Change Management Revisited

For expert organizations like hospitals, achieving awareness and acceptance of change among their members is a crucial factor for successfully implementing a new IT system. This chapter, therefore, addresses the question of how members of an expert organization can be most effectively integrated and made aware of a change process. To answer this question, we will draw on the experiences of a medium-sized Swiss hospital that recently launched its new digital initiative with the (ongoing) introduction of a new hospital information system.

After 10 years of experience in Deloitte Digital, it is time for me to reflect on how I have applied agile methodologies in different transformation projects, giving a retrospective on selected projects and sharing some of the lessons I learnt. Over recent years, agile practices have been proliferating as an approach to project planning: sometimes customers request projects to be set up using this methodology, but with few clear ideas about its underlying assumption, the real meaning or about companies’ readiness to adopt agile practices. Some may feel that “agile” is merely the latest management trend to follow. The goal of this paper is to discuss that working in an agile way has neither a single meaning nor one particular framework that needs to be applied; it is instead a way of adapting project management to customer contexts, needs, availability, and level of expertise in agile working methods. During a project’s set-up phase, consultants typically spend weeks designing and fine-tuning the most effective framework for managing the project’s day-to-day activities—and this path is always different from one client to the next. Yet, this is a crucial moment to understand needs and to shape the rules and norms that govern the project. It is very unusual to apply “pure” agile theory. In addition, the paper highlights how important it is to ensure top management is committed to agile ways of working and, if necessary, to change management practices in general to guarantee a project’s success. Agile and digital transformation promise rapid evolution and substantial business benefits, but it requires new habits from everyone. This paper examines lessons learnt and recommendations from three digital transformations to help you set up your next agile-based project in the most effective way possible.

This chapter sets out the approach that Bayer’s agricultural division, known as Crop Science, used to address a range of strategic challenges to a large proportion of its established chemical crop protection business.

Following a qualitative analysis to examine the trends affecting its established business, the team at Bayer developed a financial market model to explain and quantify the need for change. This market model addressed three strategic questions:

Building on the quantified case for change, the team embarked on a series of pilot tests with customers to start prototyping the division’s future offer. Insights from these early trials and the lessons learnt therefrom were subsequently used to mobilize key stakeholders internally and to address the required changes to (and the need for advances on) the company’s existing core business.

The team was able to learn a range of valuable lessons from this approach, namely that: the market model served as a bridge for the firm’s own organization; this was instrumental in generating knowledge about the extent of the opportunity and the desire for change; being able to clearly articulate the size of a new value pool paved the way for leadership and organizational involvement and engagement.

An inability to immediately articulate what the future value-capture model could look like and how the new venture might perform when compared to the performance of the established business, relative to return-on-investment, cannot be underestimated. This is a challenge beyond the annual investment decisions and budgeting tasks and will need to be addressed continuously.

Another lesson the team derived was that the complex nature of industry transformation calls for a high degree of expertise in and exposure to the technical challenges customers are facing. The “test and learn” approach—with internal teams “owning” a problem and addressing its challenges—is an essential tool for a detailed mapping of the solution landscape.

I worked for a traditional company with a newly defined growth strategy aiming not only to provide services in the physical world but to create integrated and complementary new digital services. Aware that over 70% of digital transformation fails and being part of the executive board of IT, I knew I had to go beyond defining technology strategy or architecture and address how people could work together in a better way.

On the search for an operating model that would help us create more value, be more adaptable, increase employability, and work more efficiently, I decided to start the transformation with my own team based on an open framework (known as Sociocracy 3.0). We selected some tools, created new roles, split functional and line management, tried new ways of making decisions, fresh ways of setting objectives, and increased our transparency and collaboration. While defining how we wanted to transform our organization, we made sure that we were already living by the principles we wanted to put in place.

After a little over a year, the transformation has been impacting employees, asking them to take more ownership, accountability, and have more influence while also giving them a more meaningful job. Although it has been mainly welcomed, some have found it overwhelming and this has sometimes created uncertainties. For managers, it has been a change toward a more servant-oriented leadership role. They had questions around how much guidance and decision-making they should give and when to take a more coaching role.

By measuring our transformation, creating feedback rituals, experimenting, learning, and role playing, we learned and adapted our behaviors but also the operating model. We certainly made our model simpler over time and increased our focus and communication with people outside our team to address misunderstanding or skepticism, and we paid special attention to creating an environment where people felt they still belonged to a team.

With the aim of becoming a more agile organization, we realized that alongside the benefits we hoped to attain, we also had some additional—and mainly positive—effects that helped us to attract talents, create a more diverse and inclusive environment, and to be more resilient and open for future change.

The company has now scaled and reused most elements of our team transformation process in other areas of the IT division.

Between a predominantly top-down only organization and a more bottom-up, self-organized one, I have seen the best results in a model where both perspectives are valued and balanced.

Overall, I would recommend everyone to consider different operating models to support their digital transformation. I would not advise anyone merely to follow one framework but to look at the pain points you are trying to solve and see which pattern, template, or tool could be useful and then to adapt it to your organization’s needs.

The technology startup Flooz, a remote-only organization, pivoted into the Web3 space not even a year old. The strategic shift included building products from scratch and discontinuing all business operations connected to the founding mission. At the same time, the goal was to grow and nurture a people-centered remote company culture. The pivot affected the organization on all levels, and the management team had to make conscious decisions about managing this fundamental shift. Pivoting until you find the product-market fit is common for startups in the first years of existence. The crucial point is how these changes are initiated and guided by the senior leaders and what leadership style and cultural approach they choose. Entering a new industry with a new product offering contained a lot of unknown variables and uncertainties. Additionally, the team had to learn new programming languages and acquire expertise in the blockchain domain. Flooz’s management team committed to a servant and vulnerable leadership style and included the team early in the process. Looking at the product, the team, and the remote culture through the lens of a people-first organization, the key elements of successful change implementation are mostly connected to creating and holding a safe space for the team. Team members drive innovation through curiosity and feeling supported in experimenting and proposing new solutions. Transparency and psychological safety became the prerequisite for a healthy remote culture, which was the foundation of Flooz’s successful change process. Next to launching a new product offering, the company managed to build a vivid and strong internal mindset of growth and continuous change. Looking into the future, more businesses must adapt to new technologies and business models. Flooz is an example of how change management practices can evolve from linear, static, and technocratic processes to a flexible approach that allows experimentation and is human-centric at its core.

In November 2020, at the top of the second COVID-19 wave in Portugal, I started the Weekly Reflection Sessions as an experiment with the premise that our days are full of missed learning opportunities and that reflection is one way to make the most of that potential. However, I was not expecting to create a virtual space that would help people connect with their purpose, process the highs and lows in their lives, and feel calmer, relieved, motivated, and less lonely.

Change management is above anything else about people: no framework survives the reality and complexity of the human experience. This chapter presents an easily replicable 45-min process that any manager, leader, or team member can facilitate to support and supercharge personal change in a group setting and online.

I review how this project went from an invitation posted on social media to a weekly online event attended by people worldwide, where attendees reflect and share their weekly learnings: a way to process the ever-changing reality of being human—individually and as a community.

This chapter summarizes the key lessons learnt based on all contributions of this book. Let us recall the transformation processes that were discussed in the previous chapters. In part one, we looked at the introduction of new digital products and technologies. In part two, we focused on organizational and cultural transformations of digital organizations.