Effective change management amidst digital transformation - a keynote review

Profile picture for user jreed By Jon Reed September 13, 2016
Summary:
To kick off Controlling 2016, keynote speaker Kevin Reilly urged the audience to embrace change management if they want their projects to succeed. Success is not go-live, and change means surprisingly tough decisions on talent and project accountability. Reilly tied these themes into the digital questions companies are facing today. But is digital transformation real - or clever repackaging?

change-in-scenery
A year ago, IBM's Vijay Vijayasankar caused an enterprise ruckus with his classic deconstruction of digital transformation, Why am I not holding my breath on digital transformation? By likening digital transformation to change management, Vijayasankar took some sacred digital cows out to pasture, raising questions on how much of digital is new - and what's repackaged from projects past.

At today's Controlling 2016 keynote, Kevin Reilly of Thought Focus reframed these two concepts in his talk, Driving Effective Change Management Amidst Digital Transformation. A former CIO who has worked extensively with ASUG, SAP's North American User Group, Reilly spoke frankly about client project success and struggles and how the "people factor" always seems to sway the outcome. Though the last section of his talk focused on lessons for the SAP customer attendees, the bulk of the topic had enterprise relevance beyond SAP - or ERP for that matter. Here's the high points.

Reilly's talk began with a focus on project alignment, before moving on to the "macro-business issues driving change" - that's where digital transformation fits into the picture. Then, Reilly tied that into SAP customer landscapes with an architectural look ahead. So what makes a change program effective? Reilly offered three disarmingly simple clues:

  • People know what’s expected of them
  • People have the information, skills and tools to be successful
  • People held accountable for results

Simple to list yes - but not to achieve. Referring to four big client projects he's been a part of, Reilly said "I learned the most from the project that went south." One key problem: a lack of clarity on roles. He also cited that vintage Michael Doane refrain - just because you had a technical go-live doesn't mean your project was a success.

"Sometimes, Bob sinks the project" - the perils of people

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Kevin Reilly in San Diego

"The soft stuff is harder than the hard stuff," Reilly warned. "You’ll find managing a team easy - except for all those people." Getting different personalities going in the same direction is no small feat. Sometimes the talented folks are the problem: "Instead of holding them accountable, you give them leeway because they are good, and they go their own way." Reilly picked on the 'Bobs' in the room:

Sometimes, Bob sinks the project.

And, this time-honored zinger from former Army General Gordon Sullivan:

Hope is not a method.

He backed it up with an actual - and tragic - quote from a "floundering" project:

I hope everything is going to be ok; we’re all working really hard.

That doesn't cut it:

Hope is not a way of getting something done. Hope is rose colored glasses. Hope is relying on somebody else to get your job done.

So what's the alternative? Reilly outlines a "Business Team Leads Approach". I've emphasized a few in bold:

  1. Many ERP projects create teams of technical and functional staff
  2. Don’t forget the Business Leads within your own company
  3. Choose the people who hurt the most to lose
    - Don’t accept people on the team who are not the very best you have
    - Think of who takes over when the leader is absent
  4. Choose people who are leaders already
    - Appointing someone a leader will not automatically make them one.
  5. Provide clear communication paths across the project
  6. Merge the business leads with the technical/functional pros
    - They will cross-pollinate each other

Involving business users might seem like a no-brainer, but many projects botch it. Reilly cautioned against the classic mistake of waiting until testing to pull business users in:

How in the world do you expect the business people to be in sync if they haven’t been involved all along? How do you expect them to be on board if the system is already in place, rather than asking if the system is working for them?

"But I can't afford to lose that person"

Of his major client projects, Reilly said that one stood out as exceptional. The business leads whose absence "would hurt the most" were pulled onto the project. Companies don't like to pull that kind of talent from their day-to-day, but Reilly says that bold move will pay off. He'll tell a project manager: "I want the person that takes over for you on vacation." Yes, his clients resist this advice:

All of them say, 'I can’t afford to lose that person'. So I say, 'Then that’s exactly the right person.'

Reilly also warns against picking someone "hoping they will become a leader because you need them to" (there's that word 'hope' again). Pick established leaders if you want your change management to carry weight.

Digital transformation - a change opportunity, or a threat

So how do we tie this into digital transformation? Reilly started with ASUG's definition from their recent digital transformation report:

The relentless pursuit of the conversion of our physical world into an environment represented by information, software, analytics, technology-enabled business processes, bits, bytes, and data.

He added:

Digital transformation is an opportunity and a threat.

Just because you do a new project doesn't mean you transformed the business:

Every one of these projects has the opportunity to transform the business, or they can be installed without changing you an inch.

Reilly believes that since the onset of the computer era, "We were digitally transforming things, and we've never really stopped." But he does see a shift: the pace of change.

The only difference is the speed in which we’re moving... In simple terms, digital transformation and change management align really well.

Reilly pointed to three drivers of digital change: cloud, big data and IoT. He noted that industries that might seem "boring" can re-invent in a digital context, often by going into the data-as-a-service business. The digital double-edge hits areas like logistics: slow to adapt to digital, digitalization now threatens to disrupt logistics. Or utilities, where renewables, distributed generation, and smart grids demand new capabilities - and are triggering new business models and regulatory frameworks.

It always comes back to results; Reilly tied theses themes into a wholesales distribution use case:

wholesale-distribution-use-case

Final thoughts

During a subsequent change management session, we talked about how the ultimate goal of change management is user adoption. That's been the case since ERP first hit the client-server market, but the stakes of user adoption are much higher now. If business users don't embrace the chosen enterprise solution, there is a high likelihood they will experiment with easy-to-download cloud solutions - bringing the issue of change to a head.

Reilly went on to talk about how SAP customers can think about change in an S/4HANA context - that's a topic for another time. For now, I agree with Vijayasankar's warning that sometimes, "digital transformation" is just sexy repackaging of the dusty change management slide deck.

One thing that isn't sexy: digital projects come down to communication. But not just firing off email status reports. It's about putting diverse stakeholders into a mixer until they gel. As Reilly said, only half-jokingly:

Please don’t separate people on your teams. Shove them all into a room, lock the door, and make sure that these folks keep talking to each other. That leads to something better than any individual can do on their own. When I end up in a room with people who disagree with me, we end up with good things. They will drive you crazy, but they will drive you crazy in the right direction. That’s why we need diversity of thought.

Digital at its most persuasive is cultural first. To connect digital business from back-end to the devices consumers live on invokes change. Robotics and automation may reduce project head count, but Reilly's view of the human side of change isn't going away - nor will it.

Image credit - Feature image - Change pollution with green environment © alphaspirit - Fotolia.com. Slide used by express permission of Kevin Reilly. On-site photo of Reilly by Jon Reed.

Disclosure - ERPCorp paid the bulk of my travel expenses to Controlling 2016. ERPCorp is a paid client, and I am part of the founding team that launched the SAP Controlling conferences. I was compensated for my work at SAP Controlling 2016, including keynote facilitation and panel moderation. However, this article was produced on my own initiative. ERPCorp produces the SAP Controlling conferences independently of SAP. This year, SAP was a paid sponsor of the conference with a hosted demo lab for attendees. SAP is a diginomica premier partner. Diginomica has no financial relationship with Kevin Reilly.