IBM Global Business Services

Executive Report

IBM Institute for Business Value

Making change work

while the work keeps changing
How Change Architects lead and manage organizational change

Organization Change Management

Enable enterprise change capability and effective organizational

transformation
IBM Talent & Change enables organizations to use behavioral science, social collaboration tools and analytics to identify top talent, deepen employee engagement and
manage transformational change. We enable clients to rethink the way work gets done
and successfully manage the size, scope and pace of transformation projects to meet
shifting market demand. Through our practical and proven Better Change approach to
transformation, we help leaders turn strategies and initiatives into results. Our experience in building and delivering effective change capability comes from over a decade of
transforming IBM, as well as from our deep history of providing Talent & Change
solutions for clients implementing a breadth of strategic, organizational, cultural and
workforce changes. With global capabilities that span 170 countries, we help deliver
sustained results to companies and industries around the world.

IBM Global Business Services

By Hans-Henrik Jorgensen, Oliver Bruehl and Neele Franke

The gap between the magnitude of change

and the ability of organizations to manage it continues to widen. A number of

factors are creating challenges that require organizations to act beyond the
boundaries of their experiences. How are organizations coping with these massive
changes? Are they enabling change leaders, engaging employees in conversations
about change or creating a culture that facilitates change across the organization?
Are there organizations that stand out in reducingor at least maintainingthe gap
between the pace and volume of change and the development of change management
capabilities? IBMs latest Making Change Work study, which surveyed almost 1,400
individuals responsible for designing, creating or implementing change across their
respective organizations, answers these questions and identifies a select group of
companiesChange Architectsthat have found the keys to making change work
while the work keeps changing.
The work keeps changing
Only

20% successful
87% enough focus

of respondents are considered

in managing change.
of respondents state that not
is placed on
managing change in critical projects.

Only

40%

Only

49%

of respondents believe they have the

right skills in place to successfully
manage change projects in the future.
of organizations hold their leaders
accountable for effectively
managing change.

We cannot solve our problems with the same

thinking we used when we created them.
Albert Einstein1

Disruption has become every organizations constant companion.

Rapidly evolving technology, an ever-growing mountain of data and
the increasing need for global integration make it difficult for even
the most forward-thinking companies to keep up with increasing
change. Yet, the ability to anticipate, manage and capitalize on
pervasive change is often the difference between market leadership
and extinction. History is full of lessons from companies that had to
completely revamp the way they compete to remain viable.

Making change work . . . while the work keeps changing

For example, one iconic U.S. publishing company emerged

from bankruptcy after realizing consumers had the desire to
see their favorite heroes on the big screen. The company
began using its publications as test beds for stories and
characters that could be adapted into movies and digital
entertainment. In accomplishing a remarkable turnaround,
this company surrounded itself with the brightest talent it
could find. It incorporated a transformation program that
began at the Board level and was driven through every level of
the organization. Today, after recovering from a near-death
experience, the companys offerings are in high demand by
numerous successful movie producers. On the other side of the
equation, there are all-too-many examples of organizations
that tumbled from the top of their industries because of their
inability to both recognize and manage sweeping change.2
What is the difference between those companies that successfully manage change and those that fail? How do companies
differentiate themselvesand even thrivein an environment where the work keeps changing? To find out, IBM
conducted the latest Making Change Work study, which
examines how organizations manage change in this new,
disruptive environment. This report builds on the first Making
Change Work research findings, published in 2008, in which
we noted that companies no longer have the luxury of expecting day-to-day operations to fall into a static or predictable
pattern interrupted only occasionally by short bursts of change.
Instead, we wrote, constant change would become the new
normal.3
Today, we find the pace and magnitude of change have
accelerated beyond even our expectations. Disruption penetrates every aspect of business. Take, for example, the way the
competitive landscape has changed. In the past, industries were
disrupted when rivals swooped in to attack large pieces of the
value chain. Now, however, more than two-in-five CEOs
expect their next competitive threat to come from organizations outside their industries. These new competitors arent just
set to steal market share; they are turning whole industries
upside down.4 For many organizations, this will require
rethinking organizational design and processes, as well as a
change in the mindset of individuals within the enterprise.

And CEOs in just about every industry have learned that

collaboration is often the key to constant reinvention. Customers,
partners and employees that collaborate can go further, faster in
an era of rapid and continuous innovation.5 Some are pushing the
boundaries of their organizations as a resultopening up to
empower collaboration among individuals, and moving away from
command-and-control hierarchies.6 Next-generation employees
(Millennials) are already there. Digital collaboration, flexibility
and creativity are part of their DNA.7
However, most companies have not yet enabled employees to
step into this new age of collaborative delivery. In our study,
74 percent of respondents said that individuals in their organization are not fully prepared to adapt to an increasingly digital
work environment, either online or offline. At the same time, for
88 percent, a major focus over the next five years will be to
leverage new technologies that make organizations more
customer centric. This poses a significant disconnect between
the desire of leaders to embrace technology and their organizations ability to follow suit.
Above all, however, it is how organizations interact with
customers that is most critical, and the methods and media for
doing so are growing more complex. Fueled by technology, both
business customers and consumers are no longer just part of the
conversation; they are driving the relationship and increasingly
demanding seamless experiences across multiple channels of
engagement. And they are quick to change loyalties if they find
an organization that can better meet their needs.8
The integration and rapid deployment of technology, such
as advanced analytics, cloud and cognitive computing, need
to be a critical focus for organizations to design customerfocused business agendas. To do so, organizations will need to
align client-facing and internal business functions across the
organization to outperform in an era characterized by transparency. Seventy-seven percent of organizations confirm that
a major objective over the next five years will be to further
integrate processes and technologies on a global scale.

