Reprinted From
April 2017
Five Cs of Change Management
Success for CFOs
BY JIM THOMPSON AND TONI COON, CPP
A
s the old saying goes, “The only constant in life is
change.” Nearly as consistent a fact is that many—some
might even say most—people are predisposed to
resist change. We like what we know, and we want it to stay
the same. This unique aspect of human nature presents a
significant obstacle to an organization looking to make any
kind of a transformational change.
The seminal work in the field of change management,
John Kotter’s 1996 book Leading Change, shows that only
30% of change programs succeed. Since that book’s release,
thousands of additional books and journal articles have been
published on the topic. Yet in 2008, a McKinsey survey found
that, despite all the attention given to the problem, the needle
hasn’t moved—only one transformation in three succeeds.
(ACA), Family and Medical Leave Act (FMLA), and the Fair Labor
Standards Act (FLSA) all present organizational risks that paperbased, or outdated, legacy payroll systems may struggle with.
Internally, payroll is being challenged to migrate away from
its traditional “cost center” status by identifying and unlocking
new opportunities to add value to the organization. At Cavender’s
Boot City, the homegrown payroll system has been replaced
by payroll and workforce management in the cloud. This was
a significant change but has automated time-consuming and
error-prone tasks, such as the calculation of complex commission
scales. Fewer in-house IT resources are needed, too. The end
result allows store managers to spend less time on payroll and
dedicate more hours to mentoring employees, serving customers,
and better serving stores.
Changing Challenges Payroll Faces
Clear Path to Success
Though the odds might be stacked against an organization trying
to make a successful transformational change, inaction is rarely an
option. This is especially true in 2017, as payroll organizations face
constant pressure from both internal and external sources.
Keeping up with the continually evolving compliance
landscape is perhaps the biggest external challenge. Minimum
wage can vary not just by state, but by county or city, and it seems
to be changing someplace all the time! The Affordable Care Act
Big projects—and projects of all sizes, really—require a clear
change management strategy to make sure they are part of the
30% that succeed and not the 70% that fail. As a CFO or payroll
leader, thinking of change management in terms of the following
“5 Cs” can help put your organization on that path to success:
Jim Thompson is Chief Financial Officer for Cavender’s Boot
City. Toni Coon, CPP, is Industry Marketing Manager for Kronos.
1. Culture—Every company has a culture, whether it is
purposefully designed or not. Before you begin to even
design a change process, you must take an honest look at
your culture and understand it from the inside out. This
involves talking to managers and employees at every level
of your organization to understand what your strengths and
weaknesses are as an organization, and how your employees
experience your culture—good and bad. Employee
engagement surveys and focus groups can help provide you
with the information you need to go into the change armed
with the information you need to make it successful.
2. Caution—When you identify a problem in your
organization, it’s tempting to leap right in and try to
immediately fix it from the ground up. However, when it
comes to transformational change, taking things in small
steps often works best. Look at the problem you need to
solve and think strategically about how you can break it up
into a series of smaller projects or changes rather than one
massive overhaul. Small bites digest better, and being able to
point to quick wins along the way helps maintain enthusiasm
for the change process.
3. Collaboration—Designing change in a vacuum is a fast track
to failure. You need to collaborate with the right people. Look
at who will be most affected by this change and invite those
people to be part of the team that will design and implement it.
4. Communication—Easy to say, hard to do effectively. If you
over-communicate, at a certain point people stop listening. And
if you under-communicate, the rumor mill will start churning to
fill the void. Here’s where you can lean on your collaboration
team. Let these folks take the lead and communicate face to
face with fellow employees, organize weekly calls, send email
updates, and communicate via internal social media channels
(blogs, message boards, etc.) to make sure that information is
available to anyone who may want to know more. At the end
of the day, people want to do a good job. Communication (and
compassion) helps to maximize effectiveness, and reinforces
a deep sense of satisfaction that their contribution to the
project’s success was meaningful.
5. Compassion—Unfortunately, this one is probably the
easiest to overlook and, at the same time, the most important.
Never lose sight of the fact that change is hard. People are
used to doing things a certain way and feel good about
themselves because they can do something well. Learning
a new way of doing things can be difficult, takes effort, and
can cause an employee to lose confidence. Don’t forget to put
yourself in the shoes of those employees most affected by the
change. They will appreciate that you do, and it will go a long
way in helping people stay positive and accept the change that
is coming. More than that, give them a voice in the change.
Let them know that the goal of the project is to make their
job easier, to ensure fairness, to eliminate their administrative
burden—and/or whatever other employee-oriented goals the
project has. When people understand the goals and feel like
they have a role in the process, they are more likely to work
with you, rather than against you.
As just one example, if you are an organization implementing a
human capital management (HCM) solution, involve the people
who will be using the new technology---everyone from managers
to frontline employees to human resources employees—in the
process. Identify veteran managers and employees who know
the ins and outs of the current way things are done and have
the self-confidence to speak their minds. This will help you
understand how they’re actually using the existing systems and
the work-arounds that have organically developed over time.
Getting their input from the get-go is invaluable in designing a
system that works.
Bring them in from day one, make them aware of the project
goals and timeline, let them take shared ownership, and get
them invested in the project’s success. Demonstrate that you
understand this change will be significant to the way they go
about their responsibilities. And don’t stop there: let these folks
be the ones who bring the change to their peers, test it, and
suggest improvements along the way. Acceptance of change is
greatly enhanced when you have the right people championing
the process and explaining why it’s going to make everyone’s
work life better.
Maximize the Odds of Success
When it comes to change, there is no guarantee of success. But
if you take the time to know and understand your culture, break
up the larger project into manageable pieces, collaborate with
the right stakeholders, communicate with the entire organization,
and treat employees impacted by the change with compassion,
your chances of success will be greatly improved. ■
The American Payroll Association (APA), www.americanpayroll.org, is the nation’s leader in payroll education, publications, and training. This nonprofit association conducts
more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Representing more
than 23,000 members, APA is the industry’s highly respected and collective voice in Washington, D.C. Get more information at www.americanpayroll.org.