Change Management for a digital transformation can be more effective if it endeavours to go beyond achieving an ‘open mind’ (mindset change that emphasizes skill) to ‘open heart’ (that emphasizes will, an earnest desire to service and solve problems for the customers).

Today’s businesses are experiencing fundamental shifts around them as they encounter emergence of new businesses, changing customer preferences and surfacing of startups that threaten the established structures. Incumbents attempt to address these challenges by transforming themselves and increasing the pace of their digital investments, some succeed and some falter.

A crucial lever that determines success from failure of transformations is the way Change Management (CM) is orchestrated. However, it may be puzzling at times as to why even a regimental CM would come unstuck resulting in under-utilized investments or people reverting to old ways of working. As organizations learn from failures, it is being increasingly realized that for transformative programs like digital, companies should move away from conventional CM that is project based to a radically different approach of perpetual change.

This article attempts to illustrate further thinking on the approach to CM. True, businesses understand that in order to achieve transformation and embrace the new order, it is important to effect a mindset change among the workforce. While this intention is well placed, considering the moderate results, it may seem that this approach is inadequate.  Can they do more? Possibly yes.  Companies should strive to move from merely effecting a mindset change (the skill that opens their mind to new possibilities of business) to achieving a heartfelt change (the will that opens their hearts to servicing their customers).

Why is the need to transition from just a mindset change to heartfelt change? Traditional CM tends to largely emphasize the ‘technical side’ of the transformation that covers the business processes and technology enablement. While the relevance is understood, the question is whether they actually inspire the workforce to portray the sincere desire, the willingness and the empathy towards servicing their customers.

When customers are spoilt for choices, companies can hardly afford any gaps in overall experience across brands, functions and even geographical locations. They try to do the impossible of achieving standards of operations across these areas and hence design CM to promote the standards. Instead, if CM effort is oriented towards encouraging an ‘open heart’ culture that is people centric, employees will find ways of localizing them towards serving their customers.

Traversing from Open Mind to Open Heart

The journey from Open Mind to Open Heart is complex. How can companies guide their employees in this transition? There are atleast 4 fundamental shifts they need to accomplish. 

Shifting to Synergized Working from Siloed operations

When companies invest in transformation engagements they attempt to perfect the different functions of the organisation such as sales, customer service or logistics. In this quest, they tend to trip on the much needed co-ordination among these functions.  When the coordination fails due to lack of information or poor understanding of the problem, even the well designed customer-centric strategy would fail leading to dissatisfaction and churn. 

As customers, we may have experienced co-ordination gaps in our own interactions with our service providers.  We have may have had excellent interactions when our transactions fall into regular categories but seen it reverse when we report a problem and trying to get it solved.  We would wish that our service providers put more ‘heart’ to solve the than leaving us in frustration.

CM should encourage appreciation and learning of challenges of peer functions and more importantly inculcate willingness among the teams to move across functions or to collaborate to solve customer issues. This could sometimes require the individual functions to give up their metrics and work towards the tasks on hand.

Elevating to Empathizing from Engaging with Customers

As noted earlier, digital investments tend to over emphasize the business and technical side of the implementation and assume that the attraction of new technologies is enough to motivate the employees to change. The higher dose technicalities force employees to follow pre-defined scripts –newly developed possibly – than acquiring capabilities to deeply understand customer situations. In other words, the employees are trained to ‘engage’ with customers more efficiently than ‘empathize’ with them to understand their needs.

CM interventions should attempt to bring a perpetual shift that is high on empathy and educate the employees to look at issues from customer perspectives and their own roles from customers’ point of view.  Empathy encourages adopting different approaches and levels of interaction for different customers. A fundamental quality that helps in empathy is listening – one of the most undervalued skills.  A good listener would know when to stick to the script and when to move out to service a need by bringing necessary resources to the table.  Organizations would do well to encourage listening together as a team to a customer complaints or requirement in order to solve them and more importantly collectively learn together.  

Empowering to Taking Decisions from Escalating Issues

When over standardization translates into capabilities, the employees would hesitate to move out of the script and simply escalate to the higher levels. The employees should be empowered to make decisions, say in customizing or providing solutions to the customers.  Moving away from standardization should be encouraged within a overarching but flexible framework. In the long run, companies would realize that local decision making will eventually be more successful than global standards.

Towards this, CM should structure teams in a way that brings them closer to the customer.  Customer proximity should be enabled by technology such as social media analytics, customer journey mapping etc.

Moving to Bottom-up from Top-Down Construct of Changes

Customer centricity would remain just a slogan if the employees were not accustomed and trained to act in a truly customer-centric way. To bring about a change, employees should be allowed to be willing participants in the planning and encouraged to devise ways of servicing the customers.  Including the employees in designing CM programs by putting them at the centre of the strategy and allowing them to own the execution can help overcome their resistance and arduous nature of change. 

