My Number One Red Flag: Executive Sponsorship

Although everyone enjoys being on a great project team, there are benefits to being on more challenging projects.  They give you opportunities to build your interpersonal skills, practice the arts of negotiation and diplomacy, and force you to become more creative in finding solutions to both standard and unique issues.  One of the major benefits of being on multiple challenging projects, though, is that you become adept at quickly identifying project "red flags."

These red flags warn you that this is not going to be a smooth project.  If I see one red flag, I prepare to dig a little deeper into my bag of Change Management tricks.  If I see two, I start thinking about the overtime hours the project will require.  If I see three red flags, I mentally add months to the timeline and millions to the budget.

Red flags can take a number of forms across many areas of the project.  My top five red flags:

• A lack of structured Project Management
• Client team members who are expected to complete 100% of their day job on top of their project responsibilities
• ERP (or any complex system) implementations that are scheduled to take less than a year
• Disgruntled end users who talk about the project failing before it has even begun

And my number one red flag: A lack of Executive Sponsorship.

It's easy to think in these days of grass-roots movements that strong, centralized leadership is a thing of the past.  If change is being brought about on the global stage without the political equivalent of Executive Sponsorship, why is it so necessary for a project?  Ask yourself, though, "Have you ever seen a popular groundswell of employees demanding a new ERP system?"  Me neither.

I would argue that without Executive Sponsorship, a project team has no chance of implementing a quality product on-time and on-budget.  The problem is that Executive Sponsors often aren't sure what they can do to support the success of the project, and the project team often can't articulate what they need from their Sponsors. 

A Practical Look at the Role of Executive Sponsors

1. Create the Vision:  Projects have a lot of moving parts, and as the pace of the project speeds up, it's easy for each part to start moving in its own direction.  That's why it's crucial for the Sponsor to clearly articulate early and often: A) Why are we doing the project, B) What does the end state look like, and C) How do we define success?  If everyone has the same answers to these three questions, it will help them resolve inter-team conflicts, enable them to prioritize project activities, and ensure that everyone is working toward the same objective.  If the Sponsor doesn't create a shared vision, each person will create his own.
2. Be a Vocal, Visible Champion:  It's not enough for an Executive to agree to be a Sponsor, then sit in her office and send the occasional e-mail.  Sponsors need to be out in front of the organization on a regular basis reinforcing the project vision.  Remind other Executives why it's crucial to dedicate money and people to completing the project.  Explain to employees the benefits they'll realize by adopting the change.  Encourage the project team and show them that you appreciate their hard work.  Executive Sponsors need to be seen as the number one supporter of the project.  And they need to be seen often.
3. Remove Roadblocks: Projects are difficult.  No matter how well planned the work and how dedicated the team members, they will hit roadblocks.  It's the Sponsor's job to remove the roadblocks that the team can't remove for themselves.  This can include freeing up time from an essential Subject Matter Expert, working to resolve issues with a vendor that's not delivering on schedule, or helping to ensure the project team has the resources it needs.  By removing roadblocks, the Sponsor allows the project team to stay focused on their day-to-day project activities.
4. Empower Decision Making: One theory says that decisions should be made by the person or team at the lowest possible level that has the ability to make it.  This means that if a team member has the knowledge and ability to make a decision, he should make it, rather than requiring every decision to be escalated to the team lead, Project Manager, Executive Sponsor, and Steering Committee.  By empowering every person to make the decisions appropriate to their level, you free up people at higher levels to make more strategic decisions.  Does it really make sense for the Project Manager to spend her time deciding what color a web page should be, when what she really needs to focus on is creating an integrated project plan?  In addition, requiring too many decisions to be escalated for resolution creates a backlog that slows down the project.  If every decision has to go to the Executive Sponsor, they will quickly take over his day.  Not only will he not be able to make the decisions quickly enough, but focusing on these decisions will distract him from his real job - supporting the project's success.

Executive Sponsorship is a key success factor for any project.  Have you been on a project where the Executive Sponsor (or lack thereof) directly impacted the success or failure of the implementation?

Right Investment, Right Impact: Creating a Change Management Budget

Reminder: The statistics used in this post come from IBM's 2008 Global Making Change Work study.