IBM Global Business Services

This integration means massive changes and realignment

within the C-suite itself. C-suite level executives must closely
examine how they and their teams interface with each other.
For example, Marketing and IT will need to collaborate as a
part of the digital front office. Supply Chain, Marketing and
IT will have to work together for omni-channel transformation. HR, Finance and virtually all operations will need to
partner with IT to capitalize on cloud solutions.

As companies move toward a more collaborative infrastructure,

the focus and importance of change management capabilities are
expected to shift significantly from traditional IT implementations to those that are more business-driven. For example, over
the past five years, organizations looked to enterprise transformation, as well as ERP and other IT system implementations as
the top three transformative initiatives.

Projects implemented in the past 5 years

59%
57%

Enterprise transformation
ERP implementation

50%
49%
48%

Other system implementation

Other organizational restructuring
Shared services

39%
37%
37%
36%

Mergers and acquisitions

Outsourcing
Business analytics
Supply chain management

29%

E-commerce and distribution

25%

Social business

Projects gaining in importance over the next 5 years

54%

Enterprise transformation

38%

Business analytics

29%
28%
26%
23%
21%
21%

Social business
Shared services
Other organizational restructuring
ERP implementation
Mergers/acquisitions
E-commerce and distribution
Other system implementation
Outsourcing
Supply chain management

18%
16%
15%

Figure 1: Enterprise transformation remains a high priority, but business analytics and social business are expected to gain importance over the next five years.
Source: IBM Organization Change Management.

Making change work . . . while the work keeps changing

When respondents were asked to select the projects they expect

to gain in importance over the next five years, enterprise
transformation still topped the list (see Figure 1). However,
business analytics and social business were next in line.
How do successful organizations manage the inescapable
challenges of change? And are there those that adapt quickly
and manage to contain the gap between the pace and magnitude of change and their capability to manage it? If so, how do
these companies create and implement successful projects in a
dynamic, competitive environment, driven by a global marketplace, demanding customers, evolving technology and an
ever-growing mountain of data?

Study methodology
To find out how organizations perceive the challenges of
change in todays business climate, as well as identify those
organizations that have developed the capabilities to stay apace
of change, the IBM Organization Change Management
Practice and the IBM Institute for Business Value conducted
the second Making Change Work study. Between September

Roles

2013 and February 2014, 1,390 interviews and online surveys

were completed. Respondents represented 48 countries, more
than 20 industries, and individuals responsible for designing,
creating or implementing change across their respective
organizations (see Figure 2).

Introducing Change Architects

Our study of almost 1,400 professionals reveals how organizationsparticularly outperformersmake change work in
todays business environment. Although companies have
increased their change management capabilities over the years,
the pace of change keeps widening the gap between need and
capability. In our study, we consider only the top 20 percent of
organizations to be highly successful in this regard. We call
these organizations Change Architects. They indicated that
at least 75 percent of their projects were a complete
successthat is, a minimum of three-in-four projects met all
predefined goals (see Figure 3).9 Among lesser-performing
companies, 35 percent can be considered moderately successful. All others45 percent of respondentsrepresent
organizations with below average success.

Based on your experience, please evaluate the average

success rate of projects in your organization
Project Manager

28%

Change Manager/Practitioner

28%

Project Management Office Member

Other Project Team Member

20%

8%

Project Team Lead

Corporate Role

35%

14%

Project Sponsor/Initiator

Functional Subject Matter Expert

45%

7%
6%
5%
3%

Below average
successful
(Less than 48%)

Moderately
successful
(From 48% to
less than 75%)

All others

Figure 2: The latest Making Change Work study is based on an analysis of

Highly
successful
(75% and up)

Change Architects

1,390 responses from 48 countries and more than 20 industries.

Figure 3: Change Architects consistently drive successful project results,

Note: Numbers may not sum up to 100 percent due to rounding.

Source: IBM Organization Change Management.

Source: IBM Organization Change Management.

often surpassing their lesser-performing peers by a considerable margin.

IBM Global Business Services

Change Architects are positioning themselves to capitalize

on the vortex of change permeating every aspect of business.
They are more effective at dynamically managing projects.
Compared to our survey average, Change Architects have at
least 56 percent more projects that were a complete success.
To accomplish this, they often place themselves in a state of
continuous transformation. These Change Architects are
designing the models that others must master if they wish to
remain competitive in an ever-more-complex environment.
In this report, we will look at what Change Architects do
differently in making change work in their organizations.
From the analysis of our survey responses, we found that

Change Architects embrace three critical imperatives that

enable them to be change-effective. They

Lead at all levels,

Make change matter, and
Build the muscle.

Becoming a Change Architect requires the enterprise-wide

integration of the three building blocks of managing change.
In essence, it is the ability to respond to rapid and voluminous
change that must be injected into the corporate culture. In the
following pages, we look at how Change Architects address
these building blocks and provide a roadmap for others
to follow.

Three building blocks for becoming a Change Architect

Make change
matter
Lead at
all levels

Build the
muscle

Making change work . . . while the work keeps changing

Lead at all levels

You never change things by fighting the

existing reality. To change something, build
a new model that makes the existing model
obsolete.
Richard Buckminster Fuller, Operating Manual for Spaceship Earth10

Change is the one constant every organization must

face. Yet, at the same time, it is something that few
organizations manage successfully. Our research clearly shows
a major reason for this is that most enterprises do not cultivate
a change-centric culture. Driving successful change starts from
the top and includes the entire organizationtop management sponsorship, middle management empowerment and an
overall corporate culture that promotes change at every level of
the organization (see Figure 4).

