Facing the devil in the detail

When putting change into practice, the devil is in the detail:

Too few people handle implementation well and the result can be disappointment and disillusion. In this article, the authors spell out what line managers and training professionals must be alert to, and what steps they must take to ensure implementation which will work.

The announcement of a bold new strategy is often followed by little follow-through which ensures that it is executed. Only a minority of companies routinely track how they perform against their intended strategy. For example, typically a company might measure the first year's targets of a new change and then ignore performance in subsequent years when problems may arise. Ignoring real performance makes it much harder to recognize and correct fundamental problems which inhibit delivery.

It's Tough and Getting Tougher

There is certainly plenty of need to respond successfully to change. Arun Sarin, Chief Executive of Vodafone has recently identified the harsh world driving change:
• Increasingly fierce competition
• Technology advancing, requiring high investment
• Growing customer demands
• The growth of China
• Shifting market dynamics
• Tough operating conditions that mean it is harder to make money

This climate gives little room for mistakes. Strong performance in the past may make it even harder to apply new methods of execution, as managers believe that the methods that have worked for them before will continue to work in future.

Sarin sees three 'must-have' aspects of making change happen: thinking ahead, creating competitive advantage - strategic leadership, executing intentions to plan - implementation or operational leadership and human leadership - the skills and qualities that leaders bring to influence others to turn ideas and plans into reality.

We will focus on the operational and human aspects of managing change in this article, although it goes without saying that a clear and well thought out strategy is a must.

A Strategy for Implementation

Whilst big picture strategies are valuable in spelling out what business we should be in and how we go about serving our markets, there is an essential part of strategy to define operationally what resources, capabilities and processes are required to achieve that strategy. Fundamental strategic decisions must be taken on priorities, such as attention to cost versus quality, customization versus standardization and speed versus accuracy.

Translating Strategy into Action

What is the common thread in companies which execute change well? Most are faced with tough, competitive environments that keep them on their toes. Importantly, execution and improvement are ingrained into their company cultures and communication and involvement is high. This shows in well-designed and well-maintained procedures that are capable of pinpointing problem areas and sorting them out quickly. They are also highly tuned to adapting to changing customer needs.
 
Toyota is perhaps the most well-known car company for making reliable cars and it has achieved global dominance even in America, the home of the motor car. It has built its success with customers through products that derive from thinking and practice of the all-embracing Toyota Way. In fact, so confident is it of its unique, relentless quest for quality and reliability that it allows conducted visits from rival companies all over the world.

Dell out-performs the industry by making delivery to the customer at low cost its top priority. This is reflected in its streamlined, focused organization and processes. It seeks high involvement from everyone in the organization, and Michael Dell, its founder, is renowned for ensuring every detail is in place.

At Porsche, in the early 1990s the market for expensive sports cars declined and the company was forced to take drastic action. Sales dropped by roughly a half of their peak in the mid 1980s. The situation called for urgent action with subsequent cuts in employment numbers and production. Today Porsche has an enviable brand position and is the most profitable car manufacturer in the world. It has a three year planning cycle which prompts its employees to assess their current position and project forward to the future.

Another notable example is Tesco, which continues to grow in the UK and globally by delivering what customers want regularly and consistently. It has a clear focus on what is important, measures this throughout the organization and involves and motivates its employees to deliver.

Where implementation goes wrong

Our experience of poor implementation of change suggests these frequent warning signs:

• Failure to see knock-on effects. Many companies fail to look at all the implications of change and how one decision, inaction or problem in a part of the organization can affect other parts.  A recent high profile example was an industrial relations problem in an outsourced catering company that had important, devastating repercussions for thousands of passengers in British Airways at a peak time. Managers must also understand what will cause resistance to change and create barriers, and also what form resistance may take.

• Not being alert to key signs. Most organisations have so much data they have great difficulty determining which are the important ones and which require no action.

• Under-investment in people. Most firms spend on technology or IT but neglect fully to equip their employees with new skills to make the change sustainable.

• Failure to uncover the true picture. Addressing change management execution will almost certainly lead to facing up to deeper management and organizational issues. For example, are performance figures being distorted? In the Health Service it is now coming to light that targets are met which distort the whole intention of the setting of standards, and in one or two cases figures have been deliberately falsified.

