Organizational change management: ITIL 4 Practice Guide

It is split into five main sections, covering:

• general information about the practice
• the practice’s processes and activities and their roles in the service value chain
• the organizations and people involved in the practice
• the information and technology supporting the practice
• considerations for partners and suppliers for the practice.

1.1 ITIL® 4 Qualification scheme

Selected content from this document is examinable as a part of the following syllabuses:

• ITIL Specialist: Create, Deliver and Support
• ITIL Specialist: Direct, Plan and Improve.

Please refer to the relevant syllabus documents for details.

2.1 Purpose and description

OCM is a practice that serves the continually emerging wish and need for organizational growth, improvement, and evolution.

To improve product and service portfolio, organizational structure or underlying technology, people are essential for the transformation to be successful. Organizational evolution enables a change in their capabilities, the way they work, feel, and behave. These changes should not be forced upon people but should lead to a new valuable system, so people could willingly adopt new ways of behaviour and work.

OCM aims to build a value-driven environment across the organization and enable successful organizational changes of a required scope. According to the organizational vision and need, all stakeholders should adopt new ways of working, as well as minimize risks and possible negative impacts of any change to the quality of service/products and consumer experience.

This is achieved by recognizing and understanding stakeholders’ expectations and values, having the vision, co-creating plans and actions, communicating effectively, empowering employees, and anchoring a new cultural approach.

OCM contributes to every part of the service value system (SVS). It incorporates three premises:

• The practice is integrated into value streams and ensures that changes are effective, safe, and meet stakeholders’ expectations.
• The practice does not aim to unify all the changes planned and carried out in an organization into one big picture: this is neither possible or required.
• The practice should focus on balancing effectiveness, agility, compliance, and risk control for all changes in the defined scope.
  

2.2 Terms and concepts

2.2.1 Change, transformation, evolution

Change is a different way of executing tasks. Doing it as it has previously been done, but in a more efficient and productive way. Change uses external impact to modify actions.

Transformation is a different way of working. It involves changes in beliefs, values, and wishes. Transformation results shift in the organizational system and as a result, in personal and organizational behaviour. The transformation is based on learning from previous mistakes.

Evolution is a state of continual improvement through transformation and change. The foundation of evolution is constant adjustments in values, beliefs, and behaviour, with the use of internal and external feedback.

There is an important distinction between organizational change and transformation. Before any organizational change is executed, stakeholders should consider the actions mentioned, as it will change the attitude and may impact the result.

Defining an initiative as a change or a transformation, helps to select appropriate methods for its management. It is also important to identify whether a specific change contributes to the organization’s evolution.

To understand the evolutionary context and every change or transformation contribution to the organization’s development, a high level of system intelligence from the stakeholders is required. System intelligence enables organizations to move from personal growth to team growth and from managed groups to creative and mature teams.

2.2.2 Emotional, social, and system intelligence

When people are involved in situations, the level of complexity increases, and it is important to be ready to deal with unpredictable and unknown circumstances. Even though the OCM practice is concerned with the people side of change, it is recommended to use the concepts and tools provided by the change enablement practice. More information about complexity-based approach to changes can be found there.

Dealing with changes related to people requires a high level of presence, consciousness, self-leadership, and responsibility from all stakeholders. Through the whole organizational change lifecycle, it is important to focus on all three dimensions: individuals involved in change, relationships between them, and systems in general.

To create flexible, resilient, and fulfilled individuals, teams, and systems, organizations should aim to support the development of three forms of intelligence1:

Emotional Intelligence is the ability to access, express, and use one’s emotions in an efficient way. It describes having emotional self-awareness and the capacity to manage feelings by directing them toward goals. It also ensures the ability to self-motivate, suppress impulsive actions, and delay immediate satisfaction in order to achieve the goals.

Social intelligence builds on emotional intelligence. It is the capability to identify emotions of other people by not making assumptions, being empathetic, and open to co-creative actions and new ways of working in order to achieve common goals and build positive relationships. It also includes knowing and using social roles and rules, effective listening, and conversational skills.

Systems intelligence is the ability to understand, reflect upon, express, and incorporate the wider context of the system(s) a human interacts within into actions. It combines sensitivity about the environment with system thinking. In regards to the ITIL guiding principles, it is based on the ability to think and work holistically, while focusing on value, in the context of adaptive complex systems. It is the capability to see oneself as a part of a system, identify system characteristics, be aware of system rules and patterns, and be able to contribute to a system development consciously.

2.2.3 Values-based organizational change

Values are deeply held principles, ideas, and beliefs that people use when displaying behaviour. It is an important foundation for decision-making and any potential changes.

