The concept of managing a set of projects or initiatives may be new in the area of change management, but it is commonplace for many large financial services firms in the project management arena. The idea is that across a large number of projects, these are then divided into a few portfolios to better manage the outcomes within each portfolio, versus a scattered, project-by-project approach.
Where did the concept of portfolio management come from? And how do we best apply this within a change management context when multiple changes are going on at any one time?
In finance, a portfolio refers to a combination of financial assets such as stocks, bonds, and cash. The goal of managing a portfolio is to get the best outcome according to risk tolerance, time frame, and investment objectives.
This is not all that different in change management. Change interventions and activities are designed to maximize the return on investment and the embedment of change. Change measurement and reporting focus on leading risk indicators such as change readiness, stakeholder engagement levels, and progress of capability development in terms of training completion rates.
Like finance investments, initiatives also have different priorities and risk exposures. Those that are higher priority and have higher risk exposures need greater focus than those that are lower priority and have less risk exposure. Therefore, clear prioritization is critical to ensure clarity of focus.
The timing of initiatives is also a notable comparison. Some initiatives take a long time to implement and embed, requiring significant continued sustainability to execute. Other initiatives may be much faster to implement, reaping the benefits sooner. From a change management perspective, focusing on the people’s requirements as a result of the speed of implementation is key. A project for the long haul requires continuous updates and engagement, versus something more intense and quick in roll-out.
So what can we learn from financial portfolio management approach?
Focus on Data
Data is king in finance. The goal of the overall portfolio can only be assessed in terms of its financial performance. Imagine trying to understand the performance of a financial portfolio without being able to look at its performance. It is the same for change management. We need to be able to assess the outcome of various initiatives within the portfolio. For example:
What are the impacts across initiatives? How do they impact the same business unit or stakeholder groups? Which business units are at risk due to the change volume planned? How can the risk be managed or mitigated? How is the change embedment tracking? This can be measured in terms of change readiness or in terms of more project-specific measures such as specific behaviors or any efficiencies or savings targeted.
Speed of implementation is also key to measure. Is there a clear sense of the speed at which different projects within the portfolio are operating? What are the short and sharp ones versus the long and arduous projects?
2. Focus on Risk
In a way, managing change can be seen as an investment in risk mitigation as mentioned previously. In overviewing the various projects within the portfolio, be aware of their corresponding risk exposures. Some of how we can value the risk exposure of initiatives related to change include:
Projects that are deemed higher risk because the quantum of change impact is higher and more complex than others Stakeholder support and drivers level Sponsor style and level of involvement in breaking through any obstacles and being visible
Project team health: Is the team cohesive and high-performing or plagued with conflicting personalities and siloed work streams? Level of awareness across impacted employees.
Example of data visualization of a change portfolio from The Change Compass
Example of data visualization of a change portfolio from The Change Compass
3. Focus on Analysis and Reporting
A finance portfolio manager spends his/her time understanding the performance and risks of each investment and the overall portfolio. In the same way, to understand how the overall change portfolio is performing, it is key to review the whole group of initiatives regularly.
Some routines can be designed into business-as-usual activities. For example, as a part of regular business planning sessions, one aspect could be to review the performance of the change portfolio metrics and reports. This would involve various stakeholders in the planning process, thereby focusing their attention on managing change and giving them accountability in this regard.
Often change approaches are built not using a structured and
well-defined series of logics but often using a cookie-cutter, standard change
approach or change strategy template. In
some cases, a ‘gut-feel’ may also be used based on stakeholder wishes or
preferences. These are subject to
stakeholder criticism nor do not achieve the goals of the initiative.
The usual standard change approach for most initiatives often
entail the following.
Stakeholder engagement – setting up forums and sending emails to stakeholders
Training – planning for and executing training delivery to ensure users understand the new system/process
Pre-go live readiness – send reminder emails and build intranet articles to raise awareness
How might we better derive change approach using sound logic and an evidence-backed approach?
