A Business Leader as a Sponsor of Change - What Can Go Wrong?
Jack Welch once said about the role of a leader in an organization: "first of all, you should make sure that all employees know where you're going, why you're going there, and - most importantly - what they will accomplish when they get there with you." From the perspective of GE's CEO, who was in that role for 20 years (1981-2001), increasing the company's value from $12 billion to nearly $500 billion during that time, this quote applies in large part to the role of business leaders IN A CHANGE SITUATION.
During Jack Welch's time, GE not only acquired many companies, but also underwent a profound cultural change that required all employees to be very open to new ways of working. Jack Welch's definition of leadership seems very apt in light of later studies conducted around the world on the impact of top management on the success of organisational change and its role in this process (e.g. Prosci, McKinsey).
In the 1980s, Jack Welch did not yet know the results of this research. But he knew very well that the success - and failure - of any major change in a company depends on the effectiveness of the leader as the "face" of that change, its promoter and tireless ambassador. The knowledge available today, such as the findings of Prosci's 10 consecutive global benchmarking studies conducted between 1998 and 2019, shows that an active and visible sponsorship is the #1 success factor of any major change in an organization. The effectiveness of the Sponsor directly translates into the degree to which project goals are achieved.
The term "sponsor" here means a high-level manager with a vested interest in achieving the goals of the project. At the same time, it is a person with the right authority and power over the processes, organization, and employees affected by the change resulting from the project. In this sense, sponsor comes from the Latin sponsus - "one who accepts a commitment." Thus, it means not only someone who makes key decisions and allocates the budget but also - and perhaps most importantly - feels ownership of the project results and is the "face" of the change for the organization.
The link between the effectiveness of the sponsor and the achievement of the project’s goals.
In all Prosci Inc. studies for the past 20 years, a key factor in the success of change is an active and visible sponsorship. Prosci's research indicates that the role of top management in a change situation can be boiled down into 3 key aspects, referred to as "ABC" for short:
- A = Active and visible participation throughout the project.
- B = Building an effective coalition for change with other managers and key stakeholders at all levels of the organization: superiors, colleagues, and subordinates.
- C (from Communicate) = Communicating to all those affected by the change the reasons for the change, why it is necessary and inevitable, and the consequences and benefits of the change.
At the same time, considering the same research, an ineffective sponsorship is the #1 obstacle to a change success. Observation of the results of the implementation of large projects and programs, such as transformations, mergers and acquisitions, digitalization, or the implementation of IT solutions shows that at least half of them fail to deliver the expected results.
One of the main reasons cited is employee resistance to the new ways of working that result from change. This is not a question of implementing the wrong solution, but of an inadequate way of implementing the solution, which can lead to unnecessary resistance and make it difficult for people to adopt and use the new solutions. This in turn leads to delaying the intended results of the projects, or achieving them only partially or not at all.
When this happens, sponsors often claim that the problem is implementation-related. In practice, it is often a leadership problem - ineffective or insufficiently effective action by the sponsor. Either way, whatever the root cause, it ends up being a problem for the project manager and the project team. They are unable to deliver the desired business results - often despite delivering the project deliverables to specification.
So where does the lack or ineffectiveness of sponsors come from?
To simplify, 3 areas of causation can be identified:
- Awareness of the sponsor's role.
- Competency to perform this role.
- Organizational capacity to effectively perform the role of sponsor.
Let's take a closer look at them, starting with the first, awareness of the sponsor's role - this is the focus of this article. The next two will be discussed in part II of the article, in the next issue of "PMI Zone".
First - is it possible that the business leader is not aware of his role in the change?
Unfortunately, yes. Prosci research shows that, according to project members, around 50% of sponsors don't understand enough about the role they are playing in the change. They then focus on the 'technical' side of the project on the assumption that because the solution meets market and business needs, people will readily adopt it and change their current way of working. As a result, there are situations such as the following:
- The sponsor's assumption is that his role in the project is primarily to MAKE DECISIONS: about goals, requirements, business objectives, milestones, resources, etc. And that is partly true. But being the "face" of the changes that the project brings is the other part of the sponsor's role in a project.
It's all about the "ABC" (see above). This requires him to take ACTION. One of the CEOs of a large Polish services company with whom the author had the opportunity to work once said, "When we announced the change in the company, I thought my job as sponsor was over and I could go back to the business and the customers, and the project would be implemented by the team. I quickly learned that I had to be the face of the change. In fact, when the change was launched, my work as a sponsor was just beginning". - The sponsor believes that since he has announced the change, it will happen without his involvement - after all, it is the job of every manager and employee. So he or she delegates his or her role to the project team, to communications experts, to the HR team, and sometimes to external consultants. Such delegation of the sponsor's role may have a practical justification, e.g. the burden of other responsibilities. But it usually ends badly for the project.