Achieving these Shifts

The journey to move from ‘open mind’ to ‘open heart’ is never easy and the rallying cry must start from the top.  The leadership should be united in the effort and reiterate the purpose and engage with employees as often as it could. Companies should follow certain general principles  that include but not limited to direct involvement of leadership, an effective employee engagement, social influence and appropriate technologies need to come together towards achieving the shifts.  The employee engagement should take centre stage and the CM should include employee-wise development plans, team workshops and identify and resolve conflicts.  A weekly if not daily debriefing on the quality of customer interactions that highlights the listening aspects, dialogue and outcomes across all levels of the organization would help further nurture the desired behaviours.

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In order to keep pace with dynamics of the digital world, organizations need to adopt new ways of managing transformations and driving the change within. They need to enthuse and empower the employees to move closer to their customers and encourage being more empathetic to their needs.  Achieving such behaviours require altering fundamental structure and traits of the workforce and bringing new norms of working across the organizations. Skills (open mind) are no doubt critical but more than that the will (open heart) to service customers is crucial to lead in the digital era.

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Digital forays have to be constructed on a strong foundation of organization change management that can potentially become challenging and complex due to the very nature of the pursuits. Companies need to shun the traditional sequential and project based approach to change management and practice a continuous change process that is hard-wired into their digital strategy.

Businesses are increasingly seeking to be digital to propel growth and compete successfully in the market place. As they move from taking baby steps to attempting transformational changes, they realize that some significant characteristics define their journey to become truly digital:

• The status quo is often challenged in the attempt to re-define operating models to become more customer centric or introduce innovative products and services or achieve operational excellence.
  
• The impact is almost always cross-functional as different functions necessarily need to come out of their silos and synchronize their moves.
  
• Established structures, processes and platforms get re-modeled swiftly and employees shaken out of their routines to achieve the desired makeover.
  

When companies pick digital momentum, such characteristics compel them to operate in a continuous change mode with intensity levels varying along transactional - transformational -disruptive spectrum.  In such a dynamic environment, Change Management (CM) becomes crucial and in fact forms the foundation to rally the organization forward and realize the aspirations. Several questions arise when we look at managing change in the digital era - How should companies strategize and execute CM? Can traditional approach to CM be effective to bring in fast-paced culture? What team structure,  methods and tools can help? This article presents a perspective and recommends a different approach to CM to successfully operate as a digital enterprise.

Importance and Challenges of Managing Change

Change Management has always been a complex subject. Businesses have seen more failures in transformation projects primarily due to their casual approach to organization change. Various studies expound the inherent difficulties in effecting change and arriving at factors that can guarantee success.  Generally the blame for failures is directed, rather misdirected, at one word ‘resistance’. In fact, research has shown that the actual cause is not the resistance of people but the inability of companies to handhold their employees to navigate the change.

CM can only become more complex and challenging in the digital world due to the very nature of the digital programs.  In a radically shifting landscape, traditional methods of CM may not sufficiently address the demands of digital because of some inherent assumptions these were built on.  Here are a few pointers:

• Managing change is relatively easy when organizations know where they are headed to. With clarity, they can attempt to sufficiently address the rational, emotional and political factors of those impacted to influence them positively.  However, digital initiatives come with uncertainties as companies attempt new business models and unproven solutions with rapid implementations, making it difficult to ascertain outcomes in advance. Such moves may not provide the clarity in scope to plan CM efficiently.
  
• Traditional methods of CM typically are structured to be carried out as a series of sequential tasks (as in Plan --->Assess ---->Design --->Implement) in a project mode. This is possibly because they were designed to align with enterprise projects such as ERP implementations that are carried out in a sequential mode over long duration typically bringing substantial changes.  In the digital era, we find businesses increasingly moving away from such big-bang implementations to adopting a more modular approach and combining them over a period of time to effect larger transformation. Following a sequential process to CM will be detrimental to such a strategy as companies have to shift gears quickly and cannot afford to be in a ‘catching up’ state of organization changes.
  
• Further, traditional methods recommend a top-down approach to change that is normally carried out by a few executives (or consultants) who would be expected to know the degree of impact and come up with appropriate interventions for the entire organization. Employee involvement happens too late in the change cycle. Successful digital companies have realized that the changes will be effective if they are not seen as a push from the top but designed by the employees themselves working in a collaborative mode. This ensures the crucial aspect of buy-in from those impacted much earlier while they understand the business shifts and prepare themselves to cope with the change.
  
• ·Companies cannot follow a fixed template for change, another classic legacy approach - every initiative requires different treatment – the impact level may depend on the scope of the digital programs.
  