One way to construct a logical, structured and well-thought-through change approach is by using a logic tree. A logic tree is a visualization that captures all the component parts of a problem, in order to make it easier to identify a hypothesis that can then be tested using data and analysis. Logic trees are great for making decisions by visually decomposing the various elements and reviewing these holistically.
In the following example, a family uses a logic tree to decide which new town to move to by narrowing almost 30 possible potential locations to just one. In the following diagram (from Bulletproof problem solving, Wiley 2019) you can see how this family started with the problem it is trying to solve, and then broke down the problem into its elements. Then within each branch a weighting is assigned to each branch, in terms of percentages. Then each sub-branch is also assigned weightings.
Example of a logic tree in deciding where to live
Then as a next step data can be collected to determine which town meets the various criteria as defined in the logic tree. By doing this, laying out the various components, and analysing its weightings, you can derive the best location.
This is how McKinsey consultants and other strategy consultants
solve large complex problems. The logic
tree forces you to structure your problem versus being lost in focusing on
certain approaches and neglecting others.
Any problem can be solved using this approach. Even the largest of problems can be broken
down into its smallest components.
Strategy consultants then go through every branch to analyse
them and collect data to prove or disprove each branch one by one. This means, that each branch or hypothesis is
tested and proven or disproven. In this
way, every option is considered and the chance of making a wrong decision is
greatly reduced.
So how might we build a logic tree that helps derive the
change approach for an initiative?
Start by defining the problem or question to be addressed. What is the goal of the initiative? Is it to implement a new system that is fully adopted by its users? Is it to increase cross-selling by sharing customer information across business units?
Think of the broader buckets of each branch. What are the core types of change approaches to address the problem? Think widely and carefully about all the types of buckets possible that would address the problem.
Expand the branches until you have covered all possibilities
Go through and assign a weighting in percentage terms to each branch and then use this to determine the focus and importance you may want to place on certain branches in terms of research and data collection
Go through each branch and systematically to reject any that do not apply based on data. For example, one branch could be to use video as a channel to communicate. However if the data shows that previous usage of video to communicate key messages did not result in raising awareness for this stakeholder group, then reject this option
Here is one partial example of deriving a change approach for a customer complaints project.
One important principle to note when building branches is to ensure that the branches are MECE. MECE stands for mutually exclusive and collectively exhaustive. Mutually exclusive means that you need to ensure that each branch is unique and does not overlap with any other branch. Collectively exhaustive means that every option or alternative has been considered and nothing is left off. In this way, the branches you have built are bulletproof from a logical structure perspective.
Building a change approach using a structured approach that is data-supported and logic tested will earn significant stride with the most critical of your stakeholders. You can even hold a workshop to work with your stakeholders to define the logic tree and assign weightings so that that the agreed approach is one that is clearly visible and logically sound.
Another important point to keep in mind is how each of the branches of the logic tree change approach will interface into the overall change environment. When planning on the execution of the overall change approach or each branch of the approach, one needs to be clear around the velocity and volume of change and what else is happening in the change landscape. Using data visualisation tools such as The Change Compass is one way to grasp and plan around the change environment.
We surveyed senior change practitioners on their key challenges
in using change data to generate insights, and here is what we found …
Change practitioners seem to face quite a lot of challenges across the board in measuring change and demonstrating the value of managing change. For many, there appears to be a level of angst and frustration in not being able to break through and demonstrate insight through change data in a clear and simple way.
Why did we survey this topic? In the new economy, our world is increasingly dominated by technology and data. More than ever data is all around us and our ability to access a range of data is becoming more prevalent. At our fingertips, we can access our phone to see how many steps we have taken today, work email and even workplace chat platforms.
In the business world, the same applies even more so. All facets of how business is being will increasingly be dominated by data. The availability of data. The insight that can be generated by data to make decisions. Data is king and a competitive advantage.
