Change Management: Factors to Consider When Undertaking that Big Project

Jan 22, 2014   |   By SEI Team

When a long-term improvement project or overhaul is needed that will inevitably impact a company’s operations, how do managers decide whether to shut down completely to expedite the change, or to maintain some level of operations in hopes of appeasing the apple cart?

Beyond careful scrutiny of the execution plan and the financial impact of the project itself, what other factors should come into play as companies attempt to accurately assess the risks and benefits of a particular course of action?

To a large extent, the factors should be determined based on an understanding of the organizational, industry and market dynamics of the system that you’re working in, and being able to identify the various stakeholders who have potential to impact the outcome of your project–especially those who might like to see it fail. Although these stakeholders will vary widely depending upon a given company’s situation, knowing who your key stakeholders are and engaging their interests in the process can go a long way toward helping you make the right choices.

Organizational Considerations

From an internal organizational perspective, this entails recruiting the support of many levels of employees whose workload or income would be affected by a major overhaul program. Avoiding the trap of allowing the decision to be exclusively c-suite-driven and, instead, inviting resistance as a part of healthy upfront planning dialogue will help to ensure that you’ve done your part to identify any potential blind spots.

It’s also important to keep in mind that maintaining employee morale throughout your project will be a huge driver of your success–another key reason why engaging the interests of your employees in your decision process is critical. In the end, not everyone may agree with the final decision, but garnering enough internal buy-in for it will ultimately instill organizational confidence in the chosen path forward.

 Industry Considerations

Addressing the interests of external stakeholders (i.e., customers and other outside players) is a bit more complicated. While securing “buy-in” may be impractical, there are other stakeholder-driven considerations that apply in certain industries–particularly in the public sector. Consider the healthcare industry. We don’t need to actually engage with patients to know that the ability for hospitals to deliver uninterrupted care is non-negotiable. This is an industry imperative, and thus, concern for safety will inevitably trump all other factors in the decision making process. In environments where a single point of failure can have disastrous effects, risk mitigation is paramount–often necessitating a lengthier transformation process.

In the private sector, supply chain industries provide an illustrative example when it comes to calculating the costs and benefits of replacing or updating a workplace system. Within these complex webs, companies are forced to recognize how their decisions to cease normal functioning (be it a complete halt or minimized output) will help or hinder other interconnected parts. What will the impact be on stakeholders that are key links in the chain? Can the company shrink the window of off-air time or avoid vulnerabilities that often arise when trying to execute too many things at once?

Market Considerations

In addition to organizational and industry dynamics, market dynamics should also play a role in informing your decision. Consider a situation in which a company’s customer base is capable of turning to one or more competitors during a period of reduced operations. In this scenario, it’s critical that the decision-making process incorporates a solid customer retention strategy. Decisions that are characterized by this dynamic are often the hardest ones to make, as many businesses undergo transformative initiatives in order to gain competitive advantage–but if the initiative itself causes enough disruption to erode your existing customer loyalty, then the expected gain won’t be realized.

Similarly, as sentiments expressed in various news sources can influence market perceptions and behaviors, it’s important that the potential impact of a company’s actions on other external stakeholders is also considered–especially if the project has any risk of negative public relations exposure. The need for such consideration will vary depending on your business size and prominence–with larger, more notable companies having more reputation management at stake.

Making an Informed Decision

Inevitably, certain employees, customers and other stakeholders will be disgruntled by your decision. The key is in identifying which stakeholders you need to have on your side in order to be successful. Involving these stakeholders upfront will allow you to integrate their interests into your decision process and begin strategizing ways to diffuse any opposing sentiments and quell external fears. Large-scale transformation projects will invariably encounter stumbles, but a well-informed planning process will consider the risk of various outcomes and accommodate for these risks accordingly.

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