Most important aspects of successful change

83%

Top management sponsorship

64%

A shared vision

57%

Corporate culture that motivates and promotes change

53%

Honest and timely communication

51%

Ownership of change by middle management

46%

Employee involvement

39%

Change agents (pioneers of change)

27%

Efficient structure and roles within organization

24%

Skill-set of project team

18%

Efficient training programs

14%

Adjustment of performance measures

Monetary and non-monetary incentives
Focus on project management tasks
Regular status reports to management

9%
7%
6%

Hard factors
Soft factors

Figure 4: Organizations view top management sponsorship as the single most important aspect for successful change.
Source: IBM Organization Change Management.

IBM Global Business Services

Becoming a Change Architect constitutes a major organizational change itselfit requires leading a shift in mindset and
behaviors of the whole organization. Analysis of study findings
revealed three key characteristics that enable leaders to drive
change across the organization (see Figure 5):

models, setting a credible and meaningful example of what

is expected of others in leading, managing and embracing
successful change.
However, only 66 percent of respondents state that their top
management is enabled to act as change leaders. For Change
Architects, that number jumps to 77 percent (see Figure 6). An
even more significant gap exists in the enablement of middle
managers as change leaders. They are the critical differentiators on the front line, responsible for creating a mindset of
change in every level of the enterprise. While the C-suite sets
the strategy, it is middle management that must facilitate
action. Yet, not even half of our respondents state that middle
management is enabled to drive change. Even among Change
Architects, only 62 percent do so.

1. Role modeling throughout the organization

2. Engage employees with a compelling case for change
3. Empower new and passionate change leaders at all
organizational levels.

1. Role modeling throughout the organization

Enabling top management to act as change leaders is a
fundamental requirement for project success, as stated by
73 percent of our respondents. These leaders must act as role

Most effective means of changing attitudes and behaviors

Involve leaders in role modeling

73%

Establish and communicate a compelling case for change

73%
64%

Identify and empower people who are passionate about change

45%

Align performance goals

28%

Use reward and recognition systems

10%

Create top-down pressure through hierarchy

Apply sanctions where necessary to achieve compliance

4%

Figure 5: Role modeling, and establishing and communicating a compelling change are viewed as the two most effective means of changing
organizational attitudes and behaviors.

Source: IBM Organization Change Management.

Making change work . . . while the work keeps changing

22%
77%

38%

more

42%

more

63%

more

64%

62%
45%

State that top

management is enabled
to act as change leaders

State that middle

management is enabled to
act as change leaders

45%

State that leaders in their

organization are held accountable
for effectively managing change

Change Architects
All others

Figure 6: Change Architects do a better job of enabling both top and middle managers to act as change leaders. They also are more likely to hold their leaders
accountable for managing change.

Note: Relative percentage increase shown.

Source: IBM Organization Change Management.

Whether it is top or middle management, change must become a

personal responsibility. In fact, when asked to identify the most
effective approach to enable management to act as change leaders,
the top response (65 percent) was that change-leadership activities
and skill building need to be included in personal goals and
development plans. A majority of respondents also cited the need
for a coaching program that incorporates the key elements of
change management, how to engage various audiences consistently and at any time during the change journey, as well as how
to gain employee commitment at every level.
Leaders involved in making change work must be held
accountable for moving the organization forward. Yet, only
49 percent of organizations in our study hold their leaders
accountable for effectively managing change. As one change

expert in Canada said, The majority of leaders are held

accountable for schedule and budgetfor projects and
implementations, but not for transitions and transformations.
Change Architects fare better, with 64 percent demanding
accountability from their leaders.

2. Engage employees with a compelling case for

change
Change Architects stand out by consistently engaging employees during the ongoing change process. In todays era of
technology-enabled communications and personal empowerment, focusing solely on one-way, top-down communication is
not enough to create buy-in throughout the organization.
While communication from the top using hierarchical cascades
is still critical in change, the style of communication needs to
encourage dialogue at all levels to drive project success.

IBM Global Business Services

Yet, in our study, 74 percent of organizations say they

primarily have a top-down change communication approach,
with few, if any, channels for employee feedback (see Figure
7). A much smaller percentage (18 percent) has multiple
institutionalized feedback channels in place, and only a very
few (8 percent) encourage dialogue across the organization
via collaboration tools.
Change Architects, to no surprise, take a different approach.
They do not just send out announcements or sporadically talk
to their employees. Instead, they are 50 percent more likely
than other organizations to take advantage of multiple communication channels and seek collaboration across the entire
organization. Leaders in these companies listen, invite feedback and act upon what they learn. One study respondent
summed it up, We need to create a real change network and
start thinking about the notion of virtual change agents.
Actually freeing up time for people to create and participate in
a virtual change network is a solution to operate in continuous
mode instead of project by project.

Change communication in organizations

Social tools and collaboration are increasingly important to

manage change and engage audiences. Yet, there is a large
discrepancy between those recognizing the importance of new
forms of communication in employee engagement and those
actually using them. In our interviews, 73 percent of respondents agreed that social channels and collaboration tools
provide an opportunity to increase employee engagement in
change initiatives, and 59 percent agreed that these same tools
speed the adoption of changes (see Figure 8).
Proper use of these new tools and techniques requires new sets
of skills and leadership responsibilities. Change Architects are
more likely to make use of social tools and technologies, and
embed them into core capabilities. They are using social
approaches not only to communicate better with their customers, but also to drive change within their organizations. In
short, they are rapidly progressing to a larger, more substantial
transformation of how they work.11 This collaborative sphere

New communication tools

74%

73%
59%

18%
8%

8%
Primarily
top-down

Multiple institutionalized
feedback channels
in place

Encourage dialogue
across the organization
via collaboration tools

Figure 7: Change communication is still primarily top-down.