However, in change management, our ability to use data has mainly been restricted to ‘soft’ qualitative data. Of course, all types of data are useful both hard and soft data. However, most of our stakeholders who make decisions on project execution, funding, and prioritisation are focused on hard metrics. We really cannot blame them because hard metrics tell a direct compelling picture, whereas soft, qualitative data requires a level of interpretation and maybe less direct in the implication.
We surveyed a sample of senior change practitioners and received 30+ responses. After sorting through the feedback and responses we grouped them into the following 7 themes. We also directly address each of the challenges posed.
1. Getting buy-in from stakeholders on data input
Some mention the importance of stakeholder support and buy-in in collecting change data. This can be quite challenging if your stakeholder does not see the value of the change data that you are collecting. Since the bulk of change data is derived from each of the impacted businesses and those involved in the initiative, it is critical that the impacted stakeholders are supportive to ensure that data may be collected and response is sufficient.
A key element in ensuring that your stakeholder buy-in to your change data plans is to come up with a ‘sales pitch’ for them personally. Each stakeholder is concerned about their own priorities and challenges. If the change data can be positioned to address one of their pain points, then it will be hard to imagine any stakeholder who will not be interested.
2. How to measure cultural & behavioural change
This is probably the biggest challenge called out across
respondents. Most change practitioners
work on embedding some form of behaviour change. As a result, being able to measure the
behaviour change is critical to demonstrate the value of having a change
manager onboard and the value of change tactics.
And since most initiatives are not end-to-end transformations of everything within the organization, there is usually a limited set of behaviours that the initiative aims to change. Working on measuring a small set of behaviours can be challenging because it is not that we are measuring the whole culture of the organisation, which can be measured by culture inventories such as Organization Culture Inventory (OCI).
One way to do this is to start by defining the actual
behaviours you are trying to measure in very specific detail, in a way that is
behavioural and observable. For example,
customer service representatives will be able to resolve customer complaints in
the first contact without escalating to their team leader. This can easily be measured using the data
from the CRM system that the representative uses.
Then we can break this down into more discrete ‘micro-behaviours’ that will contribute to the overall behavioural outcome. For example, in this example, it could be 1) Establish rapport within the first 3-5 minutes of the conversation and 2) ability to identify a customer complaint 3) Apply structured complaint resolution strategies as per training content 4) Regular supervisor coaching and guidance on complaint resolution performance. These behaviours can be recorded using call listening audits, self-ratings, and/or supervisor ratings.
3. Data requires time, resources and effort to collect.
Change practitioners told us that the amount of work involved in collecting, sorting through, and analysing data is very resource-intensive. Because of this many try and avoid this as they do not have sufficient time or resources to collect data.
A lot of the work required is also very manual. Many mentioned automation as something they
are looking forward to. Change data that
can be automated to save time and energy to follow up, collect, followed by
data analysis is one that everyone looks forward to.
The solution is to leverage various digital tools to better automate the capturing, analysis and visualization of data. For example, Change Tracking is a tool now owned by Accenture that measures change readiness and generated reports. For various task management and collaboration features, most use such as Trello or Jira/Confluence. To measure change impact and change capacity, try The Change Compass.
4. Change capacity
The capacity for the impacted business stakeholder to
undergo and embed the change is often the first that comes to mind when it
comes to change data and reporting. Most
respondents mention manually developing a change heatmap to try and depict the
potential change capacity.
However, what the change heatmap actually depicts is the amount of change impact the various initiatives have added up together. This shows how much change impact there is and not the actual capacity that the impacted stakeholder groups have. It could be that certain parts of the organization are agile, mature and have great leaders. Therefore, they are able to have a much greater capacity to undergo larger volumes of change than another part of the organization. To read more about change heatmaps go to The death of the change heat map.
To resolve this it is important to map out the level of change capacity. How does one do this? By using historical data and comparing the level of change against business feedback such as performance indicators, and employee and leader feedback. To automate this process whereby you’re able to visualize the impacts of change against the plotted change capacity levels of each part of the business leverage The Change Compass.
