Guide to Successful Change Management

Data gathering and option generation

The team looked at potential sites for the new centres of excellence. Copenhagen, London, Paris, Munich, Zurich, Belgium and Amsterdam as well as the existing location in Paris were included in an in-depth analysis. These locations were looked at through various filters - biotechnology industry, healthcare and business environment, employment and recruiting, infrastructure, transport (eg direct flights to Boston) education, languages, as well as other social and cultural aspects. Data was drawn from multiple, wellaccredited sources, eg the World Economic Forum and Arthur D Little's Global Headquarters Benchmarking Study European Headquarters. Finally Switzerland and the UK were short-listed.

One of the benchmarking studies taken into account was the Mercer Human Resource Consulting's Quality of Life Survey (http://www.mercerhr.com). This analysis was based on an evaluation of over 30 quality-of-life criteria for selected cities, including political, social, economic and environmental factors; health and safety; education; transport facilities; and other services. They mapped the different locations against the different criteria and with abalance between company costs and benefits and employee costs and benefits.

In the end Zug was rated high with a good multinational business environment, international schools, high quality of life, taxation and cost of living reasonable.

The legal process in France was extremely rigorous with employee rights paramount. The company involved the employee representatives completely throughout the decision-making process, consulted them on the current and future organizational structure, and provided them with a detailed analysis of how it would impact employees and what was intended to ameliorate their situation.

Local government agencies were equally involved.

Affiliates and culture chanae

A key aspect of the structural changes was to clearly outline key roles, responsibilities and processes in order to improve decision making and increase organizational flexibility.

The most immediate effect was on the affiliate companies. The management teams of these were given additional resources (made available from the decentralization process) and given more control related to their local organization. The ability to take more leadership was offered and taken. Business development opportunities could be seized more readily.

As with any reorganization, both the formal and informal lines of communication, authority and responsibility were shifted. There was a need to clarify responsibilities, rebuild relationships, share best practice, agree boundaries and define parameters. Once again the existing culture and values assisted this process as did the role modelling of senior change makers.

The corporate body set the overall strategy but empowered the affiliate businesses to operationalize this. Corporate defined the strategy and ensured international alignment of the strategy across the region, while operational responsibilities were assigned to local management.

Strong business results in the international markets following the restructuring, and extremely positive results of a corporate employee survey in which more than 90 per cent of all employees participated underlined the success of the reorganization.

Criteria for good change

Get the right specialist support from the beginning

Depending on the nature of the change, specific specialist functions can be crucial to success. In this case the project team recognized that external legal advice related to the complex employment matters and design of the social plan was crucial. Also, a public affairs resource was something that the company didn't have internally in International and consequently established in the Zug office.

Support from top management

A change team has more chance of success if it has unequivocal support from senior management. The project team closely cooperated with internal decision boards, external resources and local authorities.

Clarity of direction

The change team defined the objectives - to assess and review the location of the centres of excellence and put forward the recommendation on the best location and concurrently to address strategic and business requirements of its affiliates.

They went into this decision-making process with open minds but were clear that they would reach a decision and take the necessary actions to bring about any changes, if changes were indicated.

Clarity of decision making

They relied heavily on the prior acquisition of the necessary information to be able to make reasoned judgements and give a compelling business case to all interested parties. This also included being very clear about the criteria on which a decision would be made. Their data were comprehensive and drawn from both internal and external sources.

Leadership

They adopted an authoritative style of leadership which relied on their having clarity of direction, an understanding of the needs and wants of the various stakeholders, a certain credibility with staff and business partners but also an openness to incorporate different views and new data as they emerged, but always within predefined parameters.

Their treatment of staff was based on fairness and equity. There were no special cases or exceptions when it came to redundancies, promotions or relocations. They tried to achieve the balance between being clear, consultative and direct.

The transition

The Zug authorities turned out to be extremely supportive in their approach, reflecting their business-oriented mindset when Zug was being considered as potential location for the new commercial and administrative headquarters. The Swiss joint venture was co-located with the new office. The office is five minutes walk from the railway station which in turn is 45 minutes from Zurich airport with its direct flights to Boston.