If the culture of an organization is supported with personal values, it encourages people to bring their best effort and commitment to work. If personal and organizational values are aligned, any resistance to change will be viewed as an additional source of information and resource for improvement. Managing resistance will not be needed.

Organizational culture can be described as a set of values that are shared by a group of people, including ideas, beliefs, practices and expectations about how people should behave. More information can be found in ITIL^® 4: Direct, Plan and Improve.

Recognizing the distribution of values through the levels and identifying those that enable or limit the organization’s evolution, will generate sources of information for organizational change, planning, and execution.¹

Figure 2.1 Value based organizational change

“Organizations that focus exclusively on the satisfaction of the lower needs, are not adaptable and do not empower employees. Consequently, there is little enthusiasm within the workforce, and there is little innovation and creativity. These organizations are often ruled by fear and are not healthy places to work. Employees often feel frustrated and complain about stress.” Organizational changes are usually not successful in this type of organizations.

“Organizations that focus exclusively on the satisfaction of the higher needs lack the basic business skills and capabilities necessary to operate effectively. They are ineffectual and impractical when it comes to financial matters. They are not customer oriented, and they lack the systems and processes necessary for high-performance.”

“The most successful organizations are those that have mastered both their “deficiency” needs and their “growth” needs. They create a climate of trust, have the ability to manage complexity, and can respond or rapidly adapt to all situations.” These organizations present environment for transformation and evolution.²

2.2.4 Organizational change principles³

Due to the latest findings in neuroscience, technologies (such as artificial intelligence, big data, robotics, and so on), and human emotional evolution, there has been a big shift in management, leadership, and motivation approaches. These changes enable organizations to reconsider the ways organizational changes are implemented. Many of the conventional models of change management are based on obsolete ideas about human motivation and behaviour.

The OCM practice should include approaches to situations of different complexity. Organizations define the changes, the level of control, and the principles that should be addressed by the practice. Change definition considerations can be found in the change enablement practice.

An example of a set of principles that can help guide the organizational changes to be successful through designing an adaptive environment is shown below. Leaders in an organization must translate these principles to suit the specific requirements of their business if they are to achieve the target of their change.

Clear and relevant objectives 

• The objectives of the change must be based on the vision and values of the organization, and clear for the stakeholders. The change must be of real value.

Strong and committed leadership

• A well-designed process uses leadership capabilities anywhere within the organization. Anyone can contribute or lead a change initiative at any stage. The potentially complex and dynamic nature of a transformation or change should be considered, and leadership should be flexible and open rather than fixed.
• This practice should aim to create an environment where people may participate in change leadership as a shared practice.

Willing and prepared participants

The employee’s strengths should be the focus. Organizations should shift from overcoming employees’ resistance towards encouraging and supporting human intellectual capital for the purpose of organizational improvement.

• Change stakeholders are valuable change agents: they can make vital contribution to an organizational transformation. People are naturally problem solvers with a unique capacity to adapt to a continually developing environment.
• Human-centred design of the OCM process. The needs and values of stakeholders should be understood.
• Map stakeholders’ and organizational values.
• Base a change on intrinsic motivation, rather than extrinsic reinforcement. Autonomy, competence, and relatedness.⁴

Sustained improvement

• Keep co-creation as the centre approach for organizational change. Therefore, every area of an organization is open for feedback and improvement. Co-creation is a choice that joins different parties to produce a mutually valued outcome.

• To maintain the achieved good result for organizational change, systems should continually evolve depending on organizational needs and vision.

2.3 Scope

The scope of the OCM practice includes:

• designing, implementing, and continually improving an adaptive approach for a developing environment in an organization
• planning and improving organizational change approaches and methods
• scheduling and coordinating all ongoing changes through the whole lifecycle
• communicating change plans and progress to relevant stakeholders
• assessing change success, including outputs, outcomes, efficiency, risks, and costs.

This practice supports all value streams and can be used with any other practice as they can all initiate organizational changes. However, organizations usually limit the application of the OCM practice to a finite number of changes, where behaviour, capabilities, responsibilities and/or roles are to be changed.

Other practices may significantly contribute to the organizational changes in the four dimensions of service management. These are listed in Table 2.1.

Table 2.1 Organizational changes in the four dimensions of service management

There are several activities and areas of responsibility that are not included in the OCM practice, although they are still closely related to change. These are listed in Table 2.2, with references to the practice guides in which they can be found. It is important to remember that the ITIL practices are collections of tools to use in the context of value streams; they should be combined as necessary, depending on the situation.