5. Change prioritisation
Respondents call out the fact that often prioritisation of
initiatives is made based on typical project manager data points such as cost,
timeline, funding and business results.
The gap is that change data should also be taken into account. Data such as the velocity of the change, the
volume of the change, change capacity, risk of impact on business performance, business
readiness, all should be valid data points to consider in making prioritisation
decisions.
With the ability to access a range of data points, the organisation is better able to make balanced decisions to maximise benefits and minimise risk. The fact is that with the various challenges listed here in not being able to access a range of change data, decision-makers simply make decisions based on whatever they can get their hands on.
6. Data recency and validity
The usefulness of data is only as good as its recency and
validity. Outdated data cannot be used
to make decisions. What respondents call
out is that it is difficult to ensure that data is constantly updated and
valid. Once again, keeping data recent
takes significant time and effort.
However, various digital tools can again be leveraged to support data
recency. At The Change Compass we build
in a feature to remind users to update information and data recency is also
depicted in reports to reinforce the update of data.
Change governance is critical to be able to support and govern
the change data collected and reported.
Change governance does not need to be a separate body created just for
the purpose of governance change data.
It could be a business unit planning meeting or a part of a PMO agenda
for example. The purpose of the
governance body here is to reinforce the importance of data, review any
generated insights, and make decisions on how to apply insights to business
decisions.
As a change community, our challenge ahead remains how we adopt and embrace the new world of data and insights. The more we are able to leverage data and not shy away from it. The more we are able to move the discipline forward to that which is seen as directly driving business value and has a critical seat at the table in decision making.
Change Management is full of concepts and frameworks that are outdated and not based on empirical research. It seems that in the business world, we are very comfortable with concepts that sound like they make sense intuitively. If the concept is simple and interesting then we’re in. We don’t require them to have any scientific proof and research is often not required.
Let’s take one example. The Kubler-Ross model is one of the most popular models that outlines the 5 stages of grief a psychiatrist in the book ‘On Death and Dying’. The 5 stages are denial, anger, bargaining, depression, and acceptance. However, there is a lack of empirical research supporting these 5 stages, and in fact, research suggests other expressions of grief.
Moreover, we’ve somehow applied this model to change management assuming that it is relevant. Whilst dying is a change process, this context cannot be generalised across all other changes such as implementing a new system, a new product, or a new policy. Moreover, there is no research supporting this. We all know that there are lots of people who do not go through these phases during lots of change processes. And certainly, it would be hard to imagine someone going through these phases after buying a new desirable iPhone from a previous older model.
Now, if there are so many popular concepts that are not backed up by research what should we use that is based on proven evidence? Self-determination theory (SDT) by Edward Deci and Richard Bryan should be one that the change management community adopts. It is a broad-based theory about human motivation that focuses on people’s inherent growth tendencies and innate psychological needs. There has been significant research supporting this theory since the 1970s and more research is underway.
What is the self-determination theory about motivation?
The theory states that there are 3 innate human needs that if met will provide motivation, motivation to undertake tasks, to develop, and to undergo change. These 3 elements are:
1) Competence
The experience of mastery and being effective at one’s activity. When people feel that they have the skills required to be successful they are much more likely to take on tasks that will help them achieve their goals
2) Relatedness
The need to feel belonging and connectedness to others.
3) Autonomy
The feeling of choice and control over one’s focus.
Each of the three elements contributes to motivation, by having the right level of skills and confidence, by wanting to be connected to others, and by feeling in control over one’s focus or task.
Some implications of these 3 elements on how we manage change include:
1) Simply conducting training may not address someone’s level of competence. The outcome is that they need to feel confident. This means that there should be a holistic focus on a range of learning interventions to promote and support confidence, such as managerial acknowledgment, catering to individual learning styles, supportive learning environment/community after training sessions, etc.
