See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/332430106 Measuring change management performance: a case study of a Moroccan construction company Conference Paper · November 2018 DOI: 10.1109/ITMC.2018.8691289 CITATION READS 1 2,795 3 authors: Abdelouahab Errida 8 PUBLICATIONS 3 CITATIONS Bouchra Lotfi University of Hassan 1st, Settat, Morocco 18 PUBLICATIONS 8 CITATIONS SEE PROFILE SEE PROFILE Elalami Semma Université Hassan 1er 121 PUBLICATIONS 576 CITATIONS SEE PROFILE Some of the authors of this publication are also working on these related projects: Conduite du changement dans le cadre du Projet d'Etablissement Hospitalier View project Developing and implementing SCPMS View project All content following this page was uploaded by Abdelouahab Errida on 27 September 2019. The user has requested enhancement of the downloaded file. Measuring change management performance: a case study of a Moroccan construction company Abdelouahab ERRIDA LIMII Laboratory FST of SETTAT Settat, Morocco a.errida@uhp.ac.ma Bouchra LOTFI LIMII Laboratory ENSA of BERRECHID Berrechid, Morocco boushralotfi@gmail.com Abstract—the purpose of this paper is to propose an approach for measuring the performance of organizational change management within a Moroccan construction company, by adapting the balanced scorecard model to change management context. Also, it presents the main steps to be followed for carrying out the measurement and identifies a set of change management performance measures regarding four different perspectives: results and outcomes, stakeholders, project and change management processes, and learning and growth. Keywords—organizational change, management, performance, balanced scorecard I. change INTRODCUTION The complexity and dynamism in Today’s business environment has the effect of requiring many companies to implement organizational change projects in dealing with performance issues. Organizational change projects are increasingly used for the renewal and the transformation of companies [1]. They concern several types of projects, such as creating a new business, implementing new processes, merger, acquisition, establishing new relationships, etc. They are significant investments that need appropriate management approaches [1]. For this reason, managing organizational change projects is becoming a real challenge for managers who must seek more efficient change management tools and techniques. Change management is defined by Prosci [2] as the application of a set of tools, processes, skills and principles for managing the people side of change to achieve the required outcomes of a change project or initiative. There is an abundant literature on organizational change management [3] associated with an increasing demand for this literature from companies and managers [4]. However, given that organizational change is a complex process and there is no ‘one best way’ to manage it [5], many companies continue to struggle with organizational change management [6] and therefore fail to ensure the realization of the expected outcomes of changes. Balogun [7] and other authors show that 70 % of all change projects fail in all organizations. Change failure may be due to various causes such as: insufficient training, poor leadership, lack of commitment, improper planning, lack of resources and competencies, ineffective 978-1-5386-4315-0/18/$31.00 ©2018 IEEE Elalami SEMMA LIMII Laboratory FST of SETTAT Settat, Morocco semmaalam@yahoo.fr communication, resistance, and lack of an adequate performance measurement system [8], [9]. Jayashree and Hussain [10] argue that the lack of an approach for measuring the performance of organizational change management can prevent organizations from achieving the intended objectives, whereas the use of an approach for measuring change management can enable organizations to address upcoming obstacles and resistance to changes in a timely manner [11], thus reducing the likelihood of failure in organizational change management. Consequently, the management of organizational change projects should be measurable. Only when we are able to measure the performance of change management and track its progress it would be possible to achieve the objectives of change and deliver its desired results [10]. A review of literature on organizational change and change success has revealed that there are surprisingly few studies related to performance measurement in change and has confirmed the need for developing a measurement system for tracking and measuring change [10]. Hacker and Washington [12] remarked that while there are several researches that try to explain why change projects fail, there are very few tools that can assist managers in measuring change projects performance. One of the most significant contributions to research in performance measurement is the “balanced scorecard” BSC, which is world-widely recognized as an approach to performance measurement. Several studies have adapted the BSC model to measure the performance in different areas of management, such as: knowledge management [13], IT management [14], maintenance management [15] and R&D management [16]. In this paper we will try to develop an approach for measuring the performance of organizational change management by adapting the BSC to organizational change context, with an attempt to answer the following research question: How can the BSC approach be applied to organizational change management? In order to contribute to answering this question, we have