To make changes, manage them: as change accelerates, it becomes increasingly important to include employees in the overall change management process

HR Magazine, May, 2007 by Nancy Hatch Woodward

Lemon feta cheese, fresh basil, artichoke hearts, pepperoni, organic tomato sauce--all are ingredients of a major change on the menu at Round Table Pizza, a franchise restaurant chain headquartered in Concord, Calif. Because it's thinner and requires some altered cooking methods, the Pepperoni Artisan pizza, introduced late last year, is "a pretty radical departure from other pizzas we make," says Michael Hoessl, SPHR, director of human resources.

New menu items, however, account for only some of the changes that Round Table Pizza has been making for business reasons--and managing with a strong focus on employees. The company's initiatives include implementing a new performance management system and integrating employees in transition from franchises to company-owned stores.

"Thirty years ago, a Fortune 100 probably had one or two enterprisewide change initiatives going on; today that number is probably between 20 and 25," says Jeffrey M. Hiatt, CEO of Prosci Inc., a business process re-engineering company in Loveland, Colo., and author of books on change management.

At Nebraska-based insurer Mutual of Omaha, which is undergoing some major information technology changes, Sharon Rues Pettid, manager of human resources over corporate learning, says the pace is quickening. "During the last two to three years, we have experienced more change than this company has ever experienced."

Not only have change initiatives been on the rise, but the importance of managing individuals through change has been gaining credence as well. Corporate leaders are concluding that it can be costly to fail to manage employees through the process, Hiatt says.

The reason is simple, says Donna Curry, SPHR, recruitment program manager at Knoxville-based Tennessee Valley Authority (TVA), the nation's largest power company. Employees who are dissatisfied with or upset by change are generally less productive than they could be. "As cold as it may sound," she says, "it's the bottom line. We have to get the most productivity out of every single one of our employees to meet the challenges of the future."

What It Takes To Do the Job

An employer who is serious about change management, Hiatt says, has to have a structured, proactive approach that includes communication, a road map for the sponsors of the change, training programs that go along with the overall project and a plan for dealing with resistance. "You can't manage people like you manage software," he says.

What's more, there needs to be integration of plans, Pettid says. "Our managers understand that their project management plan must incorporate change management activities, and we provide them with training. Our Coaching Through Change class helps managers understand the change management model, how to use it to coach their employees and how to put together an action plan."

Getting buy-in for change management is not always easy, Curry admits. For example, she says, TVA has a number of engineers, "and they aren't crazy about touchy-feely stuff." So TVA developed "deliverables," including a template for an outreach plan for major projects. It includes a list of groups the team needs to talk with, the logical people to speak to these people and the messages to be delivered.

Each project team at TVA also designates a change management manager. They are people "who are passionate about change," Curry says. "As one of our managers said, 'Managing change is a way of thinking, and there are some people it just comes naturally to. When you find those people, you grab them and use them.'"

Timing, too, is important. A survey by the Prosci firm, called Best Practices in Change Management, reported that while over 60 percent of participants in the study indicated that change management should start during the problem-identification phase of the project, fewer than 30 percent actually started that early.

Curry, speaking as an HR professional, says she can identify with such findings. "Sometimes we are not brought in until halfway through the project, but timing is critical, and the key is the sooner the better. People are going to know something is up. And if they don't know what or why, they will make up their own facts."

A Few Ground Rules

Curry says training in a change management process needs to be just-in-time and needs to be a dialogue--not the one-way communication often used in conventional training. "The way to do this is through consultation: executives talking to the entire workforce, senior management speaking with managers, and managers engaging with their staff," she says. "The conversation has to go both ways."

It starts with executives. They have to let the workforce know that change is coming or is already here, says Price Pritchett, CEO of Dallas-based consulting firm Prichett LP and author of more than 25 books on organizational change.

When Whirlpool Corp. in Benton Harbor, Mich., acquired Maytag last year, Whirlpool made sure the president of its North American region was up front, talking personally to employees, says Tim Reynolds, SPHR, vice president of human resources.