The fourth and final finding in IBM's Making Change Work study is called, "Right Investment, Right Impact."  The study found that

Project success rates were 23% higher when the amount invested in change was greater than 11% of the project budget....Organizations that invested less than 11 percent in change had a 35% success rate; those that invested more than 11 percent had a 43% success rate.

Not only does investing this money in change increase your chance of success over competitors that don't invest the money, it also increases your chance of success above the average 41% of projects that succeed in general.

Let's convert this into dollars.  Based on these statistics, a project with a $1M budget must invest a minimum of $120,000 in Change Management (I'm using a 12% investment, since that's just more than 11%).  I've been on projects with much larger budgets that have invested much less in Change Management. 

Why is there such a lack of budget for Change Management?  I think the number one reason is that people don't understand what Change Management is and the value they'll receive on their investment.  I believe that the second most common reason, though, is that many projects don't know how to create a Change Management budget.  They can't figure out what the money would be spent on, so they see no reason to set any money aside.

Although it will vary a bit by project, I've listed the top 5 Change Management line items that require budget.

Budgeting for Change

1. Outside Help: Most companies are not equipped to handle the full range of Change Management activities internally.  We don't expect the finance guy to possess the skills required to do his own coding, so why do we expect he should be able to do his own Change Management?  Although many companies have the best intentions about having members of their project team deal with Change Management, it's a good idea to budget for outside consultants or contractors.  If you're still not convinced, I refer you back to my earlier post on the need for a professional Change Manager to increase your project's chance of success.
2. Training: Training is one of the most expensive activities covered by Change Management.  A one-hour computer-based training course with all the bells and whistles created by an external company can easily cost you anywhere from $15,000 - $45,000.  Even if you go with a more basic approach, good training development and delivery is still extremely costly.  In addition, most companies end up needing to hire contractors to help with the training development.  This cost can quickly add up.
3. Rewards and Recognition: In today's tight economy, with many companies operating with a skeleton crew, employees are being asked to take on more and more responsibility without necessarily receiving an increase in compensation.  Asking (or telling) your employees that they now need to work on a project in addition to completing their day-to-day jobs can result in revolt.  Setting aside a budget to do some simple Rewards and Recognition throughout the project, whether it's holding team dinners or providing small denomination "Thank You" gift cards, can help your employees feel appreciated and motivated.
4. Field Communications: This item won't apply to everyone, but if you have a large set of employees in the field (e.g., Sales People), it's a good idea to set aside budget for communicating with them.  Many companies prefer to meet with these groups in person, which can run up a hefty tab.  Even if all of the communications will be done through remote means, holding webinars and developing quality electronic communications carry a price tag.  I've also found that many companies feel the need to have "fancier" communications and events for their field departments.  If this is true at your organization, make sure to plan accordingly.
5. Sustainability: Many project plans end at Go-live.  A few continue for 2-4 weeks post Go-live.  Very few recognize that just because a change has been implemented, doesn't mean it has been adopted.  To really ensure that a change becomes embedded in your organization,  you need to consider the need for on-going Change Management activities.  What will you do about training new employees or those who were on leave during the project?  How will you communicate and train employees about on-going changes to a system?  What do you do if a month after go-live, you discover people aren't using the new tools and processes?  And who will be responsible for implementing any new Change activities that are required to deal with these issues?

And thus ends my analysis of IBM's Making Change Work study.  If you're not yet convinced that Change Management is a necessary part of any project, please leave a comment explaining why.  If you're a believer, what do you find to be the most compelling argument in favor of Change Management?

Better Skills, Better Change: Not What You're Expecting

Reminder: All of the numbers used in this post continue to come from IBM's 2008 Global Making Change Work study.

So far, I have been a huge fan of IBM's Making Change Work study.  It provides solid quantitative research in a field that is sorely lacking in scientific study.  They have also drawn some outstanding conclusions from this research.  When I got to the "Better Skills, Better Change" section, though, they threw me for a loop.

If you're like me, when you read the third headline from the study, you were expecting a discussion around training and ensuring your people have the right skills to implement the change.  Instead, the study focuses on having a skilled Change Manager.  In fact, IBM found that, "Projects with a professional Change Manager had a 43 percent success rate, compared to a 36 percent success rate for projects without one." 

