Introduction

Changes in organizations, often happen with lightning speed! Sometimes changes occur so fast, that organizations don’t even know they happened, until they feel the positive or negative impacts (undesired effect) of the change.  It’s like when you see a chair and decide to sit down and someone pulls it out from under you, before you sit down.  You didn’t realize the chair had been pulled from under you, until you hit the floor.  Besides this being very embarrassing, it may even cause injury (undesired effect).  This is why change must be managed properly within organizations, before the change is implemented.  How do you manage change that happens with lightning speed?  The answer is simple; slow down!  It’s amazing how slowing down, having foresight and properly implementing change can actually allow us to move faster and be more nimble.  Many times organizations don’t feel like they have the time to slow down and manage change properly and fail to realize, that unmanaged change is what’s causing them to not meet deadlines, rework, customer complaints, poor profitability; all because they didn’t manage change properly.  In this article, I will provide some basic steps for organizations to manage change properly.  The first step, involves recognizing the need for change.

Recognize the Need for Change

One of the big challenges in managing changes in organizations, is recognizing the need for change, before the positive or negative impact is felt.  It’s easy to fall into the trap, of only focusing on the routine operations and miss the opportunities or need for change.  On April 9, 2017, United Airlines had an incident on one of its flights, where United Airlines overbooked a flight and offered their customers $800 to catch another flight.  No customer accepted the $800, so United Airlines randomly selected customers to be removed from the flight, so that their crew could take their seats. One paying customer was literally dragged from his seat, which the ugly altercation was captured on video and posted to social media sites and was covered by the major news outlets.

 

This altercation resulted from the common and purposeful process of overbooking flights within the airline industry.  Amazingly on April 14, 2017, only 5 days after the public outcry, United Airlines announced in an internal email that, United crews must make “must-ride” bookings at least 60 minutes or more before the estimated departure time.  In addition, the email states that a crew member can no longer displace a customer who has boarded the aircraft.  It would have been much better, if United and the airline industry had recognized the need for this change before this incident.  Now most all airlines are quickly changing their policies.

 

This is what ISO 9001:2015, clause 6.1.1.c is referring to when it states, “organizations should determine the risks and opportunities that need to be addressed to prevent, or reduce undesired effects.”  It has always been clear that the process of overbooking flights, had a probability of resulting in this undesired effect, but United failed to recognize that it needed to proactively change this process to prevent or reduce undesired effects.  United quickly recognized the need for the change, after United’s stock lost $255 million in value only two days after the incident.  Organizations should perform process-oriented risk based assessments, to proactively recognize the need for changes.  Here is an article, we published on process oriented risk based thinking.

Recognize Change Before It Occurs

The challenge that organizations often face, when it comes to managing change, is that change happens so fast, that they don’t recognize it has occurred.  Employees make many decisions on a daily basis, which many of them result in changes from established processes.  A buyer, may decide to use a new vendor.  A project manager, may decide to implement a new step in a process.  A salesperson, may decide to offer an unapproved discount to gain a sale.  Many of these changes are being made on the fly and many times the people making the decision, don’t realize that they are making a change.  They are simply in the moment and trying to get their job done.  The issue is not if the change is good or bad, but any unmanaged change is bad for an organization.  For example, the buyer deciding to use a new vendor, may be a good change, but because the change wasn’t managed properly, it may introduce risks that will only be recognized once the change has an undesired effect.  What if the buyer added the new vendor and did not recognize that the vendor had a poor on-time delivery rate?  The vendor may be less expensive, which would be considered as good, but now the organization’s orders are late, which causes late deliveries to its customers.  This is why changes must be recognized, before it occurs.  Recognizing changes before they occur, requires that management establish a Culture of Compliance.  A culture of compliance, means that employees at every level are disciplined, committed and held accountable for following established processes and procedures. If a need for a change is recognized, it is requested using a formal management of change (MOC) process.  This also may involve recognizing a process must be developed, which is also a change to the organization.  A need for change may be recognized, but is it justified?

