Change Management Report

NICMAR

CHANGE MANGEMENT IN CONSTRUCTION

By :Harsh Joshi ACM 22 (Roll no:- 221073) Spruha Joshi ACM 22 (Roll no:- 221072) Tanvi Parikh ACM 22 (Roll no:- 221119) Darshan Mohta ACM 22 (Roll no:- 221100)

NATIONAL INSTITUTE OF CONSTRUCTION MANAGEMENT AND RESEARCH

CHANGE MANAGEMENT IN CONSTRUCTION

Profound and powerful forces are shaking and remaking our world, and the urgent question of our time is whether we can make change our friend and not our enemy. The words are not mine. They were spoken by Bill Clinton at his inauguration as US president in January 1993. Embrace change, the gurus tell us. Change or die. And - I don't know if anyone has ever told you this - but have you noticed that, these days, "the only constant is change"? Managers know all about change. It is at the heart of what they do. Thus, change management is must know phenomena in today’s era. Definition – Change management is a structured approach to change in individuals, teams, organizations and societies that enables the transition from a current state to a desired future state. Background The evolution of the change management field stems from psychology, business and engineering. From an individual perspective, the change may be a new behavior. From a business perspective, the change may be a new business process and/or a new technology. From a societal perspective, the change may be a new public policy or the passing of new legislation. Successful change, however, requires more than a new process, technology or public policy. Successful change requires the engagement and participation of the people involved. General information Change management provides a framework for managing the people side of these changes. The most recent research points to a combination of organizational change management tools and individual change management models for effective change to take place. The late Peter Drucker identified the key management challenge of the 21st century as leading change, and he believed the most important policy for doing that was "to abandon yesterday." By yesterday he meant whatever no longer works. Yet abandoning yesterday is excruciatingly difficult. Yesterday is comfortable, and the fact that it used to work inspires hope that it will again. By contrast, trying anything new will always produce problems. So companies nurture yesterday far too long. What's especially insidious, Drucker observed, is that maintaining yesterday is difficult and time- consuming and "therefore always commits the institution's scarcest and most valuable resources--and above all, its ablest people--to nonresults." Which means they're not available to create tomorrow. Change management is very important for managers. The facts and figures depict its essence in the managerial field. A recent Economic Intelligence Unit survey of 600 international businesses found that about 30% had launched five or more change management initiatives in the past year alone.

Here are some of the recent examples illustrating the significance of change management in the recent era  One of the greatest examples is still Intel's brave decision long ago to bail out of dynamic random access memory, the product on which it built its early success.  Call it tossing Wall Street a bone. Ford Motor Co. said Aug. 17 that it will shed 5,000 salaried employees. The severance costs, along with other write-offs, will shave $900 million from second-half profits. The move was designed to show investors that Ford is serious about tackling its problems while buying the carmaker time to figure out its restructuring game plan.  There is not another company in the world as closely identified with its leader as Microsoft Corp. has been with William H. Gates III. But Gates no longer runs Microsoft. He gave up the chief executive role 2 1/2 years ago to his best friend and longtime management sidekick, Steven A. Ballmer. Today, after a transition that had its rocky moments, it is clear that a new era has dawned at Microsoft: The powerhouse that Gates built is being reconstructed by Ballmer.

Concept Change management in construction is an important aspect of project management, as changes constitute a major cause of delay and disruption, and it is widely accepted by both owners and constructors that change effects are difficult to quantify and frequently lead to disputes. The development of change management systems should consider many elements of the project processes and address all internal and external factors that influence project changes. The dynamic field of construction has not been explicitly addressed by traditional construction planning and control tools and problems encountered during construction are typically treated in a static. Hence change management in the construction sector is a very important area. In the past few months London has played host to two of the biggest change management spectaculars of recent years: the opening of Heathrow airport's Terminal 5 (an eg of bad change management) and the relocation of the cross-Channel train service Euro star from Waterloo station on the south side of the Thames to St Pancras, north of the river (an eg of good change management). When Euro star opened for business out of its new north London home on November 14 last year, it managed 97 per cent punctuality on its first day. This after transferring its operations overnight. Some 400 engineering and maintenance staff also had to move from their original west London depot to a new site in east London. All in all, 1,600 employees were affected. How was this achieved so smoothly? In a word, preparation. Managers had started working on the relocation 18 months earlier. And there was an appreciation among company bosses that the move was going to be an enormous event for their employees, not just in physical terms but in an emotional sense too. Business psychologists from the

