CMPT 641 | Digital Transformation

WEEK 3
CHANGE MANAGEMENT

Dr. Sana Mojdeh

Fall 2023
GET READY FOR…

 Week 2 Recap

 Why should be always ready to change?

 Resistance to change

 Drivers of success transformations

 What can happen without Change Management?

 Advantages of CM

 CM models (Prosci, Kotter’s 8-step)

 CM Key Performance Indicators (KPIs)

 CM in the context of Digital Transformation

 How to get certified in CM?

 Group Class Discussion 1 (3 marks)

 Intro to Individual Assignment 2

 Intro to Discussion Forum 2

CMPT 641 | Digital Transformation | Fall 2023 2

WEEK 2 RECAP

 Types of DT

DT Roadmapping

Strategy and Strategic Management

Porter’s Generic Strategies, Five Forces, and Value Chain Model

SWOT Analysis

Business Model | Business Model Canvas

DT and Revenue Streams

CMPT 641 | Digital Transformation | Fall 2023 3

 "To improve is to change; to be perfect is to
change often.”
Winston Churchill

”Change before you have to.”

Jack Welch

"Don’t be afraid to give up the good to go for the

great.”
J. D. Rockefeller

CMPT 641 | Digital Transformation | Fall 2023 4

WATCH THE VIDEO IN ‘SLIDE SHOW’ MODE

CMPT 641 | Digital Transformation | Fall 2023 2023-03-27 5

WHAT DRIVES CHANGE IN TODAY’S BUSINESS WORLD?
• Changing generations in the workplace: Baby boomers are transitioning
to retirement. Millennials and Gen Z who are replacing them have
significantly different expectations of their workplaces and organizations.
• ESG adoption is becoming table stakes: In 2020, 85% of investors
considered environmental, social and governance (ESG) matters when
making financial decisions.
• Technology and digital collaboration tools are expanding: Growth in the
global digital workplace is significant, estimated at a compound annual rate
of 21% by 2028.
• Skills shortages: The EY 2022 Work Reimagined survey revealed in the last
year, 68% of employers noted employee turnover has increased. At the same
time, 75% of employers are looking at moderate to extensive changes in
learning and skills according to EY’s Physical Return and Work Reimagined
study.
• Inflation and recessionary risk: Canada’s inflation accelerated to 8.1% in
June of 2022 – the highest in the last 20 years. 6
CMPT 641 | Digital Transformation | Fall 2023
 DISCUSS IN GROUPS:
INTRODUCING NEW TECH IN ORGANIZATIONS
(THE QUESTION WILL BE PRESENTED IN CLASS)

CMPT 641 | Digital Transformation | Fall 2023 7

CMPT 641 | Digital Transformation | Fall 2023 2023-03-27 8
 “Companies with
failed transformation
programs identify
employee resistance
or management
behavior as the
major barrier (72%)
to success.”

CMPT 641 | Digital Transformation | Fall 2023 9

 70 percent of change programs fail to achieve
their goals, largely due to employee resistance
and lack of management support. We also know
that when people are truly invested in change it
is 30 percent more likely to stick. While
companies have been obsessing about how to
use digital to improve their customer-facing
businesses, the application of digital tools to
promote and accelerate internal change has
received far less scrutiny.

McKinsey & Co
CMPT 641 | Digital Transformation | Fall 2023 10
 IMPORTANT ANNOUNCEMENT

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Note that
technology,
although crucial, is
only one aspect of
transformation.

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 TRANSFORMATIVE
CHANGE
(SCHEIN, 1992)

