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Adrian Boorman: Hello, and welcome to this video brought to you by Pearce Mayfield.

Improving the performance of any business is hard, doing change is even harder, so improving the performance of change is always going to be, well, is always going to be one heck of a challenge!  Today, we want to discuss what it means to have a capability for change and to explore ways how to improve it.

Joining me, to discuss change capability, I’m delighted to have with me in the studio Robert Cole. Robert is Managing Director of the Centre for Change Management, Robert is an experienced coach, consultant and trainer in organisational change and he works extensively with business and government, and Robert is a valued long-term associate of Pearce Mayfield, of course. Robert, welcome again and thanks for coming in.

Robert Cole: Thank you, Adrian, it’s really good to be here.

Adrian Boorman: Can we start by setting the scene, please. I know that you have worked on management capability models for a long time, what - 20 odd years?

Robert Cole: Yes.

Adrian Boorman: You must have been very young when you started.

Robert Cole: Thank you!

Adrian Boorman: So how did you end up focussing specifically on change capability?

Robert Cole: That’s right Adrian. I started with the early software engineering capability models when I worked for a large IT company; then I later developed a capability model for innovation to try to help me explain how innovation works inside organisations. So, when I moved into change management and consultancy it seemed an obvious development to develop a model, a capability model for change, to help me and my clients understand how change works inside organisations.

Adrian Boorman: So it started off from curiosity and need to help the understanding really.

Robert Cole: Yes. It really helps to understand what is going on in an organisation.

Adrian Boorman: If you can’t start off by identifying you can’t come to any fixes. I had a very quick, very, very quick look at your model and I see that you set out as an objective, let me just quote this to you, quote “delivering successful change” unquote. Now, this is interesting, because there are definitions there of ‘success’ and of ‘change’ and these intrigued me, can you explain these for us?

Robert Cole: Yes. The definitions are, I hope, are quite practical and testable, but I also wanted to provide some mechanisms inside them that provide a focus for action. So, we define success in change as:

• Delivering the benefits described in the business case
• Within the costs in the business case
• And in the timescales in the business case

This makes it quite clear that a good business case is at the heart of a good change. And we define change as only occurring in an organisation when some people have changed the way they behave. That means change is a people focussed activity.

Adrian Boorman: OK, so let me make sure I’ve got this right…you’re saying that behavioural change is at the heart of organisational change?

Robert Cole: Absolutely. And it’s also at the heart of a change capability model. If we want to improve the way an organisation does change then it means changing the way people behave when they do change. So what we need, in order to improve the way people do change, is a traditional management tool that tells us about the way we do change now, what we need to do better; and how we are going to do it better. That’s what a capability model is for.

Adrian Boorman:  You talk there about a management tool but what about some basic management skills which are used in change that can support the capability to do the change?  Can you share just a few with us?

Robert Cole: Yes, I think there are four key management skills for change that are built into the change capability model, and these four keys skill areas are:

•  First of all, Benefits management, making sure you have identified the benefits and you really will get them, and then that you do get them.

•  Risk management, usually when you are planning a change, all the activities are in the future, so the risk management is a mechanism for looking into the future and try to understand what is the risk associated with this particular activity.

•  Then critically stakeholder engagement, one of the most common reasons for failure is poor stakeholder engagement, so getting this right is essential.

•  And then finally people management, those soft skills of understanding how people change their behaviours, why do they resist change in their behaviours, what journey do people go on changing those behaviours.

Those are the four key areas: benefits, risk, stakeholder and people management.

Adrian Boorman: That is very interesting because you have used the title management there three times: benefits, risk, people but when you talk stakeholders you talk engagement, because one doesn't manage a stakeholder, you have to engage with them. If the only way to get them on the site is by bullying them and managing them down, then is just not the way is done.

Robert Cole: That is absolutely right.

Adrian Boorman: Can I just rewind the tape for a second. You talked about the capability model and I think maybe now would be a good time for you to explain to us just what the capability model is or a capability model is and what the change capability model in particular looks like.

Robert Cole: OK, so if we go back to the previous point that I made about those four management areas that are essential for change, they can be used at one end of a spectrum you can use them mechanically and ineffectively, which actually makes them look quite bureaucratic; but at the other end of the spectrum they get used sensibly and as part of a culture of management effectiveness. So if we think about that range of usage behaviours, that then enables us to think about what is going on in your organisation. Are you doing something bureaucratically? Or are you using that as an effective skill in a sensible way? So that enables us to think about levels of capability. So a capability model is made by a matrix of levels of capability and the way you use different competence areas similar to the four we have just mentioned.

