Symbiosis of change and project management

Abstract

In the last few decades, the value of project management was a bit misunderstood. We have got to a point where we label as project management different processes or activities that are actually not in this field. Projects can be really different in terms of their scale, their funding, and it really depends on what happens within their corporate framework. We can safely assume that the success of a project rests on how well it is prepared, how receptive are the ones who try to achieve it, and how positive or negative is the attitude towards the specific project. A lot of times these properties are more important, than the actual professional competence of the worker, employee, or manager. In this article, I would like to investigate the necessities and needs of change management in relation to project management, since in practice these too cannot exist without each other's logical background.

If we look back 10-15 years in the past, in the operation of big companies changing to new IT systems and computers was great challenge management wise. And change happened under the umbrella of project management. How did this actually happen?

The CEOs of the companies had big expectations regarding the use of computers instead of human-centered work. They wanted shorter intervals between the ordering and payment processes, a decrease of the administrational staff, or better customer service. However to implement these technologies they needed to link the introduction of IT systems to a wide range of organizational changes . Although the employees of the companies looked at this conversion in a bad way, they felt that this is an obstacle to their daily work habits or as a restriction to it. At this point, we can see how the management of change is as equally important as the project itself.

The success criteria of projects

Reasons why a project could fail

Since in practice, the realization of a lot of projects fails, we should clarify what's the success criteria of a typical project. A project is successful if:

• It's considered finished within a specified time frame
• Uses a budget from within a specified spending limit
• Fulfills the intended purpose

At the same time, a project is considered unsuccessful if:

• Before or during the implementation phase, it is interrupted or stopped
• It reaches the implementation phase but doesn't fulfill its purpose

Because of the high number of unsuccessful projects, we should look at the reasons behind it more deeply:

• The strategic goals of the project weren't clearly defined, Not just the goals, but the expectations of the project weren't clear enough.
• The top of the management is not working with the defined system of the project, the responsible leaders do not see the essential and key changes which are introduced and are not actively monitoring the implementation process.
• The project management underestimates the scope, size, and complexity of the project:
  • Unrealistic timelines are made, and communication is not sufficient for the amount of the expectations
  • There is no consistency between business expectations and the chosen system
• The organization is not behind the change:
  • Employees naturally seek the status quo and do not feel the need for change
  • Workers are afraid of the new system, maybe it can make their work more difficult, or maybe reduces the place and value in the company, or even makes their work obsolete or unnecessary.
• The project team is not skilled enough
• Users are unable to operate the new system properly, due to a poor design or insufficient training
• Data quality is not ensured, inaccurate data leads to loss of confidence towards the project. Employees set aside the new system and get back to the old, reliable one.
• After organizational changes, performance indicators are not fitted properly
• The involvement of different supply sites for the project has not been adequately addressed
• Technical problems with implementation difficulties

Success criteria

Because most of the studies and articles overlap or sometimes complement each other in identifying the critical success factors, six higher categories have been developed, that contain different success criteria.

These six higher categories consist of:

1. Top leadership: - which has to have total commitment and vision as critical success criteria
2. Project management: - clear project goals, consistent team members, enough and correct data, planning and control
3. Organization: - optimization of business processes
4. Stakeholders: - communication, cooperations, and involvement, information, and education
5. Technology: - choosing a program or project package, implementing that into the used system, data handling
6. Performance: - performance limit and criteria, descriptive and incentive system

We can see that the success of different projects depends on lots of different factors. However, to what extent they are related to change management we need to look a little deeper into the importance of change management at different project phases.

Change management in a project

The basis of change management

The concept of change management is difficult to determine because it is used for different situations and the scale ranges from general change to change in the preparation phase or maybe change in the sales. Also, the literature on the topic is dominated by practical experiences and an integrative, theoretical frame is missing.

This problem also exists in the context of change management related to project management. In order to have a uniform interpretation of the concept, the following definition is considered relevant: Under change management, we mean the management of in-depth planned changes in a company. It is primarily about people, while the aspects of the subject are covered by project management. Change management targets the change process, from start to the final evaluation, and does not make statements about possible contents.

Moving forward with the ideas from the Success criteria chapter, the critical success factors for "Organization" and "Technology" are clearly in the content/subject level in the purpose of implementing a project. Meanwhile the "Top leadership", "Stakeholders" and "Performance" categories represent the people oriented side of the process.

