Change Management within Project Management: An Integrated Structural Business

Change Management within Project Management: An
Integrated Structural Business Process Approach
23 Feb. 2012, BCS Hellenic Section
In Brief
Most project managers follow established project management methodologies in
order to achieve success. However, some degree of failure is evident in most
projects worldwide. One important reason for this failure, is that projects often
implement change, and in its turn change may introduce new risk parameters.
Successful change
g can be influenced by
y a variety
y of factors,, which can affect the
result of change itself, as well as the objectives of the project. Change
management is the strategic and structured approach for transitioning
individuals, teams and organizations from a current state to a desired future
state.
Change and project management must be considered as integrated Transitional
activities. The success of the one largely depends on the success of the other.
Harris Apostolopoulos BEng(Hons),
g(
) MSc, MBA, PhD.C, MIET
2
Agenda
g
ƒ Introduction to Change Management
ƒ Change Management and Project Management
ƒ Change Management Modelling
ƒ Project’s
P j t’ Failure
F il
Reasoning
R
i
ƒ Project Management and Change Management Integration
ƒ Survey: Project Management Team
ƒ Conslusions / Open Discussion
3
Generic Change Management
Definitions
Change management is a systematic approach to dealing with change, both from the perspective of an
organisation and on the individual level. A somewhat ambiguous term, change management has at least
three different aspects,
aspects including: adapting to change
change, controlling change
change, and effecting change
change.
Source: http://searchcio-midmarket.techtarget.com/definition/change-management
Change management - the formal process where changes to the project are introduced and approved.
approved
Source: http://www.pmhut.com/pmo-and-project-management-dictionary
Change management can be defined as a set of processes that is employed to ensure that significant
changes are implemented in an orderly, controlled, and systematic fashion to effect organizational
change.
One off the
O
th goals
l off change
h
managementt is
i with
ith regards
d to
t the
th human
h
aspects
t off overcoming
i
resistance to change in order for organisational members to buy into change and achieve the
organization’s goal of an orderly and effective transformation.
Source: http://www.tech
http://www.tech-faq.com/change-management.html
faq.com/change management.html
4
The Change
g Curve
Source: http://www.change-works.com.au/blog.php?blog_id=34
5
Types
yp of Change
g
• Two major categories
categories, individual change management and organisational change
management.
• Especially in multinational companies
companies, cross-cultural issues can affect planned
changes and the process can get complicated.
• However,, the transitional p
period of change
g ((which mayy lead to adaptation)
p
) is not onlyy a
time consuming but also a risky process; due to cultural or even organisational
reasons the whole process is subject to fail.
6
Views on Change
g
ƒ Duck (1993) argued that change is intensely personal.
ƒ Luecke (2003) separated change into four types; structural, cost cutting, process and
cultural.
ƒ Cultural change mainly concerns the organisation
organisation’ss general approach to doing business
or the relationship between managers and employees.
ƒ Schaffer (2000) discussed discontinuous versus continuous incremental change.
ƒ Johnson et. al., (2006:) explained that “it is for the benefit of an organisation the
nature of change to be incremental” of four types:
ƒ
ƒ
ƒ
ƒ
Adaptation
Reconstruction
Evolution
Revolution
7
Cultural Change
g
ƒ Hofstede (1980) argued that the cultural differences between nationalities were evident
when employees of the same organisation were spread over many countries.
ƒ Stuttard (2000) concluded that “one common mistake is that, foreign managers fail to
realize how pervasive it is”.
ƒ Pitta et.al, (1999); managers’ business behaviour is directly related to the country’s
culture.
• Dealing with culture has the difficulty to define it universally.
8
Agenda
g
ƒ Introduction to Change Management
ƒ Change Management and Project Management
ƒ Change Management Modelling
ƒ Project’s
P j t’ Failure
F il
Reasoning
R
i
ƒ Project Management and Change Management Integration
ƒ Survey: Project Management Team
ƒ Conslusions / Open Discussion
9
Significance
g
ƒ Market needs are constantly changing; market adaptation, strategic business planning,
flexibility, speed, cultural changes are more than mandatory.
ƒ Most of the common project management methodologies such as critical chain project
management (CCPM), and PRINCE2, PMI, focus on:
ƒ Time
ƒ Cost
ƒ Quality
ƒ Those project management methodologies do not take into
serious consideration
Business Cultural Issues,, Change
g Management
g
and Adaptation.
p
10
Significance
g
((Cont.))
