Change Management – Was it a success?

Evaluation and control of the change project

This article is related to the seminar topic and specialization of Géza Nagy (student), which is focused on change management. This publication reviews end extend two seminar papers - Effective Change Management in Small Businesses during Organization Development; and Strategy of Change Management in Small Businesses during Organization Development – highlighting the monitoring, controlling, and the evaluation tasks of the implemented change management process of organization development.

In Hungary small businesses ("micro businesses: 0 – 9 employees; small businesses: 0 – 49 employees (includes micro); medium businesses: 50 – 249 employees; small and medium enterprises: 0 – 249 employees; large businesses: over 249 employees" by EU definition) [1] sooner or later must face the problem of the need for organization development. Most of the time they struggle with the problem of disorder, excessive workload, waste of information and the lack of competitive advantages due to the formal problems inside their "organizations". They, as time goes on and their market share is growing, have an instinctive demand for being a real organization with structure, hierarchy, strategy, management, administration, effective and informative communication, human resource management, well defined positions (jobs) with experts.[2]

In my seminar paper - Strategy of Change Management in Small Businesses during Organization Development – the full process of designing a strategy can be read in details[3]. In this article I will recommend a process for controlling and evaluating the implementation of that strategy.

Supposing that the owner and the management of the small business have created a strategic plan that is based on proper analyses (e.g. STEEP, SWOT, 7-S, Resource analysis)[4], and that they have implemented the changes (executed the strategy), now they have to see the positive and the negative effects, all the results and the lessons the organization should learn from the endeavor.

The owner and the management of a small business have two main tasks concerning the success of the change project: 1. to monitor and control the processes to ensure the successful end; 2. to measure and evaluate the results to determine the lessons they have to learn to ensure the success of the future changes.

To fulfill these two requirements, first of all they have to determine several KPI'S (Key Performance Indicators) to measure the different activities. There are many different things that can be measured both in strategy and in tactics.

Strategy KPI's: the number of management courses completed by managers, the average grading percentage of the leadership tests at the end of the training program. Tactics KPI's: the grading percentage of every different course, number of improved skills in the managers and leaders. Strategy KPI's: the change of the image of the company in the market (business and labor), the percentage of recognition by the potential customers. Tactics KPI's: the percentage of likeness of the new logo, the percentage of proneness to apply for job in the company on the side of the potential employees. Strategy KPI's: the percentage of general acceptance of the new report system, the number of complaint from the participants (zero is the best). Tactics KPI's: the average time needed to get the information to the recipient, the number of mistakes or misrouting (zero is the best).[5]

In my previous article (Change Management – The best way to approach - Implementation of strategy)[6] I used the example of a medical company, which has health care services for a special target group (the elderly). That imagined company is a small business that would like to get a bigger market share and also develop itself as an organization. The owner and the management planned and implemented a growth strategy. They maintained several analyses to know before they decide about the different objectives to be achieved and the projects to be executed. To keep it easy and short we can examine one portion of that strategy concerning control and evaluation.

In order to engineer the requested change effectively and efficiently, we can apply a change process form. This document can help to control the activity, avoid the possible waste of resources, and minimize the risks. There is an example below where the planned change of equipment in a small medical care company can be perfectly monitored and controlled by this form. The process will go in an orderly fashion, so after that we will need KPI's to make sure that the process is not just smooth but also successful with great results.

Change request:
Originator: Date:
Reason for the change: Resources required:
Reviewer: Date:
Stakeholders need to be convinced:

Convinced stakeholders:

Reviewer:

Date:

Requested modifications:

Executed modifications:

Reviewer:

Date:

The change process approved by: Date:
List of resources approved: Date:
Assigned Project manager: Date of start:
Approved financial budget: List of approved suppliers:
List of services and products ordered for the change process: List of delayed services and shipments:

List of services and products over the budget:

Approved extra budget:

Approved by:

Date:

