White Paper: Transformational Change Management

In today's fast-paced business landscape, organizational change is constant and inevitable. At Neasman Innovate, we understand that the principals of success do not change. They often repeat themselves in different ways. Just as a successful organization is deeply rooted in human behavior and organizational dynamics, so is the case for change management. In this white paper, we present our data-based approach to change management, leveraging the latest in behavioral science, to influence workplace behaviors, facilitate digital adoption, and create a more agile and resilient workforce. By focusing on both the human and organizational factors, we help companies achieve their transformation goals and drive lasting impact.

In the last decade, change management has gained significant popularity as a critical discipline to navigate the complexities of organizational transformation. The following section explores the key factors driving the increasing demand for change management and sheds light on its pivotal role in modern business.

Why the Increased Demand for Change Management?

While there are many reasons for the high demand on Change Management consulting in the last decade, we have taken the liberty to list the top six below which represent the reasons our Fortune 500 clients have mentioned to date.

1. Accelerated Pace of Change:

   The last decade has witnessed an unprecedented acceleration of technological advancements, market disruptions, and changing customer expectations. Organizations are grappling with the need to adapt quickly and effectively to these changes to remain competitive. Change management has emerged as a strategic enabler, providing structured approaches and methodologies to manage the speed and magnitude of transformation.

2. Complexity of Organizational Change:

   Organizational change is no longer confined to isolated projects or initiatives. Instead, it has become a holistic and integrated process that spans departments, functions, and even entire organizations. Most of these issues are too difficult for leaders to view objectively due to proximity and emotional investment; also the fact that change usually requires outside perspective in order to happen. As a result, organizations face complex challenges such as resistance to change, cultural barriers, and competing priorities. Change management offers frameworks and tools to address these complexities and ensure smooth transitions.

3. People-Centric Focus:

   Recognizing that organizations are made up of people, change management has shifted its focuses to the human aspect of change. Leaders have realized that successful change initiatives require not only sound strategies and processes but also the active engagement and empowerment of employees. Change management methodologies emphasize the importance of communication, stakeholder engagement, and building a culture of trust and collaboration.

4. Impact on Employee Performance and Well-being:

   The recognition that change can significantly impact employee performance and well-being has driven the popularity of change management. Organizations have come to realize that poorly managed change can lead to decreased productivity, employee burnout, and increased turnover. Change management practices prioritize the well-being and empowerment of employees, ensuring their concerns are heard, and supporting them through the change process.

5. Increasing Complexity of Stakeholder Relationships:

   Modern organizations operate within a complex network of stakeholders, including customers, suppliers, regulators, and shareholders. Change management recognizes the significance of stakeholder relationships and incorporates strategies to effectively manage and communicate with these diverse groups. By engaging stakeholders and addressing their needs and concerns, organizations can gain their support and minimize resistance.

6. ROI and Business Performance:

   In the last decade, there has been a growing emphasis on measuring the return on investment (ROI) of change initiatives. Organizations seek tangible results and expect change efforts to deliver improved business performance, increased agility, and enhanced customer satisfaction. Change management methodologies provide frameworks to monitor and evaluate the impact of change, ensuring that desired outcomes are achieved.

The increasing popularity of change management in the last decade can be attributed to its ability to address the challenges posed by rapid change, complex organizational dynamics, and the importance of people-centric approaches. By embracing change management principles and methodologies, organizations can navigate transformations more effectively, achieve their strategic objectives, and create a culture of resilience and adaptability in the face of future disruptions.

Introducing Data-driven Change Management

Technology is frequently the “why” of change—businesses cannot ignore AI, blockchain, cybersecurity, 5G, and quantum computing and hope to survive this decade. Technology is also the “what” of change— either modernization of an existing tech stack or new investments in emerging technology. But can technology contribute to the “how” of change, and not just the “why” and the “what”?

We know from our research that high-performing organizations are 3.5 times more likely to use data to inform change efforts and 4 times more likely to gain worker input when shaping changes. Our findings also suggest that too few organizations have grasped the concept of using data, supported by technology, to drive change. One reason for this oversight is that the discipline of change management has not kept up. The human and technological sides of transformational change have been on opposite sides of the stadium. Technologists don’t know much about what produces long-term behavior change, so they recruit change experts to help with the psychology of change. However, fatally, change agents know very little about technology. The change agent takes great pride in change processes (town halls and instructor-led training) but doesn’t think about how analytics and machine learning can support what they do with people. This is one of the most important insights we share in this white page because it is a complete contradiction to how leaders approach every other part of business operations.