ƒ Too
oo much
uc e
emphasis
p as s on
o deliverables
de e ab es o
or outco
outcomes
es (e.g.
(e g capabilities)
capab t es) which
c on
o their
t e own
o
do not deliver specific benefits, or even in the processes (the way things have to be
done).
ƒ The main difficultly arises from the fact that culture itself is difficult to be defined
because it differs among organisations and individuals.
ƒ Kroeber (1985); there are more than 160 different definitions of culture.
ƒ As Kanungo (2006) argued “people in different cultures respond in different ways”
in effect understanding and adapting to changes.
11
Project
j
Curve
Source: http://www.visitask.com/s-curve.asp
12
PMBOK and Change
g
42 steps mapped in 5 processes:
1) initiating
2) planning
3) executing
4) monitoring & controlling
5) closing
Source: Project Integration Management Overview, PMBOK, 2008; p.73
When issues are found while project work
is being performed, change requests
are issued which can modify project
policies or procedures, project scope,
project cost or budget, project schedule,
or project quality. Other change requests
cover needed preventive or corrective
actions to forestall negative impact later
in the project. Requests for a change can
be direct or indirect, externally or
internally imitated, and can be optional or
legally/contractually mandated. (PMBOK,
4th edition,
diti
pp.87)
87)
13
PMBOK and Change
g ((Cont.))
Changes: in the project management plan
that result from the Project Risk
Management process may require decisions
at the appropriate level of management to
reassign personnel, establish or modify
budgets, make commitments to others
outside the project, interact with regulators,
and comply with the rules of accounting and
law pp.5, PMIRisk).
Source: Perform Integrated Change Control, PMBOK, 2008; p.95
Perform Integrated Change Control: is the process of reviewing all change requests,
requests approving changes,
changes
and managing changes to the deliverables, organisational process assets, project documents, and the project
management plan. (PMBOK, 4th edition, pp. 61)
Change Control: Identifying, documenting, approving or rejecting and controlling changes to the project
baselines, (PMBOK, 4th edition, pp.428)
Change Request: Requests to expand or reduce the project scope, modify policies, processes, plans, or
procedures, modify costs or budgets, or revise schedules. (PMBOK, 4th edition, pp.428). Change requests can
include corrective action, preventive action, and defect repairs. (PMBOK, 4th edition, pp.97)
Change Control Board (CCB): A formally constituted group of stakeholders responsible for reviewing,
evaluating approving,
evaluating,
approving delaying,
delaying or rejecting changes to a project,
project with all decisions and recommendations being
th
recorded. (PMBOK, 4 edition, pp.428)
14
PRINCE2 and Change
g
Source: PRICNE2 Template, PRINCE2 2005; p.195
Change Control: Changes to specifications
or scope can potentially ruin any project
unless they are carefully controlled. Change
is, however, highly likely. The control of
change means the assessment of the
impact
of
potential
changes,
their
importance, their cost and a judgmental
decision by management on whether to
include them or not OGC, PRINCE2, p.285)
A change in requirements
A change in the environment applicable to the project, for example:
40+ separate activities and organized
into eight processes:
- a legislative change
- a corporate change of direction
- a new customer
- a new supplier
- an unexpected change to a member of the project management team
- actions by a competitor
- a programme managementt directive
di ti
- a corporate reorganisation OGC, PRINCE2, p.286)
15
Project
j
Change
g Curve
Source: http://www.leanhrm.com/change.html
16
Agenda
g
ƒ Introduction to Change Management
ƒ Change Management and Project Management
ƒ Change Management Modelling
ƒ Project’s
P j t’ Failure
F il
Reasoning
R
i
ƒ Project Management and Change Management Integration
ƒ Survey: Project Management Team
ƒ Conslusions / Open Discussion
17
Change
g and Adaptation
p
ƒ Pascale (1990); “change requires that businesses continuously reinvent themselves”
ƒ Sinclair (1993);culture can be managed and this is a responsibility of the management
itself.
ƒ Tichy (1983);
(1983);“we
we are all beings of habit and tend to repeat what we are comfortable
with.”
ƒ Schlossberg (1981) , Successful adaptation might involve establishing a structured
methodology
th d l
f responding
for
di to
t changes
h
such
h as new policies,
li i
or technologies.
t h l i
ƒ Parkes (1971); “First, abandoning one set of assumptions and then developing a fresher
frame, so as the person to cope with the new changes”.
