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By TBH Principal and Organisational Change Management lead, Melanie Becker
When change is poorly managed, projects run behind schedule, employees engage less in the process, and proficiency and adoption levels are lower. As a result, projects often deliver a lower ROI or in some cases fail altogether.
This article explores the increasing importance of Organisational Change Management (OCM) in modern-day project environments, emphasising the need for a new playbook to help businesses best navigate these challenges effectively using a portfolio-centric lens.
Understanding change
It is human nature to avoid change or be risk adverse. Because of this, organizations often find it challenging to drive change from within.
Change Management refers to the process of identifying and addressing the effects of change on an organization, including new business processes, changes in its organizational structure, and cultural changes. These processes are important since the effectiveness of change management has been directly related to the success or failure of a project. Consequently, OCM can generate substantial ROI if done correctly.
According to Prosci’s Best Practices in Change Management, projects with ‘excellent change management’ are six times more likely to achieve their objectives than those that have poor change management implementation.
However, today’s organisational landscape presents a more complicated picture for change management than it did in the past. Companies now manage a diverse range of portfolios, each with unique challenges, intricacies and inconsistencies.
The evolution of Organisational Change Management
If you think about what organisations looked like thirty years ago, they were relatively simple with change management primarily focused on a project level. This made sense when singular projects were the mainstay, as it meant project managers and change leaders could afford to concentrate on individual initiatives, ensuring they aligned with the organisation’s broader objectives.
In today’s business landscape, however, a portfolio-centric approach offers organisations clear advantages, most notably in consistency and efficiency.
By implementing standardised terms, language, and reporting, a business can ensure a cohesive understanding across all projects, reducing difficulties and misunderstandings and work having to be redone every time a new project is added to the portfolio. This approach not only streamlines operations but also optimises resource allocation.
A portfolio-centric approach to project management isn’t just about refining processes, it’s also a way for organisations to assess their organisational structure and adapt it to support change. For example, roles within the organisation, the governance model, and structural frameworks likely also need to be re-evaluated and potentially rewritten.
This shift is transformational: a total reassessment of strategy, structure, and cultural practices on a portfolio level to help organisations in the aftermath of Covid-19 related backlogs.
Adapting to new/changed working conditions
The Covid-19 pandemic of 2020 led to an unprecedented disruption across sectors. Businesses had to grapple with halted operations, supply chain challenges, workforce reductions, and rapidly changing consumer behaviours. Many planned projects were delayed, leading to a mounting backlog as organisations waited for more favourable conditions to resume operations.
In parallel, the renewables and utilities sectors, among others, experienced a massive inflow of funds as the world swung towards more sustainable energy sources and infrastructure development, causing numerous projects to be initiated simultaneously.
Consequently, companies, especially in renewables and utilities, faced exponential growth with an unprecedented increase in project expenditure, with budgets often tripling or more.
Project-to-Portfolio
When organisations experience such growth, transitioning to portfolio-level change management becomes increasingly important for several key reasons:
Firstly, this growth brings about complexity and scale issues in operations. When multiple projects, initiatives, and programs run simultaneously, managing them at a project level can be overwhelming and inefficient. A portfolio-level approach allows for a more universal perspective to oversee and coordinate these efforts effectively to ensure that all efforts are in sync with the organisation’s broader strategic goals and objectives.
Secondly, growth typically requires the allocation of additional resources, both in terms of personnel and financial investments. Portfolio-level change management aids in optimising resource allocation across various projects and initiatives, ensuring that resources are directed to the most strategic and high-impact areas.
When projects within a portfolio fail to meet timelines and budgets due to tools, processes, and structures, a shift from project-centric to portfolio-centric change management can help identify outliers before they fall over. In the project management world, we call these projects “watermelons” – because they look healthy (green) but harbour critical issues (red cores) that surface later in the process. Since the success of a change management initiative hinges on identifying potential watermelons, using a portfolio-level approach can help ensure outliers are managed effectively.
Portfolio-Centric Change Management: a birds eye view
With portfolio-level change management, stakeholders are given a 360-degree visibility into all projects, giving them a clear understanding of how individual processes contribute to portfolio success.