consultancy Kaisen were brought in to advice managers. A huge, two-way communication effort with staff was made. Now, consider the horrors of the launch of Heathrow's T5 in March. Sure, as far as the construction of the site was concerned, it was a triumph, a L4.3bn project completed on budget, on time and in full. But in spite of BA running a three-year change programme, called "Fit for 5", we all know what happened come opening day. The site was huge. Employees, who had not had enough training, simply did not know where they were supposed to go. More time had to be allowed to get staff from their locker rooms to the arrival and departure gates. And, as for the lockers - the new ones were not big enough to hold all the baggage-handlers' clothing and belongings, including bulky wet-weather gear. Parking space, also far from the terminal building, was inadequate. Managers were told about all these things. And BA chief executive Willie Walsh did not appear to know how grave the problems were. (He later told MPs that he had taken a "calculated risk" pressing ahead with the launch date.) Also in the Indian scenario Railway ministry has though of introducing change to combat growing traffic by having investment which include use of private-public partnership. The construction industry today in Saudi Arabia is going through a process of adapting to a changing economic environment. With the change in the Kingdom's economic thrusts due to the fall in price of oil in recent years, the construction sector is driven by competitive pressure to adjust to the present market demands and governmental regulations. One has to become auspicious especially at these times when the government has shifted its dependence to the private sector in pursuing its economic objectives. The present state-of-affairs and economic realities impinging on the construction industry are analyzed, enumerating several changemodels with the end purpose that a change management model be developed specifically suitable for use among Saudi construction companies. Aim Changes in construction projects often cause cost and time overruns. Because of the nature of design and construction of buildings, construction professionals often have to make decisions based on assumptions and previous experience. Changes at a later stage are sometimes inevitable. The aim of project change management is not to seek the elimination of all project changes, but to minimize the negative impact of necessary changes and to avoid unnecessary ones.

Approach

In this topic, we are presenting the project model that has been developed to be used as a planning and control tool for construction projects, focusing on effective patterns of construction change, and compare to those of rework. Then the structure and equations of the project model, feedback processes triggered by construction change and rework and important considerations in implementing a system, model- based project planning and control tool. Also using the model structure, change impact on the construction performance is analyzed according to change characteristics, and to discovery status and time. Need

1. Construction deals with physical manifestation, which involves construction rework. But construction rework cycle framework is not sufficient to address the issues and fails many times. Thus to avoid rework on problematic tasks by modifying their design and specification is done which is called as change management.

2. Construction

is a process based work that is performed in an unfixed place by a temporary alliance among multiple organizations. It also involves unpredictable conditions due to open work environment. Thus a construction process model must be capable of handling control issues at the operational levels as well as plans at the strategic levels.

3. The construction process model requires more flexibility in determining project scope and work dependencies than other project development model. (For eg: project development or software development.) Types of Change Management •

Individual Change Management

Kurt Lewin described change as a three-stage process. The first stage he called "unfreezing". It involved overcoming inertia and dismantling the existing "mindset". Defense mechanisms have to be bypassed. In the second stage the change occurs. This is typically a period of confusion and transition. We are aware that the old ways are being challenged but we do not have a clear picture to replace them with yet. The third and final stage he called "refreezing". The new mindset is crystallizing and one's comfort level is returning to previous levels. The ADKAR model for individual change management was developed by Prosci with input from more than 1000 organizations from 59 countries. The building blocks of the ADKAR Model include: 1. Awareness – of why the change is needed 2. Desire – to support and participate in the change 3. Knowledge – of how to change

4. Ability – to implement new skills and behaviors 5. Reinforcement – to sustain the change •

Organizational Change Management

Organizational change management includes processes and tools for managing the people side of the change at an organizational level. These tools include a structured approach that can be used to effectively transition groups or organizations through change. When combined with an understanding of individual change management, these tools provide a framework for managing the people side of change. Difference between change and rework Change and rework have different behavior patterns. Change and Rework are mainly done in the form of ‘adding’, ‘removing’ or ‘replacing’ (removing and adding). Construction rework is normally accompanied by the demolition of what has already been built. Rework is perceived to have a bigger impact on construction performance than change. As many a times rework leads to utilization of more resources and ultimately more cost is incurred in the project. Closer observation of the construction process reveals that non value adding iterations in construction are mainly associated with construction change. For reducing wasteful construction iterations requires effective change management.

