“Despite the tools available, people still use their intuition to make people decisions. There's a better way." - Dain Johnson
Dain Johnson founded and directs Rev 0 Consulting, a technical leadership consultancy devoted to “making brilliant people great leaders”. He is an engineer-turned-psychologist, having worked as a mechanical engineer in the energy industry for a decade before completing a master’s degree in industrial and organizational psychology. As a certified Project Management Professional (PMI®) and Change Management Practitioner (Prosci®), Dain is well-qualified to discuss current best practices in change management. In this episode of Expert Insight Series, Dain and Jon explore data’s power to aid organizational change and create a culture of change by disseminating data to all levels of your organization.
4 Change Management Takeaways:
- Change management saves time and helps mid-market companies manage the “people side of change”.
- How to use data analytics to support distributed decision-making.
- How to align behavioral change metrics to organizational key results.
- Change Management is no longer a competitive advantage; it is simply a business requirement.
Change Management – The Gift of Time
“Get comfortable talking about people risk.” - Dain Johnson
Change management brings efficiency to middle market companies as an effective tool to manage the people side of change. When done well, it mitigates risk and helps to prevent common project pitfalls including lack of adoption and poor results. Prosci®, the leading change management research consultancy, has surveyed global leaders for over 20 years, and they find that organizations using change management are six times more likely to achieve project objectives, five times more likely to stay on or ahead of schedule, and two times more likely to stay on budget (Prosci, 2022).
Is Change Management necessary for every project?
No. Leaders should identify the criticality, size, scope, required behavioral change, and risk levels of their project; the project’s consequence level determines the proactive use of change management. For a minor change project, (i.e., exchanging a pump), complexity is low and does not require behavioral change. By contrast, complexity is high for a merger of two Fortune 500 companies which involves meshing organizational cultures and systems.
Should I use data in change management?
Yes, and not just quantitative data. Data-driven organizations go beyond collecting quantitative data from their employees, diving into qualitative analytics as well. Measuring, interpreting, and converting qualitative metrics such as “rate of change adoption” into useful decisions takes careful planning and criteria (Futcher, 2020). Paul Gibbons, author of The Science of Successful Organizational Change, writes “Businesspeople need to understand the psychology of risk more than the mathematics of risk” (Gibbons, 2019).
Is change management a subset of project management?
No. Outcomes are more likely to improve with a 3-legged-stool approach. Senior leaders sponsor the change, project managers bring budgeting, time, and stakeholder management, and change managers oversee behavioral adoption.
"It’s 3-legged stool… If you can align the project management efforts with the change managers who are thinking about the people side of change and the senior leaders within the business who are sponsoring the change... if all three of those are working in concert, that’s really the holy grail. Change management does not exist on its own and it can’t. It has to be integrated with the business.” – Dain Johnson
Army General Stanley McChrystal and Creating a Culture of Change
When organizations regularly adapt to change, employees normalize to that dynamic environment. This paves the way for adoption of future changes, innovation, and creativity. Following the change management process fosters this shift. Leaders should remember that change management is just a tool, and culture is a collection of behavioral norms. Used in a culture of control and fear, change management serves little purpose, but used in a culture of autonomy and ownership, change management takes organizations to the next level.
“Team of Teams” – An example of distributed decision-making
Army General Stanley McChrystal illustrates this premise in his book Team of Teams (McChyrstal, 2015). When he took command of the Joint Special Operations Task Force in 2004 Iraq, he quickly realized that the military’s traditional culture of centralized control would not conquer Al Qaeda’s decentralized network. Field decision speed lagged. Unconventionally, General McChrystal used data analytics and communication to flatten the organizational structure, sharing information directly with all task force levels to empower faster field decisions. This lesson of distributed decision making through shared data relates to leaders today and tools like automated dashboards with a daily email digest simplify this mission.
“Distributed decision making makes sure that the right people have the right info at the right time to make the right decisions. That is why I love dashboards and data analytics which get that information into the right hands.” - Dain Johnson
The Role of Data Feedback in Change Management
Consider Unintended Consequences
Data-driven change management requires metrics to measure individual and organizational behavioral change. However, without care, leaders may inadvertently create metrics that reward individual employees but are a detriment to the organization. This pitfall is seen in professional sports and business teams. Scholarly studies find that when team owners connect athlete salaries to a metric of points per game, lower-paid athletes devote themselves to scoring more, often at the expense of team performance (Kahane and Shmanske, 2012). Similarly, in business, setting a metric of billable hours in the workplace might cause teams to shift their focus to increasing hours and unintentionally diminish value to customers.
