The State of Constant Change
Organizations are increasingly moving from environments where temporary business transformations occur every so often to states of constant change and the associated chaos that never-ending organizational transformation entails. There are many contributing factors to organizational environments where change is a constant. One primary cause is the ever increasing rate of IT obsolescence, where organizations are faced with an endless cycle of new solution implementations. Another major factor includes increasingly austere fiscal environments where organizations are constantly looking for opportunities to achieve efficiency gains to cut costs through reengineered business processes, organizational realignments or the adoption of new policies and procedures.
With the pervasiveness of organizational transformations, one must assess whether the changes being undertaken are too many in number or too great in complexity for the changes to be successfully implemented, sustained and deliver a solid ROI. One must also consider an organization’s recent change history and planned changes for the near future in planning new discrete change programs. Undertaking too many complex changes in an organization can have a massive impact on the ability of staff to balance their support of new initiatives with their daily organizational responsibilities. Even worse, poorly managed transformative change initiatives can have major costs by detrimentally impacting the professional well-being and job satisfaction of a workforce, thereby leading to increased rates of attrition and loss of institutional knowledge and talented personnel.
Assessing Change Portfolio Health
Every change program has its own associated risk related to change readiness. Risk can stem from a variety of sources, including knowledge gaps, poor institutional support structures, inadequate resources, or weak leadership support for an initiative. Depending on the nature of the program, the risk may be quite high, but manageable, because adequate change management resources are in place and the program was designed with a vision and executable plan for managing complex change. While it is absolutely critical to assess the risk of individual programs from a change management perspective, executives and managers must also take a more holistic perspective of all the changes affecting their organizations, their people and their organizations’ cultures.
In order to assess an organization’s ‘Change Health’, we recommend analyzing the risk associated with an entire portfolio of change programs being undertaken by an organization. Such an assessment should not only look at planned change programs that will be happening concurrently in the near-term, but it must also analyze an organization’s recent change history and other planned initiatives for the future to gauge the risk associated with a Change Portfolio of programs. When reviewing the portfolio, it is also important to assess different facets of the organizational capacity for change by taking a portfolio view to analyze the degree of overlap of change initiatives, potential sponsor overload, timing, and the associated impact on respective organizational units.
There are two primary lenses for assessing the relative risk of a portfolio of change programs. The first lens assesses the relative complexity and organizational impact of an organization’s change programs. As a rule of thumb, the greater the complexity of a suite of individual change programs, the greater the risk to the organization. The second key factor that must be evaluated is the degree to which the organization has the capacity to absorb changes. The two-by-two in Figure 1 below illustrates how an organization undertaking a host of complex change initiatives in an environment where the organizational capacity to absorb and sustain the changes is low can result in a Change Portfolio in poor health. A portfolio with such characteristics can pose a litany of organizational risks that could have a major detrimental impact on its people, organizational culture and business environment.
Figure 1 – An Illustrative, Poor Health Change Portfolio
Evans offers a proprietary approach for assessing program risk and organizational capacity for change – whether for an individual program or a change portfolio of programs. We also offer customizable approaches to improving the health of your change portfolio by identifying and successfully managing the risks associated with you organization’s change programs. If you would like to learn more please contact us!
Jim Wright is a Program Manager with Evans Incorporated’s International Practice who provides management consulting services to international financial institutions and U.S. Government clients. Jim has managed or supported a range of business transformation efforts during his consulting career including budgeting, portfolio management, activity-based costing and business intelligence solutions for clients including the World Bank and the International Monetary Fund. Recently, Jim’s focus has been on applying Evans’ Change Method – CAARMA – to improve aid effectiveness and optimize the realization of targeted development outcomes for Evans’ development partners. He is a Certified Government Financial Manager (CGFM) and serves as the VP of Membership and Development for the International Consortium on Governmental Financial Management.