Current employees in Paris were encouraged to conduct site visits to Zug in case they expressed interest in a potential relocation to Switzerland. At the same time tax simulations were ran for interested individuals. The project team did a risk assessment on losing key talent and decided that benefits exceeded any perceived risk.

Once it was agreed who wanted to move and who wanted to leave the company, or take up positions elsewhere round the globe, the French contracts were terminated and new Swiss contracts issued. A fair severance package and comprehensive outplacement supported those employees who decided to leave the company to find a new job. New staff was recruited in Switzerland, the UK and the Netherlands to fill the gaps and these were drawn from more than 17 different nationalities.

Centres of excellence were established across Europe. For example to the west of London, UK and close to the EMEA (European Medicines Agency, the drugs regulator), the company established its international regulatory, clinical research, data management and pharmaco-vigilance centre.

The British Counci

Founded in 1934, the British Council is a non-departmental public body (NDPB) and public corporation with charitable status, receiving grant-in-aid from its sponsoring department, the Foreign and Commonwealth Office (FCO), of £185 million per annum (2005/06). It has a presence in over 110 countries and its overall turnover is currently £502 million per annum including partnership funding, revenue from teaching, administration of exams and development contracts. The Council's purpose is to build mutually beneficial relationships between the UK and other countries and to increase awareness of the UK's creative ideas and achievements overseas.

During a strategic review in 2003 the senior management team developed a vision for the British Council.

Given the British Council needs information systems that underpin the stated objectives within the vision, allied to the strategy-making process, a review of the internal information systems was undertaken. This revealed the need to design and install a new system throughout the UK and the rest of its global operations.

By 2010:

We will be a world authority on cultural relations, English language teaching, and the international dimensions of education and the arts.

We will understand the needs and aspirations of those we are seeking to reach much better.

We will be using our expertise and knowledge to help millions of people reach their goals and make a difference.

We will have built many lasting relationships between people in the UK and other countries and strengthened trust and understanding between our different cultures.

We will be welcomed as an effective and sensitive partner for societies wanting to bring about a fairer and more prosperous world.

We will be connecting millions of people with creative ideas from all over the UK and with each other, both face to face and with innovative online and broadcast communications.

We will be broadening the UK's world view, particularly how young people in the UK understand and value other cultures and traditions.

And everyone who works for the British Council will feel valued and will enjoy opportunities to be creative and realize their potential.

The first stage was the implementation of the new system across the UK, particularly within its main Manchester and London offices. This case study tracks how the project was managed and delivered on time and to budget. The UK government's National Audit Office concluded its review of the project implementation by stating that it was a 'very successful implementation'.

Drivers for change

Internal drivers

The British Council systems had evolved over a number of years and at the time of the review UK operations didn't have a particularly clear vision of where IT provision was going. It had between 25 and 70 separate systems (with a myriad of smaller localized bespoke systems), which weren't integrated with one another. There was a serious question over the Council's ability to provide an IT infrastructure for the future growth and development of the organization's business.

People at all levels within the organization identified a need for change. Indeed there were frustrations articulated from the people at the operations end who needed to provide a professional service to clients and customers but were increasingly held back by the antiquated systems. Furthermore, ideas being generated for regionalization across the world meant there was a compelling case for a standardization of systems.

External drivers

The internal drivers were further accentuated by the growing need of partnering organizations to interface with the same system across geographies.

Governmental intervention had led to a drive for increased performance and better service. In July 2004 Sir Peter Gershon published his review of public sector efficiency, 'Releasing resources to the front Une', and the British Council was being asked to show £13 million of savings, the majority of which would be realized through the successful implementation of this project.

The other important external driver was the increasingly competitive environment that the British Council was facing in some of its trading areas. So, a focus on costs and overheads was a compelling reason for these changes.

The business case

There were up to 70 bespoke systems across the British Council and its regions, from large scale investments through to tailored spreadsheets. They were all at different stages in their lifecycles. There was a complex interface leading to expensive communications which hindered the free flow of information across functions and processes. This engendered a sense of separate businesses or silos. And of course poor information hindered managerial decision making. A less fragmented system would allow for centralization, or decentralization or regionalization. It would allow for the organization to become more flexible and responsive. Partner organizations were at the same time decentralizing and empowering operatives in the field to bid and manage development projects locally.