Say social media and

collaboration tools
provide an opportunity
to increase employee
engagement in
change initiatives

Agree new forms of

communication
accelerate the
adoption of change

Encourage dialogue
across the organization
via collaboration tools

Source: IBM Organization Change Management.

Figure 8: Social and collaborative engagement is becoming more prevalent

and important.

Source: IBM Organization Change Management.

10

Making change work . . . while the work keeps changing

of communication is a promising lever for employee engagement, but it will not overcome a generally poorly managed
change communication strategy. As one change expert in
Canada said, It can be a strong tool to accelerate the adoption
of changes, but only if it is used in a smart manner. In order to
have a clear and harmonized objective, a plan has to be
designed before everyone jumps to social networks.
It, therefore, becomes a basic requirement to enable leaders
to actively employ digital technology and newer forms of
communication for engagement. Of those surveyed, 65 percent
identified enabling leaders to actively engage in the digital
sphere as a top priority to accelerate adoption of change
practices. This was followed closely (61 percent) by the need
to build awareness within the organization about the impact
of social and collaborative activities.
Nevertheless, engaging in a conversation is not enough
listening, considering and acting upon employee suggestions
is the key driver for project success. Among Change Architectsthose who best embody excellent communication
practices71 percent consider and act upon employee
suggestions. That is 37 percent more than all other organizations (see Figure 9).

3. Empower new and passionate change leaders at all

organizational levels
In addition to leaders in formal positions of authority, it is
increasingly important in todays organizations to empower
emergent change-leadership at all levels. Leaders of collaborative communities of interest and opinion leaders of formal and
informal networks may have thousands of followers within the
organization. They may have more influence on the mindsets
and behaviors of employees than many top managers. Emergent leaders are, by definition, close to daily business. They
may understand and interpret change impacts better to their
followers than those messages pushed through the hierarchy.
As one change professional from France noted in our study:
Make involved people change actors, enabling them to move
things forward in the right direction. A U.K. respondent
added: Recruit the right leaders, and then empower them

Employee suggestions are considered and acted upon

37%
71%

more

52%

Change
Architects

All others

Figure 9: Change Architects also outpace others in considering and acting

upon employee suggestions.

Note: Relative percentage increase shown.

Source: IBM Organization Change Management.

to do the job. Engaging and creating dialogue is no longer up

to a handful of top managers. Leadership is emergentthe
digital revolution, paired with new ways of working provides
each and every employee with opportunities to lead
changebottom-up, top-down, sideways.

In summary
There are clear new requirements for the leadership roleit
needs to be expanded by including:
Accountability for change-leadership activities and results in
the overarching business context
Responsibility for active engagement of employees, including
the digital sphere
Ability to lead inclusively by empowering change-leadership
at all levels.

IBM Global Business Services

Make change matter

A critical responsibility of top management is to
create a clear vision of why active change management is vital to the organization. Managers also must make
sure the activities and benefits of a change management
program are well understood throughout the enterprise.
In our study, 87 percent of respondents indicate that not
enough focus is currently placed on change management in
critical projects. And the majority of organizations invest only
5 percent or less of total project budgets in change management activities on key projects (see Figure 10).12 This is
significantly less than the minimum of 11 percent required to
be change-effective that was reported by organizations in our
previous study.
Why is there such a discrepancy between financial resources
allocated and those actually needed for effective change
management? Respondents point to five specific barriers that
keep organizations from aggressively pursuing new change
capabilities. Cost is at the bottom of the list:

Budget allocation: change management versus project

management

60%
47%
24% 28%
7%

1%

11%

22%

None 1-5% 6-10% 11%+

Percent of total budget invested in Change Management
Percent of total budget invested in Project Management

Figure 10: The majority of organizations invest only 5 percent or less of total
project budgets in change management activities on key projects.
Source: IBM Organization Change Management.

11

1. Change management benefits are not clear (69 percent):

The value proposition for change management is not clear
to many organizations. What does the organization gain by
actively managing change? How does effective change
management increase project success rates? And how does
the organization assess outcomes of effective change
management? To counter this, specific criteria for change
success need to be defined at the outset and measured
against projects results.
2. Change management activities are not clear (53 percent):
Organizations gain limited consistent benefit from random
or ad hoc change management activities that vary from
project to project. Change activities are not understood,
visible or tangible. Therefore, within the organization, a
defined set of core activities should be applied to each
strategically critical project. It is not enough to embrace
change as a concept. Change management actions should be
specifically incorporated into overall project plans.
3. Role of change professional is not clear (49 percent):
Projects often fail to reach optimum outcomes because team
members do not have a view into how each role interacts
with the whole or the specific activities required. A distinct
delineation of responsibilities needs to be established
organization-wide so that employees understand the role of
the change professional with clearly defined responsibilities
and how those interlock with every change-relevant role.
4. Lack of skilled change management resources
(43 percent): Many organizations have the desire for change,
but do not have the capabilities to turn desire into reality.
As a result, inadequately trained employees are charged with
facilitating action beyond the level of their skill sets. To
adequately deal with change, organizations need to enforce
the rapid skill development of change professionals, as well
as building up enterprise-wide change capabilities.