2) Change activities should not be implemented for individuals in isolation from others. For example, if learning is utilized, the change approach should be designed to provide visibility on how others are undergoing the change process, and where they are sharing their experiences. This is why change champions are so important since effective champions promote and build a supportive community
3) Especially for more significant changes, it is important to design into the change process a sense of autonomy for those impacted. This may seem contradictory to how most companies implement change, i.e. one that is characterized by one common set of activities for all employees. What this important to emphasise according to SDT is to build in employee involvement so that they feel that they are shaping and developing the change versus being negatively impacted by it with no choice whatsoever.
There are 2 types of motivations:
1) Controlled Motivation
• “The carrot and the stick” approach to motivating someone • Seduced into the behaviour • Coerced into the behavior, often with the threat of punishment • Experience of tension and anxiety
Employees who work in a controlled motivation environment usually have negative emotions and their confidence and well-being also suffer. Also, in this environment, employees usually take the shortest path to reach the desired outcome. This may or may not have the best consequences for the company. If the company is trying to stipulate a set of behaviors, these may be avoided or blind-sighted to get to the ultimate ‘measure’.
2) Autonomous motivation:
• Experience of volition and choice about the work that one is doing • If the person enjoys the work and finds it interesting, then the autonomous motivation level increases • If the values of the work are consistent with the values of the individual this also increases motivation • If the person endorses the work, then he or she will also be more motivated to undertake the work
Organisations want more autonomous individuals that are aligned their work. Why?
Because research has found that autonomous workers are:
• More creative • Better problem solvers and be able to think outside of the box • Better performance • More positive emotions • Better psychological and physical wellbeing
So how do we promote a change environment that develops autonomous workers?
• Take the perspectives of the workers and their mindset, and be clear about what moves them, what bugs them, what they get excited or bored about, their core values and interests, etc.
• Providing them with choice and the ability to participate in the change and the decision-making process where possible. This will encourage their buy-in and engagement.
• Support them with exploring different ideas and trying new ways of approaching the work differently. This approach is also very consistent with agile ways of working, encouraging innovation, and a ‘safe to fail’ environment.
• Encouraging them to be self-starters and self-initiated.
• Provide them with a strong and meaningful rationale of the ‘why’ of the purpose of the change so that they understand the reasons behind the change.
Edward Deci goes on further to state “Don’t ask how you can motivate others, ask how you can create the conditions for them to motivate themselves”.
From activity-driven to design-driven
One of the biggest implications of SDT is that next time you design your change intervention you should focus away from key standard change management activities such as communications and training. Instead, focus on creating and designing an environment from which people can motivate themselves.
This is a fundamental shift for a lot of change practitioners and requires a depth of understanding about how the organisation functions and what will move its dial. It is not about implementing 1 or 2 core activities, it is about implementing a range of interventions to shape the environment to support change.
Some practical ways in which you can design an environment to promote change motivation:
1) Workshops for participants to brainstorm and discuss ways in which they can undergo the change journey;
2) Share stories of how other employees have experienced change personally; Use different mediums in which to communicate the change, to appeal to different people preferences (e.g. video, online, face-to-face, posters, etc.);
3) Leverage key influencers to influence the community. Provide a sandbox or other platforms (such as an online platform, showcase room, etc.) from which employees may experience and play with the new environment;
4) Break up the change journey into small steps and milestones and acknowledge each progression;
5) Encourage community discussions about the change;
The challenge in building change environments
When we start to design a holistic environment for change, more often than not we are designing this for a set of changes and not just one initiative. In this complex, continuously changing environment, we need to be able to keep tabs on what the changing environment looks like and how it is evolving amongst the various change initiatives.
As different change environment interventions ramp up, we need to be able to visualise how these interventions and activities are impacting the employees and their environment. This includes being able to visualise the pace, scale, nature, and multiplicity of the changes across various parts of the organisation. Using data visualisation tools such as The Change Compass is valuable for organisations within agile environments.
