META Trend: Through 2003, best-practice IT operational groups will mature basic process execution and incorporate proper operational metrics. By 2005, 75% of IT groups will adopt center-of-excellence structures tied to IT products and customer relationships, leverage end-to-end process capabilities, and use operational patterns for impact assessment and rapid change assimilation.
Although business challenges revolve around reducing cost, increasing sales, and improving customer service, IT organizations are under tremendous pressure to transform themselves into value-added service providers contributing to the business bottom line.
The goal is to deliver commercial-quality services cost-effectively (otherwise, outsourcing is an option). However, our research reveals most Global 2000 IT organizations are incapable of transforming themselves in a timely manner, due to inadequate organizational change programs to motivate staff members and retain high achievers. This will limit G2000 IT organizations in helping business units widen reach, deepen penetration, and reduce cost.
IT organizations should establish change programs to master people transformation. The rationale should be to create change champions. This will help IT groups to win early adopters, form a “change is good” attitude, and gain business units’ trust. As a result, a dynamic IT organization will be born, capable of transforming itself in a timely and cost-effective manner whenever the need arises.
Throughout 2002, 30% of G2000 IT organizations will assign change program managers to fully implement the transformation strategy in coordination with various IT groups and lines of business (LOBs). This will signal the IT organization’s commitment to rapidly implement the transformation strategy. IT organizations choosing to allocate the various migration activities to IT groups without appointing change program managers will risk failure, because the new vision will be inconsistently transmitted to staff members, transition tasks will be haphazardly initiated, and LOBs will partially enjoy the anticipated benefits.
By 2003, 20% of G2000 IT organizations will implement people transformation strategies to make a significant difference on service delivery in six months. Failure to do so will indicate to business units that IT initiatives are not changing at a sufficient pace and IT staff members’ confidence in accomplishing the transformation program goals will extensively diminish with time.
By 2004, 35% of G2000 IT organizations will create change champion skills to win staff endorsement of the new transformation vision and strategies, gain business units’ trust in the IT organization’s capacity to renovate its style, mature the delivery processes, and expedite the solution deployment capability. The inability to create champions will reduce the transformation program success rates and constrain IT organizations’ response to continually changing business demands.
By 2005, 15% of G2000 IT organizations will undertake post-implementation reviews to ensure transformation strategies accomplish their goals. This will increase the change adoption rate, strengthen staff members’ belief in their management programs, and facilitate future transition strategies’ implementation. Failure to perform changes in a timely and cost-effective manner will directly affect business cost reduction projects, performance improvement initiatives, and renovation undertakings.
Our research indicates effective people transformation programs are based on understanding the various states that people undergo during the change and help them to reach the desired status. People undergoing change experience the following states: 1) awareness; 2) confusion; 3) understanding/fear; 4) trust; and 5) adoption.
- Awareness. Our research indicates that in most IT organizations staff members become aware of change programs in a fragmented manner. This results in inconsistent understanding of new messages, causes perturbation, and decreases productivity. We believe IT organizations should formally initiate change programs and openly communicate messages, rationale, and the way ahead to employees.
To encourage staff involvement and contribution, IT organizations should organize focused feedback sessions to enable all staff members to understand the change program’s benefits, participate in implementation planning, and become instrumental in transmitting the new plans to LOBs. This will open two-way communication between IT staff members and managers, leading to successful implementation.
- Confusion. Our research indicates that once staff members become aware of the anticipated changes, they suffer from confusion due to many unanswered questions. We believe the prime cause is related to the widely one-way communication style adopted by many managers. This disallows effective discussions between staff members and managers, leading to increased concerns, amplified doubt, and seldom few answers to the critical issues. This delays the emergence of adopters and stops the change progress momentum.
To break this deadlock, IT organizations should arrange forums, facilitated by a third party, to discuss challenges, identify risks, and, more important, identify early adopters volunteering to share their perspectives and explore implementation alternatives with their colleagues. The appearance of this generation of champions will be critical for the transformation strategy to advance.
- Understanding/Fear. After the confusion phase, an understanding/fear state occurs, indicating the clarification of most ambiguities. However, a general fear of failure prevails. Our research indicates each individual is concerned about his/her inability to proceed to the next stage, due to limited skills, uncertainty of management support, and unavailability of tools to fulfill the new roles. This creates substantial resistance to proceed with the transformation strategy and mostly results in valuable workers leaving the organization.
To combat this issue, IT organizations should undertake skills evaluation gap analysis to assure staff members of the organization’s commitment to invest in training. This will create additional champions and construct a strong trust foundation to press forward.
- Trust.We believe inviting staff members to participate in detailing the transition plans will be an effective catalyst to build trust and increase the number of champions. Our research reveals this stage is characterized by a gradual handover of the transformation strategy ownership from managers to staff members. This is demonstrated by increased staff buy-in and constantly growing change momentum. As a result, accomplishing the transformation strategy objectives will most likely become inevitable.
- Adoption. High adoption levels are reached after achieving the first milestone of the transition strategy. Therefore, IT organizations should ensure transition plans are completed on time and on budget. Subsequently, they should undertake post-implementation reviews to guarantee future transformation strategies are implemented quickly and smoothly.
Business Impact: Business units will benefit from a people transformation strategy that motivates IT staff members, retains high achievers, and facilitates the IT organization’s renovation to meet the changing business demands.
Bottom Line: Mastering people transformation will differentiate winners from losers during the next three years. IT organizations should adopt a transition strategy based on understanding the various states people undergo during a change and continually create champions to share ownership with management, thereby raising the chances of success.
Copyright 2001 META Group Inc. 208 Harbor Drive, P.O. Box 1200061, Stamford, CT 06912-0061. Web: . Telephone: (203) 973-6700. Fax: (203) 359-8066.