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Organizational Change Management as a Foundation for Program Management

March 22, 2008 | Author: admin | Filed under: Change Management, Communications Management, Organizational Structures, Team Building, Communications Planning, Program Management

Organizational Change Management as a Foundation for Program Management (#3 in the series Foundations, Frameworks and Lessons Learned in Program Management)
By Robert Prieto

Organizational Change Management requires the consideration of two types of change that must both be managed synergistically in order to effect the strategic change that program management typically is utilized to accomplish.

Cultural Change — those changes dealing with the people aspects of reorientation of organizations and teams to a programmatic focus

Tactical Change — the basic changes in the way that individual projects are organized and executed

Key Steps in Organizational Change Management

Key Steps in Organizational Change Management

Organizational Change Management (OCM) is the planned, programmed integration of a new business model into an organization including adapting the changes so that the transformation enhances relationships among participants and improves business processes. Proactive OCM focuses on innovation and skill development of people, proactively recognizing the effects of change, planning for them, and then helping the participants to develop skill sets and tools to support the change while dealing with the discomfort associated with it. Some of the change dimensions that the program team must address include:

  • Changed management roles – The engagement by the Owner of a program manager will often require the owner’s staff to assume a less directive and a much more policy setting and oversight role. This may create uncertainty about action in some Owner’s staff that previously held directive authority and must now move to a guiding and assurance role. The effective communication of strategic objectives is critical.
  • Changed commercial patterns – The types of management, engineering and project execution resources required for the program differ considerably from what has previously been required. Key program management resources exist in the engineering and construction industry but are scarce across all engineering & construction sectors. Commercial patterns will change to reflect this widespread competition for resources. Additionally, the reconfigured risk allocation and supply chain methodologies that a program management approach may require will also represent a paradigm shift in previously established commercial patterns.
  • Changed design process – The program is typically much more strategic business objective and construction driven than what had been experienced by the Owner in prior efforts. Ease and facilitation of construction will require changed strategies for construction, procurement (program vs project) and design (standardized, simplified and changed constraints and opportunities).
  • Changed span of control – All engineering, procurement and construction will not occur under the direct control of a singular project manager. As such, formal interface and configuration management will replace traditional project design meetings at the program level.
  • Increased importance of cross cultural differences – Design and construction work may be accomplished on a global basis, requiring multiple, diverse cultures to interact with each other in new relationships formats. The sense of time, distance, style and even the spelling and meaning of words will be different. These differences must be addressed head on.

An effective organizational change management program will:

  • Define future state and assess current constraints to achieving it - Presenting the business reasons for a change is the first step towards achieving organization buy-in. If the people in the organization who are expected to go along with a change do not understand the reason for it, they are not very likely to want to participate - especially if a shift in thinking and behavior is required on their part. So, before asking or expecting people to change, communicate the rationale and the benefits.
  • Engage primary sponsor – Every change effort has a purpose and goal. In reaching towards that goal, every person in the organization affected by the change should share the same vision, and be able to “see” what the new state will look like. And everyone should be able to communicate that vision to others. A vision statement is a picture in words that is inspiring and challenging, yet attainable. It should answer the unspoken questions: What will the future look like? What’s in it for me? What’s in it for the organization? What’s in it for our customers and stakeholders? How will we make this vision possible?
  • Form and prepare project team – Management and work process challenges need to be clearly laid out. Emphasis needs to be placed on drawing out the team’s concerns, hesitations and so forth so that these may be directly addressed. Barriers to change that are typically encountered include:
    • People – This includes those who are threatened by the success of a new way of operating and how that success will affect their ability to return to doing things the old way after the program is done; those who tend to stay connected to their former chain of command and although they are in a new position, try to keep the old hierarchy in control; and those who view what is happening in their cultural (country or business) frame of reference or paradigm and react accordingly.
    • Process - Process barriers include groups wedded to the processes they have created or have been using forever, and the walls that are created by established contractual and procurement processes. These processes have been honed over the years by lawyers and contracting types to reduce the risk to owners and to shift risk primarily to suppliers. Collaborating where one party holds all the risk is problematical at best.
    • Technology - Everyone has his or her favorite mouse trap which they will champion as the best management technology to support the program management efforts. There are always legacy systems on the owner’s side which must be accommodated by what ever the other team members bring. Much energy is expended in picking the right system and then getting everyone to use it. This must be an upfront decision since the implementation process is often extended.
    • Communication - Another barrier often encountered is the lack of understanding that change is an evolutionary not revolutionary process. There must be a clear imperative for change and all should understand it is a journey not a destination. This must be revisited periodically throughout the OCM process to ensure continued progressive towards project goals and to avoid the development of pockets of “passive resistance”.

The “new” way of doing integrated Program Management takes time, requires agility and flexibility, and needs total and ongoing support from the top.

Robert Prieto, Senior Vice President

Robert Prieto is senior vice president for Fluor, where he leads strategy for Fluor’s Industrial and Infrastructure group. Mr. Prieto focuses on the development and delivery of large, complex projects worldwide.

Prior to joining Fluor, Bob served as chairman of Parsons Brinckerhoff Inc. As head of PB’s board of directors, he was responsible for overseeing management performance, establishing top-level policies, and ensuring the firm’s continued long term success.

He is a member of the executive committee of the National Center for Asia-Pacific Economic Cooperation, a member of the board of directors of the Business Council on International Understanding, a member of the board of the Civil Engineering Forum for Innovation, and co-founder and member of the board of the Disaster Resource Network. He currently serves on the National Research Council’s committee framing the challenges on Critical Infrastructure Systems. Until 2006 he served as one of three U.S. presidential appointees to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) and served as chairman of the Engineering and Construction Governors of The World Economic Forum and co-chair of the infrastructure task force formed after September 11th by the New York City Chamber of Commerce. He is also a member of the board of trustees of Polytechnic University of New York, and was previously selected as alumni of the year by its New York Chapter.

He has had an executive sponsorship role in the World Trade Center Transportation Hub; West Coast Rail Modernization; Train Protection and Warning System; Level 3 Communications Long Haul Network and Superconducting Super Collider.

Prieto holds a master of science in nuclear engineering from Polytechnic University of New York and a bachelor of science in nuclear engineering from New York University.

Fluor Corporation (NYSE: FLR) provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management. Headquartered in Irving, Texas, Fluor is a FORTUNE 500 company with revenues of $14.1 billion in 2006. For more information, visit www.fluor.com.

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This entry was posted on Saturday, March 22nd, 2008 and is filed under Change Management, Communications Management, Organizational Structures, Team Building, Communications Planning, Program Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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