1. Figure: Change process engineering form
Source: Self-made form[7]

The owner can have the idea to purchase and apply better and more up-to-date diagnostic and rehabilitation equipment that can produce more accurate diagnoses and faster healing periods. This change is coming from the doctors, nurses and orderlies working in the company. The best way to avoid the risk of wasting financial and human resources and energies with a misguided decision and project, the owner should conduct analyses (STEEP, SWOT, and 7-S). He has to see if there is any technological background in the market to get equipment that is available financially and physically, and which can produce the required difference in accuracy and time period to make the service better than those of the competitors. They have to check if the target group can and will pay more for the better services (not to lose profit). The owner then should arrange a brainstorming session with all the employees interested in the change. They must find the main points prioritized that will apply the strengths (knowledge level, experience) to use to opportunities (better equipment available in the market) to handle the weaknesses (too long recovery time and not so accurate diagnoses) to prevent the threats (loss of patients, the growth of the competitors). Then the management can plan the strategy of the change process by the 7-S Model. They can involve as many employees as possible by assigning them to the different S factors, as we discussed above. There should be coordination (regular meetings) and communication among the project managers and the employees, using the formal and informal networks in the company. This way the acquiring and the implementing of the new equipment can be done by different project teams with the coordination between them. Then another project manager will be responsible for the training (theory and practical) of the staff who will use the machines. The PR and marketing staff or the agency working for the business should be informed long before the start of the implementation to work out a communication strategy and campaign toward the target group and the their opinion leaders. Then the head of services will supervise the application of the new machinery very closely during the probation period to monitor the results.[8]

The different projects can have different KPI's, so the managers of the projects can monitor the procedures and the performance. We can simply determine some projects as an example, which we assign KPI's to. 1 – Purchasing and implementing and testing the machinery; 2 – Training staff on the machinery; 3 – Marketing communication of the new machinery; 4 – Working with the machinery.

Possible KPI's of Project 1. – a, the full cost of the equipment (later this number is used to determine the value of ROI (Return on Investment) that shows the efficiency of this purchase; b, the total number of days delayed in implementation – and also separately for every single machine; c, the number shutdowns or troubles due to implementation errors totally and separately; d, the cost of troubleshooting invoiced by the supplier; e, the number of service hours lost due to shutdowns or troubles; f, the value of service hours lost due to shutdowns or troubles.

Possible KPI's of Project 2. – a, the value of hours invoiced by the supplier due to extra training; b, number people missing training sessions; c, total percentage of the exam rate after machinery training achieved by the staff; d, number of shutdowns or troubles caused by the staff; e, value of service lost due to shutdowns or troubles caused by the staff.

Possible KPI's of Project 3. – a, number of newsletters sent to client on the new equipment; b, number clients attended the test healing and diagnostic sessions; number of sharings on social media platforms; c, number of visitors on the company's website clicking on the new equipment possibilities; d, number coupons used for test treatments; e, number of new clients requesting treatments with the new machines.

Possible KPI's of Project 4. – a, number of clients requested treatments with the new equipment; b, the value of service delivered by the new machinery; c, the satisfaction rate of the clients treated by the new machines; d, the accuracy rate of the diagnostic equipment; e, the time of healing of the different hurts comparing to the time periods achieved by the old machines.

There might be many other factors to concerned, and more indicators that can be applied. These indicators should be counted on daily, weekly, and monthly basis. The values can be compered this way day, to day, week to week, and month to month to monitor and control the improvement of the positive indicators (more clients, higher efficiency, better results) and the decrease of the negative factors (less shutdowns and troubles, lower cost of additional training for staff).

The owner and the management (every project manager) can monitor and control the progress of every single project by the above KPI's. They can see if things go right or not. They can see if there is any growth in production in the projects or there is no improvement at all. They can recognize any decline in performance. These indicators will show when and where to intervene or where and when to give support.

In order to manage professionally the correctional actions indicated by the KPI's determined for the monitoring and controlling the change process, we can use a change management control form. This document helps to identify the spots need to be strengthen or handled. This form demands approval for any correction that needs financial or human resources added to the original project. It also locates the mistakes made and get a more efficient risk management created for the future projects.

