Change Risk

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What is Change Risk?

Much of risk management work is focused on the management of risk in a relatively stable environment. The complexity is considerably greater when the organisation is in a state of change, the environment is intentionally destabilised, and still risk has to be managed. This kind of risk is significantly more difficult to manage as it impacts on capability.The article explores the nature of change risk and provides pointers as to how to be forewarned.

Most managers would generally accept that most organisations are always in a state of change – the only issues are: how much and how fast?The question is whether the change in your organisation is focused, harnessed and controlled, or is the change that happens to you.It is clear from studies, practice and simple common sense that if you can control change, you are more likely to achieve a beneficial outcome.

Consequently, good practice in change management indicates that the employment of project management principles in defining and delivering organisational change reduces the risks of failure.

The critical issue in encapsulating organisational change within a project management framework is to ensure that the integrity of the change is preserved.

This means avoiding the view that the project is about a ‘hard change’ (new software, restructure, relocation) and the management of the change process (stakeholders, transition issues, knowledge capture) are peripheral ‘nice-to-haves’. It also means that employing a project management discipline means following guidelines rather than imposing straight-jackets.

What options are there for Change Risk Management?
There are only three strategies to manage change risk: avoidance, accountability or alignment:

Avoidance: Planning change so that is does not impact on high risk business areas, resources, systems, processes and stakeholder groups: easier said than done!

Accountability: Ensuring that a designated party (with the resources and capability to do so) accepts accountability for managing the risk. This may be an internal individual or group, or an external specialist agency that will monitor the risk and either recommend or undertake relevant action on your behalf.

Alignment: Designing the change and the change process so as to reduce the probability, impact and variety of risks.

Identifying Change Risks
Experience and research has taught us that there are many sorts of issues that can derail a change process. These can range from the senior stakeholder getting a new job, through to the management of the say ‘yes’ and do ‘no’ team (most organisations have them).

Below is our checklist list of key risks that, if not attended to, could have the most negative effect on the ability to achieve change goals:

1. Power Wielders - Those in overall command, those that hold the purse strings and any others who are recognised in the organisation as ‘opinion leaders’ must be included in the process. For good or evil, if they speak, people listen.

2. Level of Dissatisfaction - The population that will be impacted by the change needs to be dissatisfied with the status quo. If not, you will build up a bow-wave of opposition that will absorb exponentially increasing resources.

3. Committment to go the distance- This is a hard one as all change is more expensive and time consuming to fix, once and for all, than anyone expects.

It is much easier to implement the quick, cheap and wrong answer that will need to be mended again in two years time by your successor. The senior players must be committed, not just involved. And they must demonstrate this by changing there own behaviours and talking up the change at every opportunity.

4. Strategic Alignment- Is the strategic direction of the organisation, the needs of its customers, the intent of the change and the reward and recognition of staff effort all heading in the same direction. If not something will come unstuck sooner rather than later when someone notices the gaps opening up.

5. Perception of Value- The change must add value for all stakeholders and demonstrate benefits. A WIIFM is a ‘what’s in it for me’, and nobody does anything without one.

WIIFM can include money, loyalty ‘for the company’ and relief ‘it removes my frustration with the old way.’

6. Communication- Ensure arrangements are in place to regularly communicate with and manage the issues of all stakeholders throughout the process of change.

Stakeholder communications is not just putting regular articles in the staff newsletter, nor is it having a website on the intranet. Your toolset might include these things, but there are two key issues to manage.

  • Analysis: who are the target groups, what do they need to know and how often, and what is the best medium for getting the information to them?
  • Feedback: Communications means the two-way exchange of information, so by what means will you engage with your stakeholders to capture their feedback, and how will you visibly act upon it, demonstrating that their efforts are not wasted.

Change is always a failure in the middle, so how will your stakeholders keep the faith?

7. Formal Systems: Ensure the new organisational processes and the supporting knowledge have been suitably captured so that they are accessible to those who will operate within the changed environment.

8. Training: The change process is supported by appropriate training and education for stakeholders (including customers), managers and operators to ensure that all those involved have the competency to deploy the changed process effectively.

9. Coordination: The change must have only one overall owner that is specified as an individual person or role holder and not an organisation or group.

The project has one leader, one team, one focus, shared goals, and a common problem solving process to tackle issues as they arise and implement fixes.

For more information on change management Click Here to contact one of our Newcastle Business Consultants.