What "better skills" should a professional Change Manager possess?  Oddly, the study doesn't say.  It provides excellent advice about ensuring Executive Sponsorship, involving employees in the change, communicating across the organization, and building sustainable change.  None of these topics, however, tell you what skills are necessary for a good Change Manager.  Which leads me to today's practical advice:

Skills Every Good Change Manager Should Possess

As with any position, there are a number of qualities a good Change Manager should possess.  Below are the top three skills I recommend.  If you're hiring a Change Manager, look for these skills.  If your goal is to become a Change Manager, look for training and hands-on opportunities to develop these qualities.

1. Foundational Skills:  A Change Manager should be able to jump in to any aspect of Change Management and actually do work.  If your Change Manager can't a) write a coherent communication, b) plan, develop, and deliver training, c) create and execute a Stakeholder Management plan, and d) explain the methodology he or she is following, it's time to find a new Change Manager.
2. Patience and Diplomacy: Because Change Managers deal with the people impacted by a project, they are often the face of the project.  They are the ones delivering communications and training, responding to inquiries, and, quite often, dealing with upset employees.  I've had clients and end users cry in my office, yell at me in person, over the phone, and via e-mail, and tell me how stupid they think the project is.  It is extremely important that in any of these situations your Change Manger is able to take a deep breath and respond in a calm, professional manner.
3. Professional Polish: Change Managers often work with senior clients much earlier than their counterparts.  It's more common for a Change Manager to interact with C-suite clients than, for example, the testing lead.  As a result, professional polish is mandatory for anyone involved in Change Management. 

Do you agree?  Are there other skills that you feel are more important?

Solid Methods, Solid Benefits: Solid Tips

Reminder: The numbers quoted in this post come from IBM's 2008 Global Making Change Work study.

Now that you're all fired up to gain insight into the changes a project will bring to your organization, IBM's study lays out recommendation number two for implementing a successful project: "Solid Methods, Solid Benefits."  According to the study,

Practitioners who always follow specific and formal change management procedures had a 52 percent project success rate, compared to a 36 percent success rate for practitioners who improvise according to the situation.

That's a 16 percent difference in success rates.

How is the average person supposed to put this advice into practice?  Unless you're a Change Manager, or work for a large organization that has a Change Management department you can tap into, the chances that you just happen to have a solid Change Management methodology on hand is pretty slim.

Don't let this stop you from realizing the full potential for "Solid Benefits."

Practical Tips

If You're Hiring Outside Help:

Many projects will bring in outside consultants to help with implementation.  If your company is doing this, here are some questions I recommend asking about their Change Management methodology during the sales process.

1. Q: Have you included Change Management in your proposal?  A: If the answer is, "No," that's a very bad sign.  Ask them why not, and follow-up by finding out what it would cost to add to the proposal.  If the answer is, "Yes," continue on to the next question.
2. Q: Do you have a Change Management methodology that all of your practitioners follow?  A: If the answer is, "No," I recommend looking at another firm.  If the answer is, "Yes," ask question 3.
3. Q: Do your Project Managers support Change Management and its integration into the project?  Do they understand the Change Management methodology?  A:  I've been on more than one project where a Project Manager said to me, "I don't really understand what you Change people do, and I'm really busy, so I won't be able to provide any support to the work you're doing."  That is never a good sign.  If the Project Manager doesn't understand and support the Change Management methodology, there's a good chance that many of the vital Change activities will be under-resourced or cut from the project entirely.
4. Q: Can your methodology be adjusted to fit our particular culture, project, resources, and needs?  A: Although the IBM study stresses that benefits are achieved as a result of consistently following a structured methodology, it is also important that a methodology has flexibility built into its design.  Not every activity in a methodology is relevant to every project.  To make sure you get the most bang for your buck, work with the consultants to figure out which aspects of the methodology will provide the most value.  This is especially essential if you have a limited budget.

If You're Doing It Yourself

Sometimes hiring consultants just isn't an option.  Sometimes you're the technology guy who is told to "figure out some Change stuff."  Sometimes an organization that has always flown by the seat of its pants suddenly realizes the benefit of having a Change Management methodology and wants you to set one up.  Now what?