Change project:
Project manager: Date of start:
Project  steps: Resources required:
KPI’s: Date of control:
KPI’s showing good results: KPI’s showing something is wrong:
Requested actions to strengthen the results: Requesting actions to correct the activity going wrong:
Reported correctional actions to superior: Date:

List of requested resources for the correctional actions:

Approved resources for correctional actions:

Date:

Approved by:

Lessons learnt from the correctional actions: New risks defined for future change processes:

2. Figure: Change management control form
Source: Self-made form[9]

When implementations start to delay, the manager must exert more control on the supplier to avoid the loss of income and company image. When the manager responsible for the training of the staff into the new equipment observes the growth of missed training sessions or can see an unacceptable amount of this indicator, he has to apply greater authoritative influence over the missing employees. The best approach the project manager can take is the handling of resistance toward changes. These stakeholders (the employees to be trained into the new machinery) are afraid of the change. They resist, as they might think there are many risks in the process concerning their future, influence, power or positions. They might even fear of being dismissed as the efficiency of new machinery can make some of them dispensable (which is contrary to the intention of the owner and the management).

This kind of fear and resistance can block the whole process if they are neglected. The best way to handle these problems by the manager is to apply the "Beckhard and Harris change formula: (D x V x F) > R. D = Dissatisfaction; V = Vision; F = First Step; R = Resistance to Change."[10] This approach can work as a miracle if used with professional communication. The lesson we can learn from the formula is not to talk about the new ideas, the changes (Vison) before we get enough reasonable and even emotional disagreement about the existing scene or practice. The employees in the example company must feel that the old machinery is slow, the accuracy is rate is low, which make their diagnostic and healing work less efficient and effective. They must 'hate' the old equipment to be ready to listen to the manager's new solutions and look at the vison. When they collectively do not like the machines any more, the manager can present the vision, the good sides of the change of the equipment. The employees will be more eager then. This way they feel less risky to accept the new systems, they will not want to work with the old ones, and be happy to have the new machines. As a magic, they will let their fears and concerns go. To avoid the relapse of the motivation, the project manager should involve every one of them (First Step) into the process. Someone can be responsible for the arrangement of the training places, the other one is sending the reminders to the doctors and nurses to attend the training sessions, etc.

When the number of shutdowns and troubles is going up, he manager supervising the testing periods must demand for re-training of the concerned doctors and nurses. When the number of applications for the test healings are low, the marketing manager had better find the reason behind this bad result and work out more effective marketing communication approaches to get the needed numbers.

So, indicators will help management to correct those courses, which go awry, before they mean too much waste of resources (human and financial). These corrections done in time can give the management the chance to finish projects with great success.

The management that monitors every project closely, is able to increase the value of success by checking the points of growth and improvement in order to strengthen the decisions, solutions and actions responsible for the excellent results. The owner can assign those doctors and nurses as lead machine operators, who have the best exams and testing period results and the less shutdown or trouble rates. If a special coupon brings in a large amount of new clients for test treatments, the marketing manager must place that coupon in many more online and offline mediums. When a diagnostic machine has very high accuracy rate, the owner should consider purchasing one more of that type of machines.

So, these good results indicators can help the owner and the management to make more strategic decisions, which will enhance the development and makes the expected profit higher. Indicators (good or bad results) supports management in planning and executing strategies with less mistakes or wastes and more advantages and benefits. They tell us when to stop before it is too late and when to 'double the bets' to win the 'jackpot'.

At the end of the change process the management can evaluate the different projects to see if the whole endeavor was successful and how much or it was a complete failure. The evaluation will give them lots of data, which can be applied in future strategies concerning changes and development. There will definitely be many lessons to learn.

When the indicators show that the new machines did not make the diagnostic and healing work easier with more accurate diagnoses and faster results in the clients' health, the owner can conduct an investigation applying all the indicators above to find the real reason behind the failure. They can find that the exam rates are low, so the staff concerned did not understand how to use the equipment. The indicators of the shutdowns and troubles also talk about the possible reasons (low competence). After getting the causes, the management can decide whether to restart the change process or the failed project, or to abandon it.

