Module: Managing Change in Organisations Unit: Identifying, Understanding and Involving Others in Change Lesson: Understanding Change Through

Consulting

Understanding Change Through Consulting

Introduction
Change initiatives in complex situations are frequently led by external Change Consultants.

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Accelerated globalisation, new business paradigms, constant technology advances and intensified competition are all leading to increased business complexity. Furthermore, technology has become closely intertwined with the overall business objectives of a company. In such a complex and dynamic environment, business problems and opportunities in themselves may be poorly understood by the client. External change consultants can bring valuable insights without the 'bag and baggage' of the internal organisation. Today many organisations are engaging external consultants, as trusted advisors, who can be completely objective.

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Understanding Change Through Consulting

Skills to Manage Change Consultancy Projects

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The skills required for change management are addressed from a Consultancy point of view . What skills must an external consultant possess to lead a change initiative? However, many of these skills are just as applicable for those leading internal change programs.

What advantages to the organisation are there in using external consultants, in change initiatives?

Defining and solving complex business problems requires deep industry expertise, practical tools, research capabilities and innovative thinking. There is now the recognition that business insights must be gained first and only then can strategic change solutions be defined. For this reason many companies are engaging external consultants all the way from business problem definition to change implementation. Change consultants usually have skills in business transformation and change across a number of industries and organisational situations. Often it is highly effective to leverage experience from other situations and industries using the expertise of such consultants - their expertise is focused on marrying the business objectives with technology. Frequently companies have gained competitive advantage by leveraging and applying knowledge from one sector to their ow n organisation. Furthermore consultants are independent; as such they are more likely to propose objective and rational solutions.

Change Consulting engagements are variable in complexity and duration. At one end of the spectrum you have a project of just a few days undertaken by one consultant, and at the other end, a project involving a large team of consultants and contractors on a major business transformation undertaking of several months. Whatever the complexity and duration, consulting engagements demand skills in project management.

Imagine you were leading a team on a major change consulting project. We have just highlighted the criticality of possessing project management skills to manage the client engagement. But what other skills and capabilities would you want from your consulting team.

A change consultancy team needs the following skills and capabilities: Ability to develop rapport with Clients Positioning w ith clients Influencing clients and managing client relationships Situational appraisal Team working (especially effective collaboration with Client organisation) Data collection Problem solving Solution generation Managing change Reporting to Clients From now on by the term "Consultant" we shall refer to the consultancy team which may comprise just one person or a number of persons bringing complementary and necessary consulting skills.

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Understanding Change Through Consulting

Client Relationship

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It should be emphasised that change consulting requires the Consultant to work closely with the client and develop an understanding of their situational context, pains and needs. The client relationship is vital, and throughout the project the Consultant must be 'connected' and pro-actively work with the Client. There is no room for working in isolation and prescribing a change solution to the client. The relationship has to be an empathetic relationship and one of mutual trust for it to succeed. This is true of all consulting engagements, but especially true in change consulting.

Why then do clients engage consultants?

The key reasons for using consultants are: The organisation may be lacking in business transformation and change skills/resources. Strategic decision to get an independent view Change is frequently better identified by an outsider Change can be divisive, and an independent and objective view is more likely to rally support and commitment from the entire organisation Risk reduction Technology transfer (change initiatives increasingly require the marriage of business and technology skills) Cross-fertilisation of business transformation experience and know ledge from other business domains/industries

The client must have the confidence that the Consultant really understands their situational need, their pains and truly empathises w ith their predicament. Only then does the Consultant have a chance of successfully defining the business problem and developing solutions for change that gain the 'buy in' of the Client. As much as 70% of a Consultant's time can be spent in understanding the customer and the situational context.

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Consultant and the Client

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Both the Consultant and the Client have to be pro-actively engaged and collaborate for a change project to be successful. Consultants need to exercise persuasive skills in order to lead, motivate, bring about actions and manage complex situations. It is critical that consultants maintain personal integrity and use sound persuasion techniques in difficult client situations. Establishing trust is an important success factor.

Consultancy is the ability to apply know -how in a client environment.

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Change Consultancy must marry the unique skills of the Consultant and the Client:

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Consultant The consultant brings know -how in the form of:

Know ledge Experience Skills The consultant's know-how may be in the business domain of the client e.g. banking, insurance, communications, and energy. But, in some cases, clients are looking for generic cross-industry know-how that have been gained and applied across a number of sectors. The Consultant's role throughout the engagement is to be attentive and make time for the client, whilst at all times managing expectations. Client The client has the unique knowledge and understanding of the organisation and business domain. This knowledge has to be imparted to the consultant and is then known as situational know ledge The Client's role is to define requirements, monitor progress and meet commitments; commitments in terms of access to people, access to systems, resourcing etc. Consultancy Consultancy is the ability to apply know -how in a client environment. It requires that consultant knowhow and client knowledge be integrated to identify meaningful and realistic change solutions.