At the customer interface, today’s marketing departments use digital tools to understand the customer journey. Marketing managers and directors use behavioral science to influence consumer buying habits, and study trends to align our products with current events to capitalize on new evolving markets without risking company dollars behind unclear objectives. However, when it comes to employee users of business-critical systems, those possibilities have yet to be unlocked. Leading businesses are doing both: harnessing the deep human expertise of the change expert with the power of data to produce quicker, less risky, more complete change implementations. Using data helps customize communications and support—creating personalized, actionable user journeys.

The shifts in change that we envision during the next decade will heal the shotgun marriage between technologists and their organizational change suitors. By using data-driven change management, we can help humans embrace new technology to make their working lives better and to make businesses and their change journeys more human. More on, we can use analytics to increase empathy, and AI to empower humans, and not just displace them; and use network analysis to build communities.

Going Beyond the Survey: Using Behavioral Data, not Attitudes and Intentions.

When considering the idea of data in change management, most people think of surveys. They are a form of data, but notoriously poor at predicting behaviors. (The academic literature on the inaccuracy of self-report data goes back decades; see “Self-report in organizational research” from 1986.)

There are two problems: The first is that reports do not always accurately reflect what people think and feel. The people who reply may not accurately reflect the views of the population—perhaps only people with grievances answer, or perhaps the aggrieved “check out” and only positive views are captured. An even worse realization is that what people think and feel is poorly correlated with what they do. In one experiment, students were given a smart pen that tracked homework behaviors. No surprise, those behaviors had a high correlation with test results. However, when homework was tracked by surveys (self-reports), there was an inverse correlation between what students said about homework and their test results.

Imagine if our survey data told us the opposite of actual user behavior? Multimillion-dollar transformational change cannot afford such inaccuracies. In business, we care about what people do, not what they intend to do. This is acutely the case in technology: We care about how much endusers use the system, not how much they say they use the system, or how much they like the system. We at Neasman Innovate feel that reform is due in the Change management

Creating Transformation Through Four IMPACTful Stages

Organization Transformation Model

Make no mistake about it, we are about to introduce a change model, but let’s be clear, there’s a difference between true Transformation and the thousands of other “n-step models.” Such models are typically presented as Michelangelo’s David would be—any alteration, however small, would alter its timeless perfection. Because technology implementations that touch 100,000 workers and millions of customers are a relatively new thing, we think that even new models must be treated as provisional and updated constantly, not like David, but rather like the Elon Musk's Tesla, with open source computing and coding.

So why the focus on IMPACT? Because impact is the x-factor and key ingredient of lasting change, which we refer to as transformation. For the sake of education and awareness, we want to note that there is a great distinction between change and transformation. We will use an everyday example, like brushing teeth, to explain it. Brushing teeth is habitual and requires very little consciousness, which means we have an internal process and routine we do without thinking. A "change" to the routine of brushing our teeth might look like a different tooth brush, or tooth paste. The alteration is purely physical, and requires no further alteration.

However, in "transformation" we would be impacted by some degree of awareness (typically pain) that causes a conviction. That might look like brushing teeth twice a day, and flossing to avoid cavity build up. Other examples are having to use our weaker hand because of an accident to the dominant hand; or having new braces inserted. These components require complete mental and physical changes that shift consciousness and increase intentionality behind what we do, how we do it, and when it gets done. Impact, the natural phenomena of growth in wisdom, is the key factor to these transformations. It is exactly what the Neasman Transformational Change Management Model brings to every organization.

With this in mind, a primary feature of our model is that we present our framework as a prototype, not as a prescriptive, linear journey for clients to follow; nor as a finished, end-all-be-all change recipe book, but rather as a scaffolding to organize and drive innovation in the change space. This ensures that the model is always a proper fit for the company and project size.

A second feature of our model is that it focuses on information flows. Data-driven change management focuses on the end-to-end information flows that are critical to design making at each stage. At the start, we combine the vision of business leaders with the capability for change of the organization to determine strategy. As development proceeds, more sophisticated AI-derived market analytics and people analytics will deliver increasingly predictive insights, whose information drives decisions at crucial nodes during the change process. In later stages, information from inside the organization helps the change team intervene correctly and efficiently. After “go live,” process changes, reactions to process changes, and the impact of process changes generate terabytes of data.

Our data-driven approach to change management heals this rift using technology to provide real-time insights into user behavior, for example, tracking the behaviors of tens of thousands of users across half a dozen technology platforms. There might be patterns in the behavior, but without machine learning, they are too hard to spot. In the future of change management, surveys will be used with behavioral data to become better predictors of what humans do—not just what they think they should do. So how do all of these components flow together seamlessly within a four phase process? Glad you asked.

