Automate This Episode #09: Effective change management in uncertain times

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  • April 23, 2020
  • Chris Ogletree
Automate This Episode #09: Effective change management in uncertain times

Automate This #09: Effective change management in uncertain times

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Do you know one of the biggest reasons that enterprise-level change programs fail to achieve their intended goal or provide any return? The answer is a lack of effective change management. In this episode, Goby’s CRO, Helee Lev, and CEO, Ryan Nelson, dig deeper into this idea. They explore the reasons that change management is so important in business, review cases where change management is done effectively from all levels of an organization, and provide insights, tips, and best practices for managers, executives, and stakeholders to help ensure smooth transitions and seamless adoption of new ideas, processes, and technology.

Read the podcast transcript:

HELEE: Hello and welcome to Automate This; the podcast about conversations for accounts payable and beyond. Today’s episode, episode nine, Ryan and I are going to unpack “Change Management.” I’m Helee Lev, CRO at Goby.

RYAN: And I’m Ryan Nelson, Goby’s CEO. Thank you, Helee. It’s going to be where obviously our backdrop is accounts payable, but this is really going to be a conversation about change and change management a little bit more broadly, but we’ll try and connect it to AP. So let me ask you this. If you were more normal and not so mature and so receptive to change…

HELEE: More normal?

RYAN: And that kind of thing. Yeah, yeah, yeah.

HELEE: Great opener. We’re like eleven seconds into the podcast and you’ve already thrown your first.

RYAN: It’s a compliment. If you were average, if you were an average person all right, how would you feel if HR sent an email on Friday afternoon and said, “Oh yeah by the way, on Monday we’re sending a new seating chart. We need you to switch things up. It comes out on Monday morning. So when you get here on Monday, it would be great if everyone could move their offices and work stations by the end of the day.”

HELEE: Oof. And that’s it? No spoiler alert of the new plan? Like is my seat better, worse? Is it the same? Am I moving? Is anyone moving or it’s just this announcement without further detail?

RYAN: 4:30, email blasted to the company.

HELEE: Oof. Yeah, that’s rough. I’d have a lot of questions, I think. Like where am I moving? Is this an upgrade? Is this a downgrade? Who did I wrong? Or did I right the correct people to make sure that my position improves? Then I’d be worried about it all weekend. Then I’d be like, “Well, that came out of nowhere. Why are we even doing that? What’s wrong with my seat now?” So I don’t know. Even I appreciate your compliment that I’m you know of above average flexibility, I think everyone in my life would agree, but I think yeah that’s even a curveball that I’d have a hard time with.

RYAN: Oh wow.

HELEE: I’d probably be walking over to HR’s desk at like 4:32 and be like, “Hey! What’s the plan?”

RYAN: Trying to get some answers, huh? Trying to understand why maybe, right? Good, interesting. Well, yeah we’ll kind of touch on that as we go. But one of the things I want to keep in mind as part of this discussion and not too much doom and gloom takeaway, but to make sure that we don’t underestimate this statistic from McKinsey I think it is: 72% of enterprise change projects fail to deliver value. A lot of those tie directly to the fact of employee resistance, lack of management support. We also know that when people are truly invested in change, it’s 30% more likely to stick. And like I said, I don’t make this stuff up. It’s not my doom and gloom. McKinsey makes it up.

HELEE: Yeah.

RYAN: I mean McKinsey analyzes and puts together a proper survey.

HELEE: I believe it. I’ve witnessed it. I don’t think that’s far off.

RYAN: Good.

HELEE: I also don’t tend to question statistics that come from McKinsey.

RYAN: Yeah. I guess I wouldn’t either. They have that reputation. So let me start. So with that kind of backdrop that you know it is, that change management is a challenge. We’ve acknowledged that personally people feel a certain way when they hear something about change. And McKinsey demonstrates that a lot of projects fail when they’re about change.

