OCI #6: Strategic Risk Areas
Part of the "Change Management Classics" series.
In the last newsletter you met my “change contrarian” self. In this one you’ll meet my “change management classics” persona. Here’s the back story: I started my change management career in 1991, as the research director for ODR, a company founded by Daryl Conner that trained many of the senior change agents practicing today. The tools and concepts developed by ODR, and the ideas proposed in Daryl’s first book, Managing at the Speed of Change, have influenced a number of the major change methodologies being used today.
In going through my old files, I sometimes run across models, concepts, and tools from this era that still have value today, although they sometimes need a little refreshing/updating. In these “CM Classics” articles, I present the “wayback” version of one of these models1, interspersed with commentary from my present-day brain.
Change Management Classics: Strategic Risk Areas
One of the models that has continued to stick with me, originally introduced in ODR’s MOC (Managing Organizational Change) methodology2, articulates four strategic and four tactical areas of change risk. I’ll focus here on the first part of this model—the strategic risk areas. Here’s how they were originally articulated:
Resilience—not having enough individual, team, or organizational resilience to sustain the change.
Knowledge—not having managers and employees who understand how change unfolds in organizations.
Decisions—not having managers who are able or willing to make the tough decisions about how many change projects will be pursued at a given time.
Architecture—not having managers and employees who can apply the skills, tools, and techniques that permit change to be executed in a disciplined, structured manner.
Comment: So often in the world of change management, we focus our attention on one initiative at a time. What I like about this model is that it reminds us that there is work we can do to prepare the organization for whatever changes might come.
One of the things you will find if you continue to read my posts is that I have moved from “risk-focused” to “strength-focused” language, emphasizing a balanced perspective on assets/opportunities and obstacles/risks. The original language is presented here.
Quadrant 1: Developing Strong Resilience
A person’s baseline level of resilience can be raised by learning concepts and applying techniques that reinforce the five key characteristics of resilient people: being positive, focused, flexible, organized, and proactive. These same attributes are critical to understanding the resilience of teams and organizations.
Comment: The language here is really old…my current model of resilience builds on this framework but talks about 7 “resilience muscles”—positivity, confidence, priorities, creativity, connection, structure, and experimenting3.
What’s still true is that when we hire and develop resilient people, and build the resilience of key teams as well as the resilience of the organizational system as a whole, we create a significant competitive advantage by enabling the organization to move more efficiently, effectively, and confidently through every transition.
Quadrant 2: Increasing Change Knowledge
Key indicators of general readiness for change are the knowledge and skills people possess regarding the fundamental dynamics of organizational transitions. This kind of change knowledge can be measured by determining the degree to which people have a practical understanding of the structure of change [I will address the structure of change model in a future post] and can apply this information to maximizing resilience for themselves and those they manage.
Comment: The more that people throughout the organization know about the predictable patterns in change—how humans typically respond to change, what leaders need to do as they manage change, the natural discomfort that accompanies the unknown and what to do about it, etc., the better prepared they are to succeed when they go through transition. They are able to share a common language, recognize normal emotional responses, identify and perform key change roles effectively, and collaborate to achieve results.
I have observed that many organizations include change leadership training at executive and middle-management levels. There is somewhat less focus on building change knowledge at supervisory and front-line levels, although that is becoming more common as well. When a large change is underway, it presents a great opportunity to provide education that will both help people navigate that transition and prepare them for additional changes.
Quadrant 3: Managing Assimilation Resources
The capacity an organization has to assimilate change should be treated as any other strategic resource (e.g., capital, technology). In this regard, resources must not be wasted or misused. Instead, it is imperative that the capacity to absorb change be skillfully acquired and carefully protected.
Key decisions involving major change should, therefore, be considered in light of the available assimilation capacity of the organization. When the demands brought on by transitions exceed an organization’s capacity to adequately assimilate them, the changes may occur, but they will be accompanied by costly dysfunctional behavior that reduces the actual value of the final results.
Comment: The idea that people have a limited supply of energy and that too many changes can overwhelm them and lead to stress and burnout is not new. Many good practices have been developed to evaluate the impact of changes and gather data to help leaders make informed decisions about how much change the organization can absorb4. What I have not seen, however, is much increase in the willingness of leaders to make the tough decisions to actually reduce the change load they are placing on the organization.
These days I tend to think about “adaptation resources” and frame the issue in terms of physical, mental, emotional, and spiritual energy. Because we only have one supply of energy that we need to use for changes, day-to-day work, and other things that draw on our individual capacity, I’ve also been working on some thoughts on the role of leaders in building human energy sustainability in their organizations. More on that soon!
Quadrant 4: Building Implementation Architecture
For each change initiative, there are certain elements from the structure of change that must be managed well for the project to succeed. These unique combinations of elements are called landscapes and can be identified by determining which of the patterns and principles will have the greatest impact on the effort.
Once these key leverage points for a particular change are identified, a specific architecture can be developed that encourages people to:
Disengage from the present state
Navigate through the ambiguity of the transition state
Be motivated and prepared to successfully assimilate the desired state
Comment: This is probably the area that has come the farthest over the past few decades. Many organizations have built or adopted some form of change management methodology to standardize their approach to implementing major initiatives. Training in change management tools and models is readily available.
There is still work to be done in this area. Even the best implementation approach will fail if leaders delegate to implementation teams the things they should be doing themselves, such as high-stakes communication, modeling new ways of operating, and holding people accountable for shifting their mindsets and behaviors. Many change agents are doing significant work on initiatives without much relief from a full-time “day job.” And the experience and wisdom that allows change teams to tailor their approach to the specific landscape of the situation at hand takes time to develop.
Stepping back from the focus on individual change initiatives to look at readiness for change in general allows us to identify ways we can continue to build organizational capability for change. As more organizations set up change centers of excellence, strategy execution offices, and other similar functions that are charged with helping the organization execute major change initiatives more effectively, this framework points to some of the places they can create positive impact and strategic advantage.
From the distance of several decades, I can see that as a community we have made progress in most of these areas, but that there is still some work to do!
Some of the material shared here was originally copyrighted by ODR, and I am using it with permission, augmented by my own perspectives and experience.
MOC was one of the very first change methodologies; it was used in training consultants at consulting firms including Andersen (now Accenture), KPMG, E&Y, and IBM, and in training practitioners and leaders inside many large organizations. Over time it was superseded by other models, but many current methodologies still incorporate language and insights that originated here. I still like MOC a lot and will continue to draw on it for future “Change Management Classics” posts.
If you’d like more information, check out my books: Prosilience: Building Your Resilience for a Turbulent World and Managing Change with Personal Resilience: 21 Keys for Staying on Top & Bouncing Back in Turbulent Organizations.