What if You Could Guarantee Successful Change? Now You Can with the Neasman Change Readiness Assessment™

Change Phase I
Intelligent Analysis: Data, Desire, and Decisions

Up to this point there are three components we have made undeniably clear:

1. At the heart of every organizational transformation, people are the center.

2. The linchpin to every transformation, big or small, is impact; which is the result of intelligence (applied data) and innovation (vision and wisdom).

3. Technology and data should be leveraged in a organization's change management initiative just as much as it is in ever other aspect of business.

By leveraging the ADKAR model we hone our focus on the individual, placing the majority of power in the hands of implementors. By giving control to implementors as stakeholders we increase buy-in along all levels of the organization reinforcing change and deflating resistance. The ADKAR model is applied to the 7 primary functions of every business (systems, structure, strategy, style, skills, staff, and shared values) otherwise known as 7S. A model made popular by McKenzie & Company. With this data we gain clarity on the areas of propensity- IQ, know-how, and functionality; as well as that of change ambition- EQ, empathy, and desire.

The 7S model is divided into two primary categories, hard-set and soft-set. Hard-set elements of 7S are Systems, Strategy, and Structure. Systems refer to components like ERPs, HCMs, and CRMs. Strategy aligns more with how the organization adds value to the marketplace, driving attention toward sales, marketing, supply chains, and customer service. The third hard-set element is Structure which emphasizes on the hierarchy, positions, and roles of the organization. The aforementioned are hard-set because they are often "set in stone", and rarely change. However, the soft-set elements are far more lucid and dynamic, requiring more management than the hard-set components.

Soft-set elements include areas pertaining to qualitative and EQ based functions like Staff, Style, and Skills. Staff bring a focus employee structure, job descriptions, and responsibilities (both written and assumed). While Style focuses on the leadership and their approach to managing the organization. Vital factors like buy-in and culture stem heavily from this component. Then there is Skills which means exactly like it sounds, and gives us a closer look into the propensity for change and how much of a learning curb employees and stakeholders will have for transition to be successful.

With a fluid framework in place, and deep data on understanding of awareness, desire, knowledge, ability and reinforcement we start the migration into the next phase of transformational change, Innovation Strategy.

Change Phase II
Innovation Strategy: Purpose and Planning

It is important to note that none of these phases come to a hard close. Instead they have ebbs and flows that end and begin based on objectives reached. The reason is simple and logical; human habit cannot be controlled. It can however be influenced, hence the reason we collect data, using it along with the wisdom of stakeholders to devise a strategy for the implementation of change behind a campaign that conveys clear communication of the vision, and drives action behind the company initiative.

In the second phase of the Neasman Transformational Change Management Model, we see many organizations get in trouble based on an element that cannot be seen, but is always felt. We will use this examples to share more about what we mean.

Imagine the following. Three three groups of ten individuals are in a park at lunchtime with a rainstorm fast approaching. In the first group, someone says, "Get up and follow me." When he starts walking, only a few others join in, he yells to those still seated: "Up, I said, and NOW!" In the second group, someone says: "We're going to have to move. Here's the plan. Each of us stands up and marches in the direction of the apple tree. Please stay at least two feet away from the other group members and do not run. Do not leave any personal belonging on the group here and be sure to stop at the base of the tree. When we are all there..." In the third group, someone tells others: "It's going to rain in a few minutes. Why don't we go over there and sit under that huge apple tree? We'll stay dry, and we can have fresh apples for lunch."

The three approaches shown here are rarely seen, but always felt. They represent the different leadership styles present in enterprise.

The first is that of authoritarianism, which is obsolete without massive power (and even more ineffective when it comes to change). The authoritarian style tells "what to do". People will ignore you or pretend to cooperate while doing everything possible to undermine your efforts. This completely sabotages any transformation initiatives.

The next is micromanagement, which tries to lead people through change using detailed instructions. Micromanagement tells people "what to do" and "how to do it". This approach is slow and only leads to incremental change.

The third example is the only one that creates the energy and desire needed to break through any status quo, and encourage dramatic shifts found in successful transformations. The reason is summed up in one word, vision. When people can see what it is they are being asked to do, and why, they have the understanding to know the purpose for its being. Every time people can correlate an outcome to a purpose that equips them to experience greater life, they will move toward it willingly.

