When Change is no change anymore... When the result of a change is stability...

Change is about ? modifying an unsatisfactory situation ? said Thiry in 1999. “Change or Die” said Hazard in 2010.
Change is in fact the way people and organizations use to adapt to the modification and the evolution of their environment. Each time, a parameter of our environment evolves, we have to react in order to adapt ourselves to that Change, so called. Then, we also have to change. Change induces change. Change is the only inevitable outcome of life.

When we implement a new process, a new tool, a new methodology or governance process, we also expect to see the impacted people and organizations to react (hopefully in a positive manner) to that change, meaning changing themselves. Again, change induces change.

So, change is good one could say. Yes, as we could say that an organization which doesn’t change is doomed to obsolescence and finally to disappear. The Ford Motors Company almost faced this situation, when Henry Ford himself was refusing to think about a new model to replace the T, even after having been a great change actor in the American society.

But change can also be a trap. And a dangerous one.

Organizations change. They must change, or they disappear. But why changing, when, how and what?

Organizations struggle into ensuring that the different changes they implement are really creating Value. Often, Change is perceived like a goal in itself, organizations implement change for the sake of changing and are stuck within a continuous changing loop, accumulating layers of permanent change which appears to be counter-productive, demotivating and finally dreadful for the organization itself.

Let’s explore how to determine if a change has to occur, and how to ensure it delivers Value... Through stability, when the change is not a change anymore.

In the Project Management world, and in the framework defined by PMI? with the PMBOK Guide?, the Program Management Standard and the Portfolio Management Standard, our organizations create the conditions for change (Portfolio Management), assemble the triggers for change (Project Management) and finally deliver the Change itself (Program Management) by developing new capabilities. By developing this continuous processes, some might think that Change is an ongoing iterative process, that evolution is a never ending flow of emerging changes.

Actually, it’s not. If the flow of change is continuous in the organization, it doesn’t have the time to absorb the change and realize the expected benefits.

To be effective, a Change, and any kind of change must be integrated into the organization’s daily business, in other words, not being a change anymore. At each step of the implementation of a change, a certain period of stability is required to ensure the organization absorbs the change and creates the expected Value.

Each organization has a limited ability to absorb change. This ability, or limit, is defined by the level of inertia of the organization, its culture, its structure even, and has to be identified, quantified and integrated into the Change Management program or initiative in order to ensure the Value is realized.

This paced and step-by-step approach is similar at the organizational and strategic level to the Agile principles developed at a project level.

By identifying specifically, the expected benefits, prioritizing them according to their contribution to the organization’s strategy, we’ll be able to build a framework of Critical Success Factors to be paced accordingly to the ability of the organization to absorb change and generate benefits by integrating the different change triggers produced by projects into its business as usual and operations.

Effective and Efficient Change Management is finally the integrated application of Agile principles, Project, Program and Portfolio Management frameworks, with a focus on Risks and Stakeholder Management.

Determining the need for Change in the Organization:

 In order to determine when a change has to occur, the Organization need to be able to analyze its environment. Meaning, it’s able to gain a sufficient level of visibility over that environment, internal and external.

The first factor to construct this visibility will of course be the proper definition of the Organization’s Strategy, and the foundational Strategic Vision. Let’s be clear, it’s not about defining performance objectives. Performance is a consequence of a successfully executed strategy, not the other way around. It’s a result. The Strategic Vision is the aim of the Strategic Journey. We can define it as the desired status of the organization’s business environment. The Strategy itself becoming the way to reach that aim, or how people will have to use the organizational tool to shape that environment, in other words to change it.

The first trigger for change will be then the distance between the current status of the business environment and that desired status. That’s the type of change which will be called “Strategic Change”, “Strategic Initiative”, Strategic whatsoever… Putting the organization in motion. Launching programs and projects to develop the necessary capabilities to execute the strategy.

But while the organization will sail on the seas of its business environment, using the different outcomes of its capability development initiatives to propel itself toward the Strategic Goal or Vision, that environment will change. As a sea, it’s moving. Also many threats will appear on the horizon, and the organization will need to be ready to adjust its trajectory to be able to avoid these icebergs. This is the second sort of Change the organization will have to face: Incremental Adjustments.

Incremental Adjustment constitute the ability to anticipate of the organization, as it will face a countering force, factor of resistance to change: Inertia.

Organizational Inertia is inherent to any organization; it means that everything takes time, that any organization has a limited capability to absorb a certain level of Change. If you try to go above that level and force beyond the level of Inertia, you’ll generate resistance and potentially hit an iceberg.

To avoid the icebergs in the sea of your business environment, despite the level of inertia, you have to adapt your speed (meaning the pace of changes) and look forward further than level of Inertia. 

The level of Inertia or Resistance...

Countering Inertia, Expending the Horizon

The level of Inertia of an organization is determined by the number of layers within this organization. Be it the number of process layers, or the number of decision making layers or even the number of interfaces between these layers. The more layers, the higher is the level of Inertia. It’s a physical phenomenon.