1. Read the Experts: If you only have time to read one book, I'd recommend something by John Kotter.  He has a number of books available, but Leading Change is probably his best known.  If you have time for two books, check out Managing at the Speed of Change, by Daryl Conner.  And if you have lots of time, the "Harvard Business Review" has published a number of interesting, thought-provoking articles on Change Management over the years.
2. Online Resources: For overall Change Management information, check out Prosci's Change Management Learning Center.  For in-depth information about training, go to the American Society for Training and Development.
3. Take Some Training: Training options, either in the classroom or on-line, abound.  Since they're always changing and I can't attend them all, I won't recommend any here.  Ask around for recommendations of courses people have attended.
4. Buy It: I know that a few years ago, one of the major consulting firms would sell its methodology to companies for a price.  I have also heard of Change gurus who will come to your organization and put in place a personalized Change Management methodology.  If you have the money, this can be a fast way to put a methodology in place.

You've reaped rewards.  You've garnered benefits.  Up next: "Better Skills, Better Change."

Real Insights, Real Actions: What It Means to You

Reminder: The facts and figures used in this post come from IBM's 2008 Global Making Change Work Study.

Now that you're completely scared that your project will be part of the 59% that fail, let's take a look at the factors that typically cause it to fail, as well as IBM's first finding on how to succeed: Real Insights, Real Actions.

IBM's study found that the three most significant implementation challenges are:

1. Changing Mindsets and Attitudes (58%)
2. Corporate Culture (49%)
3. Complexity is Underestimated (35%)

These are all "soft" people-oriented challenges that can be addressed through a strong Change Management program.

In contrast, the three challenges at the bottom of the list are:

1. Change of Process (15%)
2. Change of IT Systems (12%)
3. Technology Barriers (8%)

These all fall into the "hard" category.  Despite being seen as less of a challenge to success, I have found that these are the areas that people spend the most time and money addressing.

How do we stop focusing all of our resources on the least challenging factors and start addressing the challenges most likely to cause our projects to fail?  IBM's first suggestion is "Real Insights, Real Actions," which they describe as getting a "full, realistic understanding of the upcoming challenges and complexities, followed by specific actions to address them."

Let's Get Practical

"Real Insights, Real Actions" is a great suggestion, but how do you take it from theory to practice?  Here are
five suggestions on how to build this insight into your project plan:

1. Don't wait until it's too late: Many projects don't have a Change Manager join the team until they are finished with the plan and design phases.  The reasoning behind this is that the Change Manager won't have enough work to keep them busy during these phases, so their presence is a waste of time and money.  I've also heard people say that the work a Change Manager does during this phase will just distract the other team members from focusing on their primary work.  Bringing the Change Manger on early, however, allows you to capitalize on the "Real Insights" IBM advocates.  It also ensures that the Change Program is integrated into the overall project plan, reducing future conflicts around resource delegation.  Can't afford to have a full-time Change Manager this early in the project?  Consider bringing them on part time.  A little integration now goes a long way toward ensuring the future success of the project.
2. Conduct an Impact Assessment: Impact Assessments allow you to discover how people, processes, and tools will be impacted (i.e., changed) by your project.  I've often heard clients say they don't need to complete this activity - they already know what the impacts will be.  Maybe they do, but this knowledge doesn't help the project if it only resides in their heads.  Gather this information and put it on paper.  It's also good to remember that what employees at one level of the organization "know" is often very different from what employees at another level of the organization "know."
3. Conduct an Executive Change Readiness Assessment: Executive Sponsorship is one of the most important factors in a project's success.  Just because an Executive sits on the project Steering Committee, however, doesn't mean he or she is ready to support and drive the change.  Interview, survey, chat at the water cooler, but somehow find out how ready the Executives are to make this project a success.  I find that guaranteeing anonymity is often very helpful in making this activity a reality.  I've also found that Executives are more likely to really believe in the anonymity if you have an outside consultant conduct the interviews and surveys.
4. Plan, Plan, Plan: Here's where the "Real Actions" come in.  Now that you've gathered all of this information, it's important to use it.  Change Management isn't about creating pretty PowerPoint presentations.  Take the data you've collected and start building a strong Change Management program.  How will the impacts you've uncovered influence the training and communications you need to create?  If your Executive Sponsors don't really support the project, what actions can you take to help them fulfill their roles?  What unexpected findings could derail the project, and what plans can you put in place to mitigate their impact?  Some consultants will tell you that Change Management is an art that doesn't require planning.  I disagree.  It's like SCUBA diving.  Gather the facts.  Plan the dive.  Dive the plan.
5. Integrate: Integration needs to occur in two forms.  First, once you've created your Change Management Program, make sure that your plan is integrated into the overall project plan.  Change Managers can't work in a vacuum, and if you want time from SMEs (Subject Matter Experts), Business Analysts, Executives, etc., you need to lay claim to that time now.  This is especially important when planning for training development and delivery.  Second, Change Managers need to integrate with other team leads early and often.  Project members often don't understand the role of a Change Manager, so they ignore them.  This leads to duplicated work, missed opportunities, and a Change Program that isn't rooted in the most up-to-date information.  Although functional leads who are heads-down working on design documents may think that helping the Change Manager identify project impacts is a waste of time that distracts them from their primary focus, having integration among the teams is the only way to ensure the Change Program addresses the full range of client needs.

