Gill South: Put some thought into managing change - or she won't be right

Top executives' expertise in managing change in the coming months is going to be crucial, as companies' ability to be quick and nimble will decide their future.

Ross Pearce, senior management consultant at IBM Global Business Services, says organisations are going through a constant stream of change - and it's not about to slow down.

"Continuous change is the new norm - it's a challenge for organisations," he says.

The percentage of chief executives expecting substantial change climbed from 65 per cent in 2006 to 83 per cent last year, according to the global IBM survey, Making Change Work.

The study showed that globally, on average only 41 per cent of projects were completely successful, meeting all of their objectives on time and within budget.

For New Zealand and Australia, this average drops to 35 per cent.

Pearce believes New Zealand and Australia performed less well because of entrenched attitudes. "It's the old 'she'll be right' attitude", he says. "We may be a nation of doers but maybe if we put a little more thought into being prepared, the implementation might go better."

One worry in last year's survey was that only 24 per cent of respondents were using a formal method or framework to support change.

That percentage has gone up a bit in the past 12 months, says Pearce.

Of those interviewed, 92 per cent said top management sponsorship was key for successful change. "You have to have your senior leadership team singing from the same hymn sheet," says Pearce. They should be asking, "Where are we now?" and communicating.

"They are inevitably the sponsors; they have to articulate what that future vision is, explain to people how that change will impact them, sell the benefits from the change."

Pearce, who is speaking at next month's Human Resources Institute of NZ conference, says his message will be that HR departments should play a key role in change management. One of the standout conclusions from last year's IBM Making Change Work surveys was that one of the biggest challenges to change is people-oriented - the so-called "soft challenges" such as changing attitudes and the corporate culture.

Management also should tap into opinion leaders - people who have influence in the organisation, suggests Pearce. These are people the staff look to for their reactions. They could be specialists in a certain area, they have "mana". It could be the managing director's PA, or the receptionist - it varies across organisations.

One of the most common reasons for change management in this climate is going to be mergers and acquisitions.

"I think we'll start to see the stronger organisations looking to pick off the weaker ones if strategically important," says Pearce. "M&As are far more complex than most people imagine. It comes back to culture."

In 2002, when IBM bought the PWC consulting business, it was a huge culture shock for both sides, says Pearce, who came with the PWC side. "IBM was a big global corporate with strong processes and a strong sales culture. PWC Consulting was much more built around partnership, they built their own capability much more."

Though mergers and acquisitions are said to be good for the balance sheet, you've got to be able to understand the potential culture clashes.

M&A is probably the most difficult example of change management, says Pearce. "It probably took three to five years before you could argue that we are now one organisation."

Change management is not just something that happens internally but can also affect customers.

Air New Zealand's introduction of self-check-in last October in Auckland, Wellington and Christchurch introduced a whole new airport experience. The $30 million investment asked quite a lot of its customers, assuming they had a certain amount of technical knowledge.

Suddenly, travellers could download boarding passes on to their mobile phones or check in on their own at a kiosk. Gold elite, gold and silver members could have an electronic tag as a permanent, reusable boarding pass.

Explaining the running of the project, the airline's chief information officer, Julia Raue, says the airline had an executive steering committee driving the project, including deputy CEO Norman Thompson and general managers from across the business.

"It was a very senior stakeholder group," says Raue.

As well as getting technology right, Raue and her team built a website for staff and customers, changingthewayyou fly.co.nz. As well, a video was played on board planes describing the changes in the weeks running up to the changeover.

The airline talked corporate customers through the new policy. There was marketing to frequent travellers, loyalty members were sent information and there were lots of signs at the airport.

"There was a big focus on it being really simple," says Raue.

Selling people on the benefits of the change is key, and this part of the project was pretty straightforward.

"There were no more queues but there was still plenty of staff around, for those who were less tech-savvy or didn't fly as frequently as others," says Raue, who has "kiosk-hosted" herself.

Feedback has been largely positive - about 75 per cent of customers have given it the thumbs-up.

The airline has also won a global award for airline technology and the senior team never let go of the reins throughout the project. On launch day last October, the executive team had its meeting out at Auckland International Airport so it could be on site if there were any problems.

Gill South is a freelance journalist and author of the newly released Because We're Worth It, a "where to from here" guide for today's working mother.