18
Change
g Models
ƒ Briefly, Lewin (1951) described change as a three-stage process:
Unfreezing
Confusion
Refreezing
ƒ Bridges
B id
(1991) come up with
ith a similar
i il model:
d l
Ending
Neutral
New beginning
ƒ Bullock and Baten (1985) named their model stages as:
Exploration
Planning
Action
g
Integration
19
Cultural Model for Project
j
Success
Organisational
O
i ti
l
Cultural values
values
Organisation
Design
values
Project
Manager
competencies
Project
Management
C lt
Culture
Processes
values
Performance
Management
values
Source: Kendra and Taplin, 2000,
20
Agenda
g
ƒ Introduction to Change Management
ƒ Change Management and Project Management
ƒ Change Management Modelling
ƒ Project
Project’s
s Failure Reasoning
ƒ Project Management and Change Management Integration
ƒ Survey: Project Management Team
ƒ Conslusions / Open Discussion
21
Chaos Report
p
ƒ 1994 “Chaos”
Chaos report indicated that before they ever get completed
completed. 31.1%
31 1% of projects will be cancelled
ƒ Average success rate was estimated to 16.2% (1994).
ƒ (2003) project success rates have increased to just over 34%.
ƒ On the contrary, project failures have declined to 15% (of all projects), which is more than half (31%) in
1994.
ƒ Chaos Report (2007); overall picture of IT project failure has not gone under significant changes; actually,
it varies from 50% to 70%.
ƒ It is being
g indicated that a p
poor requirement
q
analysis
y remains the main reason for p
project
j
failure.
Other views:
ƒ Taylor (2000) in his research revealed that out of 1,027 projects only 130 (12.7%) was successful.
ƒ After all, nailing down the requirements is usually only 8% to 15% of the overall project effort
(Gottesdiener, 2001).
22
Whyy Changes
g Fail?
-Bourne & Walker (2005) categorised project failure as technical, data, user, and
organisational; culture of the stakeholders is one of the organisational reasons why projects
fail.
-Winters (2002), explained that culture is one of the top 10 reasons why project fail; for
him culture means more than just expectations.
-Most of the times it is the manager’s fault who fails to understand what the customers really
want, transform words into action and finally deliver the project.
-Gottesdiener (2001) argued that “rework due to requirements defects can eat up as much
as 50%
0% off your overall
ll budget!
b d !
23
Kotters’ Failure Reasoning
g
Error #1: Not Establishing a Great Enough Sense of Urgency
Error #2: Not Creating a Powerful Enough Guiding Coalition
Error #3: Lacking a Vision
Error #4: Undercommunicating the Vision by a factor of Ten
Error #5: Not Removing Obstacles to the New Vision
Error #6: Not Systematically Planning for and Creating Short-Term Wins
Error #7: Declaring Victory Too Soon
Error #8: Not Anchoring Changes in the Corporation’s Culture
24
Poor Requirements
q
Analysis
y
-Changing the initial requirements is:
-Time consuming, but also a risky activity, which in effect requires strategic planning and
flexibility.
-Robertson
Robertson (2002) argued that “the
the traditional job of requirements analysis is to talk to users,
users
find out how they work, ask them what they want, specify what is required, and have it built”.
-Langham(2004) stressed the fact that communication difficulties have more to do with
business culture than any failure of a project organisation or methodology.
25
The Best Ways
y to Sustain Change
g
Step1: Mobilize energy and commitment through joint identification of business problems
and their solutions
Step2: Develop a Shared Vision of How to Organize and Manage Competitiveness
Step3: Identify Leadership
Step4: Focus on results, Not on activities
Step5: Start change at the periphery, then let it spread to other units without pushing it from
the top.
Step6: Institutionalize, success through formal policies, systems and structures
Step7: Monitor and Adjust Strategies in Response to Problems in the Change Process
Source: Beer et al., (1990: pp.161-163),
26
Agenda
g
ƒ Introduction to Change Management
ƒ Change Management and Project Management
ƒ Change Management Modelling
ƒ Project
Project’s
s Failure Reasoning
ƒ Project Management and Change Management
Integration
ƒ Survey: Project Management Team
ƒ Conslusions / Open Discussion
27
Project Management and Change Management
Project management can have strategic value, when there is link between the level of
effectiveness and how efficiently a project is accomplished and when the project’s outcomes
(product or services); can provide overall business value.
Change management itself, is also a strategic and structured approach to transitioning
individuals, teams, and organisations
g
from a current state to a desired future state.