Coming up next: How to put "Solid Methods, Solid Benefits" into practice.

I'm Running a Business Here

No matter how many examples I can give about projects that failed due to a lack of strong Change Management, at the end of the day Executives are trying to run a business.  Anecdotal evidence isn't enough to prove the value of Change Management.  They need hard numbers.

In 2008, IBM once again conducted their Global CEO Study, which identified the ability to deal with change as a top C-suite concern.  On the heels of this finding, IBM followed-up with the Global Making Change Work Study.  This study involved 1,500 practitioners worldwide and delivered a set of findings that demonstrated the value Change Management can bring to a project.  All of the numbers I discuss in the rest of this post come from that study.

Perhaps the most frightening finding was that only "41 percent of projects were considered successful in meeting project objectives within planned time, budget, and quality constraints."  If you and your main competitor are both implementing a project that can give you a substantial competitive edge, only one of you is going to succeed.  The question becomes, how do you ensure that your organization doesn't become part of the 59% failure rate?

Luckily, the study goes on to reveal four elements that can significantly increase a project's chance of success:

• Real Insights, Real Actions
• Solid Methods, Solid Benefits
• Better Skills, Better Change
• Right Investment, Right Impact

In each of my next four posts, we'll look at the numbers that support these findings, as well as practical ways to incorporate these success factors into your next project.

Do We Really Need Change Management?

There is a great deal of skepticism among consultants and clients alike as to the necessity of Change Management.  Often they don't know exactly what Change Management is or what value it will provide, but they do know that it costs money.  Who can blame them for being reluctant to spend money without a clear understanding of the results they'll get for that investment?

Let's start this conversation with an exercise I use with my clients.  First, raise your hand if you've ever been at a company where they were implementing a new project (e.g., a new computer system, new business processes, organizational redesign).  Now, put your hand down if you've ever seen one of the projects fail.

I've never seen more than one or two hands stay up.

I finish by asking the group to share some of the reasons these projects have failed.  I consistently hear the same reasons over and over again, regardless of the size of the company, the industry, or the type of project.

1. Management didn't support the project.  If my boss wasn't going to make the change, why should I?
2. We didn't receive adequate training.  I didn't know how to use the new system/processes, so I continued doing things the old way.
3. I didn't even know there was a project!  No one told us about the upcoming changes until right before the new system/processes were implemented.
4. I didn't understand why we were making the change.  Taking the time to learn the new way of doing things didn't seem as important as focusing on my day-to-day job.
5. Past projects have either failed or been abandoned.  This project will probably be the same.  Why should I waste my time learning about something we won't be using in a month?

It's unusual to hear someone say a project failed because the technology didn't work.  Instead, it becomes apparent very quickly that when projects fail, it is typically because they ignore the people who are impacted by the change. 

Each one of the reasons for failure listed above can be addressed with a strong Change Management program.  Whether it's a plan to increase Executive Sponsorship, a reminder that employees can't learn a new system through osmosis, or the generation of clear communications, Change Management brings the people-side of a project to the forefront.

Have you seen a project fail?  What was the main reason the project didn't succeed?