All change: e-business technologies

Effective change management is driven by a clear sense of direction, good communication and staff co-operation, not coercion.

Effective change management is driven by a clear sense of direction, good communication and staff co-operation, not coercion.

If there is one lesson that we can learn from the dotcom frenzy it is that e-business technology is simple. So simple that it will only work when we describe exactly how our business works. Any complexity about e-business arises from the business, not from the 'e' prefix.

As many have shown, if you can sum up your business in a few lines of code, it is probably not worth much. The contrast between conventional and Internet-driven business is really one of complexity versus simplicity. A good simple business activity will be cheap, efficient and easily automated.

A good complex activity is likely to be expensive and resource intensive but will be of significant benefit to the customer. The successful use of e-business technologies will streamline simple activities and support complex ones. It relies on a clear strategic direction and makes full use of the skills and knowledge within the business. This is what change management is all about.

What is change management?
The biggest myth about change management is that it involves changing people so that they fall into line with a strategy or plan. This works best in a totalitarian state where the strategists have enough control to overcome the resulting resistance to change. An easier and more effective approach is to make it easy and desirable for people to change themselves.

The role of senior managers, according to this approach, is to communicate the need for change and to provide the support to enable it. Focusing on communication is not about being nice to people and asking them to change if it isn't too much trouble. It is recognition of the fact that people will only work differently if they view the business differently.

If you try to change what people do, they will go back to their old ways as soon as the boss stops looking. If you change how people see their job, they will do things differently of their own accord. Effective communication is not an easy way out. It takes a lot of effort, skill and a degree of patience. The following steps can help:

Step one: clarify strategic intentions
In a business culture strongly focused on financial performance, it is easy to talk about strategy in terms of financial results. This motivates shareholders not employees. Yet, employees are the only people who can turn a strategic vision into reality.

They will only make this happen if they are motivated and have a clear sense of direction. To achieve this, senior management must clarify the business' strategic intentions. For e-business to have clear strategic value, it must be relevant to the business' strategic intentions.

If senior management wants IT people to communicate with business people, a shared understanding of strategic intentions provides a common language. It also serves as a guide for choosing between the endless possibilities that new technologies offer.

Step two: why do people see e-business differently?
Senior managers, project managers and business managers all have a different understanding of change projects. They view the change capability of the business and the resource demands of projects from their own perspectives. If badly managed, these differences can become divisive.

Senior management has two key concerns: financial performance and recreating the business for the future. They also have only limited exposure to the complexity of day-to-day operations. Because of this limited knowledge they will tend to overestimate how easy it is for the business to change and underestimate the resources required by change projects.

Technology project managers appreciate the technical complexity of strategic e-business projects and are aware of the uncertainty facing the project team. They will tend to overestimate the resource demands of a project and will be more conservative than senior management about the amount of change the project can achieve.

Business managers are the most familiar with a company's day-to-day operations. They work hard to keep things running smoothly and feel that any attempts to change operations will increase their workloads. Like senior managers, they tend not to be aware of the full costs of e-business technology until they are spelled out.

Everyone in the organisation has a variant view of strategic e-business projects and with good reason. Projects can easily come unstuck because these differences are left unresolved until they turn into problems. Strategic projects are particularly prone to this, as much of the early discussions are between senior management and the appointed project manager.

Before addressing the details of what changes will be made, senior and project managers should identify which constituencies in the organisation will be most affected by the change and canvass their opinions.

Step three: Develop a communication strategy
The difficulty with involving people in change projects is that large groups are slow and their results are often mediocre. The key is to get the appropriate level of involvement for each constituency affected by the project. It is useful to categorise people as collaborators, accommodators, compromisers and resistors.

Collaborators are people who are needed to make the project work and who can benefit from it. They need to be actively involved in designing the e-business systems and planning the change process. The project team should ensure these people are well informed and their views sought when there is any uncertainty about the project's impact on the business.

The valuable opinions will often come from 'old timers' who have intimate knowledge of the business and an established network of personal contacts throughout the organisation.

Accommodators are not greatly affected by a project and their support is not vital to success. They can make change easier simply by being tolerant of variations in their colleagues' performance during the implementation period. Inform these people that change is taking place and they will usually accommodate it.

Just knowing that the purchasing staff are being trained next week is enough for many people to put in urgent requests now and hold others until purchasing gets back to normal.

Compromisers are those who can create genuine difficulties for the e-business project if it begins to have an adverse effect on them. The key to winning over these people is to listen to them and find a mutually acceptable way forward. This may mean revising the project implementation or supporting one of their projects in return for their support.

Failing to communicate with these people can turn them into active resistors of the project. Resistors can also create difficulties and either object to the project in principle or stand to lose out. Sometimes, resistance is due to misunderstanding the project and can be reduced by explaining what the impact of the changes will be.

Others genuinely stand to lose out and must either be compensated in some way or their views challenged by senior management rather than the project team. Changing into an e-business Technology can eliminate bureaucracy, but it can also take decisions away from expert staff and reduce customer choice.

A successful e-business strategy has a clear sense of direction and is driven by effective communication, so that skills and knowledge are enhanced by technology and not undermined. Knowing who to engage in communication and understanding the differences between them is the key to realising your e-business strategy.

Chris Hemingway is a research fellow in the information systems research centre at Cranfield School of Management.
This was last published in August 2001

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