Table 2.2 Activities related to the OCM practice that are described in other practice guides

2.4 Practice success factors

A practice success factor (PSF) is more than a task or activity, as it includes components from all four dimensions of service management. The nature of the activities and resources of PSFs within a practice may differ, but together they ensure that the practice is effective.

The OCM practice includes the following PSFs:

• creating and maintaining a change-enabling culture across the organization
• establishing and maintaining a holistic approach and continual improvement for organizational change management
• ensuring organizational changes are realized in an effective manner, leading to stakeholders’ satisfaction and meeting compliance requirements.

2.4.1 Creating and maintaining a change-enabling culture across the organization

A change-enabling culture is a set of beliefs, attitudes, values, common knowledge, and expectations about change shared by people within an organization. It determines whether people can identify, understand, openly discuss, and act on change in a way that leads to organizational evolution. Additionally, it differs between organizations and may become a competitive advantage, if implemented wisely.

OCM technics and instruments can only be effective when they are used in the right way and moment, and with commitment from change stakeholders.

An organization that adapts changes can be established by creating an atmosphere where people are encouraged to speak up, challenge the way things are done, and listen and communicate effectively. Adaptive environments stimulate discussions and input for changes, considers agile vision, and new ways of operation. This culture may not only impact internal communication within an organization, but also cooperation with partners and suppliers.

To assist OCM practice with creating and maintaining an efficient change-enabling culture, it is important to use the following practices:

• workforce and talent management
• relationship management
• strategy management
• continual improvement management.

2.4.2 Establishing and maintaining a holistic approach and continual improvement for organizational change management

Identifying opportunities to improve organizational changes, principles, and methods are important. Improvements can also be initiated in areas such as the practice’s processes, tools, or other resources; and should aim to improve the practice and the experience of the stakeholders.

It is important to ensure that service improvements are not only initiated, but also effectively implemented. An approach to implementing improvements is described in the continual improvement practice guide. Also, it is vital to use multiple practices in the context of value streams, to maintain the progress of the continual improvement of services.

2.4.3 Ensuring organizational changes are realized in effective manner, leading to stakeholders’ satisfaction and meeting compliance requirements

Organizations should specify and execute a process to manage organizational changes. The OCM practice ensures that the most suitable process for organization’s values and vision is in use. Many stakeholders have an interest in organizational changes. This includes:

• service provider teams
• users
• customers
• sponsors of service provision
• sponsors of service consumption
• suppliers and partners.

This practice ensures that stakeholders are identified and that their values and expectations are captured, considered, and met as appropriate. This is done in combination with the relationship management, risk management, and business analysis practices.

Organizations should focus on the continual monitoring of stakeholder engagement and satisfaction during change planning, realization, and after the change is complete. Ongoing communication, status updates, and feedback collection are important components of managing satisfaction and the workforce and talent management practice.

Many change-related governance and compliance requirements affect the OCM practice. It is important that organizations capture them, understand them, and ensure that they are met. The practice supports this by:

• including required controls in change plans, processes, and procedures
• providing required information
• initiating improvement to prevent or correct non-compliance.

As the IT world is constantly changing, many organizations do not have a static end state of the change it requires. Therefore, it should maintain flexibility in structures to support constant improvement according to recent needs; this will lead to a change adaptive environment and enable capacity to fulfil them in the most beneficial way.

2.5 Key metrics

The effectiveness and performance of the ITIL practices should be assessed within the context of the value streams to which each practice contributes. As with the performance of any tool, the practice’s performance can only be assessed within the context of its application. However, tools can differ greatly in design and quality, and these differences define a tool’s potential or capability to be effective when used according to its purpose. Further guidance on metrics, key performance indicators (KPIs), and other techniques that can help with this can be found in the measurement and reporting practice guide.

Key metrics for the OCM practice are mapped to its PSFs. They can be used as KPIs in the context of value streams in order to assess the contribution of the practice to the effectiveness and efficiency of those value streams. Some examples of key metrics are given in Table 2.3.

Table 2.3 Key metrics for the OCM practice

The correct combination of metrics into complex indicators will make it easier to use the data for the ongoing management of value streams, and for the periodic assessment and continual improvement of the OCM practice. There is no single best solution. Metrics will be based on the overall service strategy and priorities of an organization, as well as on the goals of the value streams to which the practice contributes.

3.1 Value stream contribution

Like any other ITIL practice, the OCM practice contributes to multiple value streams. It is important to remember that a value stream is never formed from a single practice. This practice combines with other practices to provide high-quality services to consumers. The main value chain activities to which the practice contributes are:

• design and transition
• engage
• improve
• plan.