At this point, with a healthy database of intel, high urgency, a cohort, and a powerful vision that gives purpose, the next element of Innovative Strategy is a plan. When it comes to strategy this too must be backed by data and research. We firmly believe that strategy must be rooted firmly in objectives that are quantifiable, feasible, and marked with a deadline. While plans do not always succeed, we can guarantee that as long as there is a definite chief aim, and plan for its attainment, we will be much closer to our desired outcome.

Change Phase III
Intuitive Management: Engage, Empower, and Educate

It's amazing to think that an elephant, if tied up to a pole in its youth, will never break from the pole as an adult. It has nothing to do with the strength of the rope, but everything to do with the strength of its mind. An elephant's amazing memory becomes its weakness, because it continues to re-live moments of limited ability based on circumstances at an earlier time in life.

I used this example to draw attention to the massive power contained in our human capital, which leaders must understand and know how to leverage. With a plan and purpose in motion the next phase of change is geared around action. If we want our employees and stakeholders to take action on strategies, they must be empowered to do so. In most cases, before anyone can be empowered, they must be educated on how to be the better version of themselves. Otherwise they become the elephant that never unlearned outdated facts and used its mind to exercise power; and therefore remains bound.

We use this phase to get creative when it comes to change. By implementing challenges, travel, and training we can close the gap on any lack of confidence, or competence for employees and stakeholders to drive forward into the new future. Phase III is called Intuitive Management because it is faith in the greater future that is the energy for everyone in the organization. With fear removed, it is all about managing tasks and education.

As High-Performance Leadership experts, one of the elements we teach on often is the power of ownership. When people take ownership of a task, title, talent we see a deeper level of commitment come from them. That new level of commitment is what helps speed up indoctrination and user functionality when it comes to technology, and re-engineering of an organization.

Another component that cannot be overlooked is the merit system. In most cases this is determined by the HR director. If a change in the organization is significant enough, it has to show up in a way that employees can see is in their best interest. Components like performance appraisals, compensation, promotions, and succession planning should all be re-aligned with the new vision.

Phase IV
Sustained IMPACT: Conquer for Confidence, Confirm Culture

Wins, both big and small, are incredibly important to this phase of organizational change. The company face lift will leave scars more times than not, and confidence will be shaken for some due to what they may feel they have lost. For every "loss" we have to re-affirm the change with wins, showing what we have conquered or overcome in what might be a painful transition. . People have a tendency to only believe you to the degree they have seen you conquer something; this is the mechanism that builds confidence. A good short term win has at least these three characteristics:

1. It's visible; large numbers of people can see for themselves whether the result is real or just hype.

2. It's unambiguous; there can be little argument over the call.
   

3. It's clearly related to the change effort.

By communicating what the organization has conquered, it provides evidence that the sacrifices are worth it, rewards change agents, helps to fine-tune the vision, undermines cynics and resisters, keeps bosses on board, and builds momentum. By building this degree of confidence behind change efforts that could cost the company millions of dollars, it is important that we make every effort to build confidence through conquering. So how do we stack even more wins onto the change initiative? Confirm through the culture.

As time progresses and your organization works into the final phase of transformation, it is important to keep note that resistance is always waiting to reassert itself. By implementing the change efforts in the culture we break through the visible and invisible dimensions of company culture. With Neasman's IMPACT Method (Identity, Mission, Purpose, Adaptability, Core Values, and Trust) we can create dynamic shifts in the culture, influencing behavioral changes consistently. When the physical structure of the workplace matches the transformation belief is compounded. No matter how much stakeholders communicate the message of change, if it is not physically seen the opportunity zone for buy-in and adoption will be limited.

We know when our transformation efforts are increasing because there will be upticks in effort, and more hands on deck helping to bring the vision to reality. While every effort will not be successful, and there will be times of ambiguity, this is where leadership must remain consistent. Consistent in the vision, mission, and core values that produce the energy to bring about change. As observers of innovation, leadership, and business strategy we can say with authority that people making and effort to embrace the future are a happier lot than those that are clinging to the past. It is not to say that learning how to become a part of the technology enterprise is easy. But people who are attempting to grow, to become more comfortable with the realities of new business, to develop leadership skills- these men and women are typically driven by a sense that they are doing what is right for themselves, their families, and their organizations. That sense of purpose inspires them through rough period.

Business leaders at the top of enterprises who encourage others to leap into the future, who help them overcome naturals fears, and who expand the leadership capacity in their organizations- these people provide a profoundly important service for the entire human society. At Neasman Innovate, we call those people High-Performance Leaders. The world needs more of these people, and we will make them.