A new era in managing the human factor in projects – The third generation of Organizational Change Management

he Human Factor in Project Leadership in the Third Millennium

Knowledge of project management has evolved a lot over the past 30 years, but only recently has it started to consider management of the human factor as a key area of expertise for professionals involved in project management.

In the past, good project managers were those who achieved their goals within the timeframe and cost parameters, with the quality and scope defined at the outset. Today executive management and shareholders expect them to go further, requiring that projects deliver the strategic objectives that motivated the undertaking, that is, what the organization expected would change after the project.

This challenge includes an even more complex and unpredictable component than processes, hardware or software—the human being. No matter how good the product or service delivered as a result of a project is, it will only bring value to the organization if people use it properly.

Since the beginning of this decade, a movement has been growing to popularize management of the human factor among project, process and human resource professionals as well as leaders from all areas.

If, in the past, this was a discipline for experts and academics only, today the third generation of organizational change management has turned managing the human factor into a key competence for professionals of the third millennium.

Over the past decades, the pressure for organizations to remain competitive and profitable has led to the development of new tactics, for example, process redesign, implementation of technological components, restructuring, mergers and acquisitions, among many other projects that required strong adaptation of the human component to the organizational environment.

The promises that justified huge investments in management models based on technologies of the information age, like Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Business Intelligence (BI), among many others, have generated expectations that were not always met, leaving a legacy of frustration in many organizations. Despite the massive capital investments, shareholders and top managers realized that the success of the projects depended greatly on people to achieve their business goals. 

In the ‘40s, Kurt Lewin articulated the first theories about human behavior during change processes. Lewin, considered by many thought leaders to be the father of social psychology, inspired a host of thinkers in the ‘80s and ‘90s who shaped the first generation that established the structure of the discipline we know today as organizational change management.

Until the middle of the ‘90s, change management was rarely applied in projects. It was limited to a small group of companies in the forefront of human factor management that used the knowledge of experts to support Human Resources.

Moving away from the psychological line, the so-called “Big Five” (the five largest global consulting firms) developed an operational change management approach that almost always focused on organizational impacts, training and communication, applied especially in the implementation of ERP projects.

The next wave of change saw the emergence of frameworks being adopted as standards for some companies. This is the major milestone of the second generation of organizational change management.

Even today these approaches, which originated from academic models or highly specialized consulting firms, are inspiring references often used by change management experts.

However, they are seldom well understood and do not adequately sensitize technical executives and project managers. It is very difficult for the logical, Cartesian and quantitative thinking of exact science professionals to translate into practical project activities proposals like “create a sense of urgency.”

At the turn of the millennium, a large number of professionals from these consulting firms created small companies that helped consolidate change management as a crucial practice, especially in strategic or large projects.

However, the world went on changing and so did change management.

Failures in large change projects, especially in the technological world, kept piling up. Those responsible for PMOs and project managers realized that, without people, projects can meet their deadlines and achieve their cost, scope and quality goals, but they do not always achieve the strategic objectives that motivated the investment.

Beginning early in the 21st century, the spread of the practice of managing organizational changes by global consulting firms attracted the attention of experts in the area. They began to organize into professional associations with the objective of developing standards, processes and a code of ethics for change managers.

Thus begins the third generation of organizational change—a structure initiated by the major consulting firms, which contributed a significant amount of professional knowledge.

In 2012, change management took on a new character in the translation of the hermetic language of experts and academic masters into the practical and objective world of project managers with the creation of the Human Change Management Institute (HUCMI®) and its base of knowledge, HCMBOK®: the Human Change Management Body of Knowledge.

Parallel to the movements promoted by other associations of experts, the Project Management Institute (PMI®) published the 5th version of PMBOK®: the Project Management Body of Knowledge in 2013, bringing as its big news a new area of knowledge little addressed till then among project managers—Stakeholder Management.

A few months later, PMI® confirmed its focus on the human issue by publishing Managing Changes in Organizations: A Practice Guide, with fundamentals that suggested that organizational change management would be more and more present in PMBOK®.

It is this growing popularization of human factor management in projects, spread mainly by ACMP® (Association of Change Management Professionals®), PMI® and HUCMI® that typifies the third generation of Organizational Change Management. The discipline went from the “what to do” phase to the “how to do it” phase within the universe of project management.

Data from the Pulse of the Profession, a 2014 report organized by PMI®, shows that change management was never seen as important a discipline as it is today. About 40% of the organizations report that the practice of organizational change management is greater than in previous years. The rate of success for strategic projects in companies that use change management as a regular discipline is 69%, versus only 41% in those companies that do not address the human factor in their projects.

The project management discipline has evolved significantly over the past three decades, but only recently has it begun to see management of the human factor as an essential area of knowledge that cannot be restricted to organizational change management professionals.

The organizational change management expert will always exist—a professional with huge experience, knowledge and skills to address the most complex aspects of the subject. However, the project, program and portfolio managers of the future have already realized that they must have a good command of human factor management in order to continuously increase rates of success in the achievement of the strategic objectives that drive organizations.

After all, there are no projects without people, nor are there organizational changes that should not be structured as projects.

When we speak of a new generation in the technological world, we are almost always speaking of substitute technologies, a new generation of technologies that overlaps the earlier generation, which is then doomed to disappear.

When it comes to human issues, the dynamic is different. Generations are added and inspire one another, but do not substitute for an earlier generation. Rather each new generation represents a new audience, with similar fundamentals but a different approach. In this particular case, 3G Change Management is a translation of the concepts of prior generations for a universe of professionals who demand a more practical and objective language targeting their reality, enhanced by some new knowledge and more connected with the contemporary world of project management.

This is the approach of HCMBOK®already used in more than 22 countries. According to this approach, the human factor is an integral part of the strategy for any kind of project. Twenty-five out of HCMBOK®’s 48 macro-activities are carried out before the execution phase is started, thus fine-tuning from the planning phase how to communicate the project, choose the sponsors who can best influence the success of the venture and define the purpose that can best connect stakeholders with the specific change and strategies in order to reduce antagonists and expand human engagement.

In its approach, HCMBOK® organizes a sequence of macro-activity techniques in order to manage cultural and human behavior issues in a structured way, while providing an arsenal of skills that are essential to project managers, for example, participatory process, conflict, motivation and behavior management, creation of team spirit, empathetic communication, creativity and innovation.

In short, the HCMBOK® guide was developed to facilitate integration into any methodology. It addresses human factor-related issues in the language of project managers and complements the Stakeholder Management approach developed by PMI®.

So, be prepared. Delivering a project within the planned deadline, cost, quality and scope is no longer enough. The expectation now is that the strategic objectives that motivated the project are measured by qualitative and quantitative goals, which require engaging the human component in order to be achieved.

No matter the title that prevails—Organizational Change Management or Stakeholder Management—it is clear that the third generation of human factor management in projects (3G CM) is here to stay and has become an essential discipline for Project Managers of the third millennium.

Vicente Gonçalves

Human Change Management Institute  is a Qualified Education Provider™ (QEP™) of the Association of Change Management Professionals® (ACMP®) for the HCMBOK®Training and Certification  Program 

 Additional information about the Human Change Management Institute is available at www.hucmi.com 

To read the first chapter and have a flavor of the HCMBOK 3rd edition,  please click here and register on HUCMI’s website.