There are two ways of optimizing this and leveling resistance to change:

• Optimizing the Organization:

In other words, removing layers, simplifying the organization, empowering decision makers, involving your stakeholders. Removing interfaces. Interfaces create only interface problems and generate more inertia and resistance and more costs.

• Enlarging the Strategic Horizon:

If you want to avoid icebergs, the best way is to see them coming. Depending on the level of the Organizational Inertia, the Strategic Horizon (how far in the future you’re operationally planning your strategy) has to be pushed as much as a minimum of twice that level of inertia plus your time to market. If the level of inertia in your organization (the time it takes for an executive decision to be made, cascaded down, implemented and the feedback on that implementation is escalated up) is of 12 months, and your environment is changing every 6 months (new products, regulations, etc., basically your time to market.) then your Strategic Horizon should be of at least 36 months {(12+6)x2}. Meaning looking ahead with a visibility over resources and initiatives as far as 3 years.

These optimizations will be achieved by putting in place a clear definition of the Strategic Vision, along with simple and aligned Portfolio Management processes.

Aligning the Organization, involving Stakeholders… The first steps to preventing resistance

 Starting from a formulation of the Strategic Vision as describing the aim of the organization and not its performance objectives, it will be possible to build an Opportunity Chain.

This Opportunity Chain will describe the backbone of the strategy. Starting from the Vision, we’ll analyze the impacted market stakeholders impacted by the realization of that vision, and then classify them along the “3i’s”: Influence / Interest / Intent. That first level of analysis will allow us to identify were are the potential forces of resistance.

Manly these forces of resistance will lie within two categories of stakeholders:

• The Influential: High level of Influence, but low level on Interest. These stakeholders are a potential threat in the development of the various capabilities we will need to execute our strategy. They usually are also a strong generator of inertia. Their resistance is rarely aggressive.
• The Affected: High level of Interest, low level of Influence. These ones are the ones who will be “victims” of the Changes. The ones who will bear the burden and have to experience the impact of the Changes within the organization, like the users of a new information system. Their resistance is more aggressive. These are the ones who will eventually put in jeopardy the transformation of the outcomes of your various initiatives into capabilities, these are the ones who will decide if a change occurs or not.

Aggressive resistance is caused by a simple factor: Fear. With these Affected stakeholders our aim in dealing with resistance will be to overcome that fear, to reassure, to secure, to preach and convince. And the best tool to do so is Involvement. You can’t be opposed to something you have contributed to define. What’s why we will involve our market stakeholders into the definition of our strategy. It’s the next step into the construction of this Opportunity Chain: Expressing Stakeholders Expectations. Of all stakeholders, where ever they are positioned on the 3i’s model.

 The 3i's Stakeholder classification model.

Of course, not all of these expectations will have to be covered… We have a strategic vision; we’ll integrate into our strategy the expectations fitting with our vision. It’s by the way the first good indicator of the reliability of our strategic vision: if none of our market stakeholders’ expectations seems to match with our vision, it could be a good idea to revise it…

We’ll then Identify the Market Needs. It’s the following step into the construction of our Opportunity Chain. Needs that we should cover in our strategy to ensure our successful achievement and fulfill the very rationale behind the existence of our organization! Yes, but… of course, there is a “but”… But… resources are limited, scarce, rare and precious. We just can’t afford to do everything we wish. We need to prioritize according to the contribution of each of these needs to the realization of our strategic vision, and based on the level of resources available. Which element will generate the most Value? This is about our third step into the construction of the Opportunity Chain, Formalizing the Strategic Objectives. An Objective is a Need, no difference. But an Objective is a Need which we will cover. An Objective is a commitment in front of our stakeholders. Commitment is another great Resistance countering tool.

And there’s a very common tool to make this prioritization between Needs and to formalize the objectives: Portfolio Management! Portfolio Management which will tell us how much resources and what kind of resources we have, and how much we need in the future, up to the Strategic Horizon, to deliver up to our promises.

The global organization's Opportunity Chain.

This is where the Opportunity Chain starts to become operational. These Objectives we have formalized, are in fact nothing else than the different capabilities we’ll have to create; capabilities defined through Programs; Capabilities delivered through the realization of Projects which will produce the triggers to generate these capabilities. Hopefully. And hopefully only.

Program create Change and Value, but Projects produce the Change and Value triggers

 Hopefully only, because projects do not create any Value.  They do not create any Change. They create only a trigger for Change and a Value trigger. Value is created only if the organization is able to exploit the results of the projects, the change will happen only if the organization can absorb the outcome of the projects into its operations, into its daily business.

The integration of these outcomes will come under certain conditions:

• The Affected Stakeholders have seen the benefits of the change to come. Their fear has been out passed.
• The Influential stakeholders have been respected.
• The capability of the organization to absorb change (in other words its level of inertia) has been respected.
• The alignment between the different components of the Portfolio to the Strategic Vision is preserved all along the Opportunity Chain.

Everything lies then within the ability of the organization to exploit the results and outcomes of the projects.

The organization's Value creation cycle. 

