We’ve all heard the phrase, “culture eats strategy for breakfast,” so why do organizations consistently fail to consider this critical element when planning strategic change initiatives?
Organizational change management is a constant in today’s economy, either driven either by external forces, internal forces, or some combination of both. For some, change is intended to position the organization to thrive and for others, change is necessary to survive. In either scenario, people will be behaving differently tomorrow than they are today. To achieve the goals of any change initiative, expectations and culture must be aligned.
Why is Cultural Alignment Important?
- Provides unified direction
- Empowers stakeholder engagement and support
- Enables realization of objectives and ROI
- Reinforces expectations and accountability
Full Picture View
Recently, a large organization replaced their 16-year-old legacy ERP system with a more modern toolset as part of a broader business transformation initiative to increase efficiencies and improve the customer experience. The legacy system was configured with too much flexibility and lacked guardrails, leading to operational inefficiencies and workarounds that were negatively impacting profitability and customer satisfaction. Over the years, the organization applied few upgrades to the system, even when the upgrade presented an improvement opportunity.
The daily responsibilities of employees include obtaining materials, scheduling and performing installs, and closing out work orders. All of which have associated tasks in the ERP to complete. The legacy system allowed employees to circumvent the ERP requirements and the culture enabled a reliance on help desk support to complete tasks on the behalf of others. Unfortunately, these behaviors and processes led to inaccurate information, service delays, and an extremely inefficient approach to delivering the organization’s value proposition.
A small group of corporate employees was chosen to lead and implement the new system. The customer-facing workforce was not involved in the design of the future state. It was assumed that their workload would not provide them with enough time to contribute or participate. With the priority and focus on improving operations, the team redesigned processes and configured the new system with more rigidity to ensure accuracy and compliance. Unfortunately, the failure to include the most highly impacted stakeholders was the first misstep of many on their journey.
At go-live, the more rigid structures and processes in the new ERP system required staff to behave in new ways, including new processes that required them to complete one task before moving on to the next. For the customer-facing workforce, this meant they could no longer obtain materials, schedule and perform installs and later complete the ERP tasks at their convenience (if at all). These requirements changed everything about the way they executed their daily routine and interacted with customers. The project team sent a few emails communicating the new ERP implementation and provided limited training, but the substantial cultural change required was overlooked and not considered. Additionally, expectations for the workforce to maintain their current level of output were not adjusted.
What Went Wrong
The culture of an organization is made up the behaviors, values, and unwritten norms that each employee collectively contributes and reinforces. It’s often said that formal policies and procedures are how an organization says things get done and organizational culture is how they actually get done. When tradeoffs, workarounds, and manual processes area allowed, a culture of accountability is largely absent. When an organization’s strategy involves changing or increasing responsibilities and redesigned processes, its culture will be impacted. It’s critical to apply structured organizational change management strategies to ensure alignment between strategic change objectives and the organization’s culture.
ERP systems are simply tools that enable an organization to accomplish a set of objectives. Implementing or changing technology without ensuring the people that will use it are prepared and supportive will surely result in resistance, low adoption, rework, increased costs, and potential ERP failure. In this example, impacted stakeholders were not included or engaged. They remained largely unaware of the reasons for the change and weren’t able to visualize any potential benefits for themselves or the organization as a whole. The frustrations experienced by the workforce operating in their normal cultural state with the sudden onset of new expectations negatively impacted employees, customers, and leadership; and the realization of project benefits and ROI expected in year 1 are now delayed for years to come.
Culture is complex and exists in every organization. When embarking on a change, avoid failure by understanding the values and perceptions across all levels of the organization, including and empowering stakeholders, and ensuring expectations are realistic and culture is aligned. If your organization doesn’t have internal organizational change management capabilities, engage with the expertise of an organizational change management professional to develop a change management strategy and plan for your next strategic initiative.
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