All capability models actually now use five or competence.

So they start at level 1, which is no competence, and got to level 5 which is the best competence. Our change capability model uses the levels as follows, I’ll explain quite briefly:

Level 1: Chaotic.

Essentially there is no overt change management and what there is, is mostly a response to a significant failure. Most change fails, according to our definition of success and usually, there is no business case and that sort of sounds like the pits, doesn’t it? And that is the default space.

Then level too, going up a level, is what we call heroic.

Level 2: Heroic.

This is where isolated individuals and groups are doing change management. This means that they increase their success rate because they are now thinking about how to do this. But they are not getting any support from the organisation, and especially poor support from senior managers. So there are pockets of good practice; although each pocket does things differently because each hero is doing their own thing and you end up with an ad-hoc business case because there is no standard in the organisation.

Then going up a level, to level three, this is what we call structured because here:

Level 3: Structured:

The organisation steps up to the plate and takes on a common method and language for doing change. So instead of pockets of staff, everyone is doing the same thing.  The managers are trained in the new structures and because everyone is practising it, the quality of implementation varies. Although most change is beginning to come successful in the sense of you are getting the behavioural change in the business that we wanted, following through the benefits, which is really what we need to obtain, is not so well implemented and the business case is used to justify the investment but isn’t used afterwards to control or to particular to measure success (which we mentioned earlier on).

Then we go up another level, to level four, we call that managed because here the whole process becomes measured.

Level 4: Managed that enables us to bring up performance into a consistency and now our change staff becomes successful and we are beginning to get significant benefits realisation. So we can say that at that level best practice is being implemented and the business case is used to justify an investment, control delivery and becomes a test for success, and because we are measuring the business, we know if we have achieved success or not.

And then finally level five, we call that reflective.

Level 5: Reflective: this is when change management is tailored to suit the environment and learning is embedded in the way we do change management, so reflective thinking is used to improve the method and the skills that we use and we can say here that best practice is actually being invented at level five. The business case is then under quality control and is aimed to improve decision making and delivery control.

So those are the five levels and then we use four areas of skills and competence which bring in different aspects of those four management skill areas that we talked about earlier on.

The four areas we focus on are:

Knowledge and skills.

Which is how the method is used, how the four management topics: benefits, risk, stakeholders and soft skills; are used and how are they developed and deployed inside the organisation, so that include things like training and education; practice and qualifications and so on.

Processes and roles.

This is about how the work is organised in terms of what processes you are going to use, who should be doing the work and that’s the area where you find job descriptions, quality criteria, and process descriptions.

Leadership and Governance:

This is about senior management commitment, middle and frontline leadership, and change the front line managers are often the critical leaders in leading the behavioural change. We talk about accountability and devolved responsibility for getting things done to the right standard, and is also about the cultural support within change is taking place.

Managing change:

Making sure that you are working on the key contributors to success; you are managing the main causes of failure that occur in your organisation in the past, you are balancing the work between change and business as usual because both have different priorities, and obviously you don’t want to damage business as usual too much during change and then you do performance measurement and generally thinking about improvement of the method.

Adrian Boorman: OK, you gave us an enormous amount of content, I can just see the detail. Don’t worry if you didn’t catch all of that, Robert has produced some excellent material to support everything that he said and I will tell you at the end how to get hold of it, so don’t worry about that.

I can see that this is a powerful model, but how exactly can managers and leaders use it to improve their performance and their organisation’s performance in doing change?

Robert Cole: That’s critical, you have a tool you need to know how to use it. The model is a matrix of levels and competence areas. It enables us to build an assessment tool by placing in each cell of the matrix a description of the behaviours you would expect to see in an organisation operating at that level doing that area.

So let’s take an example: for instance in the leadership and governance area at level three inside the model we could have senior managers support the change throughout its lifecycle as being accountable and provide appropriate leadership behaviour. Accountability is not always enforced as success is not measured. The measure is at level four attribute.

So then we can then devise a questionnaire seeking to identify whether such behaviour is taking place in the organisation, so we could ask:

•  do senior managers in your organisation, are they accountable for the success of change?

•  senior managers support change right through to the end to ensure success (and those are two behaviours we would expect to see inside level three)

•  senior managers are not often held to account for failures in a change, which is another negative behaviour because there is no measurement, although managers claim that they are accountable when it actually comes to hold them to account they wriggle out!

Adrian Boorman: Yes, yes, yes.

Robert Cole: A behaviour a lot of people would recognise.

