Change Management Framework

How an efficient and effective Change Management or Transformations can be achieved in any company.

Change Management or Transormations can be a daunting task for any company in any industry. But, with growing competition, recent recession, and the customers being more informed, companies need to transform themselves into a better players if they want to stay in the field. Starting from the Board and the CEOs until the Managers and the floor employees, everyone need to understand the importance of an efficient Change Management and strive to implement the same.

I have done a consulting project for one of the three largest banks in the Netherlands, and a prominant bank in the Europe. I had two other colleagues with me and we have analyzed and recommended certain strategic steps for the Private Banking wing of the said bank. As a part of the 3-month project with them, we have developed a Framework for an effective Change Management based on which we have made the recommendations for the bank. The Board, the CEO, and several other employees have mentioned that they had found these recommendations useful and they are actually implementing some of them.

I have decided I would share the Framework with anyone looking at transforming their company, however small or large it might be.

The Framework

The Framework for an effective Change Management
(Not intended to use without explicit permission from the author. Please find contact details at the end of this article.)

This framework is intended for developing and implementing a successful Change Strategy within a company in any industry. The main aspects of this framework include

1. Testing the current strategy and its effectiveness against the results, market trends and projected future shifts in the industry.
2. Assessing the implementation of the current strategy and identify the disparity in the intended direction and the direction in reality.
3. Recommend a Change Strategy that addresses these critical issues and pave the way for a successful change for the company or the product line or even a single department.

Stage 1 – Balanced Change

This stage focuses on the WHY of the Change; why does the company want to change? There should be a balance between the intentions of the management and the aspirations of the stakeholders. If the intended change, even if achieved, does not address the needs and meet the expectations of the stakeholders, then such a change is unnecessary. In this context, this stage also focuses on if the intended change is a result of internal realization or the public pressure and trends in the market.

Questions tested:

1. The first question against which the intentions to change will be tested is, if the intended strategy is a market targeted or designed to beat the market and the competitors. A market targeted strategy only addresses the current trends and fails to project the future potential opportunities. But a strategy that is built to beat the market explores all the alternate methods and exploits every resource at hand to ensure a sustainable growth into the future.
2. The second question to ask is, if the company considers its key competitive advantages and incorporate them in such a strategy. These key skills may include employees, technology, market share, loyal client base or even a better value proposition of the products.
3. The third question to ask is, if the company has a well-defined and right target groups. These target groups should be identified as the suitable ones for the company or its products and both, the top management and the employees, should believe so.

Stage 2 – Leverage

This stage focuses on the WHAT of the Change; what are the areas that need to be changed? Trying to change a lot of little things slows down the process and derails the intended strategy. So, priorities should be defined in terms of which areas to focus on, which key people to involve and which change processes to set up. These priorities should be few in number but have a huge and definite effect on the organization as a whole. To maintain the balance between the intentions of the management and the aspirations of the stakeholders, as said in the previous stage, it is very important to involve stakeholders in decision making in this stage.

Questions tested:

1. The first question against which the priorities should be tested is, if the right trends in the industry are considered that enables to define priorities which when changed puts the company ahead the industry trends.
2. To ensure this, both external studies and internal insights should be used. So, the second question is, what are used? External studies are accessible by the competitors also. But the privileged insights gathered by interviews and interactions with employees, customers and stakeholders, give the company two advantages. Firstly, it gives the company information which is not accessible by the competitors. Secondly, while external studies only gives a picture of the industry as a whole, internal insights shows the gaps that exist between the company and the industry.
3. The third question to ask is, if these studies take into consideration the uncertainties in the market or the complications that may arise in the future that may deflect the direction of the company?
4. The fourth question to ask is, if there is any sort of bias from the top management? Any priority defined or decision taken should be free of the top management bias and selfish intentions.

Stage 3 – Processes and Pace

This stage focuses on the WHERE the energy comes for change; is it from the internal realization that they should change or adapt a new strategy to be more sustainable in the longer run or is from the external pressures such as from the Government, the market or the competitors. More importantly, besides identifying this source of inspiration for the change, this stage also deals with the momentum of the change. It is very commonly observed that a very effective strategy developed by a company is easily derailed as some complexities arise in implementing it. These complexities can be a shift in the market, inflation, change in the Governmental regulations or change in the key management people. To avoid this, there should be continuous management of momentum to pursue this change strategy. There should be dedicated systems for training, monitoring and reporting these systems in place.

Questions tested:

1. The first question to ask is, if there is a balance between the commitment and flexibility of the strategy?
2. The employees and the top management can be very committed to the change, but is it enough flexible to address sudden complexities that may arise? If not, it will fail to address them.
3. If there is a lot of room for flexibility, the employees and the top management can lose focus and commitment and the strategy fails to address its core functionality.

Stage 4 – Communications

This stage focuses on the HOW to communicate the strategy; to both the employees and the stakeholders, collecting feedback, making adjustments and advertise the outputs.

Questions tested:

1. The first question to ask is, is there a conviction from the top management towards this change management?
2. Is this conviction reflected in the actions of the top management that can induce motivation in the employees?
3. With this conviction and motivations, is there an action plan that efficiently integrates and implements this change management in the core businesses?
4. All of this is possible by the continuous feedback from every employee involved in this change management, may it be employees, managers, clients or other stakeholders.
5. All of this is possible only if there are continuous negotiations with all the stakeholders involved in the change management.

Stage 5 – Leadership

This stage deals with the WHO should oversee all this change management; the C-Level Executives or the top management should act as the catalyst for this change. Even though this is last stage, this is the heart of this framework and binds all the other stages into the strategy. The mission and vision should be communicated to the employees and motivate them. It is their responsibility to set realizable goals and provide directions on how to achieve them with enough flexibility. It is also their responsibility to communicate this to all the employees. Besides the C-Level Executives, small cross-functional and responsible teams can be set up to dedicatedly work on monitoring and implementing such a strategy.

Questions tested:

1. The first question to ask is, are there dedicated systems that monitor and implement such a strategy?
2. Are the mission and vision of the top management communicated to the employees?

This framework has definitely helped us evaluate the current practices of the bank, analyze the trends in the industry and practices of the competitors, and come up with a strategic plan to implement much-needed change in the bank. The fields we have used this framework were Private Banking, Wealth Management, Investments, all financial related fields, and their overlapping with the recent trends of Corporate Social Responsibility of banks. It has helped us. I am sure it would help you too.

For more information on the framework, a detailed description, or about using the framework in your company, articles, or any publications, please contact me at sritejareddyw@gmail.com. I would be glad to share my knowledge with you. I believe, ‘By sharing knowledge, you increase it’.

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