The contribution of the OCM practice to the service value chain is shown in Figure 3.1.

Figure 3.1 The contribution of the OCM practice to the service value chain

For more detailed description of OCM’s contribution to value streams, see ITIL^® 4: Direct, Plan and Improve, section 7.3.1.6.

3.2 Processes

Each practice may include one or more processes and activities that may be necessary to fulfil the purpose of that practice.

OCM activities form two processes:

• organizational change lifecycle management
• management of change adaptive environment.

3.2.1 Organizational change lifecycle management

This process includes the activities listed in Table 3.1 and transforms the inputs into outputs.

Table 3.1 Inputs, activities, and outputs of the organizational change lifecycle management process

Figure 3.2 shows the workflow for organizational change lifecycle management.

Figure 3.2 Workflow for organizational change lifecycle management

The process may vary depending on the change type and scope. Table 3.2 provides examples of the activities in two different scopes of change⁵.

Organizations should embrace the diversity of architectures and approaches to management to ensure the flexibility of services and meet stakeholder expectations.

Table 3.2 Organizational change lifecycle management process activities

3.2.2 Management of change adaptive environment

In adaptive organizations, change is not a forced event, but rather a part of organizational culture. This process includes the activities listed in Table 3.3 and transforms the inputs into outputs.

Table 3.3 Management of change adaptive environment process activities

Figure 3.3 shows a workflow diagram of the process.

Figure 3.3 Workflow for management of change adaptive environment

Table 3.4 Activities of the change adaptive environment

The OCM practice activities are performed by the service provider, as described in Tables 3.2 and 3.4. They may involve customers, suppliers, and partners. These activities are also supported and sometimes partially automated by tools and technologies which are described in the following sections.

4.1 Roles, competencies and responsibilities

The practice guides do not describe the roles of practice owners or managers that should exist for all practices. They focus instead on specialist roles specific to each practice. The structure and naming of each role may differ from organization to organization, so any roles defined in ITIL should not be treated as mandatory, or even recommended. It is also important to remember that roles are not job titles, and that one person can take on multiple roles and one role can be assigned to multiple people.

Roles are described in the context of processes and activities. Each role is characterized with a competence profile based on the following model shown in Table 4.1.

Table 4.1 Competency codes and profiles

Examples of the roles that can be involved in OCM activities, the associated competency profiles, and required skills are listed in Table 4.2.

Table 4.2 The roles involved in OCM activities

4.1.1 Change Leader role

A change leader role is also known as change lead or change coach in different organizations. It is common practice to assign the role to management, HR, or project management teams; but it can also be successfully taken by a representative of any other team, who is capable of coordinating actions around the change scope and requirements in the most efficient way.

The role of a change leader should focus less on pushing through a change project, and more on creating the change-enabling environment, where stakeholders can choose to adapt for the new required state of the organizational system.

This role is typically responsible for:

• The initial processing and verification of a change request by coordinating an action of understanding the change need and scope.
• Coordinating the identification, nomination, and creation of a change team.
• Empowering, mentoring, and leading a change team through the whole change lifecycle.
• Formally communicating decisions made through the change lifecycle to the stakeholders and affected parties.
• Monitoring and reviewing the activities of the teams that are involved in a change.
• Conducting regular ad hoc practice analyses, and initiating improvements to the practice, procedures, used methods, and tools.
• Developing the organization’s expertise in the methods and approaches for the OCM practice.
• Creating an environment that embraces psychological safety, mutual respect, and trust; where employees can realize potential as self-initiating change agents.
• Reinforcing conformity with the change mandate by holding the change team accountable.

The competency profile for these roles is LACM, though the importance of each of these competencies varies from activity to activity.

4.1.2 Change team member role

Any organizational change methods and tools are flawed unless it acknowledges people’s capacity for agency and co-creation. Today’s knowledge-based environment, often requires complex problem solving and depends on the collaboration between multi-specialized contributors.

Shared leadership models support organization’s evolution by shifting from top-down one-hero leadership to interdependent, coordinative leadership by a change team. A change team is a team of people with different capabilities and skills who work together and lead change to achieve mutually desired outcomes. The shared leadership is a set of shared practices that should be executed by people at all levels of an organizational structure.

A change team and a change lead are responsible for defining, communicating, and executing the change vision and plan. It is expected that the change team will apply its ingenuity and contribute ideas and efforts to change.

When organizational change is a part of a big project or program, it is also supported by a project management team.

A change team member should demonstrate the following types of behaviour to support change processes:

• taking risks
• eager to learn new ways of working
• unlearning old methods
• assuming new responsibilities and letting go obsolete ones
• gathering feedback
• discussing errors
• celebrating and acknowledging small and big wins.

