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Is transformational change the new business mantra?

To compete, businesses must undergo a transformational change in how they operate, which begins by transforming company culture. How can companies motivate employees to take a new approach to work?

To compete in today’s evolving business environment, businesses are being forced to change how they operate. Organizations are embarking on transformational change efforts to remain relevant, find new sources of revenue and retain top talent. However, these changes are difficult because they require a change in leadership practices, communications, how work is accomplished, and most importantly, the organization’s culture.

Recent research by the American Productivity and Quality Center (APQC), a Houston-based nonprofit that provides expertise on business benchmarking and best practices, identified 12 best practices that can ensure long-term adoption of transformational change initiatives.

This study looks at how Optum Technology Inc., a provider of IT-enabled health services headquartered in Eden Prairie, Minn., leveraged three of these best practices -- preparing leadership to lead the change, taking employees along on the journey, and using a hybrid model to allow access to the right tools and methodologies for the job -- to achieve transformational change. Optum Technology focused on the development of technology to deliver a new organizational experience that was defect-free, cost-effective, reduced cycle time, and delivered in the context of a values-based culture that drives business outcomes.

Prepare leadership to drive the change. To initiate transformational change, an organization's managers must be prepared to lead the change. This includes increasing awareness of the change, as well as providing managers with the tools to effectively communicate the new vision and support behaviors across the organization. Optum Technology trained its managers in the skills required to support its new vision, including business acumen (i.e., moving beyond technical capability) and cross-functional collaboration to support innovation and customer service.

To deliver this training, the company created a Quality Leadership Academy, with these goals:

  • Drive motivation through improved communication: Employees must care about quality.  
  • Share skills through knowledge sharing, learning, and processes: Employees must see how sharing skills will affect quality and what needs to be done.
  • Drive empowerment with accountability and metrics: Employees must see that they can do something to improve quality.

The academy supports these goals by teaching managers how to drive change and quality across the entire organization. Managers work on cross-functional challenges or opportunities such as systems defects to solve real business problems.

This approach reinforces the importance of not compromising quality for schedule and empowering employees to act based upon their knowledge of the situation. The leadership academy instills an understanding that leaders can direct this information flow and manage the process with people rather than just managing the people.

Involve employees in the change journey. Successful transformational change requires that employees are included in the change, not just told the change is happening. By including employees in the development of the change, organizations foster buy-in, create a sense of ownership, and ensure employees embrace lasting change. Organizations have to facilitate a two-way dialogue between leadership and front-line employees. Optum Technology was able to do this with two strategies: employee engagement teams and innovation challenges.

Optum Technology needed to engage the workforce in the change as well as tap into its expertise to pinpoint opportunities for improving operations and customer satisfaction. To this end, Optum Technology established an employee engagement team that was responsible for communicating results of the transformation initiatives throughout the organization, as well as developing improvement initiatives for gaps identified in its annual employee survey.

Optum Technology's innovation challenges are generally two- to three-week-long virtual challenges that tap into 150,000 employees to solve current problems. A business leader or group submits a problem or opportunity via a forum-style social media application where employees can submit and vote on ideas. The originator of the opportunity then identifies three to four submissions for review and further development.

Use a hybrid model. During a transformational change effort, acceptance hinges on hybrid methods that tailor the tactics and solutions to the people, processes, tools and infrastructure components.

Optum Technology developed an integrated, organizational change framework, which uses a standardized, six-step change readiness and management process as a roadmap to assess and adjust for potential people and business environment conditions and roadblocks. This approach:

  • provides simple, streamlined and actionable tools;
  • integrates with processes, projects and programs;
  • enhances knowledge, skills and capabilities;
  • embeds standardized artifacts into operational plans;
  • provides a human capital partner to accompany the project lead;
  • and includes an intranet landing page and leader guide.  

Many of the characteristics that Optum Technology used to drive transformational change mirror some of Agile project management's core principles, particularly the need to keep things flexible, empower employees, promote collaboration and focus on customer value. Fostering employee involvement throughout the change promotes collaborative problem-solving and empowers employees to make decisions about how change is adopted. Optum Technology's change framework creates a flexible approach to manage processes and projects, including the use of pilot programs and prototypes, similar to Agile's sprints. Finally, Optum Technology's leadership academy provides managers with the tools they need to drive and enable employees to act upon the changes.

For additional information on these research topics, please see APQC’s Transformational Change and Agile 101 research collections. 

About the Author:
Jonathan Kraft is the research program manager for Business Excellence at APQC.  Jonathan has background in project management, benchmarking, and business development. He can be reached at jkraft@apqc.org

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