Applying Change Management Principles in the Project Management Community

1. Applying Change Management Principles in the Project Management Community Kristen Springer Greg Pogarch January 11, 2010

2. What we will share… • Introductions • Change and Project Management – defined and explained • GMAC and Change • Approach • Tool Demo • Q&A

3. What we hope you will take away… • A deeper understanding of organizational change management • The ability to describe why effective OCM is important • Insight into the benefits that effective OCM has on a project and for the individuals leading a project • A description of the characteristics of change • Understanding of common obstacles for implementing effective OCM • An approach on how stakeholder management and change adoption can be applied within project management methodology

4. What is Change? In business, change often feels constant. There are many type of business change, including: new systems updated procedures new business objectives revised policies new organization structures New Strategies “The only constant is change...” • Isaac Asimov

5. Human Response to Change There are natural human responses to change. Although all people are unique individuals, we tend to have similar responses to change. In general, people don’t like change.

6. What is Organizational Change Management? Organizational Change Management (OCM) is the discipline or practice of helping people adopt or accept change. current state future state OCM helps transition individuals, teams, and organizations from a current state to a desired future state.

7. What is Organizational Change Management? (continued...) OCM includes both the processes and tools for managing the people side of the change. Communication = Training + = Organizational Change Process Tools =

8. Change Models/Approaches/Gurus The practice of OCM is supported by research and practical application. There are many OCM models and frameworks, including: • 8 Steps of Successful Change (John Kotter’s Leading Change 1995) • Formula for Change (Richard Beckhard and David Gleicher) • ADKAR (Prosci) • People Centered Implementation (Changefirst) • Change Acceleration Process (General Electric) • The Seven S Strategy (McKinsey) • Managing at the Speed of Change (Conner) • And others…

9. How does OCM fit into PM work? • Every project/ program creates change • System / Technology (tools we use) • Process / Procedure (how we work) • Policy / Documentation (what we follow) • Skills / Role (who does what) • YOUR role depends on your organization • Lead/execute change efforts? • Ensure change efforts are completed? • Guide/encourage business to own change efforts? • All of the above?

10. Why is Effective OCM Important? Effective OCM supports achievement of the project’s goals and objectives. Enables timely project implementationwith an engaged and readied workforceand avoids negative interruptionto the business.

11. GE Capital: Change Research • 100% of all projects evaluatedas “Successful”had a good technical solution or approach • Over 98% of all projects evaluated as “Unsuccessful”also had a good technical solution or approach What is the differentiating factor between success and failure?

12. Formula for Results The Effectiveness (E) of the result is equal to the Quality (Q) of the solution times the Acceptance (A) of the idea. Q x A = E Quality X Acceptance = Effective Results

13. This is what you can expect to see if you put a lot of effort into the Q but not the A 8x3 = 24 This is what you can expect to see if you spend equal amounts of effort on both the Q and the A 8x8 = 64 The Equation: Q x A = E This is what you will see if you spend nominal effort on both the Q and the A 3x3 = 9

14. Change at GMAC Inc. GMAC is a global financial services company that was founded in 1919. Initially formed to provide automotive finance products and services to General Motors dealers and clients, GMAC has since expanded its business to include mortgage operations, insurance, commercial finance and online banking. • Until 2006, GMAC was a wholly owned subsidiary of GM. • Nov. 30, 2006 -- GM sold a 51 percent stake in the company to a group of investors led by Cerberus Capital Management, L.P. • Dec. 24, 2008 – Federal Reserve Board approves GMAC as a bank holding company under the Bank Holding Company Act. • April 2009 -- GMAC entered into an agreement with Chrysler to provide auto finance products and services to Chrysler dealers and customers. • May 2009 -- GMAC's ownership structure was amended again when GM and Cerberus transferred certain of their GMAC equity interests to third parties, resulting in further diversity in the ownership structure of the company. • Nov 2009 – GMAC’s Board of Directors appoints a new CEO, Michael Carpenter, to lead the company.

15. What is the impact of these changes to GMAC Inc. • Up until 2006 – captive finance company of GM with numerous stand alone subsidiaries • Multiple large initiatives began to standardize processes and systems across the organization • Must meet regulatory guidelines as a “bank holding company” within 2-5 years • 100+ projects lead by 5 large work teams launched to address compliance • New business priorities to diversify, cut costs, re-brand, etc… • 100+ projects are in flight to support critical business initiatives • Company is facing changing leadership, changing business priorities, and a changing identity

16. GMAC is introducing “Change Enablement” to its PM Community Q x A = E Quality X Acceptance = Effective Results

17. Stakeholder Management supports quality project execution and prepares for change Stakeholder Management is the process by which a project’s key stakeholders are identified and an approach to win or maintain their support is developed. Good stakeholder management leads to quality project execution and deployment. A stakeholder is any person or group who participates in or will be influenced by the outcome of your project. • Some of these people may be strong supporters. • Others have the influence to undermine your project and your position. • Some people will be the recipients and users of the end result of the work and carry on the success and intent of the project. Q x A = E

18. 10 Keep Satisfied Manage Closely (key player) 9 8 7 6 5 Influence 4 Monitor (minimum effort) Keep Informed 3 2 1 1 2 3 4 5 6 7 8 9 10 Interest Stakeholder Management Workbook helps prioritize, plan, monitor • Stakeholder identification •  Stakeholder analysis • Stakeholder communication plans/routines • Sr. Executive • Business Lead • Business Team Director • Project Team • Super Users • Department Employees

19. Stakeholder Management Workbook • Tool Demo

20. Disciplined Stakeholder Management benefits the project team • Create a shared vision of the project’s desired results • Minimize disagreements and gains consensus with project sponsors • Minimize skepticism • Build enthusiasm for the project • Gain organizational commitment and advocacy during the lifecycle of the project, which may result in obtaining project resources or other support • Organizational commitment to support the necessary activities to adopt the change • Address sensitive issues such as leadership resistance

21. Change Adoption supports the business “readiness” to accept change Change Adoption supports smooth transition/change within the business and supports benefits realization to the enterprise Q x A = E

22. Change Adoption Workbook helps plan appropriate communication, training and organization transformation tactics • Change definition • Change impact analysis (people, process, policy, technology) •  Change plan (includes organizational change, communication and training strategy) Communication Training Organizational Change

23. Change Adoption Workbook • Tool Demo

24. What are common barriers to using change management in practice? • Perception that the change is not significant • Perception that there is not enough time or resources • Perception that traditional project meetings/routines are adequate • Lack of understanding and/or OCM skills on the project team • Lack of support by leadership • Misunderstanding of who owns organization change management among the project stakeholders

25. What happens when Change isn’t managed • Changes are not defined and not well communicated • The case for change and the benefits of the change are not well understood • Fear, anxiety, and resistance prevent acceptance • Enough people don’t get on board • People don’t understand how they need to change behavior • People don’t have confidence in the change and complacency rules • New systems, tools, processes, and policies aren’t used properly or at all • Confusion abounds and deployment results are poor • Benefits realization goals take too long or are never reached • Transformation is not achieved

26. Summary – What can YOU do? Weave OCM work into the DNA of what you do… • OCM must be a part of successful project implementation: Q x A = E • Can be executed multiple ways and without significant cost • PMs will benefit when they play a direct role in stakeholder management within their project • PMs can help the business learn to own and drive quality change adoption

27. Questions?