Managing chance and innovation. 'If you cannot measure it, it is not worth doing.'

1. INTRODUCTION:

We are in a time of substantial economic, technological and organisational changes with several uncertainties. Latest and ongoing technological reforms have been improving our work environment by increasing our productivity, decreasing the risks of on job accidents or mistakes, and reducing the physical effort required on normal jobs which will allow workers to perform smarter and more effectively; potentially increasing their job satisfaction. These revolutionary changes are normal part of life. Change is essential, fascinated, scared and excited but important to plan, measure and evaluate it.

In this modern world, key success factors for change are ‘measuring’ and ‘evaluating’ the change. Measuring change is extremely important. There is a saying, ‘what gets measured gets done’. Unfortunately, we are not very good at measuring actual innovation amongst firms precisely and accurately. We mainly rely on Gross Domestic Product (GDP) growth rate to indicate the expansion of innovation and its impact on our well-being through human development index (HDI). To develop an improved alternative measurement tool for innovation, it requires vital data availability augmented with smart thinking about appropriate ways to conceptualise new statistics. But still important is how managers, leaders and owners measure change in their organisations?

2. WHY MEASURING A CHANGE?

Some measurement of change occurs in all organisations because managers are always comparing current and past performance and setting future targets. However, measuring ‘change’ should be distinguished from evaluating the success of ‘change programs’. Change’ is caused by many influential factors both internal and external environmental. The change program is just one variable of many others. A measure of ‘change’ does not necessarily prove what impact a ‘change program’ has had inside the organisational norms but it is important to measure and monitor change programs because they are expensive to implement and often fail. Measurement of change should be considered during the planning phase of change and before any action is undertaken by the change implementing manager or responsible personnel. Measurement of change serves multiple purposes:

- It should motivate and convince employees to perform desired new activities
- It should provide necessary guidance toward goal achievement and alert managers to replan in case people are distracted and resistive to new change.

US research indicates that only 25% – 30% of change efforts succeed “70% change fails”. The role of human fallibility in change program failure is expressed in the ‘one-eighth rule’ i.e. ½ ´ ½ ´ ½ = ⅛:

- One-half of people will not believe the link between how people are managed and profit.
- One-half of those who do believe will try a one-shot solution rather than a systemic approach.
- One-half of firms that make systemic changes will persist long enough to see the difference.

In my academic thinking, a person or group who is responsible for planning and managing change; and ensuring its implementation must prepare a well-defined and well-developed comprehensive plan with an evaluating matrix. The scale of success and failure of any component of change must be recorded in organisational assets system for further planning. Organisations can also carryout necessary surveys to measure the effects of change after, during its implementation and even prior change by investigating the employees’ behaviours and impacts. Success and failure of change is measurable and must be measured through managers, human resources and responsible personnel.

3. DIFFICULTIES IN MEASURING CHANGE:

Evaluating change programs is difficult because of its complexity and the ‘causality problem’, i.e. the link between cause (a change program) and effect (improved business performance) is hard to prove. Modern research by Leslie Szamosi & Linda Duxbury (2002) fills a significant void in the revolutionary organisational change and the support literature through the development of measure of organisational support and non-support of revolutionary change. The development of these measures has led to nine (9) observable behaviours of organisational support for revolutionary change and twelve (12) observable behaviours of non-support for revolutionary change.

An organisation supports changes by:

1. Pressuring legislators for fair competition
2. Keeps in contact with its customers to ensure that they are aware of what the company doing
3. Information employees regarding the change through bulletins/ teleconferences
4. Communicating the need for change
5. Paying more attention to the bottom line
6. Providing managers with separation packages
7. Aggressively pursuing emerging business opportunities
8. Developing an understanding the owing to change the completion can be a customer
9. Allying itself with other companies

The organisation does not support change when it:

1. Does not eliminate the bureaucracy
2. Allows for conflicting departmental mission
3. Allows certain departments to protect themselves form change
4. Does not make manager accountable for change
5. Is slow to react in some competitive environment
6. Does not ask employees if there is a better way to do things
7. Does not recognise where its greatest assets are
8. Does not have a common goal throughout the company
9. Does not allow employees to be flexible in the use of their skill sets
10. Only provides verbal support for change
11. Holds back information on where the company was going
12. Limits employees’ empowerment

4. METHODS OF MEASURING CHANGE:

Modern revolutionary changes can be measured typically by following three (3) methods:

1. Conventional financial measures
2. Strategy-driven measures
3. Benchmarking

4.3 Conventional Financial Measures:

Dollar-based indicators or ratios are the basic building block or standard from which to fabricate measures of changing business performance. Three (3) cautions should be observed in interpreting such data. Change should be evaluated by looking at long-term financial data – to remove the impact of exceptional events. Allowance is needed for other factors like market trends or competition, as well as the change program. Non-financial indicators (quality defects or employee attitudes) are also needed. One challenge for managers is making sense of ‘multiple financial change measures’.

The following measures indicate particular aspects of change, or take the perspective of specific stakeholders in change.

- Share price performance.
- Market share.
- Overall performance measures (sales growth, return on equity, and return on total assets or Economic Value Added (EVA).
- Profitability measures (ratios of net profit to sales or expenses to sales)
- Cash flow.
- Internal financial targets or budgets.

4.4 Strategy-Driven Measures:

A second way to measure change is the achievement of strategic targets. From its ‘vision’ and ‘mission’, an organisation may cascade strategic targets. These lead to a comprehensive implementation plan. This plan contains measurable targets for each manager (project, functional, program and portfolio). Many organisations measure change by checking actual performance on KPIs against targets. Three (3) difficulties generally arise in measuring change this way.