The importance of change management in relation to project success

Studies have shown that change management has significant importance in the implementation of projects. In the following sections, I would like to summarize the key findings related to three people-oriented categories of success factors.

Top leadership

Different studies have rated top management as the most important of the critical success factors. In project implementations, usually not just a large area of the company's assets are affected, but also the ones who want the integrate the change. To make the necessary changes the support of the senior management is essential. Support is not just about providing the needed resources for the project, but also for the change process itself. It is not enough to be a member of the top management, you have to have the responsibility and possibility of decision approval, covering all areas concerned. According to Nah's (2003) study, the vision of the project, compared to the other success factors only is in the middle importance-wise. But vision plays a very important role, as it gives direction to change. In addition, vision provides a long-term perspective. Implementing projects are usually long-term plans, that can take up several years, especially if there are cultural changes that come with it. A high problem area is also the short-term perspective of the management and their focus on quick solutions which can hinder the success of the project. Deep changes take time, and this time must be given to the company by the top management.

Stakeholders

A really common problem area is that the need to manage a change was not recognized at all or in time. The implementation of new systems leads to deep changes within a company's affected sectors. The affected employees perceive this differently, leading to insecurity, fear, and resistance, which all could negatively affect the success of the project .

In practice, this resistance leads to diversion from the necessary changes, and in the end, only the old processes are mapped into the "new system". .

Dismantling this resistance and applying a new way of working and system acceptance is the most important task of change management. In a company where employees share common values and goals and are open to change, the project is more likely to succeed. .

Performance

Performance as an aspect of success is hard to measure, this way in the referenced studies they gave rather low importance to it regarding success factors. It is mentioned that the introduction of appropriate performance targets and properties is difficult, and the tendency shows that they rather focus on quantifiable measurements than take into account people-oriented "soft" success factors. Like individual or group behavior and motivation. Change management is not applied in these cases at all or only insufficiently. In practice, projects usually start without change management, and sooner or later they reach a point where the lack of identifying a needed change or the resistance from the stakeholders significantly hampers the continuation of the project. In this case, a cry for help is made towards change management, a framework is needed to save the situation.

Change management in practice

Introduction to the VUCA model

People constantly encounter a change in their daily work, more precisely there's only one sure thing and that is change. In international practice, this phenomenon is expressed in a mosaic word: VUCA.

VUCA expanded includes:

• Volatility
• Uncertainty
• Complexity
• Ambiguity

Managers and employees in companies need to cope with these four circumstances on a day-to-day basis and provide appropriate answers and solutions to questions related to these categories. Under such circumstances, it is essential to have a top leadership that is ready, able, and motivated towards change. The hardest task for a manager is to overcome resistance against change. The shorter the time, while resistance is present in a company's management the more effective, is the management of the change process.

The background and pitfalls of change

Resistance and the elimination of resistance to organizational change are in the focus of Lewin's force-field theory. The psychologist and researcher during the development of his theoretical model used a so-called Open-System Theory, in relation to organizational behavior. This theory compares organisms to organizations/companies and enterprises, it says that they behave the same, meaning they all try to survive and establish, then maintain a relative balance. In biology this condition is called homeostatic condition, when the living organism is constantly and sufficiently adapting to external and internal changes and conditions, thus maintaining biological stability, which is one of the most important characteristics of living organisms. Lewin thought that the same is true to the business sector, and in the name of successful projects, we need to set a balance, all the factors that support change must be strengthened and the factors that oppose it, weakened. There can be innumerable indicators of change (eg. technological advancements, market urges). In my practical example, the transformation of the organization was needed due to certain features weren't highlighted in the company, and certain management functions were in the subordinate role compared to others.

Every time a change happens, it is very important that the proper preparatory analyzes and process plans are ready and suited to the specific situation before the transformation begins. We need this to prevent and eliminate the resistances mentioned in the Lewin model, the first steps should try to get rid of the forces that try to curb the change until a critical mass appears. For this, however, is crucial to know the root cause of the possible breaking forces.

