6 APRIL 2016 Consulting®
Change Management Consulting
The following is an excerpt of ALM
Intelligence’s new report on change
management consulting. For details, please
Organizations continually strive to become
responsive to change, but many are finding
this is not enough to remain relevant and competitive in a world where the average lifespan
of an S&P 500 company has decreased by
more than 50 years in the last century.
According to Professor Richard Foster of
Yale University, the survival rate of commercial corporations has dropped from 67 years
in the 1920s to just 15 years today. Professor
Foster further estimates that by 2027, more
than three-quarters of the S&P 500 will be
companies that have not yet been created.
The life and death of an organization can be
attributed to any number of factors, but a prevailing characteristic of the long-lived company has been found to be an acute sensitivity to
the environment in which it operates.
Today’s companies are operating in an
environment where new customer requirements, market opportunities, and external
threats are continuously emerging, creating a constant state of uncertainty and risk.
Meanwhile, a slow-growth economy has
intensified the focus on productivity, pushing firms to standardize not only technology but also business processes.
To compete in this environment almost
always requires a response that involves organizational change, which presents its own
challenge. “You can’t have a change program every other year,” observes David Cal-fee, Managing Director of Houlihan Lokey
Strategic Consulting. “Just the ramp-up and
the battle fatigue is going to be too much.
But change itself can be more of a constant.
You can and should build it into the organi-
zation’s DNA, particularly when there’s so
much talk about agile corporations and the
need for speed and adaptability.”
Becoming a change-agile organization
requires new ways of thinking and making
decisions, new approaches to business pro-
cess design and talent management, and new
technologies that enable companies to build
flexibility into the organization’s architec-
ture. When well-integrated, change agility
drives the capacity to seize opportunities
faster than the competition and raise employ-
ees’ comfort with changing priorities.
ENGAGING THE EXECUTIVE TEAM
The role of leadership in making change
happen is critical, but often overlooked
after responsibility for the change effort is
delegated. Managing up can be uncomfortable for project leaders, who are typically in
more junior roles. They are likely to excuse
passive resistance, accommodate the neglect of busy executives, or simply underestimate the role of senior leaders beyond
sponsorship of the change effort.
And yet, research consistently shows that
executive leadership is a fundamental lever
known to drive successful implementation
and sustainability of change over time. This
may seem counterintuitive in an era of flattened hierarchies, matrixed organizations,
and empowered employees, but the message
is clear that leadership, and more importantly,
the softer skills of leadership, are needed to
communicate and disseminate change.
Bob Irvin, Managing Director at Houlihan Lokey Strategic Consulting, is emphatic
when he says, “The CEO must clearly and repeatedly articulate the ‘what’ and the ‘why’ of
the change. That is, what the company needs
to change to, and why the change is essential
and beneficial. The first is for clarity, the second is for motivation.” A key challenge is an
overall lack of preparedness to lead change.
According to research conducted by Leadership IQ, the number-one reason leaders are
fired is because they mismanage change in
Liz. DeVito is Associate
Director and Lead for