So what is change management? Very specifically or by definition, change management is the application of a structured process and a set of tools for leading the people side of change to achieve a desired business outcome. You might see it as OCM or Organizational Change Management which is about actually achieving adoption of what you are changing. I was curious. Does that sound a little slimy or anything? Like I need to lead people to water or persuade them to like what I’m about to make them do?

HELEE: I don’t know. I don’t think it’s slimy and I don’t know that it’s persuading or manipulating, but I think it’s more just about getting the buy-in, right? So it’s like 30% of the projects fail that don’t have the employee buy-in or whatever the McKinsey statistic was from three minutes ago. But I think it’s just about you know you’re trying to change and anytime you’re trying to change something in an organization, it affects people whether it’s a new technology, whether it’s a new process, whether it’s moving your desk. So you have to appeal to the people or you have to at least I find have the people understand where you’re coming from. Even if they don’t love it, right?

So to go back to your example, like you’re moving my desk and I might hate it. But if you explain to me why you know where are you coming from and I have respect for the leadership and the general decisions that they make, I think I can get on board. So no, it doesn’t sound slimy or anything like that, but I do think that you have to be cognizant that your project is going to fail if you don’t get the proper buy-in which I think stems from a proper understanding of why the change is better. You know they have to buy into the ultimate vision that even though this change might be challenging, it’s ultimately better for me and my organization and I get it and I’m on board.

RYAN: Yeah. So the buy-in and getting the ultimate buy-in is great. And then maybe even just being respectful and empathetic along the way is enough to help. Whether they necessarily, maybe even if they don’t fully get on board, but they’d be like, “Well, I don’t fully understand…”

HELEE: Yeah. They see where you’re coming from at least.

RYAN: Yeah, yeah.

HELEE: Yeah.

RYAN: I know that we’ve seen it. One of the common things that happens you know perception. I think you’re always saying, “Perception is reality,” but one of the common things is that management or executives in some cases spend a very long time and are being very thoughtful…


RYAN: And build out this whole plan, but then announce it in one fell swoop.

HELEE: That’s right.

RYAN: And it feels like a sudden thoughtless change just happened to us.

HELEE: Totally, totally.

HELEE: Like I’ve seen it happen a couple of times. Yeah, sorry to interrupt you.

RYAN: No, I was going to ask you well what do you do about that. Like what’s a better way for like…
HELEE: Yeah. I mean and it’s a fine balance. I’ve seen it happen a couple times at Goby with some major changes that we went through whether it be personnel or otherwise and the immediate reaction is like, “Well, you know the more I thought about it, I get it, but God that was shocking!” And in my head, I’m like, “Shocking? Jeez we’ve been talking about this for months. We’ve been methodical about it. There has been white-boarding sessions, people slept on it, they thought about it again, they rethought about it again” but it’s a delicate balance, right? Between doing that planning, that necessary planning with sometimes things that are confidential so you can’t tell people too soon…

RYAN: Yeah.

HELEE: And then having it not feel like this shocking thing. So I don’t know that we’ve fully mastered that, but it’s definitely a common sentiment. So I don’t know how you you know get that information out along the way appropriately or you know if it leaks or hallway conversations. That’s always a useful tactic, but yeah you’ve got to find that perfect balance I guess.

RYAN: Yeah. I actually do like that. I like the, I don’t know. Well, yeah I like the idea of hallway conversations or those leaks really.

HELEE: Yeah. You’ve got to know the right people in your organization that have like just the right amount of the mouth that’s going to run to the correct people.

RYAN: Yeah.

HELEE: And know the channels.

RYAN: Yeah. And you have you know you’re at lunch with someone or you’re in the elevator and you’re like, “Ah yeah, we just got finished. We’re thinking about you know this or that.” And then that person is like, “Oh, interesting. I’ll keep it confidential” And you’re like, “Oh yeah. Okay whatever cool” you know? And it kind of gets out there. If it’s a six-month planning, you could almost get to almost everyone or you could get to 50 people over the course of six months and they’ve all given you their unofficial like, “Oh cool” you know? So I do think that’s one like true approach…

HELEE: Yeah.