conducted an action research in a Moroccan construction company, to assist it in measuring its business transformation. This paper is structured in three main parts. In the first part, we present the key concepts underlying our research, namely organizational change management, change measurement and balanced scorecard model. The second part is devoted to the adaptation of the BSC to organizational change management context. In the last part we try to propose an approach for measuring change management performance on the basis of the adapted balanced scorecard, including the suggestion of a list of performance measures. II. RESEARCH METHOD The methodology adopted in this paper is based on an action research conducted within a Moroccan construction company undergoing a business transformation. This methodology is inspired from the constructivist epistemology and promotes an understanding of complex processes in a learning or organizational change perspective [17]. It enables the researcher to become an organizational engineer who will build a tool, set it up and evaluate it with users [18], thus contributing to the emergence of new scientific knowledge. The host company is created in 1975, specialized in the construction of industrial and commercial buildings, with a turnover around 300 MMAD and over 30 years of experience in the Moroccan market. To carry out its business transformation, this company has initiated several change projects namely: implementation of a project management methodology, implementation of a new ERP, establishment of a dedicated department for export to Africa, integration of an activity instead of its subcontracting, implementation of an HSE approach, and creation of new subsidiaries. A key objective of this research was to propose an approach for measuring the performance of change management. To this end, we have conducted multiple meetings with change teams and we have evaluated how changes were measured within this company. These, along with literature review related to change management, change management success, performance measurement and balanced scorecard, helped us to identify the main factors that contribute to change management performance, and therefore allowed us to adapt the balanced scorecard to change management context. III. THEORETICAL BACKGROUND This section of the paper reviews literature related to organizational change management, change management success, measurement of change and balanced scorecard. A. Organizational change management Jones [19] defined organizational change as the process by which organizations move from a current state to a desirable future state to increase their effectiveness. Organizational changes can be planned, as they can be emergent. Planned changes have gained more attention in the academic literature and owe much to the work of Kurt Lewin [20], who conceived the “Unfreezing-transitionRefreezing” model in the 1950s. A planned change can be thought of as a process consisting of a series of pre- planned steps (e.g. implementation of an IT system, digital transformation projects, production system reorganization, implementation of a new methodology, etc.). In this paper, we are focusing mainly on this type of change. Changes can occur at the individual, at the group or at the organizational level [21].They can impact competencies, behaviors, processes, responsibilities, management style, culture and performance indicators [22]. Change management theory offers models, frameworks and tools that can be used to help individuals make successful transitions resulting in the implementation of change. Parry et al. [5] distinguish between two categories of change management models: processual models and descriptive models. A processual model details the steps to be followed in managing change, for example, IMA’s 10 Steps [23] or Kotter's 8 step model [24]. A descriptive model try to identify the factors that contribute to organizational performance and organizational change projects success, for example, Nadler-Tushman congruence model [25] and Causal Model of Organizational Performance and Change [26]. Despite the abundance of publications on change management and change models, there is still a need for determining the factors that contribute to improving the success rates of organizational change projects [27]. B. Change Management success According to several models [2], [23], [24], [28], some of the most common steps that, if followed, should contribute to successful changes projects, include: Assessment of the internal and external environment, establishment of a vision and development of a change management strategy, communication of the vision to all stakeholders, preparation and planning of the change, executing change management plans (communication, sponsorship, resource, benefit realization, training, coaching, etc.), tracking and reporting, reinforcing and sustaining change. Also, the literature proposes some levers which can be operated in order to succeed in the change management process, but it is up to each organization to determine them according to change impacts and specificities. In this context, Creasy[29] identifies ten top contributors to the success of change management process : (1) sponsorship, (2) use of a structured approach, (3) availability of resources, (4) integration of change management and project management, (5) employee engagement, (6) communication, (7) Involvement of managers, (8) training, (9) resistance management, (10) Reinforcement