“What you draw peoples’ attention to is where their effort goes.” – Dain Johnson
Choosing the Right Metrics based on OKRs
Consequently, Dain recommends leaders select individual and team behavioral metrics that advance business objectives and key results (OKRs). He adds, "Only measure what you're going to act on." Deloitte echoes this best practice, writing, “The new frontier in change management is using data and behavioral science - a paradigm shift from ‘attitudinal’ approaches to behavioral ones” (Deloitte, 2022).
For that reason, first determine the main objective of your organizational change. From there, you can define the key results that tell you whether you've achieved the objective. People want to know the role they're playing, what they are working for, and the rules of the game, so aligning individual, team, and organizational OKRs drives effectiveness. Think of it as the equivalent of blowing wind into the sails of a value creation plan.
How to Get Started with Change Management
“The competitive advantage these days is change. How quickly can you change? How quickly can you adapt to changes around you? Because we don't exist in closed systems.” - Dain Johnson
Adapting to Change is a Business Requirement
Today’s dynamic, volatile, and almost frenetic business environment mandates that organizations adapt or die. Where change used to be a competitive advantage, it is now essential for a healthy revenue stream. The question has shifted from, “Should we change?" to, “How fast can we change?”
Resources for Change
You do not have to lead change management alone. Many business consultancies offer change management services, and finding a specialist is wise for large projects such as mergers, restructuring, or strategic growth. In house, leaders might want to send managers through the Prosci® change management certification program. Smaller businesses might consider tools such as the Entrepreneurial Operating System (EOS, 2022) or books such as Team of Teams (McChyrstal, 2015) and No Ego (Wakeman, 2017). It comes down to communication and doing the work of guiding people through behavioral change.
Contact Rev 0 Consulting
Looking to continue the conversation with Dain? Find him on LinkedIn or through his consulting firm, Rev 0 Consulting. The firm provides services in business consulting, executive and technical leadership coaching, project and change management, and organizational development.
Blue Margin helps private equity and mid-market companies quickly convert data into automated dashboards, the most efficient way to create company-wide accountability to the growth plan. We call it The Dashboard Effect, the title of our book and podcast. Our mission is to deliver breakthroughs early and often - within your timeline and budget.
If you would like to explore how Blue Margin's team can help automate your data feedback to create a culture of change, contact us below.
Other Expert Insight Series Interviews
- Tecum Capital: Using Data for Higher Returns in Manufacturing, Services, and Distribution
- Notch Partners: Finding Executives for the Right Deal, at the Right Time
- Jill Belconis on Scaling Business with Clarity and Data Alignment
(2022). Data-driven change management using Transformation Intelligence™. Deloitte. us-data-driven-change-management-using-transformation-intelligence.pdf (deloitte.com)
(2022). Entrepreneurial Operating System. https://www.eosworldwide.com/
Futcher, Chris. (2020, April 9). How to measure change management effectiveness: metrics, tools, and processes. Cavendish Wood. https://info.cavendishwood.com/blog/how-to-measure-change-management-effectiveness-metrics-tools-processes
Gibbons, Paul. (2019, May 10). The Science of Organizational Change: How Leaders Set Strategy, Change Behavior, and Create an Agile Culture (Leading Change in the Digital Age). Phronesis Media.
Kahane, Leo and Shmanske, Stephen. (2012, September 18). The Oxford Handbook of Sports Economics, Chapter 9 - Salary Dispersion and Team Production: Evidence from the National Hockey League. https://doi.org/10.1093/oxfordhb/9780195387780.013.0009
McChrystal, Stanley. (2015, May 12). Team of Teams: New Rules of Engagement for a Complex World.
Prosci®. (2020). Change management. Prosci. https://www.prosci.com/change-management
Prosci®. (2022). Prosci® Certification. Prosci. https://www.prosci.com/solutions/training-programs/change-management-certification-program
Wakeman, Cy. (2017, September 19). No Ego: How Leaders Can Cut the Cost of Workplace Drama, End Entitlement, and Drive Big Results. St. Martin’s Press.