RYAN: Is slowly engaging people on a new idea.

HELEE: Yeah. Like it’s the time leading up to the change where you might have to keep things
hush hush or you keep it to these hallway conversations that will tell you how and when and in what medium you communicate the change itself. You know is it email? Is it live? Is it both? Is it phased? And then also you’ve got to think about kind of the fallout afterwards too. So this big change has happened. That doesn’t mean it’s done. Same with you know if you’re doing a large initiative Organizational Change Management for say new technology, you go live, that’s not done you know. There’s still a process afterwards that you need to kind of watch it and make sure that the dust has settled properly before you fully consider that to be successful. So just thinking in you know the phases of before the change, the actual change and then after the change.

RYAN: Yeah and I get it. Like maybe there have just been a lot of bad ideas too. So people are like, “Don’t. Well, why are you bringing this idea?” People get into a rhythm, you have a comfort level of what you’re doing, you know how to use your tools really well. Even if it’s not optimal, you’re in this comfort level and this rhythm and you know the famous if it ain’t broke, don’t fix it. There’s a lot there actually. Especially with all that’s going on, people are like, “Why are you messing with this? Like this is what I do.” So I get the sentiment and the grounding that a person maybe is starting with.

HELEE: Totally. But something that might seem ain’t broke at a certain level, if you take a step back and look at a 30,000 foot view and how that one piece maybe affects other pieces or other elements or things externally, the big picture might actually be broke even if that one cog within the big picture isn’t. So that’s something you know I encourage people to do is just kind of take that step back. And I remember you know now kind of having been on both sides of it, right? Like I remember what it was like in my first position when the powers at B would make a decision. I’d be like “Well, that’s dumb. Why would you do that?” From my perspective, it was you know. And then now kind of being on the other side of the table, I know that there’s, decisions are things that we make that aren’t always digested well at all levels. So the better you can communicate about it, give transparency around it, kind of explain where you’re coming from because no one has bad intentions. And anytime you’re planning an initiative like there’s many ways I’ll say it, this is for you Ryan, many ways to skin a cucumber. Okay?

RYAN: Yeah, thank you.

HELEE: Not quite. Many ways to skin a cucumber and no one’s to say there’s only one right path, right? But as leadership, you choose one. You make an educated decision, you’re thoughtful about it and you kind of go with it and maybe that wasn’t the best one. And maybe you’ll never know, but you know as long as it’s thoughtful, you would hope that people can respect where it’s coming from.

RYAN: Yeah. Yeah. You shouldn’t underestimate or assume people aren’t willing to have a
conversation. Can you name two different ways to skin a cucumber? Only one’s popping in my head.

HELEE: I don’t know. I mean you could start from right to left, you could go from left to right, you could do the one side then the other side, you could turn it over, you could cut it in half then skin it. You can cut off the ends then skin it. You could cut off one end then skin it. Is that enough? I mean there’s like a lot.

RYAN: Yeah, that’s fair enough. All right. I would say you know…

HELEE: And also I eat my cucumbers with the skin on, just FYI.

RYAN: So yeah. There’s more than one way to eat a cucumber. That’s for sure. Organizations, right? You’ve got individuals, but even organizations don’t have a cultural willingness in an approach to change. And maybe you know individuals or departments will align with that. So if your organization is just maybe not for change or is change-friendly then you may be starting from…

HELEE: Yeah.

RYAN: A good point or a rough point if you’re trying to do something. Some might even have strategic commitments that say, “We are laggards you know we don’t take risks…”

HELEE: Yeah.

RYAN: “When it comes to changing things.” I need a super, super strong business case if you want me to try to change something that I’m doing here because we don’t want to mitigate risk. So it could come from anywhere.