Strategy. C. Measuring change management Measuring the outcomes of change is an ongoing challenge [30]. It can contribute to organizational performance and success if the measurement system is properly developed and employed, as it can cause change failure if the measurement system is inadequate [10]. Measurement systems provide managers with the needed information for making decisions about change [27] and help them to evaluate the achievements of targeted objectives. The measurable improvements resulted from change projects, which contribute to achieve organizational objectives and which offer an advantage to one or more stakeholders are called benefits [31]. The benefits can include: increasing profit margin; reducing costs; increasing market share; meeting a legal/regulatory requirement; improving quality, making a measurable contribution to achieving strategic/ organizational objectives and improving performance. According to [32], effective change management creates short and long-term benefits regarding three areas of the organization: project, people, and business. Therefore, an effective measurement system should take into considerations all these dimensions. This statement is confirmed by [33], who proposes three key categories of metrics for measuring change effectiveness: business objectives, project performance and individual/ stakeholder adoption. Business objective metrics indicate the results of the change effort against desired business outcomes. Project performance metrics focus on project management activity and assess the performance against the deliverables and main milestones specified in the change management plan (e.g. change project completion, budget, resource utilization, communication effectiveness, training completion, etc.). The third key category aims to measure the adoption of the change from the perspective of individuals and stakeholders. For Prosci [34] three categories of metrics can be considered for measuring the effectiveness of change management: organizational performance, individual performance, and change management performance. The first category “organizational performance” aims to assess the achievement of desired outcomes for the change by answering the question “Did the change project deliver what was expected?” For the second category, the measures indicate how the individuals are progressing through their change process. The third category focuses on the effectiveness of change management activities and their impact. It requires answering the question “how well are change management activities applied? D. Balanced scorecard (BSC) Balanced scorecard is considered as one of the most widespread methods for measuring the company’s performance. It is conceived as a framework that can enable an organization to translate its vision and strategy into a coherent set of performance measures [35]. It proposes to view the company from four perspectives (Financial, Customer, Internal Process, Learning and Growth), for monitoring its performance. The Financial Perspective: aims to evaluate the financial performance of the organization. It indicates whether the investments are contributing to improve financial results. It uses measures such as return on investment, net income, added value, etc. The Customer Perspective aims to assess how the company is creating value to its customers. It uses measures such as customer satisfaction rate, market share, etc. The Internal Process Perspective highlights and evaluates the efficiency of internal processes and procedures. It uses measures such as cost of quality, cost of non-conformance, responsiveness, Manufacturing lead Time, etc. The Learning and Growth Perspective: it represents the foundation on which the balanced scorecard is built. It focuses on the individuals and infrastructure of the organization. It has three dimensions: human capital, information systems and organizational perspectives [36]. This perspective reflects organizational commitment to growth and change. It assesses the company’s ability to change, innovate, improve and learn. It uses measures such as motivation, information system capabilities, intellectual asset, employee skills development, etc. To demonstrate the role of each perspective in the overall performance, Kaplan and Norton [35] introduced “the strategic map” which is a diagram that represents how the organization creates value by showing the linkages between strategic objectives and the perspectives of the BSC. IV. ADAPTATION OF THE BSC MODEL TO CHANGE MANAGEMENT PERFORMANCE MEASUREMENT The BSC model is considered as a template which every business can adapt by choosing more or less perspectives according to its context and specificities [37]. Starting from this point, and from various findings that show the usefulness of the BSC in several areas of management (maintenance, KM, R&D…), we propose our adaptation of the balanced scorecard to the context of organizational change management. The adapted balanced scorecard suggests to view an organizational change project from four perspectives: results and outcomes perspective, stakeholder perspective, process perspective and learning and growth perspective. A description of each of these perspectives as well as a strategic map are presented below: A. Results and Outcomes perspective This perspective aims to assess the achievement of the desired outcomes from a change. The metrics associated with this perspective should answer the question: did the change project deliver