• Insufficient clarity and challenge. Management discipline is required continuously  to keep asking three important questions and, vitally, to take action on the results:

Big project failures, with tragic loss of life, have characterised some of NASA?s more recent space exploits. Yet some people involved in these incidents knew poor decisions were being made but did not speak out. Lack of regular, forthright and open communication and feedback can stifle effective implementation.
Implementation needs careful thought and reflection, even when - inevitably- the pressure is on to speed things up. Hoover made an overly hasty decision to increase sales through a promotion of a flight ticket with every purchase. The result was that the whole company nearly collapsed in a wave of bad publicity.

The Onus is on the Manager

The change process puts the onus firmly on the manager to drive the operational aspects and skillfully manage the people component, for example, confronting and resolving issues and leading and managing effectively by continually testing the temperature and applying high-level influencing and negotiation skills. The task demands a disciplined all-rounder who:

• Establishes robust processes to manage schedules, budgets and resources
• Communicates direction
• Structures the team, establishing roles and responsibilities
• Reviews individual and team performance
• Recognizes and rewards effective contribution

Sound implementation requires detailed scoping of the required change.  This will require an assessment of
• Who are the customers/stakeholders?
• Which key issues will the initiative address/resolve?
• What are the boundaries/parameters?
• Where do the boundaries/parameters cross with other initiatives?
• What assumptions are we making about this change?
• What will stop us or hold us back?
• What are the deliverables/outputs?
• Who are the key people responsible for driving implementation?

Change implementation plans can be described as passing through four phases:
1.   Set up
2.   Kick off
3.   Delivery
4.   Review

Programme and Project Managing

Many organizations are using programme and project management techniques to implement change, particularly those which are complex and cross organizational boundaries. In the mid-1990s, British Airways Engineering was radically reorganised to create more customer responsiveness through Business Process Reengineering.   A carefully structured programme approach was adopted, with key managers and specialists involved.  Unusually at the time, the same approach was applied to the critical 'soft' aspects with the introduction of HR and cultural change.

Stages of the Implementation Process

We have particularly highlighted the important role of development throughout the implementation process.

Set-up

Time spent in initial preparation pays off, and development is a critical element of this.

1. Communicate in advance the nature of the change and involve those affected in planning for the change
2. Assess the organization's readiness. Draw up a development plan.
3. Build contingency plans change will rarely go exactly to plan

Kick-off

A well-prepared launch will set things off with confidence. Developers can help ensure the message is well devised and executed

1. Create a management group to oversee the change, initiate team development for rapid effectiveness.
2. Develop temporary policies and procedures during the change

Delivery

Further development needs will arise; be alert to the need to coach key people, particularly on resolving people issues
1. Remind people why the change makes sense. Help people let go of the 'old'.
2. Hold people accountable for distinct areas of responsibility
3. Set short-term targets and monitor progress at regular intervals

Review

Development and HR professionals should prompt and perhaps facilitate a thorough, though not ponderous, evaluation of what can be learnt for next time.
1. Review learning points for the future, not just in one big review but as part of a continuous process
2. Recognize those who have made special efforts during change.
3. Prepare for the next change!

Monitoring, measuring and controlling

The process and disciplines of monitoring, measuring and control are often where change goes wrong. Good, relevant measures and controls help to keep a handle on what is happening and where, poor measures often mean collecting masses of irrelevant data and yet missing critical problems where corrective action is required. Cranfield?s Centre for Business Performance suggests the sort of criteria to make measurement useful:

Criteria for Performance Measurement

• Provides timely and accurate feedback;
• Reflects the 'business process'?;
• Part of a closed management loop;
• Clearly defined;
• Have visual impact;
• Focuses on improvement;

An important component of delivering must be identifying and monitoring risk. Risk Management focuses attention on the chance of an event occurring that may threaten successful delivery and to identify actions (risk response) that could be taken to shrink down to size the threat and impact of the risk.  Action should normally be taken to minimize or reduce the impact or likelihood of the risk, choosing a risk response strategy to avoid, minimize, mitigate, transfer or accept the risk.

