Systems Thinking and Change Management

Systems Thinking and Change Management Evaluation

The greatest challenge for the majority of it initiatives is to survive the change management process and emerge with sustainable and strong go-to-market strategies that support a company's core business. For Long Beach Mortgage the issues of change strike at the center of how their employees earn their living. Relying on accurate orders, pricing, and most importantly, the process of attracting and selling customers and earning their loyalty is the most important aspect of change. With so many positive aspects of changing how companies operate however, resistance is often very strong, costing literally millions of dollars to surmount.

Over and above the issues of change management is the issue of an organizations' culture. Schein (1992) defines culture as..."a basic set of assumptions that defines for us what we pay attention to, what things mean, and how to react emotionally to what is going on, and what actions to take in various kinds of situations."

Implicit in this definition of culture is the clear fact that executives first must change the cultures of companies if specific strategies will take hold and be successful. Galpin (1996) suggests that because changing the basic assumptions and beliefs of the underlying culture is very difficult, the best approach for influencing specific aspects of a culture that need to be changed for an it initiative and strategy to be successful needs to be on an exception vs. all-inclusive basis

Throughout this section of the paper, four critical areas of change management strategies are explored in the context of an ambitious and far-reaching series of enterprise-wide it initiative. Caudron (1999) defines change management as the ability of executives to embrace the human side of change, specifically addressing the fact that people don't want to be changed, they want change to better their roles, responsibilities and future in a company. The other aspect of leadership behaviors that is critical is the development of champions or de facto leaders that set the pace for everyone around them in the company. Jenkins and Oliver (1998) define this aspect of behavior that leads to successful change as being critical for the creation of trust between executive managers and the many affected employees of the company.

The first step in this it initiative is the definition and launch of a Broker Front Office Tool (BFOT) system followed by the integration of pricing and the many agent-based processes all aimed at supporting more streamlined and synchronized selling strategies through all selling channels.

In addition Michael Hammer in his many books on this topic including the Agenda (2003) illustrate through examples, financial analysis, and intensive analysis of how companies can improve their financial performance through examining their many processes and re-defining them for greater competitive performance.

In the context of enabling change for these it strategies, there are four major areas of change management explored in this paper. The first is an evaluation of systems thinking and the application of systems logic to strategies involving significant change in an organization. Implicit in this is the fact that for many organizations, the very perception of what change is, it is very characteristics if you will, need to change. The second major area of change management explored is how the various stakeholder interests and resource constraints are either met through negotiation or countered with a clear and precise definition of the objectives of the initiative. it's impossible to give everyone everything they want and perhaps this aspect of change management - the balancing of the many needs and wants of many stakeholders - is the toughest area of managing change there is. It takes skill to not over-commit to the many stakeholders involved in a project and actually over-deliver to their expectations.

The third major areas of focus is assessing the impact of technology on effective managerial decision making, and specifically explaining how new technologies drive significant change. The fourth and final major area of change management is the evolving role of ethics and corporate responsibility in managing of change as it relates both to the it initiatives and the business strategies themselves. This last point highlights the need for transparency and greater immediate feedback on any and all compliance and broader ethical issues as they pertain to enabling lasting change.

Evaluating Systems Thinking and the Application of Systems Logic

Throughout the defining, validating, and implementing of the it initiatives throughout this project, there's been a corresponding application of systems thinking and systemic logic as it relates to changing how the organization can change. With the majority of it initiatives failing due to being rejected by the organizations they are created to assist and help, the systemic approach to defining strategies for changing how people will interact with and use the system is critical. Over and above the defining of how the software, hardware, networking, and services will combine to create a cohesive and usable system, systems thinking has more to do with envisioning how the social networks and their dependencies are impacted by it initiatives.

Systems' thinking has more to do with re-aligning people, processes, and products than the simple toggling together of it components. The former is infinitely more difficult, and in the context of this paper, the intersection of people, processes, and products is where the need to define, within a company, where the concept of how change is changing is critical. Organizations need to learn how to change before they can. Systematic thinking and systems logic throughout this project is focused on mapping the processes in place within an organization first, before any part of an it initiative is implemented. Process-centric analysis through systematic thinking and systems logic also immediately highlights those areas of processes that have room for improvement and streamlining. In many cases of this project, the use of systematic thinking and systems logic has exposed areas where processes had become disconnected from each other, often forcing employees to each create their own, or just ignore a step in the process. This is certainly the case in many organizations when special pricing requests as they relate to policy management become disconnected and not coordinated with broader processes. The synchronization of and tight integration between processes is the real pay-off a systematic approach to thinking and the applying of system-level logic to any broader business strategy that is being augmented with it initiatives. Only after the processes, people, and products have been synchronized without relying on it as a crutch can true change happen. Too often however organizations only speed their way into mediocrity by spending heavily on it to automate processes that are deficient, very often not synchronized with each other, and many times lacking steps, like the managing of special pricing requests mentioned earlier in the context of policy management.