the benefits that were expected? Depending on the objectives of the change project, benefits are commonly split into two categories: financial and non-financial benefits [31]. Regarding financial benefits, this perspective examines if the change implementation is contributing to the improvement of the company’s financial performance. It aims to evaluate the financial results obtained from the implementation of the change. In addition to the indicators related to project financial performance, Prosci [2] introduces a CMROI Model (Change Management Return on Investment) which measures the additional value delivered as a result of the adoption and usage of change by the employees. It reveals the link between project results and the management of the people side of change. For some change initiatives, expected outcomes are mainly non–financials benefits and it is not easy to express them in monetary terms [31]. For this case, we suggest to expand this perspective to evaluate both financial and non-financial outcomes, unlike the basic design of the balanced scorecard model, which dedicate the first perspective to financial results. B. Stakeholders Perspective In the basic design of the balanced scorecard, the customer perspective focuses on how a firm creates value for customers. In the context of change, it will be very necessary to ensure that change project creates value for all stakeholders. A change project stakeholder would be any group or individual who can affect or be affected by the implementation of the change project [38]. Effective stakeholder Management requires identifying all stakeholders involved in change projects, understanding their expectations and ensuring their engagement in change decisions and execution. In fact, meeting stakeholder expectations will directly influence their motivation to support the proposed change, increasing their engagement, thus contributing to the achievement of the change objectives. Given the diversity of the stakeholders involved in an organizational change: change agent, change sponsor, change team members, project team members, change manager, project manager, suppliers, etc., it will be more appropriate to transform the customer perspective into a stakeholder perspective. This proposition is supported by Vasudevan [39] who suggests to make some adjustments to the balanced scorecard model applied in the context of project management, namely choosing stakeholder perspective instead of the customer perspective. Also Jo Kime, [40] mentioned that satisfying customers only is not enough for delivering sustainable results. It will be very difficult to achieve the objectives without the support of all stakeholders. We think that stakeholder theory will provides an interesting perspective in the measurement of organizational change management performance, because organizational change success is dependent on the influence and the support of the various stakeholder groups. Stakeholders can influence the change management process in many different ways, such as influencing decision-making process, not providing the resources required for the change, and resisting to change [38]. C. Process for managing changes This perspective aims at providing measures that answer the question: in which processes the organization must excel in order to achieve the objectives of change and meet stakeholders’ expectations? According to Creasey [41], an organizational change must be managed on both the technical side and people side of change by integrating two processes: project management and change management, as illustrated in Figure N°1. FIG1: Integration of project management and change management C.1 Change management process for managing people side Kotter [24] points out that change management is a process that focuses on change progress through various stages. This idea underlies the majority of change management processual models that consider change as a process or set of steps [42]. This statement is confirmed by Prosci [2], which considers that treating change as a process is a principal component of successful change management. We therefore propose to manage change by respecting a very detailed model “The Standard for Change Management”, which is developed by ACMP [28]. This model determines 33 processes to manage effectively and efficiently a change project. All these processes are organised into five process groups: (1) Evaluate change impact and organizational readiness, (2) Formulate the change management strategy, (3) Develop the change management plan, (4) Execute the change management plan, (5)Close the change management effort. Several authors have highlighted the importance of reviewing and conducting regular tracking of change project progress, to monitor whether steps and activities of change are proceeding as planned and also for taking corrective actions as needed. For this reason, it is recommended to set milestones that will help in measuring change progress. BCG [43] considers the lack of milestones to gauge progress as one of the leading causes of failed change projects. In addition to milestones, Prosci [2] recommends the use of a various tracking tools such as change management plan, communication plan, project tracking software programs, surveys and regular meeting with stakeholders. In this sense, we propose to implement a “change milestone tracker” for tacking all change management activities and all change management processes. This will help managers to be continually informed