LAUREATE INTERNATIONAL UNIVERSITIES

EXECUTIVE MBA

ELIANA AUGUSTA DE ARRUDA

THE IMPORTANCE OF MEASURING CHANGE PROGRAMS

USING PROVEN AND POWERFUL TOOLS

SÃO PAULO

2015

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ELIANA AUGUSTA DE ARRUDA

THE IMPORTANCE OF MEASURING CHANGE PROGRAMS

USING PROVEN AND POWERFUL TOOLS

Final Project (scientific article) presented as partial requirement to obtain the title of Specialist in the Executive MBA Post Graduate Program at Business School São Paulo - BSP.

Advisor: Professor Maria Cristina Ortiz Camargo

SÃO PAULO

2015

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SUMMARY

DEDICATORY............................................................................................................................................... 5

AKNOWLEDGEMENT...............................................................................................................................6

ABSTRACT..................................................................................................................................................... 7

Introduction................................................................................................................................................ 8

Objectives, Problem and Hypothesis.........................................................................................13

Literature Review..................................................................................................................................14

Accenture Change Tracking Tool.................................................................................................17

Final Considerations............................................................................................................................21

References................................................................................................................................................. 23

Commitment Term............................................................................................................................... 25

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DEDICATORY

Dedicated to the Change Management Community.

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AKNOWLEDGEMENT

To Accenture, for sponsoring part of this Executive MBA (EMBA).

To my parents, to whom I own what I am, and where I am.

To my husband, for his patience and support during the EMBA.

To my EMBA friends, with whom I spent memorable moments,

especially during the international module in Boston, Massachusetts

- USA. Many thanks for the support during the hard working times.

To the EMBA’s professors, for their dedication, and for sharing nice

content and experience.

To my advisor, Professor Cristina Ortiz, for all classes, workshops,

guidance, coaching, encouragement and inspiration.

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ABSTRACT

Changes are happening in most organizations, everywhere: acquisitions,

restructuring, merger, post-merger integrations, shared services, new business

strategies, systems implementations, cost reduction, culture change, downsizing,

technology transformation programs etc., and they are vital to the long-term

competitiveness. Organizational change is related to people, and it cannot

change while people within it change. This article will present important

information about change management, some recent statistics, and discuss one

of the greatest challenges faced by Corporate Transformations: track the

changes, and ensure that the promised benefits and improvements are delivered.

This article will also present the most common KPIs used by most of the

companies, some of the tools used to support this task, and how this effort can

be minimized when powerful tools are used. Considering all the costs involved in

a change, that changes take long, that projects typically take longer than planned

to be completed and cost more than budgeted, find out too late that the change is

off track may cause irreversible damage, contributing to increase the resistance

to future changes.

Keywords: Measurement of Organizational Change. Change Measurement

Methods and Tools. Change Tracking. Change Management KPIs.

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Introduction

Changes are the only certainty that organizations have. The future is change,

and change is a big responsibility.

Changes should not only happen when business is going down. Oliveira, 2009,

interviewed the CEO of Itaú Unibanco, Roberto Setubal, who described the

problems of changing a company that is set in its successful habits, and how

important it is to have the company moving with the world. Vermeulen et al.,

2010, agree on the same. According to them, companies should consider making

changes while performance is still good. An interesting point raised by them is

that even if the external environment is not changing, probably the internal

environment is. So, restructuring the company in advance helps build new

networks, break the silos and make the companies more creative. To help the

board define the time to change, Vermeulen et al. have created a questionnaire

named “A Corporate Cholesterol Test”. This is a very important exercise to avoid

massive reorganization and restructuring, especially for big companies.

According to Kotter, 2012, the reasons for change are basically the same:

organizations need to change, to be able to cope with a more and challenging

business environment. Aaron et al., 2008, states that more and more the

organizations look for ways to work smarter and better. According to them, it is

more difficult to have employees committed to new ways of thinking and acting

than implementing new processes and systems. Companies must ensure that

people are ready, willing and able to change. Emotional reaction must be

considered, as well.

Peter Drucker has an interesting quote: “The greatest danger in times of

turbulence is not the turbulence – it is to act with yesterday’s logic”, and Martin

Luther King has another interesting one: “Change does not roll on the wheels of

inevitability, but comes through continuous struggle”.

