“Change has never been this fast, and will never be this slow again.”
In the words of Intel co-founder Gordon Moore, “Change has never been this fast, and will never be this slow again.”
In response, the world’s most successful companies are striving to master the art of change. Netflix expanded from content delivery to content development. Google, the unrivaled search engine expert, successfully expanded its core competencies to include self-driving vehicles. And Nike doesn’t just make shoes anymore; they are a veritable digital business, targeting $7 billion in digital revenues by 2020.1
At first blush, it appears the lines between an organization’s competencies have blurred. Sneaker designers also must be digital providers. Search engine companies also must design vehicles. In truth, the lines are not blurring as much as they are consolidating into one thicker line. Today, across all industries and markets, the only core competency that must remain consistent is the ability to change.
Yet the track record for effective organizational change is bleak. Forty-four percent of completed business transformations are deemed unsuccessful after three years, and the majority of organizations place the failure rate of transformations within their industry between 20 and 39 percent.2
Regular transformation has become a requirement of survival, and the ability to successfully and quickly change—our cultures, customer experiences, technologies and business models—is a mandatory core competency. It requires resiliency and agility, and for many organizations, it requires the focus and support of a Change Management Center of Excellence (CoE) to effectively manage the anxiety, saturation and other negative stressors change can produce.
In the following piece we will define engagement models and common attributes of successful Change Management CoEs, and outline the phases required to design and deploy them. A Change Management CoE is not a singular panacea for organizations under the assault of near-constant change, but it is a critical step toward establishing a transformation-ready operating model and a resilient culture with change capabilities at its core.
Why Focus on Organizational Change Compentency?
The following challenges are typically inherent to implementing change and are often exacerbated when organizations attempt to execute many changes simultaneously:
- Lack of preparedness for change
- Lack of change management knowledge, expertise and skilled resources
- Limited stakeholder involvement and buy-in
- Multiple projects with high complexity, risk and importance
- No change management methodology
- Too many changes impacting the same stakeholder groups
- Lack of understanding of organizational impacts
Organizations with greater change management maturity handle these challenges more successfully, and are more likely to integrate changes in ways that increase productivity and enable a competitive advantage more quickly. Projects that integrate excellent change management methods are six times more likely to achieve project objectives than those with poor change management effectiveness.3
Thirty-eight percent of participants in Prosci’s 2016 change management benchmarking study reported having a change management functional group.4
An effective approach to increasing change management maturity and enterprise agility is to establish a Change Management CoE, a dedicated group focused on developing, maintaining, sharing and delivering change management expertise, methodology, processes and tools within an organization. Establishing a CoE provides numerous benefits for organizations, including:
Change Program Effectiveness
- Increased likelihood and degree of change program success
- Improved view of change portfolio, enabling better decision-making and prioritization
- Better management of multiple changes across stakeholder groups
Speed & Flexibility
- Increased speed of ROI realization and long-term benefits sustainability
- Culture more adaptable to change, enabling greater organizational agility and a competitive advantage
- Development of organization-wide internal change management capabilities
- Ability to leverage learning and best practices from previous change initiatives - increasing proficiency in change
Lower Cost & Lower Risk
- Creation of economies of scale across change initiatives and reduced overall delivery costs
- Optimization of change resources
- Standardization of project selection process and criteria
Change Management CoE Structures
A CoE can be effectively structured to engage with the business in a variety of ways. Some CoEs adopt a “thinker” engagement model, providing thought capital and strategic advisory services to the business. Other CoEs may choose to be “doers,” serving as a pool of expert resources deployed on projects. CoEs can be custom-designed to engage with the business most effectively. Four general models—self-service, advisory, dedicated support or PMO-aligned—can provide a design starting point, and can be applied individually or in combination to best serve the business.
The most appropriate model for an organization depends upon the current level of change management maturity, as well as required capabilities. The CoE model too is susceptible to change over time, and may need to transform as the environment evolves and change proficiencies increase. Regardless of the chosen model, a key focus of the CoE is building change practitioner capability and competencies at all levels of the organization.