- What do strategic measures say about ‘bottom line’ financial performance?
- How can multiple strategic indicators be integrated to give a clear ‘big picture’
- Are strategic targets overtaken by discontinuous change?

In addition to these three (3) human factors, SUP (speed of adoption, utilisation and proficiency) can also be used by management to measure actual changes. Applying these three (3) vital steps helps change management efforts and minimize risks of ‘complete failure’ of change implantation.

4.5 Benchmarking:

Benchmarking is another way to measure change. Benchmarking involves continuously comparing & measuring an organisation with business leaders anywhere in the world to gain information which will help the organisation to take action to improve its performance (productively, efficiency). Three (3) different types of benchmarking exist. Each uses a different comparison to discover ‘best practice’:

- Internal benchmarking – to find best practice within an organisation.
- Industry benchmarking – to find best practice within an industry.
- Process benchmarking – to find best practice in a ‘core’ or ‘generic ‘process (such as supplier management).

Any formal process of benchmarking has both internal parts such as deciding what to benchmark, selecting a project team and gathering internal data; and the external parts such as selecting, approaching and visiting partners, and gathering data. The following seven (7) step process contains both the internal and external parts as follows:

- Step-1: Identify the process to benchmark
- Step-2: Define the projects, choose a team
- Step-3: Collect internal information
- Step-4: Research and choose benchmark partners\, determine a data collection method
- Step-5: Collect information from partners
- Step-6: Analyse gaps, make recommendations and implement
- Step-7: Monitor and continuously improve

5. MEASURING AND EVALUATING CHANGE INTERVENTIONS

Total Quality Management (TQM) analytical tools can show how specific changes (causes) deliver specific results (effects). These include:

1. Cause-and-effect diagram (also known as the "fishbone" or Ishikawa diagram)
2. Check sheet.
3. Control chart.
4. Histogram.
5. Pareto chart.
6. Scatter diagram.
7. Stratification (alternately, flow chart or run chart)

Other organisational option is the ‘Human Resources (HR) Scorecard’ developed by Becker, Huselid and Ulrich (2001) to measure the success of change programs. The HR scorecard scores seven (7) ‘key success factors’ out of 100 to enable managers to monitor change amongst employees and relevant stakeholders. These seven (7) factors are:

1. Leadership
2. Explaining reasons
3. A vision of the outcome
4. Mobilising commitment
5. Institutionalising
6. Monitoring & demonstrating progress
7. Sustaining change.

6. KEY SUCCESS FACTORS FOR CHANGE

Key success factors considered for the implementation change are as follows:

1. Leading change- who is responsible?
2. Creating a shared need-why do it?
3. Sharing a vision-what will it look like?
4. Mobilising commitment-who else needs to be involved
5. Building enabling systems-how will it be institutionalised?
6. Monitoring and demonstrating progress- how will it to measures?
7. Making it last-how initiated and sustained

7. CONCLUSIONS:

Based on my in-depth literature review, in-class discussions and related books reading; in my opinion a change is a process which must be planned and carefully executed. Change is measurable through its effects and must be measured by organisations during planning, implantation and closing stages. Organisations must have well-established measure for change performance i.e. rate of success and failure probabilities. Such measures may include minimum but not limited to goals achievements, adoption speed, implementation time, cost of change execution, employees’ behaviour (resistance, acceptance), organisational response, effect on overall productivity, efficiency and technical awareness, trainings and effectiveness on individual transitions etc.

Individual employee’s progress and cumulative impact need to be measured several times during the lifecycle of a change enforcement to objectively evaluate the effectiveness of change management plan. By measuring it multiple times through groups’ interview, sample surveys and holistic observations; organisations can receive early warning of the need for revision(s) to the original change management plan in order to achieve the desired and sustained outcomes. Further, managers can also use ADKAR model to monitor the progress of individual transitions with respect to anticipated awareness, desire, knowledge, ability and reinforcement of change management plan.

A wareness of the need for change

D esire to participate and support the change

K nowledge on how to change

A bility to implement required skills and behaviour

R einforce main to sustain the change

8. REFERENCES:

- Class lectures

- Units presentation slides

- http://www.navigo.ca/blog/3-steps-measuring-change-success

- https://www.torbenrick.eu/blog/change-management/measure-change-management-success/

- http://conversationsofchange.com.au/how-do-you-measure-change-success/

- How Should We Think About Measuring Innovation and Change? Rebecca M. Blank

- Ad van den Oord, Karen Elliott, Arjen van Witteloostuijn, Melody Barlage, Laszlo Polos, Sofie Rogiest, (2017) "A cognitive organisation theory (COT) of organisational change: Measuring organisational texture, audience appeal, and leadership engagement", Journal of Organisational Change Management, Vol. 30 Issue: 6, pp.903-922, https://doi.org/10.1108/JOCM-08-2016-0164

- Leslie T. Szamosi, Linda Duxbury, (2002) "Development of a measure to assess organisational change", Journal of Organisational Change Management, Vol. 15 Issue: 2, pp.184-201,

- Daft, R.L., & Marcic, D. (2004). Understanding management (4th Edn.). Mason, OH: SouthWestern.

- Schein, E.H. (1996). Culture: The missing concept in organisation studies. Administrative Science Quarterly, 41(2), 229-241.

- Clarke, M. (1999). Creating change from below: Early lessons for agents of change. The Leadership & Organisation Development Journal, 20(2), 70-80.