Building Internal Change Management Capability To Achieve Competitive Advantage

1
Building Internal Change Management Capability To
Achieve Competitive Advantage

• Michael Wright
• Director, Learning, OD and Change Management,
• Constellation Energy
• Bill Young
• Director, Education Alliances, Capella University

2
Welcome

• In the long run, the only sustainable source of
  competitive advantage is your organizations
  ability to learn faster than its competition.
• -The Fifth Discipline Field Book

3
Agenda

• Introduction to Constellation Energy 10 minutes
• DVD (4 minutes)
• Building Change Management Capability 10 minutes
• Components of Change Management
• Capability 10 minutes
• Case Study Application at Constellation 10
  minutes
• Questions Closing 10 minutes

4
Introducing Constellation Energy
5
The Constellation Energy Family
6
Powering Our Growth
7
Energizing Our Future
8
Our Next Phase of Growth

• Florida Power Light and Constellation Energy to
  merge, creating the nations largest competitive
  energy supplier
• Constellation Energy will be the second largest
  electric utility
• 28 Billion transaction
• Will create a Fortune 100 company

9
Managing our enterprise wide changes is a huge
investment of money, assets, time, and resources.
Our Challenges In Managing Change

• Common Challenges In Managing
• Business Change
• Lack of (effective) leadership
• a.) actions (or inaction) by the leaders of the
  organization
• b.) the style and approach used by those leaders
• 2. Poor (or no) framework/model and tools for
  change
• 3. Failure to set metrics and benchmarks
• 4. No disciplined change process

Change Management, The Next Generation
Manufacturing Report, 1997
10
Failure Is Not An Option
Given the cost and people impacts, we can not
leave managing change to chance.
Greatest Change Management Obstacles
Best Practices in Change Management, ProSci, 2000.
11

Managing Change Is Important To Our Bottom Line

• Time/cost over-runs (delayed results)
• Cost of project restarts...
• Lost market opportunities......
• Market share erosion to competitive forces...
• Reduced features or functionality.....
• Loss of desired efficiencies....
• Reduced productivity.....
• Increased HR expenses for turnover....
• Unanticipated marketing expenses for delays..
• Stock valuation fluctuation.....
• THE ULTIMATE Project write off..

? __ ? __ ? __ ? __
? __ ? __ ? __ ? __
? __ ? __ ? __
12
Managing Change Vs. Building Change Capability
Managing Change Building Change Capability
Change Happening To Us We Are Making Change Happen
Event-driven, Focused On Specific Change Execution, Limited Knowledge Capture For Future Changes View Managing Change As The Way We Do Our Business Requiring Ongoing Skill And Knowledge To Manage Whole-scale, Constant Change
Bottom Line Impacts Can Be Significant Bottom Line Impacts Are Minimal Given The On-going Nature Of Building Capability And Focus On Change
Time To Adoption Can Vary Depending Upon Peoples Experiences Of Change Accelerate Adoption Rate Of Change
When The Pressure Is Off, Go Back To Old Ways Of Doing Things Future State Focused
Event-Based Change
Transformational Change
13

• True change takes time it is not a simple quick
  fix where you bring in the change agents and
  straighten out the organization. It is the
  systematic creation of a change capability
  through learning how to build and use outsider
  insider expertise.
• J. Klein, True Change How Outsiders on the
• Inside Get Things Done in Organizations

14
Building Change Management Capability A Source
of Competitive Advantage
15
Insider-Outsider Approach to Building Capability
INSIDER SKILL, KNOWLEDGE, RELATIONSHIPS, CULTURE
CHANGE MANAGEMENT CAPABILITY
OUTSIDER BEST PRACTICE, KNOWLEDGE, COMPETENCY
An insider-outsider infrastructure accelerates
Constellation Energys approach to building
internal change capability.
16
The Transformation Support Continuum
DEPENDENCE
INTERDEPENDENCE
INDEPENDENCE
Internal skills and capabilities are believed
adequate. Underlying belief Little support is
needed to successfully execute the change. We
need just do it.
Internal skills and capabilities can be developed
to support the change. Underlying belief A
combination of external guidance and the
development of internal capability is the best
means to ensure that there is adequate,
well-trained support through the formation of a
transformation. We develop the capability for
success over the long haul.
Internal skills and capabilities are completely
lacking. Underlying belief High levels of
external expert support are needed to
successfully implement the change because
internal capability is so lacking. We need to
let them do it to us.
At Constellation Energy, we have a significant
need to develop internal change capability that
will build and improve over time.
17
Competitive Advantage Our Future State
Structure A well positioned, functional and
visible infrastructure with roles and
responsibilities, tools and technology Process A
robust, disciplined, easy-to-use work flow. A
set of action steps and tasks that are flexible
and adaptable. Integration into SIRIUS,
integration framework processes. Aligned to
High Performance Teams, Leadership Development,
Performance Management, corporate culture,
business organizational needs People Internal
coaches, consultants, trainers. Skilled and
capable change leaders as sponsors of change.
Experienced change agents. Knowledgeable partners
in change capable of dealing with the ambiguity
of a constant changing organization Culture
Belief in risk-taking, disciplined approach and
cross department orientation. Behaviors that show
tolerance of change
18
Building Our Future State
19
Cementing Future State Capability Through
Learning
20
Supporting Just-In-Time Change Consulting