13
CMPT 641 | Digital Transformation | Fall 2023
WHAT CAN HAPPEN WITHOUT CM?
 Resistance to Change: Without effective change management, employees and stakeholders may resist
the changes introduced by the project. This resistance can manifest in various ways, such as decreased
productivity, increased absenteeism, or even active opposition to the project.
 Communication Breakdown: Insufficient communication and engagement can lead to
misunderstandings, rumors, and confusion among employees. This lack of clear communication can
hinder project progress and create a sense of uncertainty and anxiety within the organization.
 Decreased Adoption and Buy-in: Change management helps promote understanding and buy-in from
employees and stakeholders. Without it, individuals may not fully understand the purpose and benefits
of the project, leading to reduced adoption and a lack of enthusiasm for the proposed changes.
 Project Delays and Cost Overruns: Inadequate change management can result in project delays and
cost overruns. If employees are not adequately prepared for the changes, they may struggle to adapt,
leading to productivity losses, rework, and increased project expenses.
 Negative Impact on Culture and Morale: Large-scale projects often bring significant changes to the
organization's structure, processes, and ways of working. Without change management, these changes
can disrupt the organizational culture, erode morale, and create a negative work environment.
 Missed Opportunities and Failed Objectives: In the absence of effective change management,
organizations may fail to leverage opportunities for innovation, growth, or competitive advantage.
Projects may not achieve their intended objectives, and the anticipated benefits may not be realized.
CMPT 641 | Digital Transformation | Fall 2023 14
WHAT ARE THE ADVANTAGES OF IMPLEMENTING SUCCESSFUL CM INITIATIVES?

Smooth Transition: Change management helps organizations navigate transitions

smoothly by providing a structured approach. This reduces resistance and helps
employees adapt to new processes, technologies, or strategies. According to Prosci's
1 2021 benchmarking report, 73% of organizations that use change management meet
or exceed objectives compared to only 29% of organizations without change
management

Increased Employee Engagement: Engaged employees are more likely to embrace and
support change initiatives. Change management fosters employee engagement by
2 involving them in the change process, addressing their concerns, and providing
support. A Gallup study found that organizations with high employee engagement
experienced a 21% increase in profitability compared to those with low engagement.

Reduced Resistance and Conflict: Change often generates resistance and conflict. By
employing change management strategies, organizations can proactively identify and
3 address sources of resistance, minimizing conflicts and enhancing collaboration. Research
by McKinsey & Company revealed that organizations with effective change management
had a success rate of 79%, while those without it had a success rate of only 16%.

CMPT 641 | Digital Transformation | Fall 2023 15

WHAT ARE THE ADVANTAGES OF IMPLEMENTING SUCCESSFUL CM INITIATIVES?

Faster Adoption and Return on Investment (ROI): Effective change

management promotes faster adoption of new initiatives, resulting in quicker
4 realization of desired outcomes and ROI. A study by Towers Watson found
that organizations with excellent change management practices were six
times more likely to meet objectives on time and on budget.

Enhanced Communication and Stakeholder Alignment: Change management emphasizes

clear and consistent communication, ensuring stakeholders are well-informed and aligned
with the goals and benefits of the change. Improved communication leads to higher success
5 rates. For example, a case study by Prosci demonstrated that a global pharmaceutical
company achieved 93% stakeholder satisfaction and 50% reduction in time to adopt changes
by implementing change management practices.

Minimized Disruption and Costs: By effectively managing change, organizations can

minimize disruptions to operations, customer service, and productivity. This reduces
6 costs associated with delays, rework, and employee turnover during periods of
change.

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WHAT ARE THE ADVANTAGES OF IMPLEMENTING SUCCESSFUL CM INITIATIVES?

CMPT 641 | Digital Transformation | Fall 2023 17

 WHY SHOULD I LEARN ABOUT CM?

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THERE'S BEEN A SURGE IN
DEMAND FOR STRONG
CHANGE MANAGERS.

THE DISCIPLINE OF
CHANGE MANAGEMENT
IS RAPIDLY GROWING AND
WITH IT, THE CHANGE
MANAGEMENT JOB
MARKET.