HELEE: Yeah. And I think it’s definitely ingrained or embedded in the culture of a company. And I’ve worked, well I only worked at two companies my whole life. This is one of them. One was like uber conservative, kind of you know the behemoth Fortune 500 moves at the pace of a cruise ship you know can’t really turn on a dime. And then there’s Goby where change is imminent and you’ve got to kind of go with it. And my favorite quote, I might’ve used it in the last podcast, but we’ll use it again. No it was a webinar. “If you dislike change, you’ll hate being irrelevant.” Something like that, right? You’ve got to…

RYAN: I still chuckle. I have heard you say it…

HELEE: Yeah.
RYAN: But I still chuckle at it.

HELEE: Yeah, it’s a good one, right? So I think definitely you know some of it is within the appetite and the culture of the organization and also what you’re trying to do and what stage you’re at, right? So an established company that has been around for 150 years with a mature product, they probably know what they’re doing and they’ve got to keep doing it, maybe optimize a couple things. But you know with a younger company that has new initiatives and new ideas, change is going to happen. And yeah, it’s all how you react to it, right? Like anything in life.

RYAN: Yeah. And people react differently. It can be very personal the way how open people are to change or how protective they are to what might be a good thing that they have ownership of seems to be very personal. The same message in a change management communication plan, the same message isn’t necessarily going to resonate with everyone. You might think that good logic is always going to just win out and is enough, but you need empathy as well. You need to understand you may be changing something that a person built and considers you know their “baby” so that’s going to have some extra emotion connected to it. So being a change management professional is a learned skill and is a very specific thing.

Let’s talk about a couple technical things real quickly here. I believe it’s Prosci, Prosci, Prosci, a company who’s a knowledge leader in this and kind of consider themselves change fanatics, but here are the five obstacles that an organization will encounter.

HELEE: I’m skeptical of anyone that considers themselves a fanatic of anything by the way.

RYAN: Hmm I thought it was a pretty passionate word.

HELEE: It is.

RYAN: A change fanatic.

HELEE: Can you be a fanatic though about change? I don’t know. I don’t know. Sorry, as you were.

RYAN: Perhaps. Well, there are five major obstacles according to them when you’re introducing significant change. So let’s just you know briefly cover those. So there’s some official technical discussion here. One of those obstacles is going to be lack of effective sponsorship in change management. So again, make sure you think about it. The obvious employee resistance so build that in your plan how to deal with it. Insufficient resources for change management; very common, doesn’t even make the project plan…
HELEE: Yeah.

RYAN: Isn’t assigned to an individual let alone the idea of here’s your project manager, here’s your change manager. That’s probably pretty rare especially in a small or midsize company. Failure to integrate change in project management; same concept. It’s all about project manager; project manager and hitting tough timelines and not thinking about this ongoing layer of change. And resistance from middle management is the fifth thing they said. Maybe people that are stuck in the middle where they’re not driving the change, they’re not the ones that are going to be dealing with it day-to-day, but they’re not comfortable supporting it. I don’t know. I can kind of see how that might happen.

HELEE: Yeah and bringing that back maybe to AP for a moment. So we’ll talk to a lot of prospects in various stages of their AP automation journey so all these apply, right? So if you don’t have effective sponsorship like someone at the you know perhaps like the AP manager below us trying to make a decision, buy a software, but they’re not getting sponsorship from the CFO or from the IT group, it becomes a mess either at that juncture or down the road. You have the people within the AP department that say, “Hey, this is the way we’ve been doing it. You know it’s the ain’t broke don’t fix it for 25 years. Don’t touch my process;” that kind of thing. You have the insufficient resources problem. They say, “Hey, we could barely process and do our regular day-to-day AP function. We’re overworked and understaffed. Definitely don’t have the appetite to take on a major project” you know. So all of these definitely kind of resonate with thinking about an initiative to automate the AP department and it really does take a well-oiled initiative from the top down, from left to right and all which ways and really a tight process to ensure that these things are successful.

RYAN: Thank you for connecting that back to AP. So Helee, I appreciate it.

HELEE: Yes, this is the podcast for conversations about accounts payable and beyond. So we were I think too much on the beyond.

RYAN: Too much on the beyond. Well, let’s get in the Wayback Machine as one of my other favorite podcasts always says and go back to 1996. Do you remember good old John P. Kotter? And the eight Kotter…

HELEE: I do.

