of change is also transformational, strategic, and organizational in nature.
Major and incremental operational changes tend to occur most frequently at the operational systems and resource levels of the pyramid – although some changes at these levels can also be strategic in nature. For example, changing hiring practices so that they more effectively identify people who will embrace the company’s culture and who have the skills needed to support the company’s vision might be viewed as a strategic versus an operational change.
Identifying the nature of the change being undertaken and clearly defining the desired end state is important, because it helps all those involved understand “where we are going” and the impact (trans-formational, major, incremental; organizational, team/unit, individ-ual; strategic or operational) that the change will have on the organization. If done effectively, it paints the picture – in a very real sense – of the future state of the organization, team/unit, or individual.
The definition of these end states will be embedded in the strategic plan as part of the business foundation or in the definition of one or more of the building blocks.
The “change planning matrix” – a tool for developing the change management plan
Exhibit2.4shows a template to make the organizational development planning model (and, in turn, the change management plan)
operational. This is termed the “change planning matrix.” It is intended to clearly present information on the nature of changes that need to occur at the business foundation level and/or in one or more of the building blocks. In brief, it shows where the organization is today and creates a picture of where it wants to or needs to be in the future.
Key areas From:
Multiple metals and multiple technologies Component supplier Markets Many accounts
Willing to sell to any buyer Product mix Primarily gray and ductile
iron castings
Each division with its own resources and operational standards for division operating systems Management
systems
Divisional management systems
Corporate bonus plan based on divisional performance
Corporate and divisional management roles and systems
Bonus plan based on divisional performance against key goals and contribution to group Culture Lack of defined Banner
culture
Autonomous divisions, each with its own culture Informal culture
management, with minimal corporate involvement
A “core” Banner culture, with emphasis on shared values, beliefs, and norms Formal culture
management at corporate, group, and divisional levels
Exhibit 2.4 The change planning matrix – Banner Corporation
This sets the stage for developing strategies and tactics to move from the current to the desired state.
The matrix shown in exhibit2.4is based upon an actual example of a company in the foundry business. The matrix summarizes the changes that need to occur within the business foundation and within each building block. It shows that Banner Corporation is moving from a business concept of being a parts supplier in the iron foundry business to a “components” supplier with multiple metals and mul-tiple technologies, not just iron. This represents a change in business concept and, thus, a transformational, organizational, strategic change.
As stated previously, when there is a change within the business foundation, there are typically changes within all building blocks. As can be seen, this is true at Banner Corporation, where the company is moving from:
focusing on a large number of accounts of many types to targeted selling to fewer, large accounts;
emphasizing primarily gray and ductile iron castings to using different manufacturing technologies to develop and offer more diverse products;
having each division develop and manage its own resources and operational systems to utilizing more standard practices for resource management and operational systems throughout the company;
“divisional” management systems to corporate and divisional management systems that work effectively together as a compre-hensive system; and
no common “Banner corporate culture” or culture management process to a common Banner culture and formal culture manage-ment at corporate, group, and divisional levels.
This matrix, then, can be used in the context of the strategic planning/
change management planning process as a tool that shows, in a very concise manner, where the organization is and where it needs to be.
The change planning matrix can also be used at the team/unit or individual level. The “Key areas” column will need to be adapted to the specifics of the team/unit or individual, however. For example, at the team/unit level for a sales organization, key areas might include training processes, the management of accounts, customer service
processes, sales administration processes, target accounts, and other factors. At the individual sales rep level, for example, key areas might include selling skills, customer service, teamwork, sale targets, time management, and other factors. The same process – identifying where the team/unit or individual is and then identifying where the team/unit individual needs to be in the matrix – would be used.
Preparing for resistance to change
While it is important to define clearly where the organization is going, it is equally important that those who are leading the change effort devote time to identifying and developing strategies to overcome barriers to change (see chapter1). The identification of barriers should be one outcome of step1(assessing/identifying the need for change), and the strategies for addressing these barriers should be included in the change management plan.