When the results achieved by the new machinery are in the expected range (high accuracy and short healing time periods), but the satisfaction rate of the clients are low or the value of delivered services is decreasing, the evaluation of the whole change program can be difficult. Here we are facing contradictory data. The technical (medical) results are great, but the business and financial results are catastrophic. The 'investigator' needs to look at the point where he does not understand why things happen. It is irrational to get low satisfaction after high results. Something is happening that we do not know about. So, then we do not have more indicators to see, we have to go to the place and observe the service itself by ourselves. The investigator has to attend all the parts of the service: sales, interview, diagnosis, treatment, communication of the results, and the overall doctor – patient and nurse – patient communication. He can find many discrepancies: the results are better, but the staff communicating with the patients feel bad about the higher price; the accuracy rate is wonderful, but the doctors still like the old machines better and trust them better. The investigator will understand that as the doctors do not trust the new equipment, the patients will feel this and will not be as satisfied as they should be. The doctors' communication will contain 'very good diagnosis, but I would feel more secure after a second check, so please let me fix another appointment with you'. It can sound professional, but after the bragging of the PR and marketing project about the quality of the new machinery, the patients can feel insecure or confused. When the salesmen feel bad about the prices, the clients will also feel that they pay too much for the better accuracy (while they will not perceive the accuracy rate, being not doctors) and the faster healing (while they are happy about the short healing time, seeing the price they can feel that they do not need that extra time gained by the fast rehabilitation period).

The evaluation and the investigation find some lack of inner PR activities. The salesmen do not understand the higher prices and the doctors are sentimentally longing for the old machines (resistance of change). The management can work out a program to handle these two problems. If they are smart enough they can kill two birds with one stone. They can ask the doctors to do some presentation for the salesmen about the machines. All the salesmen get a real diagnosis and a treatment program. They can have a personal insight into the quality of service, so later they can talk about it (including the prices) with full engagement. While the doctors support the management in handling the doubts of the salesmen, they handle their own resistance toward the new equipment by seeing the satisfaction and understanding in their colleagues' eyes.

Summarizing the ideas above I can say that determining KPI's, collecting regularly the data for them, applying the information coming from them to correct the misguided courses and improve the high performance even more are vital activities in managing projects. Having informative indicators is the basis of any monitoring, controlling and evaluating actions. These numbers and values give us the ideas on where, when and how to intervene in any situation. We can determine at the end of the program whether to continue or forget about it. We can learn greatly valuable lessons concerning the next future programs. Like in our imagined example: next time we involve every stakeholders in the communication strategy designed to handle or reduce the resistance toward changes in each other.

I recommend the owners and the management of small businesses to create documents (change management control forms and change process engineering forms) and assign different KPI's to be able to monitor, control, and evaluate the change projects. By the application of these forms and the ideas about the management of change processes detailed above, it is safer to execute the planned strategy. These tools can help to minimize the risks of the different changes and the resistance toward those changes in the stakeholders. It will be easier to correct those activities which went wrong, with lesser waste of resources and with the more lessons learnt. It will be possible to personalize the responsibility, which makes correction (employees and processes) more efficient and effective. So, at the end of the day, these recommended tools will make higher profit and more stellar results.

TABLE OF ACRONYMS

EU European Union
HR Human Resource
KPI Key Performance Indicator
PR Public Relations
ROI Return on Investment
7-S Strategy; Structure; Systems; Style; Skills; Staff; and Shared values
STEEP Social, Technological, Economical, Environmental, Political
SWOT Strengths, Weaknesses, Opportunities, Threats

BIBLIOGRAPHY AND WEB RESOURCES

1. Middlesex University. (2015.Date of citation: 12.2.2018). Definitions. Microbusiness Research Portal: Middlesex University. www.microbusiness.ac.uk/definitions/

2. Nagy, Géza. (2019). Change management – The best way to approach – Implementation of strategy. LIGS University.

3. Nagy, Géza. (2019). Change management control form. Budapest.

4. Nagy, Géza. (2019). Change process engineering form. Budapest.

5. Nagy, Géza. (2018). Effective Change Management in Small Businesses during Organization Development. LIGS University.

6. Nagy, Géza. (2019). Effective Strategy in Change Management in Small Businesses during Organization Development. LIGS University.

7. Passenheim, O., Prof. Dr. (2014). Change Management. Prof. Dr. Olaf Passenheim & bookboon.com

8. Nagy, Géza. Change management – The best way to approach – Implementation of strategy. LIGS University, 2019, pp. 6-7.

9. Nagy, Géza. Change management control form. Budapest, 2019.

10. Passenheim, Olaf, Prof. Dr. Change Management. Prof. Dr. Olaf Passenheim & bookboon.com, 2014. ISBN 978-87-7681-705-3. p. 16.