By managing change at the portfolio level, organisations can better ‘see the wood for the trees’, which means faster risk identification, more effective resource planning, and contingency planning.
Moreover, portfolio-level change management promotes transparency about a portfolio’s health, offering stakeholders insights into the overall portfolio’s progress, removing the distraction of the low-level details by making reports more transparent and uniform to read and understand.
Managing interdependencies and unifying project components
When organisations were smaller and less complex in nature than they are today, change was both championed and communicated via direct communication from the line manager to the people reporting to him or her.
Businesses models were also more hierarchical than they are today. Bosses told their employees what to do, and when and how to do it, and they often had both a strong relationship with their teams, as well as technical knowledge to understand the impacts of any change and were well placed to communicate effects, as well as provide tailored support to their teams throughout the process.
Today’s organisations are more complex, and managers are often far more technical and time-poor, lacking the ability to develop individual relationships with their staff and communicate change effectively. Teams have also grown in size and are often spread across many geographical locations, leading to potential operational divides – while mergers and acquisitions (a common occurrence for many businesses), add even more layers of complexity in terms of trust and communication.
The “change manager” role was created to zero in on one issue, to own it and see it through to completion: change.
With middle management increasingly busy with other tasks, and ever-larger teams, change managers, were brought in to devote their full attention to helping people and processes transition.
Sustaining change
TBH’s change managers have a background in a variety of project disciplines, which means they understand the technical aspect of the change and how these impact individuals and teams. This ensures meaningful dialogue with clients, which builds trust and removes change resistance. The biggest difference between TBH’s change managers and other types is the way they approach work. While some change managers are charismatic, smart, and good influencers, they can struggle to gain trust due to internal forces: their charges, being more knowledgeable about technical issues etc.
We find for OCM to really succeed, charisma isn’t enough. Technical knowledge and skill comes into play when deciding what’s feasible and what isn’t. In other words, change managers need to work from the inside out for real respect and trust to be built. Most do the opposite.
A great change manager needs to understand not just the project, but the work that is being done. The why. The how. And every way in which a person’s role will be impacted. Only then can they effectively communicate these factors to leadership and be effective sponsors of transformational change.
The TBH approach
Change management today is more than guiding organisations through change. While it’s crucial to have efficient systems in place, a change manager’s effectiveness is only possible if people are receptive and adaptable to new ways of working.
While in the past, the focus of change management was often at the project level, addressing specific challenges as they arose – at TBH, we adopt a more nuanced human approach to the psychology of employees and organisational culture by hiring people with the right skills to implement the methodology in person.
By deeply understanding how change impacts people at all levels within an organisation, change managers can gather important feedback from the doers with boots on the ground – right through to senior leadership to create a culture of open communication, where feedback is taken onboard at all levels, and acted upon where necessary.
If projects within programs and portfolios fail to meet expectations in terms of time and cost, it may be necessary to make changes in processes, technology, organisational design, culture or methods of working, in order to ensure that the portfolio achieves more than its parts alone.
A new playbook for OCM
In today’s business environment, OCM is a decisive component of project success, and while operating at a project level can work well for small-scale projects, as the number and complexity of projects grow, a portfolio-level approach becomes necessary.
By adopting a portfolio-level approach to OCM, and by investing in the right people and methodologies, TBH offers organizations a new playbook for organizational change management that positions them for success in a rapidly changing world.
TBH innovatively combined a number of project control elements with traditionally corporate approaches to governance and organisational change management to help organizations achieve their key strategic priorities by improving project delivery, increasing efficiency, and reducing workplace conflict.
About Melanie Becker
Melanie Becker (Principal) leads the Organisational Change Management (OCM) service at TBH. OCM is a core service within TBH’s broader Integrated Project Controls (IPC) function. Melanie is an experienced program manager and governance expert who specialises in the establishment and embedding of portfolio management frameworks and governance structures to help clients achieve their portfolio targets.
Melanie will be a speaker at the Project Controls Expo Australia 2023 on 15th November in Melbourne.