12

Making change work . . . while the work keeps changing

5. Change management is too expensive (26 percent):

Acquiring new resources, adopting new methodologies
and tools, and investing in training and education can be
costly. But expense trails the other barriers to effective
change management by a wide margin. From a financial
standpoint, the inability or unwillingness to invest in the
active management of change can, in the long run, end up
being much more expensive. As previously noted, the
equivalent to Change Architects in our 2008 study invested
a minimum of 11 percent of total project budget in change
activities. Yet, only 22 percent of the companies in our newest
study said they invested that amount or more.13
For successful projects that respondents referred to (achieved
as-expected-or-more benefits), 76 percent include their change
management activities in overall project plans33 percent
more than those that underachieve (see Figure 11).14 They are
better in defining activities, linking them to business context and
assigning responsible roles for execution.

Results when change management activities incorporated

at beginning of project plan

76%

33%
more

However, having activities, roles and responsibilities in place and

communicated is not enough. Change professionals, as well as
those with other change-relevant roles, need to have the authority
and power to do whats required to make change work. They have
to ensure that change progress is on the agenda of executive
sponsors. Of the organizations in our study, 77 percent that
achieve as-expected-or-more benefits make change management
deliverables visible to executive sponsors35 percent more than
those achieving benefits in their projects that were less than
expected. These successful organizations are better at delivering
tangible outcomes and keeping change progress at the forefront.
To make benefits clear, success criteria for change progress need
to be defined, agreed and measured against. Refining success
criteria and monitoring progress are the critical levers to reap
expected project benefits and more. And 78 percent of respondents stated that progress was measured against predefined
goals. But what are they actually measuring against?
Respondents measured project progress mainly against
milestones (87 percent) and through status by work stream
(71 percent). In contrast, organizations that achieved as expected
benefits or more were much more likely to measure progress
against (see Figure 12):

57%

Achieved as expected Achieved less than

benefits or more
expected benefits
(90% and up)
(Less than 90%)

Figure 11: Successful project results are more likely when change management
activities are incorporated into the overall project plan from the beginning.
Note: Relative percentage increase shown.
Source: IBM Organization Change Management.

Adoption of skills and behaviors (57 percent more often than

all others)
Understanding of organizational benefits (52 percent more
often)
Commitment to personal role and case for change (50 percent
more often)
Level of senior leadership support (39 percent more often).

In summary
The organization as a whole must have a clear understanding
of the role, activities and benefits of change management. It is
the critical responsibility of top managers to establish the right
organizational context by making change matter. They must
create this vision, reinforce the benefits and inject change
management into the corporate culture of the organization.

IBM Global Business Services

13

Measurements used to reflect project status

92%

Milestone completion

88%
69%

Project status by work stream

72%
44%

Understanding of organizational benefits

29%
36%

Level of senior leadership support

26%
36%

Adoption of new skills and behaviors

Commitment to new personal role

23%
27%
18%

Achieved as expected benefits or more (90% and up)

Achieved less than expected benefits (Less than 90%)

Figure 12: Milestone completion is how most organizations measure project status. Successful projects put more focus on success criteria for change progress
in their measurements.

Source: IBM Organization Change Management.

Build the muscle

Although the pace and magnitude of change continue
to accelerate, the challenges associated with implementing a complete portfolio of change and transformation
initiatives remain heavy with soft factors, for example, corporate
culture and underestimated complexity. In our newest study,
respondents view the hard factorsnamely shortage of resources, change of processes and ITas increasingly challenging
(see Figure 13).15

With technological opportunities of the digital era driving the

future agenda of organizations, it is not surprising that changes
in IT and processes are becoming more challenging. And
managersespecially middle managersare squeezed by
demanding change programs that, in many cases, share
resources with daily business operations. And all of this is
expected to be handled within a corporate cultural setting that
is often not conducive to change in the first place. In other
words, the soft stuff is still the hard stuff, but the hard stuff is
getting harder.

14

Making change work . . . while the work keeps changing

Challenges of implementing change

Corporate culture

44%

Shortage of resources (for example, budget, people)

44%
40%

Complexity is underestimated

36%

Change of processes

35%

Change of IT systems

23%

Lack of commitment at higher management

Lack of transparency because of wrong or missing
information/communication
Lack of change know-how

20%
19%

Lack of motivation of involved employees

17%

Technological barriers

17%

Hard factors
Soft factors

Figure 13: Corporate culture, lack of resources and underestimated complexity are seen as the biggest challenges in implementing change.
Source: IBM Organization Change Management.

Top managers should address the spectrum of challenges of

implementing change by empowering highly skilled change
professionals who, in turn, accelerate the development of
enterprise-wide change capabilities. These professionals inject
change into the culture. In our study, 84 percent of organizations staff their projects with 50 percent or more internal
resources to manage change. Yet, the large majority of respondents (77 percent) state that the average change management
experience of experts in their organizations is only six years or
less. Additionally, only 40 percent indicate they have the right
skills in place to successfully manage change projects in the
future. That means a gap remains as the demand for change
capabilities is outpacing the efforts of organizations to address
ita race for change capabilities is on!
The demand, therefore, is for both rapid skill development
of dedicated change professionals and building up general
internal knowledge, skills and a mindset about how to

effectively deal with change. Organizations cannot address the

increasing pace and magnitude of change today by reinventing
activities and roles ad hoc or on a project-by-project basis.
Change Architects recognize this. They formalize change
expertise and systematically build enterprise-wide change
capabilities. Over the last six years, the use of formal change
management methods in projects has, on average, increased
from 24 percent to 45 percent. For Change Architects, this
number jumps to 55 percent (see Figure 14).16
Additionally, formal roles, career paths, job descriptions and
development goals facilitate the development of effective
change professionals. To accomplish this, personal development plans need to be in place that include the core activities,
competencies and skills required to successfully execute the
organizations change activities, as well as to enable other
change-relevant roles.

