Change Series Part 1 – Why Change?
By Craig Johns
We live in a world of rapid change that has been catalysed through enhanced globalisation, constant technology innovation and generational diversity. This results in a constantly evolving organisational environment that requires savvy business leaders who can simultaneously coordinate both people and project management.
Through a four part series, I will take a look at transformational change from a variety of different angles and provide an insight into some of the organisational changes I have personally experienced. Part one will consider why change is important for organisational success, ways to manage change, and organisational impact through change. Part two takes a look at how to prioritise change, while investigating the challenges and resistance faced during change. Part three highlights factors for success during change and implementing a continual change culture. Finally, part four will bring to light effective communication strategies during a change process.
Organisations are motivated by becoming more efficient, more competitive or closer to their customers. These motivations along with reactions to specific problems or opportunities, which are based on either internal or external stimuli, are common reasons for initiating organisational change.
Leaders are constantly looking for the ‘competitive edge’ that will ensure sustainable growth and relevancy for their organisation in the future. They are looking at how the organisation can change to improve through activities such as solving puzzles, identifying new revenue streams, seizing opportunities in the market place, streamlining the way we do work, reducing organisational costs and aligning work more effectively.
In many cases, organisations are looking at ways to simplify and streamline processes so resources can be reallocated to support growth and find solutions for their customers’ needs and desires. Simplification is often neglected in a world where complexity is the enemy, and is a good stimulus for establishing a positive change initiative in an organisation.
A leader needs to identify signs of declining growth and value early, before they produce catastrophic effects on the organisations relevancy and bottom-line. A successful leader will be initiating change as each growth initiative is cresting the wave of the sigmoid curve of growth. so a cultural of continued momentum is built into the organisations culture.
Case Study – Triathlon ACT
In 2014, Triathlon ACT was in a state of flux after producing losses in 3 out of the previous 4 financial years. It needed to stimulate revenue through growth or transform the way it works to ensure long-term sustainability. The Board made the bold move to invest in a new corporate triathlon after identifying three new sponsors. Due to limited resources and a change in Executive Director, they decided to outsource the marketing and communications aspect of the event to a respected local event management company, but at corporate rates, rather than not-for-profit rates.
I was recruited to Triathlon ACT, as Executive Director, in November 2014. On arrival I was informed that the corporate triathlon event would be postponed by four months (March 2015) due to the venue not being complete and only 28 people registered. I noticed that the corporate triathlon model was a very high risk venture and would be very challenging to get a return on investment in the first 3 years, and as a result of a couple of other unexpected expenses was heading down the path of a very large $55,000 loss for the 2014-15 financial year.
Immediate measures needed to be taken and I worked closely with the staff and Board to reduce expenses and cut costs where possible, while still initiating some small win strategies to regain confidence in the triathlon community. The event resulted in a rather large financial loss, but there was strong commitment from the sponsors to continue in future years. I faced a tough decision to cease the contract with the event management company, to allow the corporate triathlon event the opportunity to at least break-even in the following year.
At this point I began the change management process of instigating a change in focus for Triathlon ACT from being a predominantly event management focused to a sport development based organisation. A sense of urgency had been created through the consecutive large financial losses and rapidly dwindling reserves, and therefore the Board were open to change. Two other factors that had to be considered where that the sport of triathlon in Australia was about to launch a Whole of Sport (8x State and Territory Triathlon Associations and the National Body) Strategic Plan and was investigating the opportunity for a unified operating model. The next step was to convince the Board that we needed to licence out the events that Triathlon ACT organised in the ACT, and prepare for an organisational restructure.
Change management is a “collective term for all approaches to preparing and supporting individuals, teams, and organizations in making organizational change” (Unknown, 2018). Significant change management utilises methods that reallocate and redefine the use of organisational resources, processes, financial allocations and other modes of operation. It involves different disciplines such as information technology, behavioural sciences, social dynamics, business solutions and financial management.
With complex relationships between the different disciplines involved in change management, it is crucial that the leader creates a team of champions. Utilising key influencers within your team who have a direct relationship with the change effect, will help smooth the change process as there will always be those who are automatically on board and those who will challenge the reasons for change. You will need to effectively groom and nurture the influencers, also known as change ‘champions’, so that everyone is singing off the same song sheet. The change ‘champions’ will need to be influential in also ensuring that everyone is singing in harmony.
Leading change is about the careful synchronisation of both change management and project management. While project management focuses on the tasks to achieve the change requirements, change management focuses on the people impacted by the change. Your “project managers are identifying the milestones and activities that must be completed, outlining the resources needed and how they will work together, and defining the scope of what will be part of the project and what will not be. Whereas change managers are crafting key messages that must be communicated, working with project sponsors to build strong and active coalitions of senior leaders, and making the case of why the change is needed to employees throughout the organization, even before the specific details of the solution are complete”. (Unknown, 2018)
Case Study: Triathlon ACT
Before initiating change from a predominantly event management focused to a sport development based organisation, we had to get the buy–in from a number of stakeholders. With the Whole of Sport (WOS) supporting the idea that State and Territory Triathlon Associations (STTA’s) should, where possible, outsource their events, it was an easy sell. Therefore the most important stakeholders where our affiliated clubs as they had a vested interest in ensuring that their members could have access to affordable, safe and suitable events in the region. We utilised a Club Presidents meeting and regular communication of the process we would go through to determine how event delivery in the ACT would look like in the future.