Transforming Outcomes and Results into Value: A matter of Program Management

 As a project is a tool to produce a trigger for Change and Value, the aim of the Program Management layer and the accountability of the Program Manager, is to ensure that the organization will be capable of absorbing that outcome and transform it into Benefits.
Based on the prioritization model defined at the Portfolio level, and according to the identified and accepted level of organizational inertia, the role of the program manager will consist of pacing the delivery of these change triggers to respect the limits of the organizations in terms of absorption of change.

Any change needs to be developed, deployed and exploited to create Value.

How to ensure that we create Value? Value is something which has to be measurable through Performance Indicators (KPIs) related to the achievement of a certain function, benefit or capability.

The realization of that Value requires then a certain period of stability to get measured. And if we can measure a “before” and an “after” status, it’s even better, we’ll be then able to demonstrate an evolution, to demonstrate a movement toward our Strategic aim, a Strategic Change.

Pacing of benefit delivery.
source: Michel Thiry.

Yes, but what if we need Incremental Changes in reaction to the constant evolution of the environment?

Incremental Changes and Organizational Agility

 To develop this anticipative capability, the organization will need to put in place an Integrated Portfolio Management Framework, mainly focused on 4 items:

• A strong and comprehensive definition of its Strategic Vision, used as a reference baseline to construct the strategic alignment indicators.
• A predictive performance measurement system, based on simple and consolidated relevant indicators, mainly derived from Earned Value metrics.
• An anticipative Risk and Contingency Management model properly constructed to provide a realistic overview of uncertainties and unexpectancies, and allowing deriving evolutionary trends in terms of Achievability and Exposure to Risk of the different components of the Portfolio.
• An Analytical framework, integrating Business, Strategic, and Performance based and Risk indicators to gain the necessary long-term visibility up to an acceptable and reasonable Strategic Horizon.

 The objectives of the implementation of such a framework being to give to the organization the ability to anticipate soon enough the emergence of a potential threat, by making small but significant adjustments to the course of its strategic implementation, without deriving too far from its initial Strategic Vision, and so achieving Organizational Agility.

Organizational Agility being the capacity of an organization to adjust frequently by small increments its Strategic Plan, while delivering a continuum of Business Benefits and Performance realization, and in the same time, keeping an aim on the Strategic Vision.

Conclusion

 We can see that we need to develop an integrated Opportunity Chain allowing to align the parameters corresponding to Risks, Benefits and Performance of the various components of the Portfolios. And secure the sustainability of the Strategic Vision, long enough to realize it or to be able to make it evolving along with the evolution of the organization’s environment in a controlled manner, which will be anticipative instead of reactive.

Only with these pre-requisites in place, you will be able to pace your changes accordingly, adjust stability periods allowing the organization to absorb the change and transform the threat into an opportunity and into benefits and Value.

 - Thank you for having read this post, you will find instructions on how to claim 1 free PDU and download the paper in PDF by clicking here. - 

Few References

Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK?guide) – Fifth edition. Newtown Square, PA: Author.

Project Management Institute. (2013). Program Management Standard – Third edition. Newtown Square, PA: Author.

 Project Management Institute. (2013). Portfolio Management Standard – Third edition. Newtown Square, PA: Author.

 Michel Thiry. (2015). A Framework for Value Management Practice – Second edition. Project Management Institute, Newtown Square, PA.

 Michel Thiry. (2015). Program Management – Second edition. Burlington, VT: Gower Publishing Company.

 Olivier Lazar. (2015). Open Your Strategic Horizon And Gain Organizational Agility, Or How To Overcome Organizational Inertia - 2015 PMI Global Congress Proceedings – Orlando, Florida, USA

 Olivier Lazar. (2015). Delivering Benefits - 2014 PMI Global Congress Proceedings – Dubai, UAE

 Troy Hazard. (2010). Future-Proofing Your Business. Wiley

About the Author

Olivier Lazar, is an Organizational Governance expert, coach and trainer. Graduate with a Master’s degree and an Executive MBA in Strategy, Project and Program Management from the Lille Graduate School of Management and from the PMI Leadership Institute Master Class 2013. Committed to the advancement of the profession, he’s Managing Partner at the Valense Palatine Group, a former President at the PMI Switzerland Chapter, and currently sitting at the Chapter Members Advisory Group at PMI.

With more than 15 years of Project, Program and Portfolio Management experience, both on the operational and consulting perspective, Olivier has worked in a large scope of industries, from Corporate Finance to Aerospace or from E-business to Pharmaceutical and Energy. He has been published in professional press and has presented in number of PM conferences around the world, including PMI Global Congresses in EMEA and North America, and is as well a Seminar Leader for PMI SeminarsWorld?.

 He’s also one of the very few to hold seven credentials from PMI:  PfMP?, PMP?, PgMP?, PMI-PBA?, PMI-RMP?, PMI-ACP? and PMI-SP?.

Olivier's leitmotiv lies in his conviction that sharing Knowledge is a major factor for global performance and common development, organizational and personal, as such; Olivier is also a member of the PMI Educational Foundation Leadership Society, promoting Project Management as a Skill for Life.