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These quotes do not apply only for companies which need to pass through any

transformation program to remain competitive, but to their employees as well.

Gray el al., 2010, brings to our attention another important point: people need to

be creative in this post-industrial economy, where the nature of work is constantly

changing. People are not in the position anymore of letting the naturally creative

ones to be creative, but challenge themselves to be more productive, innovative

and find different ways of delighting and surprising their customers. This is not an

easy task, and Gamestorming can help a lot.

Petrescu, 2010, confirms what the Change Management professionals are aware

of: there are lots of literature, methodologies and software about how to manage

and implement change available in the market, in the shelves or even in more

than 320 consulting companies offering Change Management services (by 2011,

according to Prosci web site). In 1995 Kotter outlined the “Eight Success Factors

to Transform Organizations”, which are more related to people’s behavior:

1. Establishing a Sense of Urgency

2. Forming a Powerful Guiding Coalition

3. Creating a Vision

4. Communicating the Vision

5. Empowering Others to Act on the Vision

6. Planning for Creating Short-term Wins

7. Consolidating Improvements and Producing Still More Change

8. Institutionalizing New Approaches

Aaron et al., 2008, identified the eight undeniable truths about change:

1. Organizations change when the people within them change

2. Resistance is inevitable

3. Commitment to the past hinders change in the future

4. Connecting to the head and the heart builds commitment

5. A leader’s action speak louder than words

6. Effective communication demands quality and quantity

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7. People support what they help to create

8. Sustaining change takes support and reinforcement

Petrescu, 2010, brings to our attention a very important combination for a

successful change implementation: "hard“ and “soft” areas. In summary, project

planning and new implementations (hard) are as important as the embracement

of new technologies by people (soft), as an example. The “hard” side is much

easier to measure than the “soft” side, what made her conclude that the people

side is the most challenging part of change implementation.

The Change Management discipline has been accomplishing great

improvements in the last years, aiming to deliver more and more value to the

clients:

Methodologies

Best Practices

Certification Programs

Enterprise Change Management

Cloud-based set of transformation tools

Agile Change Management

Gamestorming

Change measurement tools

Innovative learning systems

Etc.

The Association of Change Management Professionals® (ACMP®), the

industry’s first global association for Change Management practitioners, was

launched in 2011 and recently completed two great accomplishments:

October 2014: released the ACMP’s Standard for Change Management,

a common definition and understanding of the discipline of Change

Management.

February 2015: released the ACMP’s Qualified Education Provider™

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(QEP™), which approves Change Management training and continuing

education courses aligned with the ACMP standards, and with the

Certified Change Management Professional. It applies to Change

Management professionals who act independently or are part of a

company, to help them keep aligned with the standards and provide

more value to their clients.

ACMP also organizes annual workshops, which are very important to keep their

members (or any other participant) up to date and connected with professionals

from all over the world. Their members benefit from change management

development and career growth, can volunteer to contribute with the continuous

improvement of the Change Management discipline, and also join a local chapter

to contribute in their regions. Learn more at www.acmpglobal.org.

In recognition of the growth in demand for change management services and the

need for consistent adoption of change management practices, ACMP has

committed to developing industry recognized certification programs. Their initial

focus is on certification for change management practitioners – a credential

which is being developed under the working title of Certified Change

Management Professional™ (CCMP™). ACMP plans to introduce the credential

in 2016.

Prosci, the world leader in benchmarking research and Change Management

products since 1994, provides a suite of products that also contribute with the

strengthening of the discipline:

Change Management Certification

Certified Instructor Application

Train-the-trainer Program

Advanced Change Management Program

Onsite Program Audit

Etc.

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Learn more at www.prosci.com.

According to Prosci, 2014, the Change Management trends are:

1. The awareness of the need and value of Change Management is

increasing at all levels of organizations.

2. Organizations continue to devote more resources and positions to Change

Management – 36% of the 2012 Best Practices in Change Management

respondents indicated that their organization has created an office or a

functional group around the discipline of Change Management.

3. Change Management activities are being introduced earlier and more

often into Project Management programs.

4. Demand is growing for building internal Change Management

competencies versus relying on outside consulting.

5. There is a greater demand for Change Management training and

certification within organizations.