Even though the Board realised that we needed to restructure the organisation and outsource the events, they weren’t fully confident. Therefore in year one of the restructure I positioned that we only licence out 3 of the 5 events to ensure quality could be controlled and lessons could be learnt before licencing out the final two events. This meant there would be a strain on both financial and human resources in year one, as we still required the same employee Full Time Equivalent (FTE), had less event revenue coming in and we had to grow the two events we were still organising so they were attractive enough for commercial event providers to want to licence them in year 2.
As a small organisation I was fulfilling the roles of: leader of change; change manager; and project manager. I identified a change champion within the Board, who helped garner the support and trust of all the remaining Board members. The President of the Board also acted as a change manager and worked closely with Club Presidents and other stakeholders. We made a few mistakes in year one, which cost us financially, but ensured there was a greater sense of urgency and a wave of momentum during the change process going into year two.
The current rate of change in organisations is somewhat relentless and when an organisation introduces a change, one or more of the following will be impacted in some way and you need to be prepared to manage the impacts appropriately:
- Organisation structure
- Job roles
A key aspect of a change process, is understanding your employees concerns. Changes to any or all four of the impacts will have some effect on your team members. To help you understand the scope of the change management effort, it is important to take into consideration:
- What are you specifically trying to change?
- How do your team members feel about the proposed change?
- The number of people who will be impacted and who are they managed by
- What new skills will be required and do you have the right people to deliver the skills?
- Are there any other changes happening simultaneously?
- What is the expected return on investment as a result of the change?
You will need to be at the top of your game to ensure that stress levels are minimised, loyalty is maintained and team members are focused on making a difference as the change will have an impact on the organisation.
Dr. John P. Kotter, a pioneer of change management, invented the 8-Step Process for Leading Change (Kotter, 2017). It is a very practical model that requires the successful implementation of each step without losing momentum during the change process:
- Establish a Sense of Urgency
- Create the Guiding Coalition
- Develop a Vision and Strategy
- Communicate the Change Vision
- Empower Employees for Broad-Based Action
- Generate Short-Term Wins
- Consolidate Gains and Produce More Change
- Anchor New Approaches in the Culture
Case Study: Triathlon ACT
Utilising the 8-Step Process for Leading Change (Kotter, 2017), I will use Triathlon ACT’s change process of restructuring the organisation from a predominantly event management focused to a sport development based organisation, as an example:
- Establish a Sense of Urgency – Financial loss in 3 out of 4 financial years, and dangerously low financial reserves. There was strong interest from Commercial Event Providers to licence the events in Canberra. Members and clubs were looking for more support (value) for their membership fee investment.
- Create the Guiding Coalition – A change champion was established within the Board and brought the Board along for the journey by ensuring they were participating in the development of change.
- Develop a Vision and Strategy – Triathlon ACT developed new Strategic Objectives (2016-19) that aligned with the Triathlon Australia WOS Strategic Plan. We used a Gap Analysis and feedback from stakeholders to identify what areas of sport development required attention, and used this as a basis to drive the change.
- Communicate the Change Vision – Presentations to the Board, Club presidents meeting, member newsletters, social media communication, and stakeholder strategic planning session. We established a “Bringing Triathlon Back to Canberra” campaign early in 2015, which set the tone with stakeholders, Board and Staff that we needed to be innovative and more savvy to increase recruitment and retention of members and participants. By the time we started the strategic planning sessions with stakeholders that were already aligning with the direction we wanted to head.
- Empower Employees for Broad-Based Action – We established clear roles for all staff, and gave them the opportunity to develop and prioritise strategies to ensure that the change would be successful.
- Generate Short-Term Wins – We improved the branding of events, had positive feedback on the Bringing Triathlon Back to Canberra campaign, gave the annual awards a face-lift, unified the triathlon community through club presidents meetings, achieved record membership numbers, Commercial Event Providers delivered increased participation at events, we established a successful school activation program and we reduced the financial deficit in half during year one.
- Consolidate Gains and Produce More Change – Triathlon ACT developed new sport development plans, which resulted in successful programs such as a pilot school activation program, coach development workshops and a new WOS sponsorship deal with Sanitarium. Event participation rose each year, the staff were restructured and the FTE reduced, all major events were licenced out, a substantial financial surplus was achieved in 2017, and we successfully worked in partnership with the clubs to deliver two low-cost events, which supports the recruitment and retention of new triathlon participants and members.
- Anchor New Approaches in the Culture – The change process has been successful with long-term licence agreements in place, new markets attracted to the sport through targeted campaigns, there is harmony between clubs with mutual collaboration, large growth in event participation has been achieved, development of new clubs has occurred and most importantly financial stability and rising reserves has resulted from the changes.
Knowing why your organisation needs to change, how to manage it and the possible impact will only prove successful if you understand how to prioritise change amongst competing organisational requirements. In part two, I will identify a number of challenges and resistance you may face when implementing organisational change.
Part two – Change Tantrums is now available link
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