Using the insights and core concepts from the self-determination theory will serve significant value for the change management community. Not only are its concepts well-researched and proven by research but there is a range of directly applicable implications for the change practitioner. No longer do we have to work with frameworks that are fashionable but lack the rigor of empirical research. The challenge now is how we adopt this within our change approach and ‘change the way we approach to change’.
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Move over older concepts and motivation theories such as Lewin’s, Bridges and Kubler-Ross models that are dated and not based on years of rigorous research….. It’s time we started to focus on well-researched and evidence-backed models that explain people’s behaviours in change. Of course there is no single approach that may provide the best results in the motivation of a group of employees. However, this framework provides valuable insights of the types of motivation for individual employees that lead to employee commitment to organizational change.
Change management practitioners often grapple with the challenge of employee motivation to embrace change. A powerful framework that can guide this process is Self-Determination Theory (SDT), which emphasizes the importance of intrinsic motivation (versus eternal factors) and the fulfilment of basic hierarchy of needs of people within the work environment. This theory of human motivation takes into account critical tiers of human needs of employee development or professional development that leads to the outcome of employee engagement. By understanding and applying SDT, practitioners can create environments that foster genuine motivation for change.
Understanding Self-Determination Theory
SDT identifies three core psychological needs essential for motivation:
Autonomy: The need to feel in control of one’s actions and decisions as one of the basic needs that leads to employee satisfaction and a positive work environment. When individuals perceive they have a choice, they are more likely to engage willingly in change initiatives.
Competence: This refers to the desire to feel effective and capable at the individual level that leads to employee performance. Providing opportunities for skill development, career development, performance reviews and positive feedback can enhance individuals’ sense of competence, making them more motivated to pursue change.
Relatedness: The need to feel connected and understood by others also leads to job satisfaction. Building supportive relationships and social connections foster a sense of belonging, which can significantly enhance motivation. This is a basic condition of human nature that focuses on intrinsic factors rather than external factors of needs theory that lead to job enrichment.
By addressing these needs, change management practitioners can cultivate an environment where individuals are intrinsically motivated to engage in and sustain change.
Applications in Change Management
Foster Autonomy: Encourage team members to take ownership of their roles in the change process with targeted performance goals. Allow them to set personal goals related to the change initiative and choose how they want to achieve those goals forms a solid foundation. This autonomy can lead to greater commitment and enthusiasm.
Build Competence: Offer training sessions and resources that help individuals develop the skills necessary for the change. Celebrate small wins to reinforce their capabilities, which boosts confidence and motivation.
Enhance Relatedness: Create opportunities for collaboration and open communication among team members. Establishing peer support systems or mentorship programs can help individuals feel connected, fostering a supportive environment conducive to change.
Linking SDT with Agile Teams
In Agile environments, where adaptability and collaboration are crucial, SDT aligns perfectly with team dynamics:
Empowered Teams: Agile practices emphasize self-organizing teams, which inherently supports autonomy. Team members are encouraged to make decisions collectively, enhancing their sense of ownership over the process.
Continuous Feedback: Agile methodologies promote regular feedback loops, which not only help build competence but also reinforce a culture of learning and growth.
Collaboration: Agile teams thrive on collaboration, fulfilling the need for relatedness. Daily stand-ups, retrospectives, and pair programming foster connections among team members, enhancing their commitment to shared goals.
Motivating change is not just about implementing new processes; it’s about understanding what drives people. By leveraging Self-Determination Theory, change management practitioners can create an environment that nurtures autonomy, competence, and relatedness. This approach not only facilitates smoother transitions but also cultivates a culture of intrinsic motivation—essential for sustaining long-term change. Embracing these principles within Agile frameworks further enhances team dynamics, making the journey toward change both effective and empowering.
Click here to download the infographic on ‘Self-Determination Theory’ of motivation. Stay tuned for our up-coming article on this.