Communication strategies that help change

In practical situations, Lewin's three-step model was created with the help of leaders and change management professionals. We can say that the most common inhibitory effect of the change is the pursuit of permanence and security by the people. In addition to security, those working in the organization are also sometimes afraid of their own success, as they believe that if a new structure emerges as a result of the change, where new managerial functions are highlighted or introduced, individual failure also increases, which everybody wants to avoid. This is why one of the most important tools for eliminating barriers is the communication strategy of the change process itself. It is no coincidence that this is a vital element of the preparatory phase of a change.

In the case of my practical example presented below, the key to the communication strategy was creating a communication "scenario" that is broken down by day, including:

• When managers consult with which employee or sector
• When and with what content the coordination will take place
• What channel through the communication takes place
• To whom and when will the information process progress

The positive nature of an organizational atmosphere is a key factor to avoid and managing change, it allows employees to look at change without fear, and with openness. Quality information could be an organizational response to the following questions:

• When and what will happen?
• What is the background of change
• What are the benefits of the change for the employees and for the company?

The communication that is able to support change management is successful and effective if it is not necessary for the employee to guess what will exactly happen to them or with the organization. The worst-case scenario is when the employees don't get information on time, or a more dangerous case is the appearance of disinformation. In these cases, the lack of information, due to human nature, will be supplemented by imagination, which can create unacceptable situations in reality.

Change management in practice using the Lewin-model

In our case, the communication method used by the management of the company in our practical example was, in addition to informing, the solution recommended by Lewin, ie. the partial involvement of the employees in the decision making. The management held a key employee forum, where the whole plan of the change has been presented, this step is of course preceded by several smaller group workshops. The management of the company at the meeting has presented three possible versions of the structure and procedure, of how the organization planned to operate the following business year. For all three versions, in addition to the factual description, -pro and - con arguments were added with detailed economic calculations. Seemingly the most effective model was the one that involved giving the task to the staff of helping with compiling their individual and organizational objectives for the coming period. For example what they want to achieve in the company, beyond what the senior management strategically designated. Of course, the organizational goals set by staff were incorporated into the forthcoming communication materials and the organization openly thanked valuable employee contribution.

Kurt Lewin created a three-phase model for managing change, that has the potential to stand ground in today's competitive sphere and help the change process effectively. The three phases are:

1. First phase: Defrosting
2. Second phase: Change or move
3. Third phase: Solidification or re-freezing

In the first phase, the thawing phase, the current organization and system is changed. In this section, several methods can be used by change managers and professionals. In my practical example, the management has chosen the following path: first, the experts analyzed why the company is not reaching the desired revenue numbers that are included in the plans for that business year. The possible reason for this according to the Pareto principle was that the company had too general answers and reactions for some of the more significant questions, dictated by the market. The root cause of this was that some functions of the management acted as a part of a larger organizational department, and thus lacked the decision-making powers and competencies, that would have been necessary for successful and efficient operation. In this case, the company, to overcome the already mentioned organizational resistance, chose a well thought out, structured, and conscious communication method, that supported change by presenting necessary analytical information to the employees. An important element of this phase was to make the employees aware that the change itself has to happen, and there's no alternative for the company.

In the second phase, the phase of the change, the actual process of the change happens. What the management had planned, will be introduced. Changes in an organization can happen on three levels: individual, structures and systems, corporate and organizational atmosphere. With this in mind, you can consciously prepare for change and this process can also be structured and executed. In our case, after a few weeks, a conflict developed between the two newly formed organizations and sectors in the company. To solve this problem a facilitated workshop was held, that had as a final output a refined task matrix, which clarified the problematic area and removed the obstacles towards further success. For this to happen, it is required that the managers and the staff always be able to find a constructive solution, before the problem escalates.

The third phase is the solidification or re-freezing phase, which is the process where the change is finalized. Failure to do so, or improper execution involves the rearrangement of the processes from the original condition. In our case, this meant that the organizational structure has been introduced in all corporate processes and governance systems, with fine-tuned and appropriate settings. It is important that in corporate culture, for change to be properly implemented the leader is not ashamed to admit a wrong decision. A good leader is someone who realizes in a short amount of time that change is needed and he also admits this to his team.

Conclusion

In summary, Kurt Lewin's three-phase model is applicable to all elements of the corporate change management processes. The key point for the labor market and organizations is the training of competent management that is able to find the right answers for the company in the VUCA world, deal with problems and make the necessary changes based on good strategy. In such a way we don't need to use the language of force and orders, but maintain and even increase employee engagement after the change has taken place.