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CM MODELS
Prosci
Kotter’s 8-step model

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 The PCT Model provides a framework and common
CM MODEL: PCT language so teams can connect these four aspects of the
project. Key stakeholders develop a shared definition of
project success comprised of various facets of
leadership/sponsorship, project management and change
management.
• Success – the definition of success for your change,
which includes the reason for the change, project
objectives, and organizational benefits
• Leadership/Sponsorship – the direction and guidance
for a project, including who is accountable for defining
why a change is happening, how it aligns with the
direction of the organization, and why it is a priority
• Project Management – the discipline that addresses
the technical side of a change, by designing, developing
and delivering the solution that solves a problem or
addresses an opportunity, within the constraints of
time, cost and scope
• Change Management – the discipline that addresses
the people side of the change, enabling people to
engage, adopt and use the solution

CMPT 641 | Digital Transformation | Fall 2023 21

 2023-03-27
22

WATCH THE VIDEO ON

THE COURSE PAGE:

PROSCI PCT CM MODEL

CMPT 641 | Digital Transformation | Fall 2023

 CM MODEL: ADKAR

 1. Awareness of the business reasons for change. Awareness is a

goal or outcome of early communications related to an
organizational change.
 2. Desire to engage and participate in the change. Desire is a goal
or outcome of sponsorship and resistance management.
 3. Knowledge about how to change. Knowledge is a goal or
outcome of training and coaching.
 4. Ability to realize or implement the change at the required
performance level. Ability is a goal or outcome of additional
coaching, practice and time.
 5. Reinforcement to ensure that change sticks. Reinforcement is
a goal or outcome of adoption measurement, corrective actions,
and recognition of successful change.

2023-03-27
CMPT 641 | Digital Transformation | Fall 2023 23
 CM MODEL: ADKAR

The ADKAR Model is useful in:

• Diagnosing employee resistance to change

• Helping employees transition through the change process

• Creating a successful action plan for personal and professional

advancement during a change initiative
• Developing a change management plan for your employees

Refer to ‘Prosci ADKAR folder’ on the course page (week 3)

2023-03-27
CMPT 641 | Digital Transformation | Fall 2023 24
 3-PHASE PROCESS
 The Prosci 3-Phase Process is one of the three main
components of the Prosci Methodology, in addition to
the PCT Model and the ADKAR Model. While the ADKAR
Model enables successful change at the individual level,
the Prosci 3-Phase Process provides a framework for
achieving change at the organizational level.
 Through this organizational change management
process, change practitioners work through three phases
(Phase 1– Prepare Approach, Phase 2 – Manage Change,
Phase 3 – Sustain Outcomes) to achieve successful
project outcomes.
 Each phase is broken down into three stages, and each
stage includes important activities to support the
success of a change initiative. Although the Prosci 3-
Phase Process is structured, it is also adaptable and
scalable to fit the needs of any organization or change
initiative.

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WHAT ARE WE ACTUALLY
CHANGING?

CPMT 641 | Digital Transformation | Summer 2023 2023-03-27 26

10 ASPECTS OF CHANGE IMPACT

CMPT 641 | Digital Transformation | Fall 2023 27

CM MODEL:
KOTTER’S 8-STEP
 It is an easy step by step model which provides a
clear description and guidance on the entire
process of change and is relatively easy for being
implemented.
 Emphasis is on the involvement and acceptability
of the employees for the success in the overall
process.
 Major emphasis is on preparing and building
acceptability for change instead of the actual
change process.

Refer to ‘8-step
ebook file’ on the
course page (week
3)

28
 FOR MORE CM MODELS VIEW:
HTTPS://[Link]/BLOG/CHANGE-MANAGEMENT-MODELS/

CMPT 641 | Digital Transformation | Fall 2023 29

 HOW DO YOU KNOW IF YOUR CM
INITIATIVE IS GOING WELL?
HOW WOULD YOU MEASURE THE
HEALTH OF YOUR CHANGE
MANAGEMENT?

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CM
KEY
PERFORMANCE
INDICATORS
Adoption Rate
Employee Engagement
Productivity Metrics
Cost Reduction or Cost Avoidance
Time-to-Adoption
Stakeholder Satisfaction
Training and Development Metrics
Resistance Levels
Employee Turnover or Retention Rates
Customer Satisfaction
CMPT 641 | Digital Transformation | Fall 2023 31
CM KPIS EXPLAINED
Adoption Rate: This measures the percentage of employees or users who
have adopted the change or new process. It helps gauge the acceptance and
integration of the change within the organization.
Employee Engagement: This KPI assesses the level of employee involvement
and commitment during the change process. It can be measured through
surveys, feedback, or employee satisfaction ratings.
Productivity Metrics: These metrics evaluate the impact of the change on
productivity levels, such as output per employee, cycle time, or error rates.
By comparing pre-change and post-change data, you can determine if the
change has positively influenced productivity.
Cost Reduction or Cost Avoidance: If the change initiative aims to reduce
costs, tracking the actual cost savings achieved or the costs avoided can be a
useful KPI. It helps assess the financial impact of the change.