Construction changes refer to work state, processes or methods that deviate from the original construction plan or specification. During the construction process changes take place either unintentionally i.e. unintended change or on purpose. Unintentional changes results from low work quality, poor work conditions or external scope changes. Or even sometimes due to upstream hidden changes.

Any change either intended or unintended can lead to further changes in tasks following the changed task. Hence, any change leads to subsequent changes in the project as it progresses. Effective change management done at an earlier stage than subsequent changes can be made easier and more cost effective for the workforce so employed. Figure below represents various cases of construction (at operational level) wherein change or rework is suggested. For effective change management one should opt for the task which is more economical and less laborious. Generally rework is avoided because it becomes problematic involving more labor and resources.

Approach to change management:Change management should involve proper recognition of the problem , strategic planning (which is effective at all levels) , proper execution of the planned change and that can be done by having an interaction for the change among various departments and workforce/manpower involved in it. When these tasks are optimized, balanced and integrated in a proper co-ordinated fashion then one can have effective change management for any project whether it is related to the construction sector or any other sector. All the tools used for strategy, planning, resource allocation, execution, interaction etc like CPM, network diagrams as well as construction rework cycle have not proved fruitful as construction project deals with a lot of uncertainties, and in spite of advances in construction equipment there are cost overruns and chronic schedule delays. Thus, an effective tool like a project process model is needed to have a better approach to change management to make strategic decisions (policy making) both at operational and strategic level. Generic process model of change management:Below is a general process model representing a step wise decision making action plan to have change management in the construction at strategic as well as operational level.

The diagram is self explanatory but the infrastructure development of the much talked about destination Dubai stands as an excellent example illustrating all the stages for which results are positive. Dubai was a desert (barren land) some few years ago. Its ruler Mohammed bin Rashid Al Maktoum had a vision to develop the country. He developed a strategy for the vision. He thought of changing the conventional construction techniques into faster methods of construction (like precast methods, use of Swiss rolls (green carpets with fitted watering systems imported) etc) to have a steadfast growth of real estate and infrastructure in the country. Today, Dubai has attracted world-wide attention through innovative real estate projects and sports events. A majority of the its revenues are from trade, real estate and finance. Real estate and construction, contributed 22.6% to the economy in 2005, before the current large-scale construction boom. Dynamic project model:This is a dynamic project model developed with effective change management and construction policy-making both at strategic and operational level.

Here four basic functions: Plan for change  Prepare for change

 Carry out change  Evaluate or control change Require to be done (as a part of change management strategy) if people, time and resource problems are encountered. Also if there are people, time and resource problems for any project then a proper action plan in the form of the four above mentioned tasks needs to be executed. Apart from that if there are subsequent changes meet at other levels after a change has been accomplished then one need to repeat the process cycle (as in the project model). Following will further illustrate the processes involved in the model in detail. Plan for change:Anticipate problems   

People problems Time problem Resource problem

Prepare for change:  

Prepare people Schedule change Allocate resources

Carry out change: 

Delegations to staff Motivation

Evaluate/Control change: 

Control time Control cost and performance indicators

Further the three key change determining factors are as follows:1) Resource factors    

Use of budgetary control Plan cash flows Control expenditure Monitor performance indices

2) Time factors  Use of networks – involve planning of operational sequencing, identifying critical activities, identify potential problems.  Use of charting techniques – involve scheduling time, allocating resources and monitoring the progress. 3) People factors One faces a lot of manpower problems during construction operations. Thus an effective manager needs to:Identify and remove restraining forces (Eg:- Unnecessary workforce employed in wooden form working)  Carry out the change (Eg:- Remove additional workforce )  Freeze the situation by reinforcing the new behavior (Eg:- Adopt aluminum formwork) 

Thus, we conclude that change is inevitable and hence as managers we need to be prepared to face it in the construction sector as well (both at organizational and strategic level). Arming our self’s with the construction management techniques like understanding of project process model will help us immensely.