IBM Global Business Services

15

Use of formal change management method

88%

increase

55%

45%

31%
42%

more

36%
28%

24%

2014

29%

more

2008

Use of formal change

management method
Change Architects
All others

A formal change
management method is
always or at least
regularly used

Training for a formal change

management method is
always or at least very often
conducted

Figure 14: Use of a formal change management method has increased significantly since the original Making Change Work study in 2008.
Note: Relative percentage increase shown.
Source: IBM Organization Change Management.

Sixty percent of organizations in our study confirm a formal

career path for project managersas opposed to only 25
percent for change professionals. Having a formal career path
for project managers does not qualify as a differentiator for
successit is rather avoiding underperformance. Change
Architects reveal a key differentiator of success in this
areathey establish a formal career path for change professionals 42 percent more than other organizations.
Change Architects also coordinate their formalized change
discipline centrally to systematically build muscle organization-wide. There is a clear need for central coordination to
drive consistent methods, change-related trainings, career
developments, asset reuse, company-wide knowledge and best
practice sharing. A central framework of reference and

knowledge should be established that can be, in turn, adapted

to specific applications, project types and capacity. This is not a
geographical alliance, but is instead a consolidation of expertise, institutional knowledge, best practices, performance goals,
career paths and more. Compared to others, Change Architects have their change management capabilities considerably
more consolidated33 percent for Change Architects; 24
percent for all others.

In summary
Establishing a change discipline by formalizing change
expertise, systematically building enterprise-wide change
capabilities and centralizing change management efforts and
teams helps organizations to build the muscle for change
successfully in the long term.

16

Making change work . . . while the work keeps changing

The journey begins

Change is hardest at the beginning, messiest

in the middle and best at the end.
Robin S. Sharma, Author17

Becoming a Change Architect enables an organization to

reduceor at least maintainthe gap between the pace and
magnitude of change and the development of change management capabilities. Disruption, as we have pointed out, is constant.
Despite the fact that many companies have solid know-how to
make change work, they have not been getting better at actively
managing or executing it. The only way to close the change
capability gap is to know the gap! Organizations have to recognize
its dimensions and have a clear vision of the steps that need to be
taken to close it. To do so, organizations are required to weave
change into the fabric of the organization by working through the
three building blocks of change: lead at all levels, make change
matter and build the muscle.
To identify where gaps typically occur and provide a path
forward, the IBM Institute for Business Value Research Hub
analyzed how organizations responded to the questions in our
study. It grouped them according to their existing change
management capabilities and their ability to achieve outcomes
that were as expected or better.18 What we discovered is that
organizations evolve through five distinct levels of maturity
(see Figure 15).

Maturing through the stages of effectively

managing change

The great successful men of the world have

used their imaginations... they think ahead
and create their mental picture, and then go to
work materializing that picture in all its
details, filling in here, adding a little there,
altering this a bit and that a bit, but steadily
building, steadily building.
Robert Collier, Author19

The five maturity stages of managing changeinformal,

emerging, formalizing, scaling and embeddedeach incorporate a set of capabilities and characteristics that must be
developed before moving on to the next stage. As an organization moves from one maturity stage to the next, it adds
additional capabilities and characteristics. And those skills that
were previously developed are further refined. It becomes a
continuous cycle of growth and development.
Not all organizations will begin the change management
journey at the same place. Where to start depends upon the
current state of change management maturity. However,
regardless of where the journey starts, proceeding at a steady,
predefined pace and with a common approach simplifies the
process.

IBM Global Business Services

The five stages of maturity are:

1. Informal stage
Organizations at the first level of change maturity may follow
a structured approach to project management. For change
management, however, they primarily rely upon top management to act as change leaders. Informal organizations tend not
to use a common or standard approach to managing organizational change, nor do they apply lessons learned from previous
projects. Therefore, they frequently look to external resources
for methods and skills. These organizations are just beginning
to recognize social and collaborative tools as opportunities to
engage employees in change initiatives.

17

3. Formalizing stage
Organizations that are formalizing change capabilities have a
standard method in place and are applying consistent change
management activities and tools to more projects. However,
these organizations still lack a systemic approach to build
enterprise-wide change capability. To enable a more formal
approach to organizational change, leaders acquire skills that
enable them to create commitment to change among different
stakeholders. Formalizing organizations focus on applying
change management capabilities to specific projects. The
necessary resources may come from internal staff or be
sourced externally.

To move to the next stage, organizations must include changespecific criteria in project progress measures and engage
leaders in change management fundamentals by coaching
change-leadership skills as part of personal goals and development plans.

To get to the next level, these organizations must create

accountability for all leaders to drive change on all levels with
a strong focus on middle management, and create change capabilities that are centrally coordinated. Training on formal
change management methods should be systematically
conducted for all relevant change roles.

2. Emerging stage

4. Scaling stage

Organizations with emerging change management capabilities

are beginning to expand their project management to include
change-specific measures as a part of project status. However,
most of these organizations still do not use a formal method
for change management, nor do they provide associated
learningtheir change capability is only beginning to evolve.
Emerging organizations are coaching their leaders on the
fundamentals of change management and increasingly emphasizing change-leadership skills as part of personal goals and
development plans. These organizations also have a greater
appreciation for using social and collaborative tools to engage
employees.
Drivers to get to the next level include implementation of
change management methods and creating skilled leaders that
can facilitate active commitment to change among different
stakeholders.