Justify the Change

Before the change is made, employees should be required to justify the rationale for requested changes.  I have seen many instances, where a change is requested, but when the requester is required to justify the change, it becomes unnecessary.  Having to justify changes, forces employees within the organization, to slow down and think about the necessity of the change.  In the example above, I mentioned that a salesperson may want to offer an unapproved discount to win a sale.  If the salesperson is forced to justify the change, it may be determined that it’s a good change or it may be determined that the change may have an undesired effect, on the organization’s profitability.  Why does the buyer feel the need to add a new vendor?  Does the organization already have a similar properly evaluated vendor?  Would the organization have more leverage by consolidating its vendors, to have more negotiating power?  In United’s case, the change to no longer displace passengers, is justified.  This is why changes must be justified, before they are made.  United’s change was justified, but did they take the time, to determine the necessary resources required to successfully implement it?

Define Required Resources

United made a very significant change is only 5 days, but did they define the required resources to properly implement the change?  Although the change is a good, remember that any unmanaged change is bad.  Let’s look at the highlights of United’s policy changes below:

 

-Crews must make “must-ride” bookings at least 60 minutes in advance, before flight departure time.

-There will be no deviation from their policy.

-No must ride crew member can displace a customer who has boarded an aircraft.

 

What will happen the next time a United crew member and passenger are booked for the last flight out for the day?  The crew member has made their booking at least 60 minutes, but the passenger has booked, paid and waiting to board?  Based upon United’s policy change, the passenger would still get bumped.  It appears that United simply transferred the problem from the plane, to the lobby.  Organizations must always consider the required resources to execute change.  Should United implement an alternative travel process for its crew members, which is separate from its customers’ bookings?  What resources may be required to ensure that the changed policy can be properly executed?  Do they need to have back-up crews in place?  Do they need to figure out a way, to still get passengers to their destination on time, if they are displaced?  Whatever the solution, its’ most likely less expensive than $255 million, but it’s clear that they could not have thought about all of the required resources in 5 days.  Having a formal management of change (MOC) process in place, allows organizations to consider the risk and the impacts of changes, before the change takes place.

Consider the Risks and Impacts

Does the process of overbooking flights have risks and undesired impacts?  Many times when organizations make changes, they don’t think about the risks or the impacts involved.  Managing change in organizations, is based upon the concept of cause-and-effect, which states, “that every action has a reaction.”  A good change, can have a negative reaction to another process or person.  When one team wins, it actually means that another team lost.  The Sales Department won another sale, by providing an unapproved discount, but it had a negative reaction on the overall profitability of the organization.  The Buyer added a new vendor, but because the vendor can’t keep up with delivery, the organization is now late with its customers.  United crew members can no longer displace passengers that have boarded planes, but will this cause a crew to not make its next assigned flight?  Will the customers that are waiting for the crew have their flight cancelled?  Anytime change occur, the organization is introducing risks, which can have a desired or undesired impact.  Considering the risks and impacts of changes, before they are made, allows the organization to properly consider potential risks, before they have an undesired impact to the organization.  Considering risks and impacts of changes is fairly easy when you think about it?  Assessing risk associated with changes, is ultimately about having controls in place to prevent or reduce undesirable effects due to the change.

 

For example:

 

What is a risk and impact of providing a customer with an unapproved discount?

-Risk: The project is less profitable

-Impact: Reduced profitability for the company

-Mitigation: Look for opportunities to upsell or sell additional services

 

What is a risk and impact of using an unapproved vendor?

-Risk: Vendor may not be able to meet on-time delivery demands

-Impact: Would cause delays to our customers

-Mitigation 1: Use approved vendor list

-Mitigation 2: Evaluate new supplier properly and get approval to use.

 

What is a risk and impact of United no longer displacing boarded customers?

-Risk: Crewmembers not able to make their next assigned flight.

-Impact: Flight may be cancelled for other customers.

-Mitigation 1: Have back-up crews on call.

-Mitigation 2: Have contingency plan in place for displaced customers, to still reach their destination on time.

 

It’s true that an organization can’t think about all of the risk and impacts, associated with changes, but often it’s the obvious risks and impacts that cause the problems for organizations.  Only if they took the time to think about them, before they implemented the change.  It’s always better and less expensive to measure eight times and cut once.