Having the right talent in the right place is key. More and more sponsors and

leaders need to understand that Change Management activities must be

performed by people with the right competencies, and let the others act in their

core skills. Try to save budget in this area may cost much more later on.

Change Management is not intended to work by itself, but with other disciplines

as well. Examples:

Strategy:

o According to Aaron et al., 2008, the application of effective Change

Management helps the company accelerate the pace of change to

achieve timely business outcomes, and financial returns.

Project Management:

o Project Management deals with the technical side of the change,

while Change Management deals with the human side of the

change.

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o According to Prosci, 2014, 71% of the 2013 study integrated

Project Management with Change Management, due to the

following reasons:

Critical to success

Request from influential individuals

Past experiences, when integration was not considered

Avoid isolation from teams

Nature of the project

Note: there are cases when the integration is not recommended.

The previous statements reflect the benefits of applying Change Management to

a project, but do not answer one of the biggest challenges faced by the Change

Management professionals: how to effectively track the changes.

Objectives, Problem and Hypothesis

The objective of this article is to present the benefits of using proven and

powerful tools to track the changes in Transformation Programs.

Measure performance is not an easy task, either considering the strategic, or the

change management point of views. According to Mankins el al., 2005, a very

important rule is define very clear goals, informing what the company will, and

will not do. High performance companies use real time performance tracking to

develop and deploy effective countermeasures when events throw the

companies’ plans off course.

Another important point raised by them, based on their researches, was that 15%

of the companies rarely track performance against long-term plans. As a result,

they continue funding losing strategies.

This article also aims to prove, based on the researches and literatures

consulted, the hypothesis below:

H1: there is an added value in applying Change Management to a

program or a project.

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H2: there is an added value on measuring the success of the change

through the Change Management tools, especially with the powerful ones.

H3: it is very important to select the appropriate KPIs when measuring.

H4: it’s important to report the Change Management effectiveness to the

multiple levels of the organization.

Literature Review

Why Measure?

Change is made to benefit an organization. Without measuring the effects of

change, it is impossible to ensure that the benefits are being realized.

According to Chrissis et al., measurement is a very important management

capability the supports the review of project progress, product size, quality, etc.,

enabling management to take decisions and corrective actions. It is important to:

Specify the objectives of measurement

Specify the analysis mechanism, data collection, data storage, and

reporting

Provide objective results

Collect the improvement opportunities is it is as important as measure.

Communicate the results of the measure to the relevant stakeholders, supported

by clear and concise contextual information to guide them on the results

interpretation. Support on decision making and corrective actions helps a lot.

There are four important points to consider:

How the metrics were specified

How the data was obtained

How to interpret the results

How the results address the company’s needs

Likierman, 2012, shares his experience in this area. According to him, most

senior executives find measurement an onerous and difficult task. They generally

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have to deal with a mass of numbers and comparisons that not always provide

the right information about performance. This is risky, as misunderstandings may

lead to wrong decisions. If the indicator is precisely and loudly specified, it will be

easier to see what is not fitting for the purpose. Below you have a summary of his

main recommendations:

Have quantitative and qualitative metrics

Do not look only at your own company

Make sure that you find the relevant data

Do not focus on the past, but also on the coming months

Look at what you are not doing, as well

Diversify your metrics to avoid manipulation

A decision about not doing something should be analyzed in the same

way of a decision of doing something

Be very precise about what you want to assess (success criteria), the

related metrics, and make everyone very clear about it

Finding the right people to manage performance is key. They must be experts,

define the right number of Key Performance Indicators (KPIs), interpret them

correctly, and ask the right questions to draw the conclusion. Line managers are

the ones who generally understand performance, and they should be in contact

with financial managers, although sometimes conflict interests may break the

communication.

Campa, 2013, also raises a similar point: the CFOs should work close with

business strategy guys, and the financial managers should be able to explain

how they effectively contribute to the success of the company. They should help

business to succeed, and not act as a profit center.

Prosci, 2014, states that fewer than 40% in the 2013 participants’ survey

reported measuring change management effectiveness, and 45% reported the

results to the following recipients:

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Sponsors

General leadership

Project/Program personnel

The metrics reported are related to the following areas:

Individual employee metrics

Overall project performance metrics

Change Management metrics

Measurement

As stated previously, Change Management partners with other areas of the

company. Due to this reason, its effectiveness may contribute with KPIs that are

used by other areas, such as Finance and Business Strategy. Change

Management must be integrated with decision-making teams, as well.