- Sponsors underestimate the importance of the 'human side' of change to the achievement of the project's business goals. They focus on the technical aspects and the implementation of the project's products. They see these as the sources of future benefits. Of course, this is partly true. Without the implementation of the project scope, there are no results. This means, for example, that people don't understand the reasons for the change and don't see it as relevant to the here and now - even though they are informed about the technical aspects of the project. It is also common for the human aspects to be left out of the project plan. No resources are allocated to them. Change management is usually limited to project status communication and training. It is used when there is resistance and fires need to be 'put out'. An experienced programme manager in the IT industry once said: "It was easier for me to convince the project sponsor, the VP of Technology, to spend several million Euros on changes to the IT system than to invest 10,000 Euros in preparing the users for the change”.
According to research conducted by Prosci Inc, approximately 50% of sponsors do not understand their role in the change process.
To simplify, 3 areas of causation can be identified:
- Awareness of the sponsor's role.
- Competencies to perform this role.
- Organizational capacity to perform this role effectively.
The first of these, awareness of the sponsor's role, was described in the previous section. Now it is time for the other two areas.
Second - can the sponsor's competencies needed for change be a challenge for high-level managers?
On the one hand, the issue seems simple: the ABCs of being a sponsor are not "rocket science". They are specific actions and behaviours. Any senior manager should be able to master them. However, when it comes to practising, this turns out to look different.
"Sponsors see the biggest challenge in building coalitions” - the Prosci survey found.
A "coalition" for change means a group of managers who share a common goal and openly support a project, even when the needs of the whole organisation require significant changes in the way individual areas (BUs, plants, divisions, departments) operate. This takes time and consistency. It also means confronting people who do not want to actively work for the project in this coalition. It also requires tough conversations. It requires setting clear expectations, giving feedback and drawing consequences when agreements aren't implemented. This is a challenge for many senior managers. Even if they themselves have strong convictions about the project.
It should be tailored to the audience. It should mobilise them to action and build commitment. As Jack Welch said: "It should be clear where the company is going, why, and what the benefits are for the people, not just the organisation. Many managers don't see the need for this. It seems to them that people need INSTRUCTIONS, not INSPIRATION. In practice, the opposite is true...
Communication should also be regular and frequent. It should not just be at the beginning of the project. This is another sin many sponsors commit. It often seems that a one-off communication is enough. In practice, this is not the case.
What's more, the most effective form of communication is a "face-to-face" message. Some sponsors are more likely to use email, a company newsletter or an intranet. It's hard to imagine that someone is going to be inspired to change by reading a fawning memo from the CEO...
Communication should PREVENT action. It should not explain it AFTER the fact. Sometimes business leaders delay communication because: "the solution is not ready yet". By the time "it's ready", it's usually too late. Informal communication - gossip - wins, which is faster and unfortunately more powerful than official information, but it's too late. It is much better to communicate the change in stages and not wait for a finished solution. This is because some elements of the change are usually not certain until the end, until GO LIVE. Sometimes it can also be a healing process to say to employees: "We don't know yet and we'll let you know in X weeks/when we've finished analysing".
Meetings with staff need to be prepared. Excellent support is a pre-prepared Q&A and answers to potential questions about the change. Answers that are given "on the fly", without preparation, are often not well thought out and leave the sponsor open to later accusations of inconsistency - which undermines their credibility.
Resistance to change is a common phenomenon. However, many sponsors underestimate its real importance in the change process and fail to manage it constructively for the sake of implementation.
It is important to understand that resistance is natural, that doubts are not always due to aversion to the project but can have very important causes: misunderstanding of the nature and purpose of the change, fear of the unknown, fear of job loss, or even doubts about the legitimacy of the solution being implemented - sometimes quite justified. Resistance does not occur in a vacuum. It can be related to the organisation's culture, negative pressure from the team, previous negative experiences of implementing other changes, or even non-work related reasons such as a difficult family situation. Resistance is feedback. It's a healthy reaction that can be used for the good of the project - but not all sponsors take this approach.
Overcoming resistance and turning it into commitment and support for change is a process that takes time. It is difficult to expect people to 'buy in' to new solutions immediately. Patience is needed. Perhaps the current opponents of the change should be involved in working out how it will be implemented, so that they have a chance to identify with it.
Self-reflection on the part of the sponsor is also in demand: "What am I doing as a sponsor to make my people want to get involved". Research shows that a significant amount of resistance could be avoided if the right IMPLEMENTATION MODE was chosen. Unfortunately, many sponsors create Resistance to Change by acting inappropriately, sometimes even without realising it.
Sponsors may work on a new project for weeks or even months at a time. They have time to get used to the change as they analyse different options and plan how to implement it. Once they have made a decision, they expect everyone in the organisation to accept the change IMMEDIATELY and eagerly proceed with implementation. What annoys them is that this "everyone" also needs time. And yet the sponsors themselves, who are at the beginning of thinking about a new project, are not always convinced.