4.2 Organizational structures and teams

It is unusual to see dedicated organizational structures for the OCM practice, although the change leader role may be associated with a formal job title. This is typical for organizations with a complex bureaucracy or when a very high level of change-adaptive environment is required for organizational success.

Many organizations may include a change team and temporary teams assigned for a specific change, especially if the change is treated as a project. For more details on project teams, please see the management practice guide.

5.1 Information exchange

The effectiveness of the OCM practice is based on the quality of the information used. This includes, but is not limited to, information about:

• organizational strategy and values
• organizational structure
• reflection of employees’ values to organizational values
• services and their architecture and design
• partners and suppliers
• policies and requirements which regulate organizational structure
• methods and technics to run organizational changes
• proposed changes, including:

• expected benefits for the employees and the organization as whole
• estimated time and cost of change realization
• regulations affecting the change

• lessons learned from similar changes in the past
• past and ongoing changes
• stakeholder satisfaction with the practice.

This information may take various forms. The key inputs and outputs of the OCM practice are listed in section 3.2.

One important success factor of any change is an efficient distribution of accurate, timely, and up- to-date information. The distribution of information and ideas relies on the employees’ network density. The more links between social-network modes, the more likely that information will spread.

In bigger networks, people can benefit from the diversity of information channels, and the amount of perspectives to see one change. Network density makes it more likely that change understanding and acceptance will be achieved faster⁶.

5.2 Automation and tooling

In most cases, the OCM practice can significantly benefit from automation and using tools. Where this is possible and effective, it may involve the solutions outlined in Table 5.1.

Table 5.1 Automation solutions for OCM activities

Very few services are delivered using only an organization’s own resources. Most, if not all, depend on other services. These are often provided by third parties (see section 2.4 of ITIL^®Foundation: ITIL 4 Edition for a model of a service relationship). Organizational change may impact agreements that are already finalized and working patterns with partners and suppliers. Therefore, these relationships should be considered while creating and performing a change vision and plan.

Relationships between organizations may involve various levels of integration and formality. (see Table 3.1 of ITIL^®Foundation: ITIL 4 Edition for more information about relationships between organizations). The decision to involve partner representatives to change activities, present change results or request input information to change, depends on forms of cooperation.

Where organizations aim to ensure fast and effective OCM, they usually try to agree close cooperation with their partners and suppliers, removing formal bureaucratic barriers in communication, collaboration, and decision-making (see the supplier management practice guide for more information).

Some organizational change activities may be outsourced to the third parties such as training, workshops facilitating, coaching, analysis, audits, and so on. The ownership and accountability for OCM actions are usually not transferred to an external resource.

Most of the content of the practice guides should be taken as a suggestion of areas that an organization might consider when establishing and nurturing their own practices. The practice guides are catalogues of topics that organizations might think about, not a list of answers. When using the practice guides, organizations should always follow the ITIL guiding principles:

• focus on value
• start where you are
• progress iteratively with feedback
• collaborate and promote visibility
• think and work holistically
• keep it simple and practical
• optimize and automate.

More information on the guiding principles and their application can be found in section 4.3 of ITIL^® Foundation: ITIL 4 Edition.

Axelos Ltd is grateful to everyone who has contributed to the development of this guidance. These practice guides incorporate an unprecedented level of enthusiasm and feedback from across the ITIL community. In particular, AXELOS would like to thank the following people.

8.1 Authors

Antonina Klentsova.

8.2 Reviewers

Roman Jouravlev.

References

1. Based on articles and methods https://www.teamcoachingzone.com/wp- content/uploads/2015/01/RSI-White-Paper.pdf and https://www.crrglobal.com/relationship-systems- intelligence.html [Accessed 25th October 2019]
2. Quotations from https://www.valuescentre.com/wp-content/uploads/PDF_Resources/Additional_Articles/Article_Importance_of_Values.pdf [Accessed 25th October 2019]
3. https://www.forbes.com/sites/carstentams/2019/09/10/metamorphle-nine-principles-for-good-design-of-organizational-change/#2a1851283d31 [Accessed 25th October 2019]
4. Self-Determination Theory, the leading motivational theory developed by Edward Deci and Richard Ryan.
5. https://rework.withgoogle.com/blog/changing-the-change-rules-at-google [Accessed 25th October 2019]
6. https://www.forbes.com/sites/carstentams/2018/04/23/it-takes-a-village-change-management-as-community-building/#d1c52f85683e [Accessed 25th October 2019]