Organizations with a maturity level focused on scaling their

change capabilities provide formal change management
training for all relevant roles. They coordinate change efforts
centrally to drive enterprise-wide application of a standard
change discipline across a transformation portfolio of projects.
Scaling organizations begin to systematically hold leaders at all
levels accountable for effectively managing change. Rather
than relying solely on top management, these organizations
also place a strong emphasis on enabling middle managers to
act as change leaders. Scaling organizations also value social
media and collaborative tools to engage employees.
Drivers to get to the next level include systematically building
enterprise-wide change capabilities, defining a budget dedicated to change management, and formalizing change management activities to be consistently integrated in all project plans.

18

Making change work . . . while the work keeps changing

5. Embedded stage
Organizations with the highest maturity level continuously
invest in, and integrate change management activities into
program/project budgets and plans, apply formal methods and
tools, as well as regularly monitor program effectiveness and
measure the adoption of change. Embedded organizations are
systematically up-skilling all change-relevant roles through

Informal

Build the
muscle

Make
change
matter

Lead
at all
levels

Move to
the next
level

Emerging

formal change management training. Change capabilities are

broadly available to flexibly manage change across a diverse
transformation portfolio. These organizations have embedded
managing and embracing change into the culture of the entire
enterprise. Agility in changing is a pervasive part of the
mindsets, behaviors and the ways their leaders, managers and
employees work. Where is your organization positioned along
the change management maturity stages?

Formalizing

Scaling

Embedded

No standard approach to
manage organizational
change

No formal organizational
change management
method or associated
learning

Standard change
management method
in place

Formal change management

training for all relevant
roles and change efforts
coordinated centrally

All change-relevant roles

upskilled by formal training to
ensure change capabilities
broadly available to manage
diverse change activities

No change-specific
activities built into
project plans and
measurements

Change-specific
measures as a part of
project status

Change management
activities and tools
consistently applied to
specific projects

Enterprise-wide application of
a standard change discipline
across a transformation
portfolio of project

Continuously invest in
and integrate change
management activities; apply
formal methods and tools;
regularly monitor adoption
of change

Rely upon top

management to act as
change leaders

Leaders coached on
fundamentals of change
management and changeleadership skills as part
of personal goals and
development plans

Leaders enabled to
create commitment to
change among different
stakeholders

Leaders at all levels held

accountable and strong
emphasis on enabling both
top and middle managers as
change leader

Change is embedded into

the corporate culture of the
enterprise and as part of
every organization members
mindset, behavior and way of
working

Include change-specific
criteria in project progress
measures and engage
leaders in change

Figure 15: The five maturity stages of managing change.

Source: IBM Organization Change Management.

Implement change
management methods and
enable leaders to create
commitment among
different stakeholders

Create accountability for all

leaders to drive change,
train all change-relevant
roles and build centrally
coordinated change
capabilities

Define dedicated change

management budget and
consistently integrate change
activities into project plans

IBM Global Business Services

Please find below questions that can help kick-start your

thinking and determine next steps.
Lead at all levels
Do leaders understand the importance of change-leadership
on projects and serve as role models day-to-day?
Are change-leadership activities included in personal goals?
Do leaders leverage collaboration technology to engage in
change conversations across your organization?
Make change matter
Do leaders assign resources to organizational change
activities on projects and initiatives?
Does your organization measure change adoption? (for
example, skill/behavior adoption, understanding of
organizational benefits, commitment to personal role and
case for change, level of senior leadership support)?
Do leaders embed organizational change management
activities into the management system (for example, through
reviews of change initiatives and/or inconsistent change
activities)?
Build the muscle
Do leaders, managers and employees have sufficient
organizational change capabilities to manage change
challenges by tailoring common methods and tools to
specific situations?
To what extent can your organizational change capability be
described as consolidated and organized centrally?
To what extent is the personal development of change
professionals incentivized through systematic personal
developmentor even reinforced through a career
framework?

19

To learn more about this IBM Institute for Business Value

study, please contact us at [email protected]. For a full catalog
of our research, visit ibm.com/iibv
Access IBM Institute for Business Value executive reports on
your tablet by downloading the free IBM IBV app for iPad
or Android from your app store.

About the authors

Hans-Henrik (H.H.) Jrgensen, is global Organization
Change Management leader at IBM. He has led numerous
projects in the area of management and strategy consulting in
Europe, Americas and Asia over the past 20 years.
H.H. has been instrumental in driving the development
of the empirically based Better Change method and the
Making Change Work studies. H.H. can be reached at
[email protected].
Oliver Bruehl, M.Sc., is a Senior Consultant with IBMs
Strategy & Analytics Management Consulting Practice.
His key expertise lies in delivering leadership and sponsorship
programs for effective organization change adoption. Oliver
has led various program teams with a focus on management
consulting and technology strategy in
Europe and South America. He can be reached at
[email protected].
Neele Franke, M.A., is a Senior Consultant at IBM Strategy &
Analytics Management Consulting. She has extensive expertise
in the area of strategic change communication and management consulting with experience in leading project teams
across Europe. She received numerous awards for her academic research focusing on communicative expertise and organizational enablement. She can be reached at
[email protected].

