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How to Analyse Your Business Readiness for Change

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This is often one of the earlier steps in determining the costs, time and risks involved in any changes being proposed by the business.

I write this blog, as this is also one of the most 'grey' areas of organisational change consulting.

With that said, most businesses need definitive answers in relation to their most critical questions:

1. How long will it take?
2. How much will it cost?
3. What are our risks
4. What must we do to eliminate them?

This blog will talk about the merits of qualitative rather than pure quantitative methods for analysing your business readiness, highlight the importance of categorising the changes you are considering making, based upon the complexity of the changes, and therefore selecting a change management professional according to the complexity.

Assessing business readiness to change in the change management market place is frequently described as one set of prescriptive tools and so this blog will also attempt to debunk that.

I know that many followers of these blogs will have their own experiences and opinions and it is my genuine hope that these can also be shared in the comments to help provide the readership with as wide a perspective as possible. It will also be rather research-heavy, as change management approaches have a far greater chance of success where supported by the research now readily available.

A worrying statistic for any business is that only 30-40% of change projects are reported to reach their objectives
(Drzensky et al, 2013, p. 95; Vakola, 2013, p. 97).

Given that a highly profitable and reputable industry of change management consultancy has grown from guiding organisations through change, this is a worrying statistic for most businesses. My first observation here is that in order to minimise this being you, as a business manager or leader, you must accept responsibility for appreciating the true complexity and so competency required from these consultants. One tip - beware the consultancy who claims that they can provide a very analytical pre-deterministic tool for analysing your business readiness to change!

Here are the typical phases that ideally a change professional would chart as the stages to follow for implementing change:

Change Phases

1. Determine complexity of change and so the competency required of the change management professional
2. Prepare and create capacity
3. Identify a shared mental model (beliefs, attitudes, emotions) about the change
4. Assess current state and build future state design (business readiness resides here)
5. Implement
6. Evaluate
(Change Phases, adapted from Griffith-Cooper & King, 2007, p. 16)

Fairly recent organisational change studies as well as older studies refer to change readiness as the beliefs, attitudes, intentions and behaviour of employees (Armenakis et al., 1993, p. 682; Holt & Vardaman, 2013, p. 10; Vakola, 2013, p. 97). As such, understanding such a subject is nearly impossible with the use of quantitative methods (Brown et al., 2005, p. 313–314). This is reflected by the following quote by Garcia and Gluesing (2013, p. 432):

“Organizations are socially-constructed entities that exist in particular contexts, both because of their internal and external cultural factors. Narratives, interviews and observations lead to the discovery of mechanisms and relationships within and between individuals and groups that one cannot unearth with strictly quantitative”

What this highlights is that methods of reflective inquiry around what these beliefs, attitudes, intentions and behaviours are likely to be will provide more responsive and realistic plans, more so than analysis of a highly analytic, data-driven, quantitative nature.

Therefore businesses must be comfortable with methods of appreciative and reflective inquiry and self-examination. They must beware believing in a particular analysis simply because there is data to substantiate it. Follow your gut - if the readiness plan doesn't sound right, it probably isn't!

In support of this, researcher Duerr (2004, p. 45) advocates the use of a reflective inquiry process for organisational analysis, instead of trying to gather and fit data under pre-defined classifications to determine business readiness.

Incorporating the Notion of Organisational Culture into Business Readiness ... not easy to do at all!

To be able to create adequate readiness for a change project, it is widely accepted that the business must clearly understand the factors that will influence their change readiness. One of the main factors is clearly its culture (Johansson et al., 2013; Janićijević, 2012).

Without doubt organisational culture will influence how the changes are taken up by the organisation (this statement is supported by the most respected literature on the subject from Armenakis, 1993; Schein, 1986, p. 31).

With that said, can business do this with some confidence?

I have already recommended an observational, interviewing, inquiring method with a reflection of these results back to the business, to clarify impressions and assumptions. Interviews and surveys can be utilised to form assumptions based upon a mix of qualitative - quantitative data. Having an independent third party conduct this is useful where they are skilled in reflective interviewing and appreciative inquiry. Their impartiality is their strength alongside their willingness to attempt to understand the organisation in a participative, inclusive way, prior to making change recommendations. Being able to challenge their own assumptions, talk respectfully with various stakeholder groups, and listen, as well as analyse, is critical.

In a study relating to TQM implementation, Detert et al. (2000, p. 851) argue that organisational culture is the main reason for the failure to adopt total quality management initiatives. Such an initiative usually requires changing the way the business interacts, communicates and manages itself. Where successful this typically leads to a change of values and beliefs, which are key pillars of organisational culture. Where unsuccessful, the old and dearly-held values and beliefs remain and perpetuate the old ways of working.

Change Complexity and Change Management Competency:

Clearly creating 'strategic' change, such as that of implementing organisation-wide TQM (including Lean, Six Sigma, etc.) is far more complex than that of implementing a new data system (sometimes referred to as 'incremental' change).

Where the change initiative is built upon pre-existing values, beliefs and behaviours, the change effort is much more likely to succeed (Heracleous, 2001, p. 440). In this sense, if the business already embraces the values, beliefs and behaviours of TQM, then the change implementation can be considered to be more incremental rather than highly strategic, and therefore less complex.

These are important distinctions to make when considering the sort of change management competencies required. The change management skills are not the same and businesses are wise to clarify this when engaging a third party.

Both the literature and the change management professionals hold debates over what skills and competencies are best suited to manage an organisational change project. Most of the literature now insists that the person responsible for managing organisational change should have a background in organisational development, psychology or other behavioural science streams (Kanter et al., 1992; Cummings & Worley, 2001; Caluwe & Vermaak, 2003).

In the case study conducted by Crawford and Nahmias (2010, p. 409), a project manager for instance was viewed as more focused on tangible components of the project such as budget, schedule, resources, time, quality, etc. The change manager was more concerned with impacting organisational culture and targeting the behaviour of the employees, educating the staff about the change initiative, engaging the leadership and building effective communication, support and social networks. Competencies including communication with stakeholders, the ability to influence attitudes and behaviours towards change and an ability to articulate and identify key organisational cultural dimensions in order to deliver change must be considered to be the most important change management tools for preparing the business for change. And these competencies become more critical and nuanced, where more complex changes are required.

For anyone wanting the full references listed above, please get in touch and I'll happily send them to you. I hope this was useful insight into the nuanced world of what's required of a Change Manager and to effectively assess business readiness to change. As ever, all comments are very welcome!

Joanne Milne

PSi Partnerships Ltd.