Change is hard…Governance is harder

Introduction

As I recently pondered my cat’s proclivities to stress when she undergoes change, I started to think about her as a microcosmic metaphor for why effecting change is hard in the corporate world and why maintaining it is even harder. I wondered whether I could boil down my many experiences leading change into five sound bites to see if they can serve as a primer for anyone working on change programs. Let’s start by setting the stage with my inspiration, Katya.

Fifty percent of all cats get car sick. I can attest to this googled assertion because we have two cats, and one of them, Katya, gets car sick 100% of the time. In over 900 three-hour car trips to our weekend home, she has been car sick each time. This usually lasts about 30 minutes while she gets her bearings and becomes convinced of our target destination. She has mapped the journey in great detail and any deviation, stopping for ice cream, taking a detour, making a right turn instead of the usual left, and she lets us know her displeasure through a series of vocalizations and protestations. Her brother on the other hand, could care less. No drooling, no vocalizations, just sleep and the occasional yawn. 

Katya’s malady is less about motion sickness and more about change. She hates change. She hates the anticipation of change, the change process itself, and takes an hour or two to adjust to the results of change. Her brother embraces change, relishes the adventure, and looks forward to whatever trouble he can get himself into next. BTW, lest you think us terrible cat owners, please consider that more than one close friend has told us that if they ever meet an untimely demise, they’d like to come back as our cats. 

I don’t have any scientific data to back this up but I’m guessing these feelings about change and how different species react to it are universal. So, with this conceptual frame in mind, I offer the following practical points for driving change and achieving sustainable outcomes.

Part 1 - Driving change

Start with a change plan that addresses corporate culture and human nature

Successfully executed change programs take into account the pace of change that the organization can absorb and make sure that they’ve thought about how the change impacts the rank-and-file stakeholders. Unfortunately, and all too often, the focus is on delivering results for the senior leadership sponsors, on-time, and within budget. Success is declared, then the real work begins, typically resulting in a long tail of cleanup work to correct for underestimating stakeholder impact. The cleanup results in sub-optimal outcomes and growing stakeholder discontent over time ultimately dooms the change program.

So, what do I mean about cultural awareness and rank-and-file sensitivities? Here’s a case study:

 A number of years ago, I led a global consolidation of CRM systems at the largest US private bank. We had multiple legacy CRM systems in different regions and lines of business resulting from multiple mergers over the years. CRM systems are a funny beast. They often feel to the relationship managers (rank and file in this case) as an intrusive overhead on the business development process. Moreover, the legacy RM teams each had their own favorite “overhead” and were highly resistant to change. It wasn’t until the occasion of a new significant merger before we finally had the organizational will and sense of urgency needed to embark upon a consolidation of the multiple CRM platforms. 

So how did we tackle this thorny problem? For starters, we took a “design first” approach and placed the RM (a key customer) at the center of the planning and implementation process. We created a working group of key influencers, convened weekly design sessions, and proceeded to build a system that addressed the practical needs of the relationship manager while delivering on the overall program goals of increased sales and lower operational costs. We made the system frictionless from a data entry perspective, integrated and automated the cross divisional customer information file, and institutionalized the feedback mechanisms for continuous improvement. The RM’s felt empowered and engaged with a sense of ownership. This wasn’t an implementation that was “done to them” but rather, an implementation that they felt part of.

Communicate, communicate, communicate

It’s trite but true, the importance of communication cannot be overstated. Sustainable change can’t take place without changing behavior. One of the tools for behavioral change is a well-designed communications program.   In fact, show me a successful change program and I’ll find a successful communications program within it. The best comms programs, supporting a major change effort, are far reaching and broad. They don’t just communicate dry facts; they draw the audience in and engage it. They seek to motivate, reward, inspire, and form a sense of community for the change effort. 

One of the most basic levers of employee satisfaction is feeling appreciated and acknowledged. A great comms program understands this and leverages this basic principle to help drive change. Here’s a case study:

One of my roles at a major swiss bank was to drive operationalization of enterprise architecture in the global markets organization. In other words, stand-up an enterprise architecture function where none existed. If you’ve ever worked in an investment bank, you would know what I mean when I say that it is often a “hero” culture, where individual achievement is rewarded, sometimes at the expense of the greater good. 

Tactical exigencies of “time to market”, competitive product demands, and “supporting the next big deal” usually won out over more abstract priorities like reduced application complexity, total cost of ownership, and lower technical debt. In such an environment, it’s not unusual to have duplicative systems, risk and compliance challenges, and higher operational costs. Hence, it was time to dust-off the enterprise architecture playbook (tried and failed several times before), re-write it, and embark upon a major change program.

As I was building this team, my first hire was a director of communications. I recognized early on how important messaging the vision and engaging the organization was to driving our change effort. We used levers like training to inform and demonstrate the requisite behaviors of great architectural hygiene. We developed the training material for our Architecture 101 classes from the ground up, customized for our specific audience and culture, and delivered to our entire technology organization.

We established a firmwide distinguished engineer (DE) program to drive home the point that great engineers, as individual contributors, can eventually attain managing director recognition without needing to manage an army. Part of the nomination criteria for distinguished engineer was how well they exemplified the behaviors we were looking to institutionalize. We also built out an employee recognition program, incorporating monthly feedback surveys and a monthly newsletter highlighting employees sharing their stories about who they are and what they’re about. 

These are just a smattering of the communications components we put in place to help drive the right change behaviors in a sustainable manner. 