Pitagorky (2011) “Project managers, to be effective must be competent change managers.
Homes ((2001)) explained that project
j
managers
g
should establish a solid foundation for
change and that today’s role of project manager focuses more on the project and the
team.
Effective projects are those which achieve a business change within a managed
organisational context (Gooch, 1997).
28
Project Management and Change Management
Integration
P j t Management
Project
M
t
Current
Transition
Future
Change Management
Project management and change management may seem as separate, but they are
integrated in practice.
Source: http://www.change-management.com/tutorial-definition-2009.htm
29
Project Management and RISK Management
Risks that are worth to be investigated can be highlighted through analysis to their high
chance of occurrence or the high impact they can have.
One of the main purposes of project risk management is to identify, estimate and control
project risks which effectively are related to project success or failure.
Risks that are related to change management are addressed both with strong control and
negotiation strategies.
Risk can be very simply identified as “any potential problem that threatens the success of a
project” (Taylor, 2006).
Changes incur RISK and have to be controlled.
Oxford’s dictionary definition: “Risk is related to: a situation involving exposure to danger, the
possibility that something unpleasant or unwelcome will happen”.
30
Agenda
g
ƒ Introduction to Change Management
ƒ Change Management and Project Management
ƒ Change Management Modelling
ƒ Project
Project’s
s Failure Reasoning
ƒ Project Management and Change Management Integration
ƒ Survey:
y Project
j
Management
g
Team
ƒ Conslusions / Open Discussion
31
Successful Change Management &
Adaptation Tree
32
Case Study: Project Management Team
Survey
Parent Node: PMT (Project Management Team)
Child Nodes: Performance, Motivation, Appraisal, Rewards, Training
Respective Attributes
33
Glossary:
y Performance ((Child))
Performance: Based on the achievement of preset metrics such as KPI’s (Key Performance
Indicators),Balanced Score Cards, KSFs, (Key Success Factors), 360, SLAs (Service Level
Agreements)
Planning outcomes: The term used to describe the totality of what the project is set up to deliver,
consisting of all the specialist products (OGC, PRINCE2, p.333)
Proper planning and organisation of the transition on a life-cycle basis will facilitate a successful
change (Kerzner, 1995, Project Management, 5th edition, p.149)
Attaining Goals: Comply to pre-defined results in terms of project goal and objectives.
Benchmarking: comparing one's business processes and performance metrics to industry bests;
commonly related to time, cost and quality. Try to take advantage the good paradigm and avoid the
pitfalls.
A
Acceptance
t
l
level:
l Performance
P f
result
lt based
b
d but
b t nott limited
li it d to
t objectives
bj ti
(
(goal,
l target,
t
t time
ti
f
frame,
schedule, budget etc)
Regular review: Periodic review of project management’s team performance depending on
project’s conditions, e.g., bi-monthly, quarter, etc.
Review on agreed
g
standards: Refers to p
project
j
management
g
standards as defined for example
p
by PMBOK, PRINCE2, ITIL, Scrum, ISO, etc.
Audit and verify: evaluation of project management team and processes based on goals and
objectives for the success of the project.
Clear targets: Targets should be clear to all stakeholders from project initiation and connected to
results; upon change they have to be communicated again unambiguously.
unambiguously
34
Conclusions
-The best way to integrate cultural differences and changes into projects requirements analysis processes
i to
is
t involve
i
l people
l work
k together
t
th on solving
l i business
b i
problems
bl
and
d achieve
hi
results.
lt
-In order for projects to be successful all stakeholders even though they might have different
vocabularies they have to find a way, actually model the customer’s requirements and conform to what is
being
g expected.
p
-On the other hand, there can be no right way to adapt to cultural changes and moreover to predefine
the results of an IT project, because what works on individual level might not work for others.
-Even
Even though,
though there is no right way to manage change,
change flexibility is mandatory; in a broader corporate
organisational frame, managing culture is the solution.
-The main goal of all organisational changes is improvement and sustainability; change over change is a
stage that most managers try to avoid.
-Change Management and Project Management can be seen as integrated and complementary
processes.
35
Questions?
To live is to change, and to
be perfect is to have
changed often
John Henry Newman
People
P
l d
do no change
h
with
ith
the times, they change the
times
P.K Shaw
Thank You
Change is the law of life. And
those who look onlyy to the
past or present are certain to
miss the future.
John F. Kennedy
36
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39