The bottom line about systems thinking and the application of systems logic throughout this project has been to first tackle the most critical business processes first. Second, the looking for opportunities to synchronize these steps or approaches to doing things with products, and most importantly, the needs of people in positions who are called on to complete the work needs to follow. Only through systematic thinking and the application of systems logic to processes first will any it initiative be successful.

Managing Stakeholder Interests and Resource Constraints

Intermediating between the many demands from stakeholders, the resource requirements of strategies, and resource constraints involved in optimizing it initiatives to meet the strategic objectives of a company are where the essence of change management's challenges are. Throughout this project, best-in-class techniques, approaches, and research for successfully changing how organizations implement change management strategies have been explored. Managing expectations and not over-committing to the many needs of stakeholders, internal and external customers, sales, operations, and service is a skill that exemplifies the most experienced project managers and professionals who manage it initiatives. Rather than focusing on trying to be all things to all stakeholders, the more experienced project management professionals focus first on how to create shared ownership and high visibility of resource constraints and the trade-off needed. The need to create ownership over and above placating stakeholders with too many promises is the foundation on which lasting change must be created. Aguirre, Calderone, Jones (2004) argue that the CEO and senior management team must band together and have a consistent and strong show of support for any strategy to be successful. The authors point out that many executive teams disagree over it initiatives, which in many companies is the catalyst of change, and their impact on business strategies. For any effort at change to be successful there must be a single and strongly positive message from the senior management team to the company to gain the trust and confidence of affected employees.

Taking this concept of ownership further, change management strategies must center on creating consistent and credible opportunities for stakeholders to contribute to and influence the direction of the strategies being created. Advisory Councils infuse ownership to stakeholders and give them a forum for making their needs known as it initiatives are transformed into business strategies. This is especially important in the context of the Broker Front Office Tool (BFOT) strategies aimed at streamlining attracting, selling to, and servicing indirect channel partners and resellers. This aspect of bringing the Voice of the Customer (VoC) into the transformation of it initiatives into channel-based strategies is even more difficult than evolving change management programs within the four walls of any organization. Bringing change to agents and the indirect channels in the context of the Broker Front Office Tool (BFOT) forces the issue of gross margins, channel training, and pricing applications, three of the highest priorities for any agent, to the forefront of the change management strategies. Literally any channel relationship hinges on these three priorities and the extent to which strategies can be created to accentuate and strengthen a company's ability to deliver on these is the extent of the lasting success of any channel-facing strategy. it' contribution to making these three priorities a reality and sustaining them is where best practices in managing stakeholder interests and prudently managing resources comes into play. Stakeholder interests of indirect channel partners is heavily dependent on gross margins and their own profitability, yet the most successful Broker Front Office Tool (BFOT) and policy management strategies also hinge on making a company relying on these agent-based and channel strategies easier to do business with. At the center of aggressively managing stakeholder interests especially where indirect channels are involved is the need for balancing revenue and margin generation on the one hand, and the necessary applications for better serving their own customers, partners, and sustaining their relationships.

Assessing the Impact of Technology on Decision Making

The change management plan defined for this project assumes that the delivery of applications and their use, maintenance and upgrading for greater functionality is going to be revolutionized over the next five years as Software-as-a-Service (SaaS) solidifies its leadership position as the dominant software business model. In terms of managing change and ultimately making the Broker Front Office Tool (BFOT) applications more adaptable to how both agents and employees within the organization's jobs are changing. For many organizations there is the requirement of being out in the field, serving channel partners and solidifying relationships, much more aggressively than has been the case in the past. Having thin-client applications that can be accessed from any web browser, at any time, from any location globally is what is driving the growth of Salesforce.com for example.

Exacerbating the speed of technological change that impacts the change management plan defined in this project is the shift in purchasing power happening within many organizations. Now line-of-business executives including sales vice presidents and general managers of many companies hold the balance of power in the purchasing of applications. Further, these same executives often are called upon to deliver greater and greater sales performance and results over the years. The need for having a technology platform that can shift with the needs of line-of-business executives is critical. Implicit is the fact that the one-size-fits-all strategy of implementing enterprise-wide applications is now longer relevant to the line-of-business strategies companies are undertaking. The SaaS business model on the other hand is permeable enough to align applications, services, and modifications to the varying needs of users. The fact that SaaS also aligns better to a process-centric view of change in companies needs to also be considered.