CMPT 641 | Digital Transformation | Fall 2023 32

CM KPIS EXPLAINED II
Time-to-Adoption: This measures the time it takes for employees or users to fully
adopt and adapt to the change. It can provide insights into the effectiveness of
change management strategies and the speed of implementation.
Stakeholder Satisfaction: Gathering feedback from key stakeholders, such as
employees, managers, customers, or partners, helps assess their satisfaction with
the change process. Surveys or interviews can be conducted to gather this data.
Training and Development Metrics: If the change involves new skills or knowledge,
tracking training participation, completion rates, or competency assessments can
be valuable KPIs. They reflect the level of employee readiness and competence in
the new environment.
Resistance Levels: This KPI measures the level of resistance encountered during
the change process. It can be assessed through surveys, focus groups, or incident
reports, providing insights into areas that require additional attention.

CMPT 641 | Digital Transformation | Fall 2023 33

CM KPIS EXPLAINED III
Employee Turnover or Retention Rates: Monitoring turnover rates during and after
the change can help assess the impact on employee morale and job satisfaction.
High turnover may indicate issues with the change process or employee
dissatisfaction.
Customer Satisfaction: If the change impacts customer experience or service
delivery, measuring customer satisfaction levels can be a relevant KPI. Surveys,
ratings, or feedback mechanisms can be used to gather this data.

Can you think of any other KPIs?

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 CHANGE MANAGEMENT
IN THE CONTEXT OF
DIGITAL TRANSFORMATION

CMPT 641 | Digital Transformation | Fall 2023 35

 Change Communication and Awareness CM
Digital Skills Development
DIGITAL TRANSFORMATION
Change Leadership and Sponsorship
Change Impact Assessment
Change Readiness and Adoption
Change Governance and Project Management
User Experience and Customer-Centricity
Data Privacy and Security
Change Measurement and Evaluation
Change Sustainability and Continuous Improvement

CMPT 641 | Digital Transformation | Fall 2023 36

CM IN THE CONTEXT OF DIGITAL TRANSFORMATION (CONT’D)
 Digital Skills Development: Digital transformation often requires acquiring new skills
or enhancing existing ones.
 Assessing current skill gaps
 Designing training programs
 Providing resources for learning
 Supporting employees in acquiring digital competencies

 User Experience and Customer-Centricity: Digital transformation often aims to

improve the user experience and enhance customer-centricity.
 Understanding user needs and expectations
 Designing intuitive interfaces and workflows
 Gathering user feedback
 Continuously iterating and improving digital solutions based on user insights

 Data Privacy and Security: With the adoption of digital technologies, protecting data
privacy and ensuring security becomes paramount. Topics related to data privacy and
security include developing policies and procedures, implementing security measures,
training employees on data handling, and complying with relevant regulations.
CMPT 641 | Digital Transformation | Fall 2023 37
CMPT 641 | Digital Transformation | Fall 2023 38
GROUP CASE REVIEW # 1 | 3 MARKS
1. Download and read the following article from the course page | week 3:
Going Digital: General Electric and its Digital Transformation
2. Go to the page in below and listen to audio file:
[Link]
-went-wrong/
3. Discuss in groups:
What were the goals of GE Digital Transformation project?
What caused GE Digital Transformation project failure?
What aspects of Change Management were among the failure points?
4. Provide the highlights of your discussion in class during.

CMPT 641 | Digital Transformation | Fall 2023 39

Project Management in the context of
Digital Transformation

CMPT 641 | Digital Transformation | Fall 2023 40

 Let’s look at
Forum 2
Individual Assignment 2

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