Daniel Sheehan was neck-deep in an SAP implementation at Georgia-Pacific LLC in the mid-1990s when he saw the importance...
of business process change management. The Atlanta-based paper and pulp manufacturer had decided that the patchwork of back-office systems used by its 12 divisions needed to be centralized. Everyone agreed the plan made sense on paper. A year into the work, with its business division leaders in revolt, Georgia Pacific shut down the SAP project and wrote off $120 million, recounted Sheehan, then an IT manager on the implementation.
"This reengineering process had nothing to do with the software, and had everything to do with change management," said Sheehan, now CIO at Dunkin' Brands Inc., whose brands include Dunkin' Donuts and Baskin-Robbins. "It was amazing how worked-up people would get about changing. I learned a big lesson there."
Sheehan took his "big lesson" on change management across town to Coca-Cola, which he helped see through a seven-year, $1.7 billion global SAP implementation. And at Dunkin', his change management skills continue to be put to the test: He recently was tapped by business leadership, for example, to show 150 new Dunkin' franchisees the value of standardizing on and financially supporting corporate platforms -- not a job typically given to the CIO.
"Forget the technology; it is all about human behavior and how you get people to look at things differently," Sheehan said.
Ten years into a new century, effective business process change management remains as critical as ever -- and as elusive. That's not because CIOs are inherently bad at change management or haven't recognized how important change management skills are to the job of being a good CIO, experts say. Factors ranging from the way employees get company information to the pace of change now required of companies to stay competitive, are upending traditional change management models.
"Change management is a perennial issue for CIOs because the context of change management is constantly changing," said Mark McDonald, head of research for Gartner Executive Programs at the Stamford, Conn.-based consultancy.
This is especially true for business process change management, said McDonald, who has written a series of blogs on the changing nature of change management.
Unlike infrastructure change management, where mechanical precision is tantamount to success, business process change management is more like a social science, in McDonald's view, subject to judgment and interpretation and dependent on context.
"In infrastructure change management, you need to get 100% on your test. With business change management, it is pretty much impossible to get 100%," McDonald said. Change is a social process that resists mechanistic answers, he added.
According to McDonald, traditional change management models no longer hold.
Betting the success of an entire company on an SAP implementation or on a merger and acquisition, for example, is highly risky and disruptive to the growth of organizations and to day-to-day operations, McDonald said: In a rapidly changing business environment, successful companies often are better off making many small changes whose sum ideally is greater than any one transformation. Gartner has found that the total number of changes that organizations have to go through on a yearly basis has grown dramatically, and each change has gotten much smaller, he said.
Also changing is the way change is brought about in the enterprise, McDonald said. Thanks to social media outlets, modifications to the way employees do their work are increasingly critiqued in real time. In this setting, the old, top-down paradigm of change management -- senior leadership identifies a problem, proposes a solution and goes to considerable pains to explain why that change is good for the rank and file -- is no longer tenable.
Instead, the first signs of a need to change often bubble up from the bottom, based not on a strategic decision from the top, but on a feeling of dissatisfaction among the rank and file, McDonald said. Thus, the first step in change management is for employers to be attuned to these rumblings of discontent. Secondly, employees and the public are demanding greater transparency from employers in the face of change. This clamor may stem in part from employees' and the public's increased access to all kinds of information -- or from a lack of trust in the wake of recent financial scandals and crises, he posits. Recognizing this need for more transparency is critical to effecting and managing change.
"People change in the face of clear information that drives active choice rather than passive submission," McDonald said.
Tom Sawyer's fence
Jack Santos, executive strategist for the executive advisory program at Midvale, Utah-based Burton Group, agrees that change itself is changing. "That's why change management doesn't go off the radar. Just when we think we have a handle on it, the rules of the game change," he said.
That's why change management doesn't go off the radar. Just when we think we have a handle on it, the rules of the game change.
Jack Santos, executive strategist, Burton Group executive advisory program
But the new zeitgeist also applies at the IT infrastructure level, where the consumerization of IT has upended change management, Santos argued.
"IT traditionally has said, 'We have to get changes under control.' Small changes were made on a once-a-week-basis; big changes, on a version-rollout basis, once a quarter. Now a Google comes along and screws that up, making changes all the time," Santos said. "With the consumerization of IT and the growing technology expertise in the business ranks, the business has turned around and said, 'Gee, why can't we manage change like that?'"
Santos' advice to CIOs? "Because business is more involved in IT, business has got to be more involved in change management, and that is best described as business process change management."
Gartner's McDonald put it more strongly: "The first thing CIOs need to do is get the hell out of the way of the business, unless the CIO is changing the IT organization or IT processes," he said. While IT may be spending a huge chunk of money on the change, one of the biggest mistakes CIOs can make is to take ownership of business process change management, he said.
"The business executive is more than happy to assign the majority of the risk to the CIO and IT for change management. It is like Tom Sawyer getting others to whitewash his aunt's fence," McDonald said.
Let us know what you think about the story; email Linda Tucci, Senior News Writer.