2010 Great Lakes PMI Dinner Meeting Driving Successful Change in Organizations

1. 2010 Great Lakes PMI Dinner MeetingDriving Successful Change in Organizations Enhancing Program/Project Success with Organization Change Management Disciplines Kathy Hogan The Abreon Group Amy Palazzolo Ford Motor Company

2. Objectives • Invite you to consider programs/projects as vehicles for change in your organizations • Understand how Organizational Change Management (OCM) disciplines contribute to successful change • Definition of OCM • OCM process/knowledge areas • PM and OCM knowledge area integration • Provide some practical tools/examples to take-away

3. Who is the Speaker? Amy Palazzolo • Bachelors & masters degrees in computer science • Started career on product development applications • Software engineer on an early telematics program • Launched some of Ford’s early social media technology • Several years of experience in enterprise architecture • Managed lots of infrastructure projects & programs • Completed PMP certification December 2006 • Most recently PMO Manager for the Data Center Consolidation program at Ford which is a $60M global multi-year program  • Recent collaboration with Kathy on OCM techniques for Ford’s IT Service Management deployment

4. Who is the Speaker? Kathy Hogan • Bachelors degrees - Business, Communication, Education • Began Career in Training/ Organization Development • Reengineering Engagement – Product Development • Joined Top 5 consulting firm – Director Change Management/Communication - very challenging – but fun • Designed Change Management Product Offering aligned with Project Management process groups and SDLC • Lead OCM Consultant Data Center Consolidation • Two Change Management Certificates 1997 &1998

5. Driving Successful Change Program Management People Management Successful Change + = When the disciplines of program management and people management (OCM) are united a powerful implementation model emerges to drive successful change in organizations. Industry statistics* indicate less than 75% of organization changes meet expected targets; i.e., time, budget, scope, quality and adoption. The reasons cited are failure to focus on the importance people play in making change successful. Greatness lies in our willingness to change! *(Standish Group, McKinsey, Gartner and ProSci)

6. Considering programs (and projects) as vehicles for change

7. What is a Program? Related projects managed in a coordinated way for benefits and control not available from managing them individually (PMI) Achieve organizational strategies through the management of a related series of projects and ongoing work activities (ESI) A collection of vehicles of change designed to achieve a strategic objective (Bartlett)

8. Refresher on Stages of a Program Main stages of a program: Transition from strategy to program Assessing program feasibility Preparing for program execution Execute, monitor and control, close

9. Transition from Strategy to Program Generally a function of senior management Examine the current state and the desired future state of the organization Identify the changes required to move the organization from current to future state Programs are proposed as the vehicle to implement the desired organization changes Techniques: Kaplan & Norton’s Strategy Map

10. Assessing Program Feasibility Show how the program results will impact the future state of the organization Identify the change impact on people and assess their capacity to absorb the change Prepare a business case with projected costs and benefits to validate affordability Techniques: Zachman Framework - Business Architecture Technology Proof of Concept Organizational Change Models Cost Estimating Models

11. Identify the stakeholders and understand their priorities, influence, and concerns Establish a governance model to monitor progress, make decisions, escalate issues Develop SMART objectives with clear linkage to organizational strategies Establish a process to measure benefits Design a workable organization structure with clear roles and responsibilities Define scope; assess time, cost, risk, etc. Preparing for Program Execution Underlined are key themes in Program Management according to the PMI Standard for Program Management

12. Programs/Projects As Change A program/project is about change As project managers, you have been entrusted to lead the changes that your organization needs All people go through an emotional transition during times of change For the best results, you must help people through the transition your programs and projects require of them

13. Disciplines which contribute to successful change

14. IT Implementation Findings The Standish Report – “There is Progress” Key * Success – On time, budget and within scope *Challenged – Time, budged and scope over runs *Failed – Project Cancelled

