Professional Management of Resistance to Change (Part 2)

February 8, 2005 by admin

What are the problem situations in the individual phases of an international SAP rollout? In our example, a global, German manufacturer of specialist machines is implementing a four-year SAP project. The head office and main manufacturing facilities of the enterprise are located in northern Germany. The group has 9,000 employees worldwide, located in production plants in Spain, the United Kingdom, the United States, and Singapore, and has service and sales companies in Germany, Denmark, Spain, France, the United Kingdom, the Netherlands, Belgium Austria, Switzerland, and Singapore.

USA and Canada

USA and Canada

Master templates are rolled out for financial accounting and controlling, supply chain management, service management, global master data management and distribution, global data warehousing, and the internal supply chains. At the end of the four-year project, around 4000 users should be handling their processes using SAP R/3 or with the support of SAP Business Information Warehouse – supported by a Global Competence Center.
The four-year project consists of the following stages:

  1. A four-month feasibility study, development of the business case
  2. Four months for setting up the overall project
  3. Six months for master development
  4. A four-month pilot project
  5. 30 months for rollout in waves, in some cases parallel rollout in different locations

Feasibility study / business case

Spain

Spain

The business case, which is the justification for the whole project, is generally drawn up by experts in the head office. The results must be communicated to the managers of the affected organizational units clearly and unequivocally.
Problems of acceptance arise even in this early phase, although as a rule they do not break out yet. For example, one-sided or dressed-up efficiency and effectiveness analyses by the head office may cause unease in the management organizations of the subsidiaries. Resistance usually remains below the surface, and the potential offered by the harmonization and standardization of business processes is usually denied by the subsidiaries with the argument “Things are different here.”
In this phase, change management is faced with three particularly important tasks. It must first rapidly evaluate the initial effects of the changes. It must then develop an effective information and communication strategy. And finally, discussion must be formalized at management level and the changes associated with the project must be categorized.

Setup of the overall project

The following activities are required in this stage of the overall project:

  • Setup of a central project team and a global steering committee
  • Development of an approach for implementing the project
  • Development of a uniform philosophy for project management and controlling
  • Global documentation and communication
  • Rollout plan based on the rollout portfolio
Switzerland

Switzerland

From the point of view of change management, the question of how representatives from the subsidiaries can be involved in the activities must be urgently addressed. The rollout plan – which also addresses the question of when the software is to be installed in the individual countries – should not be drawn up on the basis of business or technical requirements alone, but should also consider the complexity of the rollout location. The basic principle is to work from the easiest to the most difficult.
Once the rollout plan has been created, things become serious for the locations. At this point, their tactics and arguments are primarily fact-based. However, in reality they believe that a global SAP solution will rob them of authority and freedom. As a rule, tensions between the group – with its strategic approach – and subsidiaries – with their national interests – are therefore revealed for the first time at this stage. This results in a greater need for communication and coordination on the part of the executive board and management. In relation to this, one problem is the question, often still unanswered, as to how the costs of the project and the subsequent costs are to be distributed among the individual subsidiaries. Thus, to sum up, while the effects of the change processes caused by a standardized global SAP solution cannot yet be felt by most in the corporate group, they are the subject of much speculation.
The task of change management is to present the project with one voice, to communicate the decisions immediately, and preferably via the relevant subsidiary, and to make sure the quick wins are already pinpointed in the project plan.

Master development

Tasks:

  • Development of rollout master
  • System documentation for adaptation to local factors
  • Modeling of business processes
  • Definition of key users and creation of training materials
  • Definition of project interfaces
  • Reporting at subsidiary level (BW-ROM)
Russia

Russia

In this phase, the challenge is to reach a compromise between group aims and country-specific interests. There is usually a great deal of friction here, with the pretence of agreement in formal meetings accompanied by bilateral haggling. The phones don’t stop ringing. The wide range of different sizes and functions of the various subsidiaries means that arguments arise over the consideration of their special requests, which go against the group’s demand for standardized SAP software. Assimilation is costly, increases complexity, and takes time.
One of change management’s tasks is to help develop a central master plan and to market this within the group. The subsidiaries and their needs must also be taken into account in this. The central project team must be prepared and trained to carry out its tasks in the locations.

Pilot project

If the pilot project is a failure, the rollout won’t have a chance. All the subsidiaries will be looking eagle-eyed to see whether the pilot project is a success or not, and the following therefore applies:

  • “Hope for the best” is not an option
  • Close relationships must be maintained between the local teams and the central project team, not just at a work level
  • The results of the pilot project must be portrayed honestly – even if they are not positive in individual cases

In this phase, change management must employ a tactic of restrictive communication. If shortcomings are revealed or the project develops badly, emergency communication is needed. Ultimately, the pilot project must be marketed authentically – there is no place for glossy campaigns. The main subject of communication is the main fear of the other locations: can the results be transferred to us?

Rollout in waves

Mexico

Mexico

The way the project has developed up to this point is a key factor for measuring the general mood within the overall project. However, the degree of acceptance and willingness to implement the project usually varies greatly from one subsidiary to the next. At this phase of the rollout project, change management is carried out more in the individual locations than in the central project. The basis for a successful rollout is therefore a location-specific approach to change management, which can have very individual traits. One decisive issue is the role in which the country organization sees itself. The resulting problems are typical.
If, for example, smaller subsidiaries do not have sufficient human resources or project expertise, the local rollout must be carried out by consultants from the central project, which causes frustration within the subsidiary. In the case of parallel rollouts, local teams carry out redundant or duplicate tasks. Inefficiencies result if the mistakes and tensions present in individual rollouts are not made transparent. Power games resulting from insufficient distribution of responsibility and clear roles on the part of the decision-makers also lead to a loss of efficiency.

Netherlands

Netherlands

In this phase, change management must harmonize the interplay between the local teams and the central team, and ensure a uniform attitude towards the project. Most of the work here is done by the local change management team members in the subsidiaries. They coordinate cooperation between the works council and the company management, draw up a strategy for regional key users, and carry out or support training measures, for example. The central change management team trains and manages the local teams, assists them by providing change management services, and defines the rules for global change management. It reports centrally on the project and is responsible for central communication media, supports the change processes across subsidiary boundaries, ensures that strategic and operational change management measures are planned, defined, and implemented – and thus involves the subsidiary stakeholders in the processes or communicates via native speakers, for example – and ensures that information and experiences are shared between subsidiaries and locations.

Sparring partners in project management

Denmark

Denmark

It is generally the overall project manager who has to bear the brunt of the resistance. The overall project manager’s task is to eradicate difficulties in the project coordination and to ensure all concerned are focused on the group aims. In practice, project managers usually react incorrectly to acceptance problems. They either give in too easily, hide behind directives, or fall back into their particular area of expertise. Consequently, specialist departments and user groups become even more detached. This leads to unspoken resistance and all too often this puts the success of the project on the line. Experience has shown that measures such as professional support, training, or specialist advice are generally not enough to ensure smooth implementation.
Professional change management specialists therefore see themselves not just as sellers of the project, but also as sparring partners for the project managers. It is not enough to do a good job and advertise this effectively. The right formula also includes talking to people about the forthcoming changes, explaining to them the need for the project and its goals, and involving them – whenever possible – in decision-making. However, because of the potential trouble spots, it is also a formula that is even more difficult to apply in an international context and therefore requires all the more tact and experience.

Marcus Woehe

Martin Mitterer

Oliver Kohnke

Frank Rothenspieler

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