The software solution which emerged was Enterprise Resource Planning (ERP), which is the technical term for the range of activities supported by multi-module application software that assist the organization to manage and administer the important parts of its business. It does this by integrating and automating many aspects of these business operations.

After considered and considerable debate, an off the shelf solution was agreed which would provide the whole British Council with a consistent solution. Allied and aligned to this would be the creation of 10 core business processes across the world. Key benefits of the system would be:

* total organizational information and communication integration;

* the breaking down of functional and departmental barriers;

* the same consistent real time information for all areas; and

* the capability to analyse data in a variety of critical ways, for example, budgets could be viewed at any sector, unit, country or regional level.

All these benefits had links with and indeed underpinned the 2010 strategy and were aligned with creating a cohesive business direction. It was to be the biggest change project in the British Council's history. It was a radical response and would affect every single department across the organization, with 360 global job losses, and 80 reductions planned in the UK central finance department in the first year of implementation.

Key players and stakeholders

Key stakeholders included the following.

Senior management

Senior management took a very close interest in the project as it was so intimately tied in as an enabling strategy for the 2010 vision. At implementation stage the Deputy Director General was appointed as the senior responsible owner (SRO), which sent a clear message to the whole organization of making this a top priority.

The programme board

The programme board was set up as the senior sponsoring and monitoring group, with representatives of all the major stakeholders on board and chaired by the Deputy Director General. It provided informed challenge and stakeholder management. A support office was set up to ensure a uniform approach to change management and tracking and monitoring of delivery and efficiencies gained.

The business

All parts of the business were consulted and involved at each stage of the process.

Consultants

The consultants' consortium was an important and critical part of the project. There was one large consultancy and a number of smaller specialist consultancies. The decision was to have a representative of the consortium on the programme board in the interests of open transparent communication and good partnership working.

Finance and IT

The finance and IT departments were most directly affected, partly with both having important roles to play in the design and implementation, but also with the finance department requiring restructuring as a direct result of the changes, with a reduced headcount and a decentralization process.

Staff

All staff were affected to an extent. Their involvement and interest in the project was in direct proportion to the degree of change which they would undergo and the timescale in which it was to occur. The British Council ethos was one of openness and consultation and this was embodied in the way that people were involved, communicated with and consulted.

Union

The trade union was an important stakeholder to work with, address inevitable staff issues related to the change and to negotiate a way through them. The union was also an important communication tool and thermometer for taking the emotional temperature of the organization.

Other stakeholders

The FOC, the government's stakeholder, was content to be at arm's length and, although with considerable power, would only get interested if major issues were highlighted.

Although the first phase was a UK rollout, managers and staff from other countries were interested, mainly for three reasons to ensure:

1. business continuity;

2. difficulties in implementation were resolved before the overseas rollout; and

3. full understanding of the impact of this large integrated solution on both UK and overseas operations.

Programme team

The programme team comprised people drawn from finance, technical and operational sides of the business, the change training team and members from the consortium. The programme team demonstrated their credibility by being recruited not just from the finance and IT departments (though of course they were fully represented) but through selection on the basis of their operational track record, experience in the business and change management expertise.

Richard, the programme manager, had been a director for the British Council in Indonesia, with experience in change management and process re-engineering. Paul, the Change Communications Manager, had had 10 years' experience teaching and teacher training in Hong Kong and had been involved in overseas business development.

Design stage

The programme team followed the programme guidelines and terminology as laid out by the Office of Government Commerce (OGC). The programme support section became a centre of excellence (in OGC terminology), followed the managing successful programmes methodology and aligned the various project management methodologies which had grown up across the Council.

OGC works with public sector organizations to help them improve their efficiency, gain better value for money from their commercial activities and deliver improved success from programmes and projects. Our priorities are to support the delivery of:

* the public sector's £21 .5 billion annual efficiency gains by 2007/08;

* £3 billion saving by 2007/08 in central Government procurement;

* improvement in the success rate of mission critical projects.