15. IT Implementation Findings User involvement Executive management support Experienced project management Clear business objectives Small milestones Firm basic requirements Competent Staff Proper Planning Failed • Project Cancelled “The People” OCM 29% Challenged • Cost Overruns • Time Overruns • Scope Creep 26 % 46% Succeeded • On Budget • On Time • Within Scope Standish 2010 When organizational transformations succeed…., pay attention to “people issues,” especially fostering collaboration among leaders and employees and building capabilities. McKinsey 3/2010 “People whose lives are affected by a decision must be part of the process of arriving at that decision” – John Naisbitt

16. Commitment Phases Internalize Adoption Commitment Knowledge Train Acceptance Support for changes Educate Understanding Preparation Communicate Aware Time

17. Organization Change Management OCM enables faster realization of benefits by ensuring changes are successfully adopted and sustained by people. WHAT IT IS A strategic and systematicPROCESS that uses tools and methods of OCM that can be measured and deliberately influences those employees who jobs are impacted to achieve the intended outcomes. THE PURPOSE

18. Organizational Change Management Disciplines Organizational Profiling/Prooject Alignment Stakeholder Management Communication Metrics Business Readiness Education Learning Develop alignment and commitment around change, enabling executives to effectively sponsor and lead the change Align Project Management and OCM activities, determine people and organization risk developing mitigation plans. Build awareness, understanding and by-in of the change through proactive, consistent and targeted communications Measure progress and adoption Organization Design Align and optimize the organization with ‘to-be’ vision, including organization structure, jobs, performance measures and HR processes Build organizational ownership of the change through active sponsorship and participation in the design and implementation Build the required knowledge and skills enabling the workforce to perform their new roles.

19. Project Management Processes

20. Project Management Processes

21. Commitment Phases Measurement Communication and engagement activities Internalize Sustain Adoption Commitment Coach/Mentor Knowledge Train Acceptance Support for changes Educate Understanding Preparation Communicate Aware Time

22. Change Management - Solving the Performance Puzzle A comprehensive Change Management Program addresses critical people focused activities across four key change management dimensions Change Management Key Dimensions Lead – Key Executives championing the program and bringing people along • Create understanding of need for program • Set direction and goals – assign clear accountability • Gain commitment of key stakeholders • Lead, motivate, reinforce change journey Guide – Align program with stated outcomes • “Story” articulated and shared – clear definition of “To-Be” State • Speed and depth of change is managed effectively within culture • Measurement processes in place and functioning • Use of resources prioritized Group Lead Guide Own Outfit Outfit – Equip teams and individuals with skills, tools and support to succeed • Effective Communication • Appropriate performance management and rewards • Consistent approach and tools • Skilled resources from both partners • Dynamic and effective training program Own – People on the ground take ownership of the success of the program • Build enthusiasm and commitment • Involve the right people with the right influence and knowledge • Create local ownership of performance goals • Reinforce local implementation planning • Identify and address resistance Individual Organization Driven Program Supported

23. Practical Tools/Examples

24. OCM Risk Card Tool

25. Culture Assessment Tool This assessment is designed is measure the consistency between the current culture and the culture required to drive the change. It also assesses the overall strength of the existing culture (business practices). Scale of 1 – 7 1 strongly disagree – 7 strongly agree Management Processes - How consistent are the culture’s (business practices) existing management processes (i.e. planning budgeting, HR, IS with those required for successful change. Decision Making – How consistent is the culture’s (business practices) current approach to encouraging decision making (e.g. democratic participative, authoritarian) with those required for successful change? Communication – How consistent are the culture’s (business practices) influences on communications (what is conveyed, how openly, to whom, when it occurs) with those required for successful change? Leadership – How consistent are the cultures (business practices) current methods for encouraging people to cooperate and coordinate their activities with those required for successful change? Teamwork – How consistent are the culture’s (business practices) current methods for encouraging people to cooperate and coordinate their activities with those required for successful change?

26. Communication Approach In each phase, the plan for implementation/change needs to include a way to address and communicate each of the items listed. The items are not multiple choice.All must be included in the tactical plan Current State Transition Post-Deployment

27. ?? Questions ?? Thank you! apalazzo@ford.com kathy.hogan@abreon.com