Project problems can arise in change engagements as a result of bad client habits. Can you identify some of these?

Here are some common problems that arise from the Client organisation: Not taking responsibility for the project Insufficient resourcing from the Client organisation Lack of access to the right people Expecting the Consultant to comply with all their demands (outside of contract) Not keeping the Consultant informed Additionally as the Consultant you should understand any unwritten expectations and issues from the client organisation (e.g. personal objectives, personal w ins, and politics) and pro-actively manage these.

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Understanding Change Through Consulting

A Solutions Approach

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Companies are looking for more than "advice" with regard to change. They are looking for total solutions. "Total solutions" are driven by a business need or a requirement for business transformation. Companies are not interested in point solutions that tackle just one problem, because it is increasingly recognised that problems are inter-related and an integrated, total solution is the strategic way forward. This is known as the Solutions Approach, and is consistent with system modelling. Given the focus on the Solutions Approach, change consulting efforts should first target the business, and not supporting functions or IT departments. Consultants should have the ability and credibility to engage at the very top of the "business" to acquire a thorough understanding of the business need, strategic vision and develop situational knowledge. Only in this way can consultants define the business problem and make a credible business case. It is the very top of the business (CEO and Board level) that will be the final decision making authority on actions following the consultant's recommendations for change/transformation.

To establish change credibly you need to be able to convince the client organisation that you (your consulting team) possesses the following knowledge/skills/competencies: Situational fluency (understanding the customer situation, customer pains) Business domain know ledge Technical competence Vision Collaborative skills

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Developing Situational Fluency
To develop situational fluency it is necessary have some knowledge of the customer domain. So what is customer domain?

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By customer domain (or business domain), we mean the particular industry or sector that the customer operates in. Let us consider an example. You may be in the business of selling data mining software. This is a generic product that has application in many industries - pharmaceutical, financial, retailing etc. If your company is targeting a customer in the oil industry (an industry in w hich data mining has many applications), it is unlikely that the client will take you seriously unless you demonstrate some knowledge of the industry, and its particular challenges. The depth of customer domain knowledge required of the Consultant w ould depend on the complexity of the business need and the industry. In many technically-oriented sectors (e.g. telecommunications, pharmaceutical, petroleum, defence) deep domain knowledge is required. In other sectors, e.g. financial services or insurance, domain knowledge can be acquired (by reading industry publications, learning about customer workflow , talking to the customer etc) and further developed during the consultancy engagement.

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Situational knowledge

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Gaining situational knowledge requires an understanding of the precise circumstances, the state and environment in which the client currently operates. It requires the Consultant to appreciate the customer pains and empathise with the customer predicament. By pains we are referring to the client's problems, difficulties or dissatisfaction with the existing situation; the reason why they are seeking change. Situational knowledge cannot be established without the Consultant (or selling team) possessing some domain knowledge.

Situational knowledge is established from the following:

1. Customer domain 2. Specific business need(s) of the Client. The business need may be an internal or external need. 3. Business workflow 4. Existing products/services that make up the current solution. 5. People in the organisation that perform the tasks relating to the business w orkflow. 6. Customer problems/issues 7. Customer pains 8. Customer vision for the future (if one exists)

The term customer pain is used frequently in the context of understanding customer needs. Customer pain is when the Client experiences (and recognises that it is experiencing) problems, difficulties or dissatisfaction with the existing situation. The Client knows they have a problem, but may not know the cause and does not know how to solve it through change. A simple example of a customer pain w ould be that of a sales team being unable to access customer relationship information held outside of the sales database. The Client needs to admit and elaborate the pains with the Consultant before effective solutions can be found.

Turn you attention to your ow n working environment. Can you identify two customer pains that prevent you from doing your work effectively, or are a source of frustration? Elaborate. Elaborate the pain (not the solution).

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From Situational Knowledge to Situational Fluency

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Situational fluency does not come purely from a situational knowledge. It is a combination of know ledge and skills, including situational knowledge. Michael Bosw orth Bosworth M (1995) identifies four areas of focus in gaining situational fluency:

1. Situation knowledge 2. Capability knowledge 3. People skills 4. Selling skills

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Situational Knowledge Understanding the precise circumstances, the state and environment in w hich the client currently operates. An understanding of the customer pains and empathy w ith the customer predicament Capability Knowledge Capability knowledge is the ability to integrate and map technology know -how and solution capabilities on to the Client's situational context. People Skills People skills are self-explanatory, but are especially important in change consulting. We should emphasise the importance of establishing sincerity and relationship building Selling Skills A Change Consultant must possess selling skills to gain situational fluency. Firstly you must sell the work you are carrying out, as well as the output of your change engagement to all levels in the Client Organisation. People are usually sceptical of change consultants and you must be able to persuade them that you are adding value and that there is business benefit in the engagement. You must be able to establish a relationship based on mutual trust and respect during your consulting engagement.