At an early design stage a significant decision was taken. The systems review had reached a decision on what was needed but the 2010 strategy process had not been completed. One of the first acts of Robin, the Deputy Director General, on becoming SRO was to declare that 'Strategy leads the system not vice versa.' As a result the project, now called Finance and Business System (FABS), was held back for six months to allow completion of the strategy work. A key aim was to keep the strategy and the system development together. So, for example, a decision was made to restructure and downsize the finance department at the same time as changing the finance system. Although challenging and in some ways doubling the amount of change during a specific time period, the alternative was to do them sequentially, and having the wrong structure and the wrong people operating a new system or having a new way of working with new people but not the system to deliver the new objectives. In some quarters this was seen as brave, in others seen as potentially foolhardy.

A series of senior management workshops was held to engage managers from across the Council in the strategy-making process; to involve them in looking at the consequences and implications of developing the new system; and to elicit their support for the change process and the turbulence it might cause. This resulted in a document outlining the new strategic direction, the challenges ahead, and clear outputs and outcomes.

The prevailing culture at the British Council was one of a collegiate decision-making process. This produced a 'dynamic tension' in different stakeholder relationships:

* the design team were keen to move forward at a rapid pace;

* the consortium consultants tended to come from a culture of proactivity and focused action; whilst

* British Council operational staff were immersed in their usual way of doing things.

Various dynamics were at work in that many staff, as previously mentioned, were keen to update the systems and develop more responsive ways of working. However, they also needed to be listened to and asked for input.

There were different levels of engagement in different parts of the business which needed spotting and managing. Inevitably there were some winners and some losers. One aspect was that some areas, previously benefiting from bespoke systems, were now being asked to give up those systems for the greater organizational good. Overall 100 staff participated in the design stage, which included, in addition to the finance and IT functions, both the UK business and representatives from the overseas operations.

Implementation process

On the programme manager's appointment the implementation process started with a 'mobilization and visioning' event: in effect a two-day team workshop bringing together the technical people, the business people, the change training team and the consortium. This struck a balance between getting organized on the task and focusing on how that might be done - the process. This generated a commonly held and understood vision and also a set of guiding principles for team working.

The implementation process followed a normal systems project:

* configuration (done mainly by the external consortium);

* proof of concept;

* realization;

* integration;

* user training;

* user readiness; and

* go live.

Critical activities in the whole programme included the process of installing the software; getting staff to understand what the changes were for and how they would affect the way of working; and helping staff learn what to do.

Change management workshops were designed and run for all staff. Coordinators were appointed in all areas and managers were asked to complete a business readiness grid (BRG) detailing the extent to which they were prepared for the changes in their particular area.

An effective project management structure was established with a clear line into the programme management board. There was business representation for all strategic discussions whilst a business assessment group assessed the blueprint, the training and user acceptance, and reported back to the board. There was a clear governance structure with a senior responsible owner and clear responsibilities and accountabilities. An issues log and a risk management log were part of the everyday process.

One key point in the implementation process was the decision in the summer of 2004, following a Gateway Review, to delay the go Uve date. There were previously agreed criteria, evidence based, to assess whether both the system and the business were ready for implementation.

A business assurance group (BAG), drawn from both the business and the project, had been set up for this very purpose. It was a critical part of the change process. Delaying go live was a difficult decision, though the BAG was empowered to take that decision. There was pressure from many quarters (the consortium, some senior management and the programme team) to press ahead.

The OGC Gateway Process examines a programme or project at critical stages in its lifecycle to provide assurance that it can progress successfully to the next stage.

Purposes of the review:

* Confirm that the business case is robust.

* Confirm that appropriate expert advice has been obtained as necessary.

* Establish that the feasibility study has been completed satisfactorily.

* Ensure that there is internal and external authority, if required, and support for the project.

* Ensure that the major risks have been identified and outline risk management plans have been developed.

* Establish that the project is likely to deliver its business goals and that it supports wider business change, where applicable.

* Confirm that the scope and requirements specifications are realistic, clear and unambiguous.