A Different Approach to Change Management

Organizations should move away from a sequential and project approach to CM and practice a continuous process that will not only keep pace with the intended business changes but also minimize the side-effects of disturbances to the day-to-day operations and employee involvement.   

To start with companies need to establish a dedicated CM team that will form an integral part of the digital strategy team and jointly govern a Digital Program Office.  It will be cross-functional with members hand-picked from key departments consisting of unit managers, influential executives and where required representatives of business partners to act as change agents. They of course, need to believe in organization’s vision, assess the impact of the change and more importantly be willing to change themselves first. 

The CM team has to follow a more fitting change approach and here is a suggested methodology that involves 5 stages carried out on a continuous basis:

• Imbibe - The CM team should understand and absorb the intent of the digital programs, contribute to strategy, assess the possible impact and align the change plan to the business context. Further, matured digital enterprises may pursue multiple programs in quick succession addressing different business demands.  The CM team not only need to multi-task but also assess the possible cross-impacts of such multiple programs.
  
• Initiate – Initiate involves preparing a CM plan covering communications and implementation aspects of the change programs. As a pre-requisite, the team needs to conduct an impact study that assesses the changes to organization across structure, roles, and processes and also examine possible hurdles that can derail the initiatives. It can tap into organization history or responses to past programs and ensure they are prepared with adequate measures to counter the hurdles.
  
• Include - Employees and business partners should be encouraged to contribute to effecting the change by sharing ideas on the process and implementation. Towards this, the CM team should bring in the stakeholders on to a common platform where such exchanges can be facilitated. In fact, such an exchange need not be pegged to a project but can be a continuous process. Thus, the ideas and suggestions need not necessarily be restricted to problem on hand but can be more wide-spread and possibly can be used for future programs.  The CM team should distill the ideas and suggestions and consider them for bringing the required changes.  The company can introduce appropriate reward and recognition schemes to encourage wider participation by the employees.
  
• Influence - The stage is the classic process of influencing and convincing the employees to align with the new operating models and handholding them to navigate the terrain. CM team can use a mix of traditional and innovative methods including
  
• communicating through various channels, using platforms such as social media to connect with the employees,
• addressing ‘what-is-in-it-for-me’ concerns and
• conducting one-on-one counseling sessions with employees to address concerns and fears that are deeper in their minds and not normally brought out during regular interactions.

• Implement - Implement stage is without doubt the critical piece of CM.  The team needs to work with various functions of the organization for implementation. The changes may cover, depending on the impact, organization structure, roles, appraisal methods and compensation structures. 
  

Guiding Principles

Top management commitment, continuous communication, one-on-one interventions at every stage are some basic tenets of managing change.  To operate successfully in a digital environment, companies also need to consider the following key principles.

Leading the Charge

As noted earlier, the CM team has to be cross-functional and form an integral part of the digital strategy team.  There is an on-going debate on ownership of digital programs whether a company needs the services of a Chief Digital Officer or should do with CMO or CIO. However, not much is said about the responsibility for change.  Irrespective of the ownership of the digital programs, the CEO should directly be involved in CM, providing directions and frequently reviewing the progress. He / she may appoint a senior executive to own responsibility for CM and provide on-the-ground support (call it Chief Transformation or Change Officer).  The Board has an equally vital role to play and they should be part of the process.

Empowering the CM Team and the Stakeholders

Organizations should promote an open and transparent culture where every employee has equal stake in bringing the new order.   The employees and business partners should be seen as the designers of change than just consumers.  The CM team itself along with the Program Office should implement a flat structure, encourage open communication and collaboration among the members.  The CEO and CXOs should be willing to listen to and act on team members and employee suggestions and consider them on merit even if they are non-traditional.  

Demonstrating a Sense of Urgency

Companies have to operate in a fast paced environment of change, taking decisions in real time and implementing swiftly.  A sense of urgency should pervade all digital actions and the CM team has a significant role to play in achieving the momentum.  It should be comfortable in assimilating data from different sources to study the impact or understand the reactions of the stakeholders. Further, it should continuously explore quick-win opportunities to demonstrate the benefits of change and boost the confidence levels of stakeholders before rolling out in fullness.

Implementing New-Gen Tools to Support CM

Companies should consider deploying platforms that bring the employees together for collaboration and sharing ideas. They should evaluate leveraging social influence and gamification mechanisms to drive change in attitudes and behaviours by integrating such principles into the collaborative platforms.

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In the digital era, organization change cannot be realized by following a piecemeal approach driven by a small group of managers.  A continuous change process, a more inclusive and collaborative structure and agile execution are crucial to usher in the new business order that is impactful and employee oriented. CM, thus has to become an organizational capability of companies wanting to move up in the digital ranks.

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