By: Michael Kanazawa (picture: Charles M. Jones, 1953, Flickr)

You’ve just been tasked with launching a major change effort, “hmm, what to use?”

A question was raised recently to me about the differences between Change Management, Process Reengineering and Corporate Transformation. Often these terms are interchanged, mixed together and used in confusing ways. I was asked to clarify the differences and discuss how and when each should be applied to solve business challenges. Here’s my shot at clarifying the intangible and helping to select the right tool for the right job.

All of these three terms relate to change, but to different levels and types of change. The problem with the fuzzy definitions is that it leads to people applying the wrong practice to their business challenge. It’s like someone saying, “We need to dig a tunnel from England to France; let me get my Black & Decker rechargeable drill.” Or equally bad, “We need to place a screw in the living room wall to hang a mirror; hold on while I get the dynamite.”

Change Management, Process Reengineering and Corporate Transformation are clearly diffent. They are distinct processes, require special capabilities, and are applied in different ways. Change Management is geared towards communications and training on some specific shift in the use of an information system or process.

Business Process Reengineering (BPR) relates to taking an entire end-to-end business process, like billing and collecation or sales as examples, breaking it down to component steps, realignigng the steps to be more efficient and effective, and implmenting the new process. The implementation of BPR projects typically entail major systems changes and significant changes to the organization and how business is conducted.

Corproate Transformation is more focused on changing the business overall. A transformation effort is centered on clarifying the corporate strategy and putting a process and discipline in place to drive strategy execution, alignment of the orgnaization and disciplined follow through for performance.

The most common mistake we see in selecting the right tool for change is underestimating the level of change that is being called up. What may seem to management as a minor tweak in business process is often received by sales and operations as a major shift that is disruptive to the daily operations and requires much more preparation and considerations to accomplish. My ChangeThis artice titled, “People Don’t Hate Change, They Hate How You’re Trying to Change Them” became one of the fastest downloaded pieces on their site. The team at ChangeThis said that they knew that trying to get corporate change right was one of the biggest frustrations people have and so this was no surprise to them.

Rather than debate which tool is right and which is wrong, following are definitions to explain where each tool is useful as a starting point. This lays out the business objectives, scope and proper application of each tool.

With these definitions, it is more clear to understand the problem so often faced with corporate change, and that is applying the wrong tool in the wrong situation. Have you ever been at a company where a change effort is launched and results in abandonment due to push-back in the field, complete underutilization of a new system or process due to lack of support from the business, or becoming yet another flavor of the month due to lack of alignment and follow-through? It’s unfortunately very common.

If you are investing a significant amount of money into a new process or system, by definition it has to have a large impact on the business overall to be able to generate the benefits required to drive a positive return on investment (ROI). However, too often, the typical change effort applies only process reengineering and change management and the resulting pitfalls open up into gaping holes when it is time to execute the changes throughout the operations. These gaps include:

• No market or customer fact base to substantiate decisions on priorities or describe why the changes are being made
• Business benefits of a new system or process can only be achieved with changes to how the company positions in the market, interacts with customers, positions competitively or engages employees in their daily work, but the full organization is not brought into the process
• Employees need to be invested in the changes and engaged in the process actively. Simply going to a trainer-led class on change will not change operating practices and behaviors
• An ongoing process for strategy execution and follow-through is required to sustain the changes, drive continuous improvement, and achieve the full market and operating benefits

The diagram below of a complete process shows how and where BPR, Change Management and Transformation all play into a complete solution and compares that to the “Typical Change Effort” that is often under-scoped and leads to the lack of execution and follow-through needed to achieve the desired results.

The final suggestion I have in choosing the right tool is to consider using a combination of these tools for a truly successful change effort. The map above shows how and where to use each tool in a full process.

Corporate Transformation: Follow an end-to-end process for setting a clear vision, selecting a minimal set of transformation initiatives, aligning the organization, engaging the full organization, and following through with diligence.

Process Reengineering: Once target initiatives are selected in the transformation process, focus effort on creating more efficient and effective processes specifically in the transformation initiative areas. Drive systems development based on detailed mapping of current and future processes.

Change Management: Communicate and train all users of the systems or processes to be changed to ensure they are prepared and then fully trained as the changes are triggered.

The only situations where skipping the transformation process may make sense is when a specific system change will not impact the way people do their jobs or interact with customers. In other words, just a back-end systems change. Otherwise, you are risking a lot by not using the full tool set. But use these tools in an integrated and streamlined way to keep things simple and high impact.

For more information on architecting a successful process that integrates, the complete Accelerated Corporate Transformation Process is outlined in detail in the book, BIG Ideas to BIG Results (FT Press/Pearson, 2008).

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