about the change progress. Without the feedback that such tracker can provide, managers will be unable to determine what actions may be taken to successfully manage the change. C.2 Project management process for managing technical side The growing research interest in the use of project management as a way of implementing change [44] is understandable as there is a belief that projects and programs are ways for organizing change in successful organizations [21]. Indeed, Project management provides the processes and tools that help organizations to effectively manage the technical side of a change project [2]. For this, it is recommended to use project management processes and their best practices for managing the technical side of change. One of the most popular methodologies of project management is PMBOK, which determines 42 processes to manage effectively and efficiently a project. All these processes are organized into five process groups (Initiating, Planning, Executing, Monitoring and Controlling, and Closing). Various studies [45], [46], [47] have demonstrated the importance of integrating project management and change management. For [47], the integration takes many forms, namely unifying documents, clarifying the roles and responsibilities of the resources involved in project management and change management, using project management tools and good practices for managing change (e.g. communication plan, stakeholders analysis, risk analysis, etc.). C.3 Portfolio change management In addition to change management and project management, various studies stress the importance of using portfolio management processes when implementing multiple changes. A portfolio is defined by PMI (2013) as a collection of projects, programs and other work that is grouped together to facilitate the effective management of that work to meet strategic business objectives [48]. Portfolio management is the centralized management of one or more portfolios, which includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work, in order to achieve specific strategic business objectives [48]. D. Learning and growth perspective In the basic model of balanced scorecard, the fourth perspective “learning and growth “has three dimensions: human capital, organizational capital and information systems. We think that “ human capital “and “organizational capital ” are valid in the case of organizational change projects, as they are both considered as central components of organizational change [49] [50]. Indeed, Prosci [2] reveals that the number one obstacle to success for major change projects is employee resistance and the ineffective management of the people side of change, which means that poor management of human factors is associated with change project failure. Also, it is argued that organizational capital is a factor that can influence organizational change success through its main components: culture, organizational learning and structure. In the context of organizational change, it is crucial to prepare the environment, the culture of change and the organizational structure that enable organizational change success and sustain long term performance. Regarding “information system”, we think it would be more appropriate to replace it by “change resources’, as the availability of change resources and funding are considered as key success factor for change management. Prosci [2] reveals that change management is likely to be more effective in change projects with dedicated resources than in those without a dedicated resource. FIGURE 2: The four perspectives of the adapted BSC E. Strategic map In the figure N°3 we present the strategic map proposed for the adapted balanced scorecard. At the top of the model is the results and outcomes perspective, followed by the stakeholders, the internal processes for managing change projects, and learning and growth perspectives. It can be argued that individual performance, availability of change resources and appropriate organizational capital, contribute to change management success. They represent the three dimensions that constitute the foundation of the adapted balanced scorecard and concern several components such as: competencies, skills, human and material resources, leadership, culture, change management maturity, change management readiness, etc. All these dimensions could influence the internal process perspective. The successful management of change project on both the technical side and people side by integrating change management and project management processes may contributes to creating value for stakeholders. Indeed, effective change management ensures that the objectives of change are aligned with stakeholders’ expectations and enable stakeholders to be more engaged and to actively participate in change decision [48]. The Engagement and the participation of the stakeholders in implementing the activities of change project, associated with a good sponsorship can have a significant impact on change success and contribute to realize the benefits of change [28, 54]. • Process perspective: change management effectiveness, and project management effectiveness. • Growth and learning perspective: resource availability, individuals, organizational learning and organizational capital. 