The KPIs can be financial and non-financial, and should be tied to the

organization’s vision, mission and core values:

Changes in profit or gross income

Changes in market share

Changes in costs

Changes in the culture

Changes in customer satisfaction

Changes in the Net Present Value

Individual performance management

Correct use of the processes

New levels of delivering products or services

Client satisfaction surveys

Employee satisfaction and motivation surveys

Organization success in the short, medium and long term

External factors

It is important to create a baseline data before the project starts. This way, the

progress can be reviewed over time.

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Change Management Measurement Methods

According to Prosci, 2014, and existing literatures and methodologies, there are

several ways to measure change. Below are some examples:

Stakeholder analysis

Impact analysis

Change readiness

Change commitment curve

Cultural assessment

Skills assessment

Surveys

Checklists

Implementation reviews

Observations

Case studies

Action Plans derived from feedback and workshops

Note that these tools may be used in the different phases of the change

management project.

Change Management Measurement Tools

As stated previously, there are several methods to measure change, but this

article will explore a very powerful change tracking tool owned by Accenture, a

global management consulting, technology services and outsourcing company.

Continuous innovation and rapid transformation have been themes throughout

Accenture’s story, traced to the 1950’s.

Accenture Change Tracking Tool

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Change Tracking is a patented, innovative, and effective “navigation system” for

leaders to monitor and improve performance during times of change. It has been

developed to:

Answer the question: “Is the Change Program on track to high

performance?”

Support the reality of the organizations: management of multiple change

initiatives.

Change Tracking is used in more than 30 countries in over 150 global

organizations. It helps their leaders to minimize the risk and realize the benefits

of significant change, and build change capability for the future. Below are some

of its features, benefits and capabilities.

Features and Benefits:

Has a simple user interface

Can be used to monitor multiple change initiatives (if correctly set up, it

can use one survey to capture information for multiple stakeholders)

Available in 11 languages

Can be used by small groups (from 20 to 200 people) undergoing change,

or entire organizations

Sets up the organization at a baseline point

Provides feedback using practical reports / easy-to-understand change

maps at three levels, and leaders see where to focus resources

Focus on the factors that really make the difference

Brings science to Change Management, as it:

o Has sophisticated technology, statistical analysis and mathematical

models in the background

o Takes a research-based insight and predictive analytical approach

to provide organizations with insights, and the support they need to

achieve exceptional performance across times of change

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o Finds patterns and common pathways in complex data sets

o Functions as a Global Position System for the organization

Its benchmarking database, composed by 750,000 change journeys, 15

years of research and dozens of projects with global companies, provides

a very rich source of knowledge, combined with sophisticated analysis that

finds patterns and common pathways in complex data sets.

Surveys stakeholders and analyzes the results, so that organizations can

effectively plan, manage and guide their change programs to achieve

successful outcomes a very rich source of knowledge

Its feedbacks are used to identify trouble spots before change goes off

track, and to initiate appropriate corrective actions with confidence

Provides performance reports on the key six drivers of change

Supports the identification of risks

Enables Consultants spend time in value-added services

Applicable for private and public organizations

Applicable to a variety sectors:

o Government

o Financial services

o Health services

o Mining and Resources

o Manufacturing

o Engineering

o Energy Utility

o Pharmaceutical, Motoring, Sanitation, Biotech

o Telecommunications

Helps Accenture’s clients understand how change impacts their programs

and business outcomes, and enables organizations and teams to assess

and track the performance and behavior of their people

Capabilities:

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Change Model: composed by 22 to 44 questions, which take no more

than 15 minutes to be completed through an online survey. Shown in

figure 1.

Change Map: the knowledge of over 750,000 individual change journeys

are embedded in each region, helping to predict and model the best way

forward, and anticipate obstacles along the way. Shown in figure 2.

Action Pathways: practical, actionable reports which enable the quick

identification of critical issues, showing where action is needed, and what

the responsible people need to do.