Four Phases to Establishing a Change Management CoE
Regardless of the engagement model, successful CoEs share four attributes: alignment with the organization’s vision and culture; a formal structure and processes; an ability to promote and enable a common change management approach and language; and a mission to build capability and capacity to support initiatives at both business unit/department and enterprise levels.
To make change a core capability, organizations must embark upon the design and activation of a Change Management CoE as an enterprise project, with an executive-level primary sponsor and dedicated core project, and change management teams. From there, North Highland employs a four-phase approach to establishing a CoE that is empowered to embed change management capabilities within the organization’s culture, stimulating agility and transformation readiness.
1. Visualize & Align
The journey begins by creating a vision for the CoE, and defining the criteria for success. Overall objectives and an appropriate engagement model must be clearly defined. Ideally, the sponsoring executives and the extended CoE team cocreate success metrics and align expectations, which create a foundation for tracking and communicating CoE impact. In this phase the change management methodology—which will provide common language and experience across the organization—is identified, and the CoE vision and charter is documented with well-defined strategic drivers to reinforce and enable the CoE strategy. Finally, the organization is assessed to evaluate the receptivity of the CoE organization, and a willingness to adopt new processes and behaviors. Identifying possible points of resistance will inform mitigation activities, which will be integrated into plans developed during Phase 2.
2. Ideate & Design
Knowing your current state of organizational change management maturity guides the roadmap of your journey. An assessment evaluates the organizational change management competency based upon five levels ranging from “Ad-hoc or Absent” to “Organizational Competency.”5 Comparing results against the desired level of maturity will inform the creation of the CoE Capability Development Plan, which will roadmap the path to transformation readiness. This plan will define change-readiness requirements across the organization, including everything from talent acquisition and management activities to tools and methodologies, and articulate activities designed to embed the new CoE within the broader organizational culture.
3. Structure & Govern
An organizational structure and operating model must be created to support the CoE engagement model and future vision. A key success factor will be aligning the structure with the organizational style, specifically a centralized, decentralized or hybrid structure. The operating model also will include distributing geographic and functional resources, identifying where sponsors reside within the organization, defining how it will establish standardization, and establishing how change managers will be selected within the organization.
Governance will enable consistency and sustainability for the CoE. Of equal importance will be articulating and tracking metrics that document the value generated by the CoE. Careful consideration must be given to designing quantifiable metrics that incentivize the correct behaviors. If other CoEs exist in the organization, aligning CoE practices, where appropriate, will ensure consistent practices and promote enterprise-wide uniformity.
4. Launch & Refine
As with any change, the adoption of new CoE processes and tools will happen at the individual level. When a group of individuals makes the conscious decision to adopt the new way of operating, organizational change will occur. Creating and implementing a well-defined change management and deployment plan, which is expertly aligned to the company’s culture, will promote awareness and adoption of the CoE. The plan should include methods that will continue to build change management competency within the organization, improve the proficiency of the change management professionals, and reinforce the importance of including change management within organizational change efforts.
The work of creating a Change Management CoE is not complete until the organization and internal change capability is considered an integral part of the business’s value stream. Many organizations start by supporting a few large initiatives to clearly demonstrate value, building momentum from there. Organizations should conduct regular maturity assessments and refine the CoE plans as needed to continuously embed change management into the culture and to consistently grow change management capabilities.
The Competency of Change
Change is inevitable within organizations and continues to accelerate. Keeping pace with the rate of change, much less getting in front of it in a meaningful way, requires organizations to systematically and continuously build change capabilities. For many organizations a Change Management CoE is an effective way to embed that continuous growth, and when designed effectively and empowered appropriately, is a measurable source of business value.
1. NIKE, Inc., Oct. 15, 2015
2. North Highland survey of 202 VP-level and above executives in US- and UK-based organizations with $1B or more in revenue, February 2017.
3. “Best Practices in Change Management – 2016 Edition,” Prosci
4. “Best Practices in Change Management – 2016 Edition,” Prosci
5. Prosci Change Management Maturity Model, copyright 2017