Adrian Boorman: I can hear bells ringing! OK, can I just challenge you then on a very practical level: what sorts of things would an organisation need actually do to improve? I mean can’t be that hard, can it? Or can it?

Robert Cole: A good way to think about improvement would be to have a look at the significant differences between each level of the model and how these differences could be implemented and moved across.

So if we have a look at level one, you don’t have to do anything to get to level one, it is the default position. In practice, there are not many organisations working completely at this level, but often some of the change competence areas do fall at that level, whereas most of the others would probably be at level two.

To get to level 2 you need pockets of proactive change management. This is usually a localised initiative. A senior manager decides to bring in some people with change experience to improve the competence; or a middle manager goes out to get some education on change at their own initiative, so they are generating small areas of competence. These are the people that become the heroes; if they don’t get some support then they will leave.

Adrian Boorman: If the heroes don’t get support, consultancy, and coaching and mentoring...

Robert Cole: Yes, yes. So once you get to level two, senior managers have got to start swinging in behind their staff and broadening the competence, otherwise the heroes will just disappear. They will find easier places to go and work. So senior management awareness and growing commitment.

And that’s what takes us to level three. To get to level three the problem needs senior management action. The senior management have to impose an organisation wide method and provide the resources to get it implemented. But you can see that this is quite hard because for an organisation at level two which is trying to get to level three, is used to under-resourcing its change.

Adrian Boorman: Catch 22.

Robert Cole: Catch 22. So they have actually got to stump up the resources and they have to put up investment to do that and in today’s climate that’s not a trivial thing to do, so that is quote hard. And actually moving from level two to level three can often take a couple of years in an organisation, so the managers have got to stick with it. You can’t sort of say that after six months, is this working and if it doesn’t appear to be working try something else, where in fact there isn’t anything else.

Then when you get to level four, the key at level four is measurement and you only get there if the rest of the management activity in the organisation is also using measurement for consistent performance. So it’s a cultural shift across the whole organisation and using effective measurement is a significant investment as well as a cultural change.

And finally, the difference at level 5 is the use of regular reflection on everything a manager does to seek improvement. This search for improvement also requires knowledge management and a learning culture – which means one in which risk taking and failure is acceptable because of what can be learned from it. That is another significant cultural shift. I would suggest that only a handful of organisations are working at this level.

So I think that in the answer is, improving the way an organisation does change is hard. The capability model will provide a route map for improvement, but only a committed organisation will complete the route and reap the rewards.

Adrian Boorman: So is a commitment, cultural shift, behavioural changes, and as you mentioned, and this is a topic for another day, fail fast and fail cheap, failure is not life threatening as long as you can fail fast and fail cheap and encourage people, within boundaries, to take risks.

Robert Cole: Yes, very much so.

Adrian Boorman: That sounds like a good place to leave it and thank you Robert, another fascinating and insightful look at Change. It is a big subject, isn’t it?

Robert Cole: Oh, yes!

Adrian Boorman:  Now I mentioned earlier that you have produced some material to support some of the things you said today, can we make that, or can you make that available to viewers?

Robert Cole: Yes, they will be available. There is a series of pictures summarising the various levels and content.

Adrian Boorman: That’s great, thanks, I’ll tell you in a moment how you can access this material.

Let me try to briefly summarise, I hear you saying that whether or not we find it comfortable we all operate in an environment of change and that whether or not ‘change leader’ appears in our job descriptions or maybe it is in our DNA, to begin with, we are all responsible, we have a key role in developing, and leading, and participating, and sustaining organisational change.

Robert Cole: Yes we do.

Adrian Boorman: There are tools to help us on the journey but a cultural and behavioural shift is a prerequisite.

Robert Cole: Yes.

Adrian Boorman: Would you go so far as to say that any organisation which does commit itself to ‘doing change well’ to do lasting, sustainable change’ will ultimately have a distinct commercial competitive edge?

Robert Cole: It definitely will. An experience with organisations that had moved up their change competency level, they are doing more change, they are more successful, and generally, the organisations are much better places to work in.

Adrian Boorman: So change can be good, despite our resistance to it?

Robert Cole: Change is always good!

Adrian Boorman: Robert, that is a great place to leave it! A very optimistic tone! Again, my grateful thanks to you for coming here.

Robert Cole: Thank you, Adrian.

Adrian Boorman: If you’d like to get hold of a copy of the material that Robert mentioned then please do drop me a line at adrian.boorman@pearcemayfield.com and if you’d like to follow up on anything you’ve seen and heard today or to find out what else Pearce Mayfield can do to support you or your organisation in delivering successful change then we’d be delighted to hear from you.