Approve the Change

Changes within organizations should be reviewed and approved, before implementation.  Many times changes are implemented, without prior approval.  This is why it’s important that Management establishes a culture of compliance.  Employees at all levels, must understand processes and procedures are in place for a reason, but can be changed through the management of change process.  This starts with Management providing the example to every other level within the organization.  Before changes are made, they should be submitted using a management of change form.  Don’t use the, “we don’t have time” excuse.  Organizations often struggle with this concept, until a major undesired effect is experienced.  An MOC form typically addresses the following:

-Define The Issue

-Controlled Document Impacted

-Justification for Change

-Resources Required

-Risks and Controls

-Impact on Responsibilities and Authorities

-Approval (Approved or Rejected)

-Approval or Rejection Explanation

 

The MOC form allows the requestor of the change to walk through various points of consideration, which is then submitted for review and consideration.  It should be noted, that this is done before the change is made.  Until the change is approved, the existing process or procedure should be followed, unless it’s actively causing an undesired effect.  In this case, the process may be suspended and the approval should be expedited.  Notice I said that the process should be suspended until the change is reviewed and approved.  Once the change is approved it can now be communicated and implemented.

Communicate and Implement the Change

Upon approval, the change must be communicated to all internal and external impacted parties, so that they can implement the change.  This may include other internal departments, employees, suppliers, customers, surrounding community and regulatory bodies.  A change is only effective, if it’s implemented.  This means that communication and implementation are two different steps.  A change may be communicated, but the objective of the change is not realized, until the change is implemented.  Communication, typically happens by revising processes and procedures and training internal and external parties, on the change.  Communication must also be done in the manner that will reach the impacted parties.  This may involve policies, procedures, news releases, email, video, newsletters, memorandums, contracts, etc.  The point is, that the communication must be designed to reach its target.

 

When communicating changes, organizations must be mindful it will take multiple communications, to get the message across that something has changed.  Typically, something must be communicated at least three times and via three methods, before people start to pay attention.

 

Although implementing change in an organization is not a simple process, it must be done properly.  United implemented a major change in 5 days, but the effects of the change, will not be understood for many months to come.  This is mostly due to the fact, that change involves people changing their behaviors and perceptions.  Changing a machine is simple, we can revise the code and the machine will do what the new code says.  People are not that easy and this is probably a good thing!  People need time to adjust and change their behaviors and be assured that most will initially resist the change.  Don’t get on your people are resistant to change high horse.  We all are resistant to change, but if change is: recognized, justified, resources provided, risks and impacts addressed, approved and communicated; most people will transition.  Most resistance to change occurs when the change is a knee jerk reaction and people are forced to change without given the rationale behind the change.

 

When working with people to implement change, organizations should use the Kurt Lewin Change Model.  The model states that the process of changing the behavior of people, involves three steps: unfreeze, change and refreeze.  Unfreezing involves talking to people about the change, before it occurs.  The initial communication should be done multiple times, so that people’s old behaviors and perceptions are thawed out and they can process the impending change in their minds.  The next step is implementing the change.  Because the change was communicated multiple times, it makes it easier to implement the change; because, people are in a thawed state and open for change.  Once the change has been implemented, organizations must then refreeze the change to be the new process.  This is done by follow up communications, conducting follow up audits and holding people accountable when they slip back into their old behaviors.

In Summary

In summary changes in organizations must be managed properly, so that undesired effects can be prevented or reduced.  Organizations must proactively recognize the need for change, before undesired effects are experienced.  Changes in organizations happen so fast that, it’s hard to recognize them, which is why establishing a culture of compliance is crucial.  The need for a change should be justified, which may prevent unnecessary changes from being implemented, as there are always a cause-and-effect that should be considered.  For every change there will be a reaction, so organizations must consider the risks and impacts on other processes when considering changes.  Changes must be approved, before they are implemented.  Change is not fully effective, until it is properly communicated and implemented by the internal and external parties involved in the change.  The Kurt Lewin Change Model, should be utilized when implementing changes within organizations.  Organization must proactively manage change or change will reactively manage the organization!

 

Author

 

Oscar Combs, Senior Consultant of The ISO 9001 Group, a management consulting, auditing and training firm based in Houston, Texas.  Oscar has over 22 years of experience working with management systems.  Oscar has worked with clients throughout North America, South America, Europe, The Middle East, Asia and Africa helping companies manage risk and improve their business operations.  Oscar holds an MBA from the University of Houston.  He is certified by Exemplar Global as a Principal Management Consultant and Lead Auditor. Oscar is also a Senior Member of the American Society for Quality and has served as the Programs Committee Chair for ASQ’s Houston Chapter 1405.