20

Making change work . . . while the work keeps changing

Contributors

Contacts

Maria-Paz Barrientos, Vice President and Partner,

Strategy & Analytics, Talent & Change Global Center
of Competency

Global

Tina Marron-Partridge, [email protected]

Kinthi Sturtevant, Vice President and Partner,

Strategy & Analytics, Talent & Change Global Center
of Competency

Barbara Lombardo, [email protected]

Eric Lesser, Research Director, IBM Institute for

Business Value

Acknowledgements
Shanker Ramamurthy, Tina Marron-Partridge,
Marc Chapman, Dave Lubowe, Peter Korsten
Toby Barnard, Lisianne Heil, Katja B. Jensen, Andrea Kaiser,
Jovana Konopka, Elisa Naetsch, Ronny Schritz,
Anja Spychalski, Stephanie Veit, Annelies Visser, Lizzy Zwiers
Ignacio Crespo Agudo, Hilary Bland, Silke Boyd,
Iris Brueckner, Svetlana Y. Bryukhova, Gordon Busch,
Fredrik Collstrand, Barbara Crawford, Eric Denkhoff,
Siddhartha Dev, Katja Engeler, Melanie Eskelinen, Lori Feller,
Silvia Di Girolamo, Michael Hanna, Eui Sook Huh,
Janne Jalava, Jayme Johnson, Peter Johnston, Toru Kaneko,
Sanna Keskioja, Christine Knittl, Cristiane DAddio De Moura,
William J. Needham, Johan Risberg, Marloes Roelands,
Sumanta Deb, Maria Isabel Loaldi de Tacchi, Max Theseira,
Thierry Viegas, Tao Xia, Erina Yang, Shi Rong Zhang
Steven Ballou, Kristin Biron, Kathleen Martin, Jim Phillips

North America
Brazil and Latin America

Subodh Rajadhyaksha, [email protected]

Europe, Middle East & Africa

Andi Britt, [email protected]
Asia Pacific

Simon Thomas, [email protected]

Greater China Group

Steven W. Davidson, [email protected]

Japan
Toru Kaneko, [email protected]

IBM Institute for Business Value

IBM Global Business Services, through the IBM Institute for
Business Value, develops fact-based strategic insights for senior
executives around critical public and private sector issues. This
executive report is based on an in-depth study by the Institutes
research team. It is part of an ongoing commitment by IBM
Global Business Services to provide analysis and viewpoints
that help companies realize business value. You may contact
the author or send an e-mail to [email protected] for more
information.

IBM Global Business Services

References

1 Einstein quote. Thinkexist.com. http://thinkexist.com/

quotation/we_can-t_solve_problems_by_using_the_same_
kind_of/15633.html
2 IBM Institute for Business Value analysis based on publicly
available information.
3 Jorgensen, Hans Henrik, Lawrence Owen and Andreas Neus.
Making Change Work. IBM Institute for Business Value.
October 2008. http://www-935.ibm.com/services/us/gbs/
bus/pdf/gbe03100-usen-03-making-change-work.pdf
4 Reinventing the rules of engagement: CEO insights from the
Global C-suite Study. IBM Institute for Business Value.
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5 Cortada, James, Eric Lesser and Peter J. Korsten. The
business of social business: What works and how it is done.
IBM Institute for Business Value. November 2012. http://
www-935.ibm.com/services/us/gbs/thoughtleadership/
ibv-social-business.html
6 Jorgensen, Hans Henrik, Lawrence Owen and Andreas Neus.
Making Change Work. IBM Institute for Business Value.
October 2008. http://www-935.ibm.com/services/us/gbs/
bus/pdf/gbe03100-usen-03-making-change-work.pdf
7 Ibid.
8 Pulieri, Jill, Kali Klena and Laura Van Tine. Greater
expectations: Consumers are asking for tomorrow, today.
IBM Institute for Business Value. March 2010. http://
www-935.ibm.com/services/us/gbs/thoughtleadership/
greaterexpectations/
9 On average respondents state that 48 percent of their projects
in their organizations were a complete successi.e. all
predefined goals were met. 38 percent of projects were only
partially successful meaning set goals were not met within the
given limits, but were completed. 14 percent of projects were
stopped or failed.Taking 48 percent, the average rate of
projects that were a complete success, and adding one
standard deviation of 27 percent results in a threshold of 75
percent. All organizations with a 75 or more percent rate of
projects that were a complete success are therefore considered
highly successful.

21

10 Fuller, R. Buckminster. Operating Manual for Spaceship Earth.

Lars Muller Publishers. July 15, 2008.
11 Cortada, James, Eric Lesser and Peter J. Korsten. The
business of social business: What works and how it is done.
IBM Institute for Business Value. November 2012. http://
www-935.ibm.com/services/us/gbs/thoughtleadership/
ibv-social-business.html
12 Jorgensen, Hans Henrik, Lawrence Owen and Andreas Neus.
Making Change Work. IBM Institute for Business Value.
October 2008. http://www-935.ibm.com/services/us/gbs/
bus/pdf/gbe03100-usen-03-making-change-work.pdf
13 Ibid; 11 percent was identified as the minimum level of
investment in MCW1 to be considered a change master
14 Looking at critical, differentiating factors in key reference
projects, here, success is measured by the ratio of achieved vs.
expected benefits. Achieved less than expected benefits
(<90%), Achieved more than expected benefits (>=90%)
15 Jorgensen, Hans Henrik, Lawrence Owen and Andreas Neus.
Making Change Work. IBM Institute for Business Value.
October 2008. http://www-935.ibm.com/services/us/gbs/
bus/pdf/gbe03100-usen-03-making-change-work.pdf
16 Ibid.
17 Sharmin, Robin. The Leader Who Had No Title: A Modern
Fable on Real Success in Business and in Life. Free Press.
December 28, 2010.
18 To determine how organizations progress along the change
management maturity model, the IBM Institute for Business
Value Research Hub conducted a cluster analysis in which a
rating scale of responses was used to group organizations
according to their level of competence. This cluster solution
first involved determining the number of clusters that exist
with our survey respondents and then assigning respondents
to similar groups based on their responses. This solution
found a total of five clusters: informal, emerging, formalizing,
scaling and embedded.
19 Quotations Book. Quotationsbook.com http://quotationsbook.com/quote/20399/

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