5. Select performance measures and method of measurement: For each area of measurement, we suggest to set measures and indicators as recommended by the BSC. Also, it is necessary to select a method of measurement and data collection among the available methods such as surveys, focus group, and interviews [31]. For example, concerning the change project “implementation of a new ERP”, some of the main measures that are proposed are: • Results and outcomes measures: change management ROI, employee productivity increase, KPI of ERP implementation project, contribution to performance, time saving. • Stakeholder perspective measures: customer satisfaction measures, Employee satisfaction and commitment measures, Employee proficiency measures, Employee adoption measures, supplier performance, executive managers commitment and sponsorship, etc. • Process perspective: communication, training, and coaching effectiveness measures, sponsorship effectiveness, completion of change management activities according to plan and milestones. • Growth and learning perspective measures: individual performance measures, resources availability measures, organizational learning measures, organizational and individual readiness for implementing ERP. FIGURE 3: Strategic Map of the adapted BSC V. PROPOSAL FOR AN APPROACH FOR MEASURING CHANGE MANAGEMENT PERFORMANCE WITHIN THE HOST COMPANY Taking into account, on the one hand, the perspectives of the adapted balanced scorecard as described above, and on the other hand, the various factors that influence change management performance, we propose for the host company to measure change management performance related to ongoing change projects, by following the steps below: 1. Determine the expected objectives and benefits of change: the first step aims to determine the objectives and the various expected benefits of the change project. 2. Identify stakeholders: the second step focuses on identifying the main stakeholders involved in change projects. 3. Determine plans, schedules and milestones: As mentioned in the precedent paragraph, it is deemed necessary to track the progress of change project. To do this, plans and schedule including milestones, should be clearly determined. 4. Determine the areas of measurement: we suggest to choose relevant areas of measurement regarding each perspective and taking into account change project context. For example, concerning the change project “ implementation of a new ERP”, the areas of measurement that are proposed are : • Results and outcomes perspectives: Proper implementation of the ERP, change management contribution, productivity, contribution of ERP to performance; data availability. • Stakeholder perspective: customer, Employees, executive managers, users of the ERP, project managers, project team, supplier of the ERP. Prior to implementing this approach, the company experienced considerable difficulties in managing and measuring changes. Indeed, several change projects were launched but they have failed to attain their objectives. For example, in 2017 this company tried to implement a new ERP, but the lack of an approach for tracking and measuring the change progress was one of the major causes of failure for this change project. Despite the fact that the implementation of this approach is still in its early stages, this has resulted in several benefits for the company, as outlined below: The Managers are becoming more convinced that change management performance may be affected by various factors and they are aware of the importance of training, coaching, involvement of stakeholders, and tracking of change management activities in improving change projects performance. It is remarkable that the implementation of the approach has contributed to improving the daily management of changes by considering them as projects. The consideration of the learning and growth perspective has obligated the managers to concentrate efforts on upgrading organizational procedures in order to increase the maturity of both change management and project management. It is noted that some indicators are not easy to measure and necessitate the development of additional tools and documents, such as: satisfaction questionnaire, CMROI calculation method, framework for assessing change management readiness, change management maturity audit, etc. Hence, the approach may be used as a guideline for managing changes and could serve as a basis for further development of a detailed performance measurement system. CONCLUSION AND PERSPECTIVES In this paper we have tried to adapt the balanced scorecard model to the context of organizational change management by proposing four perspectives: results and outcomes, financial, stakeholders, and learning and growth. We have also proposed a strategic map that considers the learning and growth perspective as a foundation of the adapted BSC and reveals the causal relationships between the four perspectives. An approach for measuring change management performance within the host company was also proposed. As a perspective, it would be very interesting to explore various studies concerning how researchers have identified the factors that influence the performance of change projects, the effectiveness of multiple change management, and change management effectiveness. This will help to improve the adapted balanced scorecard and will confirm the relevance of the proposed measures. Furthermore, to validate this model, it will be necessary to apply it in different change projects and different contexts, thus enhancing its efficacy by omitting some factors or adding others. [6] T.Rick, companies are struggling with change management, 2012. [Online]. 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