Situational fluency is critical in consulting engagements. Situational fluency is made up of: Situation Know ledge Capability knowledge People skills Selling skills

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Problem Solving and Consultancy Tools for Change Programs

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The Consultant's work is largely to do with problem solving; usually ill defined problems. First, you need to understand and define the problem. Only then can an outline change solution be envisioned. Data Collection is the most time consuming part of problem solving and needs to be carried out w ith expertise. We present some of the consulting tools at the disposal of the Change Consultant.

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Questioning Techniques

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Listening is at the core of consulting - active listening. But to listen you need to engage the client. Different types of questions can be posed for this: Open Probing Closed Reflective Leading Hypothetical

Contrast Open and Closed questioning. Give examples, from a technology context, to demonstrate the questioning techniques. Why might you pose a (i) hypothetical question and (ii) a leading question when gathering information on a consulting engagement. Post your answ ers on the Group Learning Space. Review the submissions of three colleagues and learn from their responses.

It is said that the thought is in the question posed by the Consultant and the data in the Client's answer.

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Interviews

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One-to-one Interviews Pros:

Personal contact Flexible agenda Targeted contribution Opportunity to clarify context and provides a feel

Cons:

Time-consuming Are you interviewing the right person? Can be difficult to analyse data Group Interviews Pros: Meet more people, hence data is more representative Higher profile Cons: Requires careful preparation and management People may be inhibited to speak in a group forum May not be able to clarify individual responses

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Other Data Collection Tools

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Observation Pros:

You gather first hand information Collect data in unanticipated areas of significance

Cons:

Time consuming Difficult to analyse and put in overall context Inspection Pros: Can inspect at your own pace Collect data in unanticipated areas of significance Cons: Availability of documents/work products to inspect Very time consuming Questionnaires Pros: Wide reach Easy analysis Views may be more considered and honest (especially if anonymous) Cons: Close ended Low response rates Some participants may be reluctant to express concerns in writing Hard to achieve strength of feeling and relevance

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Cause-and-Effect diagrams

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Cause-and Effect diagrams, also known as Fishbone diagrams or Ishikaw a diagrams, are an excellent w ay of identifying problems and issues. It is a vital diagnostic tool in Change Consultancy.

Figure 2.0.8 - Generic Cause-and-Effect diagram

Graphical representations of relationships betw een items or factors can stimulate thinking about problems and issues. Cause and effect diagrams are frequently used in brainstorming sessions on change consultancy engagements. It is often best to create an unstructured list of hypotheses by brainstorming and then to map them on to cause-and-effect diagrams. The cause-and-effect diagram is then effective in stimulating further ideas about issues and contributory causes. Details of this technique in the context of change management are addressed in Cause and Effect Analysis

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Diagnostic Surveys and Logic Diagrams

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Logic diagrams are a useful structured technique in going from facts to findings to recommendations. In the consulting context, Client's opinions constitute facts and the Consultant's opinions constitute findings. Logic diagrams enable Consultants to ask "w hat do w e make of this?" and arrive at recommendations.

Figure 2.0.9 - Logic Diagrams

Facts are the data that can be ascertained from diagnostic surveys (using methods such as questionnaires, interviews, inspections, observations). Findings are the result of evaluation by the Consultants. Conclusions can be thought of as the diagnosis, with recommendations the Consultant's view on the change solution. Judgement is an important factor in going from findings to conclusions to recommendations.

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To complete this know ledge check activity, see the Knowledge Check section at the end of this lesson.

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To complete this know ledge check activity, see the Knowledge Check section at the end of this lesson.

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To complete this know ledge check activity, see the Knowledge Check section at the end of this lesson.

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Knowledge Checks
Module: Managing Change in Organisations Unit: Identifying, Understanding and Involving Others in Change Lesson: Understanding Change Through Consulting

Understanding Change Through Consulting - Page 17

Understanding Change Through Consulting - Page 18

Understanding Change Through Consulting - Page 19

Knowledge Checks - Solutions

Module: Managing Change in Organisations Unit: Identifying, Understanding and Involving Others in Change Lesson: Understanding Change Through Consulting

Understanding Change Through Consulting - Page 17

Understanding Change Through Consulting - Page 18

Understanding Change Through Consulting - Page 19