• Executive understanding and commitment to our
  change management approach (SIRIUS)
• Enough capable in house expertise (change agent
  networks and internal change management
  consultancy)
• Sufficient resources and time to support
  continued development of change agents and
  internal change consultancy
• Visibly positioning and sponsoring internal
  resources as dedicated and competent to assist
  with major change efforts
• Ensuring external consultants understand our
  change management methodology, as the change
  framework, partnering with internal resources to
  create and execute change plans

21
Future State Impact

• Training
• 1079 staff trained from 1/06-7/06
• Increase in SIRIUS training
• Course feedback is very positive (6.5 out of 7
  satisfaction rating )
• Seeing higher enrollment SIRIUS-GP Community
  of Practice for continuing education
• Methods Support
• Community of Practice is actively sharing
  examples, best practices, updated tools and
  providing ad-hoc mentoring via Share Point
• Internal CM consultants are partnering with
  engagement directors to better leverage internal
  capability
• Toolkit v3.0 Design Review feedback from Focus
  Group participants, Love it when can we use it

We are leveraging our COP to hone our methods
provide a wider-reaching support model.
22
Contributors To Our Success
23
Case Study
24
Lessons Learned
25
QuestionsMeeting Close
26
Thank You
Contact Information michael.wright_at_constellation.
com 410-783-3234
27
Appendix
28
Change Framework, Tools Training
29
Constellation Energys Change Management Framework
30
(No Transcript)
31
Internal Change Management Curriculum
32
Supporting Change Management Resources
33
Communication Vehicles
34
Transformation Communications
35
Change Management Community of Practice
36
Change Management Knowledge Suite
37
Internal Change Management Consultancy
38
Internal Change Management Consultancy
Process
Output/ Results
People

• Our approach to change management focuses on
  transitions helping people bridge the gap from
  current to future state in the quickest and most
  efficient way

39
Our Change Management Practice

• Internal we have change management resources on
  staff who understand the organizational culture
  and are ready to help you when needed
• Experts from our Business Process Improvement
  Group whos distinctive competence is change
  management we have years of hands on experience
  across a broad range of initiatives
• Flexible - our level of engagement can be adapted
  to suit your needs we can offer full time or
  part time support
• Lower costs our fees are lower than those of
  external resources

40
Change Agent Networks
41
Change Network Overview
A Change Network is a structured group of
employees who work with the projects to support
the implementation of change.
Why do we need a Change Network?

• Creates ownership among impacted employees by
  giving them an opportunity to be involved, voice
  their opinions, and shape the approach being used
  to implement the change
• Increases effectiveness and trustworthiness of
  communications through respected peer delivery
• Reduces change resistance by encouraging
  associates/end users to understand the need for
  change and its potential advantages
• Supplements communications coming directly from
  Business Unit Management / Supervisors
• Coaches and enables associates to take action and
  make the change effort successful
• Provides feedback of the change effort back to
  the project team
• Builds change leadership for the future
• Input into design of change

42
Change Network Roles
The design of the Change Network focuses on
cascading commitment from Executive Sponsors to
Change Targets that are being asked to adopt the
change in a consistent and rigorous way.
Change Network
Initiating Sponsors

• Set vision, defines changes, and communicates
  priorities
• Provide resources and support
• Publicly demonstrate commitment
• Aligning change to business strategy

• Builds change network
• Coordinates and coaches members
• Provides consistent, coordinated information and
  materials

SustainingSponsors

• Demonstrate commitment to outcomes
• Allocate resources / support and provide project
  guidance
• Publicly support and validate change effort
• Support and coach change agents

• Support change and communication efforts within
  respective organization partner with supervisors
  to deliver key messages
• Provide a designated communication point
• Surface issues/concerns work with project to
  resolve / address