Create a win-win for hesitant stakeholders

Sometimes, change feels like a zero-sum game for the impacted audience. In their minds, there are losers and winners, and they want to make sure they’re on the winning side! In this scenario, those who feel they’re on the losing end of the stick will resist change, undermine change, and more importantly, are probably unhappy employees who feel disenfranchised. That’s not a good place for any organization to be. So, what to do? Create winning scenarios for anyone impacted by the change effort. Demonstrate how supporting the change effort will bring good things to all involved. Here’s a case study …

I spent eight years building an innovation program from the ground up in a global markets technology organization. Markets technology organizations are the cream of the crop in any large financial institution. They typically leverage the most leading edge (sometimes, bleeding edge) technologies available to solve very complex problems where every micro-second is a competitive advantage. These teams prefer to build as much as possible themselves and innovating organically is in their DNA. It’s an exciting but expensive space and of late, unsustainable. Margin compression, regulatory pressures, and higher market risks are shrinking IT budgets that were once lavish. Moreover, a single organization cannot conceive of all the best ideas. There are many small and innovative startups that have something to offer. Hence, the need for an innovation program, but getting it stood up successfully in this type of environment is rife with challenges.

I summarize these challenges into a few key bullets…

• Global Markets technologists are excited about innovation but they usually want to invent it, find it, attempt to copy it, and most importantly, introduce it to their business customer. So, there’s an element of NIH (Not Invented Here) that needed to be dealt with.
• The business unit drives IT funding levels. Any POC’s and pilots need to be self-funded within the IT organization and there was no centralized funding of innovation initiatives.
• There’s a built-in inertia within any large organization against introduction of anything really new. Vendor management, IT infrastructure, security, and operational risk management are all built-in components of this friction against change.

So, within this context, I built the innovation program for three purposes. 1) curate innovative technologies that can increase revenue, decrease costs, and/or reduce risks. 2) find innovative companies that we can either invest in (through our tech funds) or recommend to our clients to solve specific problems and serve as a good reason for a thoughtful client conversation. 3) establish relationships with firms that will someday be our clients, either on the buy side or sell side.

My approach to this change effort was to start with the business heads, introducing them to curated startup companies that can solve specific business problems and use cases. I made sure to invite their technology face-offs to these meetings, otherwise I was sure to get a cool reception and passive resistance. Getting the business excited created a “pull energy” that both compelled and excited their tech teams.

We then helped make new technology introduction as frictionless as possible for the delivery teams by working with all the key players to help resolve any impediments to getting their POC or pilot off the ground. I also rallied support from the appropriate CIO and made sure to highlight and make visible, the technology team “driving” this effort. We made all POC’s, Pilots, and MVP’s very visible across the organization, drawing attention to the accomplishments of the delivery team. In short, I made sure that everyone involved was visible and acknowledged for their work, creating win-win’s every step of the way.

Find the naysayers and turn them into yaysayers

This point goes hand-in-hand with finding the win-win for hesitant stakeholders. In every major change initiative, there are a few key stakeholders that are critical path to your success. Some of the early naysayers will be vocal and obvious. Some will be publicly supportive but passive-aggressive resistors. Regardless of how the resistance manifests itself, it’s important that you identify these resistors, develop a strategy for creating a win-win, and turn them into converts. In fact, important and vocal resistors can be your best champions and all change efforts need champions.

Nothing is more convincing than early success

It’s not uncommon for a change effort to go awry due to poor problem decomposition and solution delivery segmentation. This manifests itself by attempting solutions in large unmanageable chunks, taking too long to deliver your first success, and worst yet, missing the mark and failing the first implementation. I’ve seen this happen and it’s not pretty. Here’s a case study (names have been changed to avoid throwing shade) …

Acme Bank was a SIFI (systemically important financial institution) bank with a few challenges on its plate. One of which was with the Federal Reserve. The Fed had issued a number of MRA’s (memorandum requiring attention) to one of Acme’s technology divisions regarding Acme’s project management and system implementation practices. In summary, the Fed concluded, after several reviews, that Acme was deficient in how they manage technology project and had poor controls over their implementation. Among the list of issues the Fed found were lack of: source code version control, global solutions delivery standards, change implementation controls, consistent system documentation, and segregation of duties within the delivery organization. In the Fed’s view, this represented an outsized risk that required immediate remediation. Acme’s technology delivery team were a wild west that needed to be tamed. 

George was the COO of this technology organization and was responsible for responding to the Fed and remediating these issues. George was a really smart guy that made a few large missteps along the way, and these missteps ultimately led to the demise of his multi-year, $20M change effort. George brought in a consulting firm and spent a year designing the solution, power pointing, and syndicating the strategy. Unfortunately, he created a theoretical framework that sounded good on paper but was impractical. Worse yet, he set about implementing the first iteration with cumbersome tooling that was hated by the very same delivery teams from whom he was expecting compliance. He rolled out the solution “big bang” without phased implementation and in the end, failed to achieve the adoption rates needed to change compliance trajectory. The failure of this effort also damaged the “brand” causing the second iteration (with a different team) of this initiative to fail under the weight of the baggage left by the first implementation.

I could wax on about what went wrong and how things could have been done differently (we did eventually get it right – more about this in Part 2 of this article)  but, in the end, violating some of the key points we’ve already raised in this article pushed this effort towards its eventual failure. 

• So, what’s the connective tissue between these five sound bites? 
• Start with a change plan that addresses corporate culture and human nature
• Communicate, communicate, communicate
• Create a win-win for hesitant stakeholders
• Find the naysayers and turn them into yaysayers
• Nothing is more convincing than early success

Let’s start out with the assertion that a competent solution and plan is table stakes for success. But more than this, you really need to incorporate the human factors into the change equation. Creating a plan with an empathetic eye towards your targets of change is essential to creating meaningful and potentially sustainable change.

In my next article on this topic, I’ll focus on what it takes to sustain the change you’ve worked so hard to make. 

 “If you’ve always done what you did, you’re always gonna get what you got”

Lisa Watson-Morgan - NASA Human Landing System Program Manager - 2021