The discipline of risk management improves decision-making, planning and setting priorities and increases the likelihood of delivery. To evaluate risks in a structured way, for each risk the potential Impact and Likelihood is evaluated and plotted on a risk map. Prioritizing risks means you can allocate time and money toward the most important risks. Risks should be periodically monitored to head off trouble. This could lead, for example, to setting aside money to alleviate cash flow problems or ensuring effective IT support to avoid significant systems down time at key times.
A common and potentially serious issue in execution is the problem of responsibility falling between two stools. This can lead to unforeseen and unwelcome issues causing damage.  Using a template, called a RACI chart, is helpful in establishing for each activity who is:

Responsible = 'Doer' R

Individuals who perform an activity - responsible for action/implementation.  The accountable person defines the degree of responsibility.  R's can be shared.

Accountable = 'Buck stops here' A

The individual who is ultimately accountable - includes yes/no and power of veto.  Only one A can be assigned to an activity / decision.

To be Consulted = 'In the loop' C

The individuals who need to be consulted prior to a decision or action being taken.  Two-way communication is vital in all forms of consultation.

To be Informed = 'For your information' I

The individuals who need to be informed after a decision or action are taken.  One way communication is sufficient for this.
Another useful visual planning and monitoring tool is the Gantt chart. For a project task, it enables everyone to assess visually what needs to be done, the sequence of those tasks and progress to date.
During the delivery phase of a project the project team needs to meet regularly to control risks and issues, making any changes to the plan that occur as well as monitoring delivery against that plan. Visual aids help tremendously and it is worthwhile spending time and effort putting up charts and graphs in a project room so that everyone can regularly refer to key measures.

The Human Aspects of Change

When Sir Ken Morrison's supermarket took over Safeway, he alienated many staff whose support he later needed. One of the key factors in effecting change is to work assiduously to bring others along with you. This will mean listening, flexibility about means, negotiation, keeping morale up, being a role model and sometimes a shoulder to cry on. Yes, it is a long list, but neglect it at your peril!

Time to Take Stock

Under each of the headings, make an assessment of your capacity to execute change and deliver. Note actions to improve areas which should be strengthened.

• Delivery of regular improvements, my own and my team?s, is at the forefront of my mind.
• I clearly communicate my expectations and priorities
• Development plans are in place and are active to enhance my, and my team?s, delivery
• I have measures installed which reflect the results we need and the changes expected
• I regularly ask for feedback ? and act on the results
• Reward and recognition processes are in tune with the changes we need
• Follow-up plans, with milestones, are always agreed and carried  through
• I regularly try to enhance my skills
• I keep up-to-date with business  trends to be more effective in  what I can deliver

Conclusion

It is important for managers to develop implementation skills and to know how to translate a company's change aims into individual areas of responsibility and accountability. Disappointing results from change management initiatives can often be tracked back to poor execution.

To increase the chances of success, managers should approach implementation in a systematic and a planned way. It is particularly important to carry people along with you and minimize resistance. Putting together a comprehensive change implementation plan requires the manager to think ahead and take decisions about the nature of the implementation and the context in which they are making their decisions. This planned approach to implementation is more than a set of techniques; it inevitably requires flexibility and attention to organizational culture, individual and group attitudes and the development of measures and processes to make change stick.

Learning Points

• In today's environment it is a necessity to equip managers to understand how to execute change successfully and how to
  take the initiative in making change stick.
• In particular, there needs to be emphasis on enabling managers to develop implementation approaches tailored to their 
  organisation's context, rather than to a standardized recipe. They must understand:
• The difficulties and pitfalls of  implementation
• Strategies to manage implementation within their organization
• The importance of focused measurement, coupled with regular communication, feedback and involvement

Research into successful organisations which manage change well has led to a clear pattern emerging of where many companies go wrong:

• Not spotting what really matters
• Under-investment in people
• Failure to uncover the true situation

Managers need continuously to keep asking three important and probing questions and to take action on the results:
• Where are we now?
• Where do we want to be?
• How do we close the gap?
Targeted performance measures are vital to provide the necessary information.

Steve Macaulay and Sarah Cook are consultants who specialize in the development of managers and organizations to achieve change in a customer-focused way. Steve Macaulay is at Cranfield School of Management, Sarah is from The Stairway Consultancy. They are the authors of 'Change Management Excellence', published by Kogan Page, price £16.99. They can be contacted through Sarah Cook at the Stairway Consultancy, on 01628 526535

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