Change Agents
CM Team
Change Targets

• Listen to / read communications
• Ask questions and identify issues
• Understand / adopt change

43
Change Network Structure
Representatives from all impacted business units
create a spider web of change agents across the
organization. Depending on the impact of the
change, the appropriate change agents would be
called into action
BU 1 Change Agents - Finance - Procurement -
Operations
BU 2 Change Agents - Finance - Procurement -
Operations
BU 3 Change Agents - Finance - Procurement -
Operations
BU 4 Change Agents - Finance - Procurement -
Operations
Other Non-Reg Change Agents - Finance -
Procurement - Operations
BU 1 End Users
BU 2 End Users
BU 3 End Users
BU 4 End Users
OTHER End Users
44
Change Network Structure
Business Transformation Office
Project PYXIS
HR Transformation
Building Internal Change Capability To
Support Rapid Deployment
Merger Integration
E-Time Project
45
Change Networks Accelerate Change Deployment
Change networks support rapid deployment of
business change

• Acting as a sensing network identifying
  business specific issues, escalates change
  barriers and assisting in identifying current
  skill and knowledge levels of target groups
• Being involved in deployment of communications,
  design, delivery and evaluation of learning
  solutions locally
• Having credibility with target groups and ensure
  overall alignment of change to business
  culturethey bring business perspective and
  language to the change implementation and know
  what works for sustainability of change
• Building local acceptance and commitment of the
  changeaccelerating targets through the change
  curve, managing transition issues associated with
  change
• Maximizing speed to competency and overall time
  to productivity and performance

46
Change Agent Time Requirements
The estimated time commitments required of a
successful Change Agent are identified below, and
may increase with later stages
47
Approach Identifying People Who Can Influence
and Communicate Change
Inputs
One-on-ones to finalize network demographics and
selection plan
Nominate potential network members
Finalize selected employees and notification
responsibilities

• Project Audience Analysis
• Stakeholder Analysis

A
Who Controllers Committee members Advisory
Committee members Others (as appropriate) -
managers / supervisors When Date Outcome Validat
ed demographics Change Agent nominees
Who Project Communications team Controllers
Committee members Advisory Committee
members When Date Outcome Change Agent
demographics Actions to validate
Who Controllers Committee Advisory
Committee Project Communications
Team When Date Outcome Change Agent list
Small group information sessions for nominated
employees (optional / as appropriate)
Change Network kick-off
One-on-ones with nominated employees
A
Who Manager / Supervisor / Committee member (as
appropriate) When Date Outcome Updated Change
Agent List Change Agents know key dates
Who Responsible committee member Change
Agents When Date Outcome Change Agents informed
on high level objectives and expectations
Who Project Communications Team Sponsors
Change Agents When Date Outcome Change Agents
educated and able to perform role

• Tools available for use
• Briefing packet
• Change agent role description
• Change agent considerations checklist

Announcement of Change Network members
Introduction to Change Network in Business
Specific Comms Vehicles
48
Considerations In Determining the Right Change
Agents
1. Think of a situation when a peer asked the
candidate for an opinion or sought his/her
advice.Why do others value and seek out the
candidates perspective?

• Understands the organizations culture what
  works well and doesnt work well
• Described by peers as trustworthy,
  well-respected, and/or knowledgeable
• Has a accurate, working knowledge of changes that
  are at hand

2. Think of a situation where the candidate had
to interact with others to accomplish a goal.Why
do you think people are motivated by the example
the candidate sets?

• Has a positive attitude and is willing to support
  others
• Takes time to connect with other employees
• Expresses a genuine interest in others opinions
  and feelings

3. Communication is one of the primary purposes
of a Change Agent. What is the candidates
strongest communication skill?

• Has an open communication style that makes others
  feel comfortable asking all types of questions
• Is very approachable and intentionally make
  people feel at ease
• Strong written communication skills
• Comfortable speaking publicly, and can field
  questions in a group setting
• Able to communicate good and bad news both
  upward, downward, and to peers

49

Motivating Change Agents
Participation in the Change Network requires hard
work, so Change Agents must believe their
contribution and input is valued and respected
50

Monitoring the Network
To provide on-going coaching and continuously
improve, implementing mechanisms to measure
overall effectiveness of the network
Reviewer
Metric Tool
Measures
Change Management Team Controllers
Committee Advisory Committee

• Activity completion
• Meeting attendance

Activity Tracker

• Approachability
• Interpersonal skills
• Informative
• Reliability

Change Network Member Effectiveness Survey
Peers Supervisors and Managers