Addressing Climate and Culture Change during a Product Innovation Transformation
By: Dr. Ken Huskins, Principal Consultant

Dr. Cooper and Dr. Edgett’s research indicates that while approximately 75% of North American companies use Stage-Gate as their core New Product Development process, a much smaller percentage actually adhere to them, which severely erodes business benefit.  Faulty process design? Yes, in some cases.  Poor technology platform?  Sometimes, but not usually.  Poorly executed management of the change?  Much more often.

In sports there is a saying: “No pain, no gain”.  However, we should be mindful that excessive pain will no doubt erode whatever possibility of gain existed.  And so it is necessary with every business process “transformation” to anticipate and accept that  (1) change will make people uncomfortable AND  (2) the need exists to put into place a well designed change management implementation plan that prevents ‘uncomfortable’ from becoming ‘unbearable’.

Change management is especially important when implementing any element of a new Product Innovation “management system” because Product Innovation:

• Touches and is dependent upon virtually every functional group in the organization
• Requires extensive, multi-stage coordination and communication between and among executives, managers and professional staff
• Typically has high associated risks and costs that can have major impact on results

Successful leaders of transformation initiatives understand that there are two equally important, parallel processes at work during organizational change:  Individual Change and Organizational Change.  Both start from the Current State and end when the Future State of your target business process has been achieved.

As individuals, we all go through three phases when dealing with changes that affect us personally, most commonly referred to as Endings, Transitions and Beginnings¹:

• Endings – this is defined as “what is left behind” or “what ceases to be”, whether positive (gain) or negative (loss)
• Transitions – the move from “was was” to “what will be”, where people often get “stuck” due to a high degree of uncertainty, mistrust or self-preservation at play
• Beginnings – this is not the same as starting, but represent the point at which individuals understand and begin to embrace the change, see the positives and become proactive

• Leading – this is the period where key individuals (leaders) drive the change forward, usually through announcements and the unveiling of Future State visions
• Designing – this is the process of getting people involved in crafting the details of the future state, and turning that vision into actual processes, tools, roles and responsibilities
• Realizing – when the organization collectively begins to see the benefits and value of the change more broadly, usually capped by the expression “it’s much better now”.

Sound pretty straight-forward?  Actually, it can be if you put in place all of the elements which fall under the umbrella term of effective “change management planning”.

Change Management Planning

What is it?  Philosophies that are rarely well-executed?  Something that everyone says they understand but few are actually good at?  Something that leaders are responsible for but actually everyone plays a part in?  All of the above are true.

To make it tangible, a Product Innovation Transformation leader needs to create a formal “Change Management Plan”.  A good Change Plan contains activities, deliverables and resources to focus on each of the following eight areas of successful change management:

1. Shared Vision for Change – also known as the “case for change” or the “burning platform”, this is the well-articulated story that helps people understand why changing your approach to Product Innovation is not just necessary but imperative for the business.  Clearly lay out the vision for both organizational and individual benefits.
2. Culture & Behaviors – “walking the talk” by having leaders demonstrate that they are actually serious.  Examples include assigning resources, freeing up investment dollars, incentive programs for ideas, or even just consistently attending Gate Meetings.
3. Organizational Readiness – surveying the organization to identify current perspectives and barriers to change that exist.  A powerful tool for gaining insights into organizational readiness for Product Innovation is the SG Benchmarker product, which highlights not only current organizational maturity against best practices but also the degree of alignment (standard deviations of responses).
4. Strategic Change Plan – an actual work breakdown structure of activities, deliverables, roles and responsibilities to manage the change process, with an individual project leader to manage and track completion of the plan.
5. Communication - ensuring that messages are effectively communicated by the leadership team to key stakeholders in the organization. For Product Innovation, this  includes:
   • Getting stakeholders to understand the connection between the product innovation process and their personal ability to succeed (i.e., “What’s in it for me?”)
   • Stressing how every function, role and level are essential participants in the process
   • Proactively alerting owners of any aligned internal processes as well as key customers and suppliers if they will see visible evidence of process changes.
     
     Methods include e-mail, small and large groups, intranet bulletin boards, newsletters, etc. When you think you’ve communicated ‘enough’, recognize that you likely have not. Make it easy for stakeholders to offer their feedback and raise questions.
     
     
6. Organization Design – the process of defining a new organizational structure, roles and responsibilities for Product Innovation.  This includes Process Owners and Managers (e.g., the Stage-Gate Idea-to-Launch Process Manager), Gatekeepers, Product Project Leaders and impacts to existing functional departments.
7. Leadership Development – training specifically targeted at executives who need to lead and participate in Product Innovation processes.  Examples include GateKeeper training, Winning at Product Innovation, the Innovation Diamond, etc.
8. Individual and Team Alignment – this is most commonly accomplished through training. The effectiveness of your training strategy and execution is critical to managing change. As you prepare, be certain to consider:
   • Adult learning principles that drive knowledge retention and receptivity
   • Timing, relative to which roles to train first and when relative to roll-out schedule
   • Structure, relative to content, facilitation, and hands-on application of principles
   • Certification of the effectiveness of the training and trainees’ level of competence
   • Install a mentoring support system and triggers for re-fresher training

A good Change Plan, if executed effectively, will drive Organizational Change AND facilitate Individual Change.  The key for Individual Change is providing Leaders with tools to support Individual Change for the key change agents in each of their teams or functions.  For example, if a Shared Vision for Change is documented, then not only should it be presented to large audiences, but Leaders should also spend one-on-one time with key Individuals to understand the critical role they will play in creating the new vision, help them move through their own “change journey” as quickly as possible, and prepare them to help others.

Success Criteria Metrics

Once your Change Plans are in motion, you need to show clear, tangible evidence that progress towards achieving the forecasted benefits is being made. We recommend that ‘success criteria metrics’ be defined, measured, and results reported frequently to the stakeholders to reinforce commitment, benefits, and recognition of how change is being effectively managed.  Contact us; the author will be happy to discuss examples of success criteria metrics used by firms that have achieved sustained traction in adoption of their Product Innovation processes.

In summary, Product Innovation is a fully cross-functional business process and the Transformation of that process impact the way a significant portion of the individuals in your organization work. Some level of resistance and friction can always be expected.  Organizations need to actually create tangible Change Management Plans.  They also need to define and measure what constitutes success for both the organization and individuals.  Those that do enjoy real benefits sooner and experience the journey with far fewer bumps in the road!

References, 1. Adaptation of Lewin, K. (1951). Field Theory in Social Science. New York: Harper and Row.

You can reach Dr. Ken Huskins at ken.huskins@stage-gate.com.

More resources on this topic:

1. Making Stage-Gate Stick on July 16-17 in Washington, D.C.  Join Stage-Gate expert and sought-after implementation consultant, Mike Wiebe, for this 2-day, hands-on public seminar dedicated to helping innovation professionals master the tough challenges of implementing Stage-Gate.  Don’t waste time and don’t jeopardize business results trying to figure this out on your own.  Benefit from the learning experiences of thousands of companies who have successfully implemented Stage-Gate or struggled through several attempts.  Register Now. 
   
   
2. Stage-Gate International Consulting Services.  Work side by side with our Product Innovation Transformation Services team and chart a course of action that uniquely addresses your organization’s goals.  Click Here for More Information.   
   


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