Organisations need excellent change management skills to determine how external environmental events could impact them so they can either mitigate against them or exploit them to their advantage, writes Paul Taylor MBCS author and consultant.

The past couple of years have seen some of the most turbulent changes in history.

Brexit has changed the political landscape in the UK, and in the EU and it is safe to say that the long-term impact of Brexit will take many years to fully materialise. COVID-19 has caused widespread disruption across the globe with sudden changes in social practices, increased economic hardship as well as a tragic number of deaths. At the time of writing, the UK has had five different Prime Ministers in the past six years (including three in the current year) which has created political instability and paralysis as well as a massive decrease in trust in the political establishment. Finally, there are some very challenging economic conditions with increasing bank interest rates and inflation across the globe.

Therefore, to survive, it is important that organisations (whether they are political, government, commercial or charitable), successfully cope with this constant flow of environmental impacts. This means that organisations need efficient and effective change management to ensure they are aware of any external changes and then to understand their local impact which will then allow them to either (a) implement plans to mitigate against them and/or (b) implement changes to take advantage of any opportunities that they could present.

Scanning the external environment for impacts

There are several different models and methods that firms could use to perform this environmental scanning. The PEST model, (which has been around for many years) is still very valid and popular. This model is where organisations assess the external environment through the following four lenses:

  • Political factors – What political factors could impact the organisation? Such as legalisation changes, tax rates, political instability, etc.
  • Economic factors – What economic factors could impact the organisation? Such as inflation rates, exchange rates, economic growth, etc.
  • Social factors – What social factors could impact the organisation? Such as demographic changes, cultural changes, population growth, immigration, people’s attitudes, etc.
  • Technological factors – What technological factors could impact the organisation? Such as are there any new technologies becoming popular?

It is important to remember that the four above categories are not siloed and there are interdependencies between them. For example, one could say that social media was originally a new technology factor which has had a social impact, which in turn could have a political impact in terms of new legislation being implemented to manage it; or that social media has increased political instability in certain countries.

While the selection of an analysis model or tool is important, it could be argued that obtaining vigorous and appropriate data is even more important. It is essential to remember that, any analysis is only as good as the underlying data that is used in the evaluation. This means that organisations need to pay careful attention to the data they gather. One good tip is to gather data from multiple sources and then combine it as part of the assessment. The range of different sources is vast and can cover (a) data gathered by the organisation themselves (b) data obtain from external organisations such as specialist data providers (c) data provided by governments and other political groups (d) data obtain from academic research and (e) data obtained from industry peers or working groups. This richer and wide collection of data will allow organisations to provide deeper analysis because it will allow (a) data to be compared (b) any biases to be watered down (c) allow any gaps to be identified and possibly even filled and (d) also allow any correlations and cross-linkages between causes and impacts to be uncovered.

ALL CHANGES NEED A CLEAR BUSINESS REASON AND MUST PROVIDE SOME SORT OF BENEFIT.

Implementing changes to mitigate against impacts or exploit them

Once this environment scanning analysis has been completed, then organisations can determine what changes they need to make themselves to either (a) mitigate against the impact of the environmental changes and/or (b) exploit any opportunities that the environmental changes could offer.

Now, this list of organisational changes must be implemented successfully which means organisations need a strong change management capability to allow this to happen, namely:

  • It is important to ensure that the change links to a key business reason and provides some benefit to the organisation. Although, the benefit will likely be to meet the challenge or take advantage of the opportunity the environmental scanning has identified. However, always be wary of making a change without a clear business reason because, otherwise, time and effort will be wasted.
  • All changes need to be supported by clear and visible management support. This will help with motivation regarding implementation.
  • It is essential to understand what ‘actually needs to be changed’. The traditional methods of scope definition are still valid., but organisations need to think much deeper to understand what functions, processes, products, technology, roles, etc. could be impacted and therefore need to change. Apart from ensuring that nothing is missed, it also ensures that the right people are involved in the change.
  • Does the organisation (including its suppliers and customers) have the skills and capabilities to implement the changes successfully?

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Most organisations think of this in terms of ‘traditional’ project management skills (such as planning, resource management, risk management, etc) but this is a much wider area. For example, does the organisation have the required technical skills to make the change? Or do they have the required human or interpersonal skills? Interpersonal skills are particularly important and are often overlooked. Change is very much a social process. It is triggered by humans, is implemented by humans and is used by humans. Therefore, it is very important to manage the human side of implementing change.

  • It is important to implement the change in the best manner. For example, has the change been ‘broken up’ into suitable work streams covering areas such as technology changes, testing, legal changes, process changes and so on? Has the go-live approach been agreed upon in terms of parallel runs require, phasing, a big bang, etc? Is there sufficient governance in place to provide oversight and control across the entire implementation?
  • Finally, it is important to remember that change is hard work and challenging. This means people need to work long hours to implement a change. Therefore, it is important to appreciate the efforts of the change team. A simple ‘thank you ‘ goes a long way.

The human's guide to managing change book coverAbout the author

Paul Taylor is a freelance consultant with over 30 years’ experience of implementing change across various industries. He has recently published a new book called ‘The Humans’ Guide to Managing Change.‘