Why Invest in Enterprise Change Capability

In my role at Prosci, I have the privilege of working with senior executive teams across all different sectors and geographies. Reflecting on the last two years, one thing that’s stood out is how the language and tone of the dialog has changed. I’m hearing far more leaders say they are going through an unprecedented amount of change. Comments like, “We’ve got more change coming in the next three years than we’ve experienced in the last 20 and our future depends on the success of their transformation efforts,” are becoming commonplace. This means it’s an exciting time to be engaged in the change management discipline.

Interestingly, when I ask these leaders if they have an established approach for budgeting, hiring and onboarding, ramping up new clients, closing the books at the end of the month, inbound marketing, process improvement, etc., they always say “yes, of course.” When I ask what kind of common approach they use to address the people side of their most important changes, I get some interesting looks... everything from blank stares to multiple requests to rephrase the question. All of this points to the fact that the need to establish a robust change capability still lives in many leaders’ blind spots. 

The High Price of Low User Adoption

It’s no secret that value comes not from what gets built, but from what gets used. And in the last two years, I’ve seen multi-million-dollar projects get totally scrapped because of lack of user adoption. It’s not an isolated issue; I’ve seen this happen in telecom, healthcare, higher education, utilities, consumer products, travel, insurance and retail sectors, just to name a few. 

We coach clients that these ‘glorious belly flops’ are only really mistakes if they fail to harvest lessons from them. We’ve been hearing “fail fast and fail forward” for many years, but most big organizations don’t have a culture that supports this kind of thinking. Instead, lots of companies spend more time on finding who they’ll blame if things don’t work and not nearly enough time ensuring impacted employees are able to adopt the new change they are trying to make. 

On the bright side, the risks and trade-offs associated with not building organizational change capabilities are starting to become a C-suite discussion topic. One of our multi-billion-dollar global clients even gave us feedback that their board identified change adoption as a top enterprise risk. 

The Growing Demand for Change Management

I believe organizations are forced to pay for change management whether they know it or not. It’s much easier and more prudent to pay a small dose proactively with some intention than paying a multiplier downstream to clean up a mess. Through the numerous failed changes that organizations have experienced, they are starting to view change management less as an optional ‘nice to have if time permits’ approach to a ‘must-have step on the critical path to value realization.’

We’re seeing leaders grasp the understanding that adoption of new ideas doesn’t happen by accident – and it takes intention and investment to achieve the desired outcomes. It’s getting easier for leaders to make the case that big project budgets need to include dedicated investment in change management activities. One of my favorite quotes of the last year comes from a CFO who said, “We need to start investing at least as much in change management as we are willing to put into contingency budgets.” 

Tips for Growing Change Capability

So what does it mean to build a change-capable organization? Here are a handful of tips I’d put forward to anyone brave enough to tackle the task of growing organizational change capability:

1. Building organizational change capability requires a sponsor. I’m not talking about a nebulous group of leaders spread across the top of the organization. Instead, I’m talking about a single named individual with the combination of authority, influence and courage to address the need to improve the benefits realized from organizational changes. Selecting the right executive sponsor makes all the difference in the journey toward building an organizational change capability. If you have a minute, listen to this interview with an executive sponsor at Bose about some of their challenges and opportunities around building change capability.
2. Select your first change initiatives or projects wisely. Many of our clients are insistent that they need to start with multi-year transformation efforts to demonstrate the effectiveness of a structured change management approach. While these big transformations are often sexy targets, they can pose real challenges. If it takes you three years to demonstrate the results change management can deliver, many organizations have already forgotten about it. I’d encourage you to look for highly visible projects that provide an opportunity to put wins on the board in the first 100 days of engagement. You can read about how a Danish global transport and logistics company began building change capability with two pilot projects.
3. No senior leadership team is looking for training on change management. While it’s essential to engage senior leadership to play the role of sponsors, if you frame this as a need for change management training, you’re often dead on arrival. Instead of positioning training as a key need for senior leaders, I’d recommend framing change management as nothing more than an accelerator of business outcomes. Don’t engage senior executives in a training program — instead, look for an opportunity where the senior leaders are already getting together in person and embed a Sponsor Briefing as a working session focused on accelerating the outcomes of the changes they are already sponsoring.
4. Clarify the role of your leadership. Research shows that sponsors are the number one driver of change success and research also shows that sponsors need a crisper understanding of their role in times of change. Interestingly, sponsors often have the curse of knowledge when it comes to change details. They hear about, think about, plan for and discuss changes often weeks, months, quarters and even years in advance of the organization hearing about it. Even worse, many sponsors think that hundreds or thousands of impacted employees will instantly embrace the sponsor’s viewpoint on the heels of a single email announcement. 
   
   Building awareness of why change is necessary, championing the change, and demonstrating active and visible support throughout the change are all steps that leaders can take to drive adoption and reinforcement of change… but many don’t have an adequate understanding of what good sponsorship looks like. Consider checking out our webinar, “How to Enlist, Engage and Empower Your Sponsors,” for some ideas.

Change Is Here to Stay

Change is no longer an episodic event, sequenced out in a manner that organizations can absorb. Instead, change is a constant that’s here to stay, and the only way for organizations to thrive in times of change is to build a change capability. Senior executives are starting to realize that the ability to out-change the competition is the way to win in competitive markets. 

What steps is your organization taking to build a robust change capability?