Change Model:

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Figure 1. Key Stakeholders of the Change Program complete a survey, using the Accenture Change Model as reference, to determine where in the Change Map they are located. Reports are delivered to multiple levels of the organization. Change Map:

Figure 2. Multi-dimensional Change Map, composed by four zones and twenty regions, where corrective actions should be taken to drive the employees to the High Performance zone.Learn more at www.accenture.com.

Final Considerations

Change Management discipline has been growing in importance in the last

years, and has been proven through methodologies, tools and skilled

professionals to be an effective way for improving the performance of the

organizations, no matter the size of the project.

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Although the main purpose of this article is to explore change measurement

through the use of a powerful tool developed to track change, due to the fact that

most organizations are struggling in this area because of the number of change

projects in place, there other aspects required to be mentioned.

In the same way organizations need to innovate to remain competitive, Change

Management professionals need to innovate as well, to ensure that they are truly

helping their clients. Important questions to be done:

Are we building / improving our skills?

Are we building others’ skills?

Are we challenging ourselves?

Are we spending time in value-added services?

Are we being creative?

Are we being innovative?

Are we contributing with the improvement of Change Management

discipline all over the world and locally?

Are we benefitting from new technologies?

Are we being resistant?

Are we helping to break resistance?

Are we expanding our networking?

Are we integrating with other disciplines, such as Strategy, Program and

Project Management?

Are we selling our competitive advantages correctly, with passion?

As stated previously, a powerful change tracking tool, aligned with other best

practices can make a big difference in a transformation program.

As stated by Prosci, more and more the companies are seeing the importance of

having Change Management professionals in their projects, and sometimes

including the discipline as part of their project life cycle: one more reason to think

about the previous questions, and be prepared for new scenarios.

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Measure change is hard and challenging for a lot of people, and will always be.

Invest in the right tool is key, and build the willingness to take the results in

consideration as well.

It is important to ensure that clients act on results, and implement the

recommended actions. This is why it is important to report the right information to

the multiple stakeholders, and in the right time.

The combination of the four hypothesis lead to successful improvements.

References

Association of Change Management Professionals. Qualified Education Provider (QEP), 2015.

Association of Change Management Professionals. Standard for Change Management, 2014.

CREASEY, Tim, TAYLOR, Tracy. Best Practices in Change Management – 2014 Edition. Prosci Benchmarking Report – 822 organizations share lessons and best practices in change management, 2014.

CAMPA, Jose. Lessons from the Crisis for Corporate Finance. Deep Insight, 2013.

LIKIERMAN, Andrew. HBR Guide do Finance Basics for Managers: Speak the language, Decide with data, Manage profitably. The Five Traps of Performance Measurement – pages 139 to 151, 2012.

CHRISSIS, Mary, KONRAD, Mike, SHRUM, Sandy. CMMI Third Edition – Guidelines for Process Integration and Product Improvement. Addison Wesley, 2010.

GRAY, Dave, BROWN, Sunni, MACANUFO, James. Gamestorming – A Playbook for Innovators, Rulebreakers, and Changemakers. O’Reilly, 2010.

HBR’s 10 Must Reads on Change Management. Featuring “Leading Change” By John P. Kotter, 2010.

RAMONA, Petrescu Ph. D. Organizational Change Process – Steps to a Successful Change. 2010.

VERMEULEN, Freek, PUNARAM, Phanish, GULATI, Ranjay. Change for Change’s Sake. Harvard Business Review, 2010.

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HAMPTON, John. Fundamentals of Enterprise Risk Management – How Top Companies Assess Risk, Manage Exposure, and Seize Opportunity. AMACON, 2009.

OLIVEIRA, Frederico. Transforming a high-performing company: An interview with Roberto Setubal. McKinsey & Company, 2009.

AARON, Stacy, NELSON, Kate. The Eight Constants of Change – What Leaders Need to Know to Drive Change and Win. Change Guides LLC, 2008.

KOTTER, John. Leading Change – Why Transformation Efforts Fail. Harvard Business Review, 2007.

AARON, Stacy, NELSON, Kate. The Change Management Pocket Guide – Tools for Managing Change. Change Guides LLC, 2005.

MANKINS, Michael, STEELE, Richard. Turning Great Strategy into Great Performance. Harvard Business Review, 2005.

OURO, Renilda. Mudança Organizacional: G Soluções Genéricas para projetos. Leia a Bula Antes de Usar. Qualimark, 2005.

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