RYAN: Oh, you do?

HELEE: I’m maybe more upset that 1996 is now considered way back. Like that…

RYAN: Yeah, isn’t that something? John P. Kotter, Kotter’s 8-Step Process to Change Management which people are challenging now you know in different ways and new ideas, but it kind of holds up as far as it is a human behavior change. So it makes sense to me that it kind of holds up, but here are eight steps. We talked about some of the resistance or challenges or hurdles that you might have to clear. So let’s run through these eight steps and how you might do that.

Create a sense of urgency. So make this something important whatever the initiative is. Build a guiding coalition. So actively get supporters. Build a coalition.

HELEE: Yeah.

RYAN: Form strategic vision and initiatives. Make sure it’s valuable and that there is something behind that. And then we talked about a coalition. Number four is enlist a volunteer army so the…

HELEE: Whoo!

RYAN: Concept of go beyond just this little coalition and get a bunch of people you know that can spread this thing. Maybe those hallway conversations we talked about. This is pretty broad, but enable action by removing barriers. So think about your change management plan and what you’re going to come up against. Get some short-term wins. Like we were saying, like you always say, “Perception is reality.” So get a win and share that win and say, “Yep, see? This is a good idea” Sustain that acceleration once you get it going and voilà you should be able to actually institute that change in the end. Step eight, institute the change. So I like Kotter’s little plan here.

HELEE: I approve.

RYAN: Good. I think the main thing is don’t underestimate the importance. Whether you’re a small organization, you’re not going to hire change management strategy personnel and all that. Assign the concept to somebody and be thoughtful about steps like this or sum approach to change management. But Helee, that brings us to the exciting part of the day where you today need to guess “Beans or Beer.”

HELEE: And what am I on this?

RYAN: “Beans or Beer.”

HELEE: Like O for six or something?
RYAN: I don’t know. We should tally it up officially…

HELEE: Real fun.

RYAN: But we’re going to get you, we’re going to get you out of that, all right? It’s 50/50 so at some point you should be six and six or something, right? Because it’s just a 50. Is it coffee or is it alcohol? That’s all we’re doing. “Beans or Beer,” all right?

HELEE: All right. Go!

RYAN: This is in honor of one of our newest and most exciting customers. These are all either beans or beer places in Northeast Ohio where this company is from which I am incredibly fond of as I grew up in Northeast Ohio and it has a special kind of culture there. I’m going to name three and they’re all the same. “Thirsty Dog,” “Hopping Frog” and “Winking Lizard.”

HELEE: Okay. If those aren’t beers, then I like give up on this game.

RYAN: You’re correct.

HELEE: Aaahh! I got one.

RYAN: Congratulations. Congratulations. Some really fun craft breweries in Northeast Ohio. Check ‘em out.

HELEE: Excellent. All right. So in conclusion, if we had to sum up today, Ryan, would you agree by statistics per McKinsey, most big projects fail. And a lot of times it is because of the lack of attention to change management and being thoughtful about the steps that go into influencing or building your coalition or being thoughtful throughout the process or communicating when or wherever it may be. But I would encourage everyone out there, don’t be that statistic. Don’t be in the majority of the projects. Try to be in that outstanding minority percentage that gets your projects done and gets them done properly so yeah. That’s…

RYAN: Agreed.

HELEE: That’s where we’re at. Yeah?

RYAN: I do. Don’t be that project that fails.

HELEE: Don’t be that miserable project. It’s bad. All right. Well, thanks everyone. We appreciate you. All the hundreds of thousands of listeners that took time out of your busy days to listen to episode nine of Automate This. Don’t forget to check us out on your favorite social media channel #automatethis which is also a cartoon; shameless plug. And we’ll catch you next time.

Chris Ogletree

Chris joined Goby as Inbound Marketing Coordinator in 2016, taking over generation and development of client-facing content, such as email campaigns, website administration, and marketing collateral. He has been an integral part in Goby's rebranding project and website redesign.

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