“ Sponsors are usually weeks or months into a new project before its launch. Yet they expect almost immediate buy-in and commitment from people.”
We don't always deal with those we need to deal with when we are changing. Paradoxically, the biggest challenge comes from neutral people. Sometimes it is even said that neutrality in change is implicit resistance. And the threat to implementation outcomes can come from people who are very much FOR the change, which is the hardest thing to convince sponsors of. Such people don't see the risks, don't accept dissenting views, and can sometimes discourage others from changing by their uncritical attitude to the 'new'. Today, for example, the widespread implementation of digitalisation (which is always conjugated) is a source of resistance when managers are no longer interested in traditional, 'non-digital' or less digitised products and processes. In such a situation, people in the organisation who are paid to deliver results from operations may have doubts about the legitimacy of the "new religion" and may be effectively discouraged from change by its uncritical "followers".
Another challenge for sponsors is consistency of statement and action. In a situation of change, it is critical, it builds (or undermines?) the sponsor's credibility. The Anglo-Saxons use the term "walk the talk". This means "always do what you say and do what you expect others to do". For example, if top management itself prefers hierarchy and guards its "silos", it is difficult to engage employees in implementing a lean culture in the company where the main rule is to focus on delivering value to the customer. Or to implement a culture of feedback when you may be openly reprimanded by a manager for "too bold" statements or ideas.
The syndrome of the "disappearing" sponsor. Business leaders are not always able to maintain their high level of commitment for the entire duration of the project. There is usually a "strong" start. Then the sponsor moves on to other priorities. It is important to be aware that the activities of the business leaders who sponsor the project should be spread throughout its life cycle and synchronised with all the key milestones. Implementing major change is a marathon, not a sprint. The ability to 'spread the forces' over time is also critical to the sponsor's effectiveness.
And thirdly, can the sponsor increase its effectiveness by getting the tasks associated with its role in change properly organised?
Yes, they can. Here's a look at four aspects of coalition building.
Building a coalition is also about preparing others to manage change effectively. It is not enough to have a coalition of SUPPORTIVE managers. They must also have the right COMPETENCIES to effectively lead their people through the change. The CEO alone, no matter how capable and hard-working he may be, is not up to the task.
A key aspect of the sponsor's work organisation is having time for the sponsor's tasks and performing them at the right time in the project.
First, the sponsor must have professional help in preparing the appropriate analyses, plans and materials necessary for effective change management: for example, an analysis of the impact of the change on employees, an analysis of the organisation's readiness for change, a diagnosis of the sponsor coalition, a change management strategy, a communication plan, materials for meetings with employees, and much more.
Secondly, the action plans for the change management must be in line with the implementation plan of the project. This is a task that requires not only competence. It also requires calm and time. These tasks cannot be handled by the sponsor alone.
"The change manager can be a very effective support to the sponsor in order to play his or her role in the change process effectively.”
It is useful to have a competent person(s) - the change manager - to help carry out these activities. This is a role in the project team responsible for the preparation and co-ordination of the implementation of human risk management tasks, i.e. change management. More and more organisations are moving in this direction. They are strengthening the competence of project teams or training dedicated specialists for such tasks.
When an organisation uses a structured approach that has been proven in practice, it is much more effective to implement project change management. By implementing such methods not only for a specific project, but also for the future, change sponsors can help themselves - and all employees. In today's turbulent times, the ability to quickly adapt an organisation to a changing environment is a key source of competitive advantage. The fact that 80% of Fortune 100 companies use the Prosci change management methodology is evidence of the scale - and importance - of this phenomenon. However, this is the subject of an article in its own right.
To conclude: What does it take to be an effective change sponsor and what can a project manager do?
As you can see, the role of change sponsor, as defined by a senior manager, is a significant one. It involves a wide range of responsibilities and tasks. If you prepare properly, the implementation of the sponsor's ABCs will not only be effective but will also provide a great deal of satisfaction. This will come from the effective implementation of solutions with a high level of involvement and real participation of all employees. The founder, co-owner and CEO of a Polish company, which has now gone international, calls the sponsor of change in his organisation an INVESTOR. This is because he takes care of his investment. He gives it not only the resources and the decisions, but also his time and his attention. And he or she tries with all his or her might to make sure that the investment brings the expected return. It's hard to think of a more apt way of saying this.
“A sponsor should look after his project like an investor looks after his investment - not just making decisions, but above all taking the actions necessary to ensure that his investment delivers the expected return. Doing this means being the "face of change" to those involved.”
To help the sponsor play his role effectively, what should the project manager do? Exactly the same: HELP. Help them understand why they need to play this role, help them prepare for it, and then help them play it: substantively, organisationally and, if necessary, logistically. Either yourself or through a dedicated change manager. Use change management methods, as more and more organisations around the world are doing.
This article was published in the 09/2019 edition of "Strefa PMI".
Author: Krzysztof S. Ogonowski, CEO Silfra-Consulting