Oct 28, 2024

Why does change management fail?

  • Article

Leveraging people as key drivers for capturing value (case study)

The mining industry plays a fundamental role in the global economy, contributing approximately 11.5% to the world’s gross domestic product (GDP). When including related industries, the total contribution of mining to the global GDP is estimated at 45%.

Projections state that capital expenditure in the mining and minerals industry will reach between US$1 and $1.5 trillion from 2011 to 2025. However, despite this massive investment and the importance of mining in the global economy, the success rate of large-scale mining projects is only 2.5%. This low success rate stems from issues such as insufficient definition during project planning and a lack of collaboration among key roles. This creates an opportunity to identify change levers and measuring their effectiveness in achieving the value set by the client.1

  1. Why does change management fail?

    These figures may be surprising, but similar trends are occurring across various industries, including large-scale mining projects, and the world needs large-scale mining.

  2. Cultural maturity index: measuring two balanced forces

    To address these and other challenges, we developed the Cultural Maturity Index (CMI), which measures progress toward objectives using two balanced forces (push and pull). This helps us identify change levers for interventions to meet client goals.

    Step 1: We first defined and analyzed the key stakeholders involved in these projects, using an existing relational framework. Next, we applied Mitchell’s Stakeholder Model, which provides a practical approach for identifying and managing stakeholder relationships. By considering the dynamics of power, legitimacy and urgency, this model can be especially useful for decision-making, reputation management and corporate social responsibility efforts.

  3. The Mitchell Stakeholder Model, also known as the “Mitchell, Agle, and Wood Model,” is a widely recognized approach for analyzing and understanding an organization’s relationships with its stakeholders. The model was developed by James A. Mitchell, Robert K. Agle and Donna J. Wood and suggests that organizations should consider not only their shareholders, but also a broad range of stakeholders who may influence or be affected by the organization's actions.

    Step 2: Another important step we took was to establish guiding principles that define the behaviours we should observe to measure adherence and maturity in the operational excellence model. We based these on the Shingo principles, which are organized into four dimensions and ten core principles, from which we identified 30 key behaviours.

  4. These elements, along with others, allowed us to define the measurement instrument and the indicator. The result was as follows:

  5. This approach was based on applying assessment instruments that address fundamental aspects of implementing a productivity management model. These tools measure an individual’s adherence to practices and tools (push elements), as well as behaviours that align with the principles of the Shingo model2 (pull elements). These behaviours reflect each individual's actions in every practice of the excellence model within projects. Together, these elements formed the Cultural Maturity Index (CMI) indicator.

    The assessment tools generate a line, with an expected score of 83 (expected maturity level) for each element displayed along the x-axis, as shown in Figure 4.

    The scale based on the Shingo Model ranges from 1 to 10. A score of 8 indicates a sufficient level of development that ensures stable adherence and consistent behaviours over time. The gap to reach a score of 10 is determined by the specific results of the project.

    Note: The desired maturity index is 10 points, while the optimal level to sustain maturity over time is 8 points (on a scale of 10, based on the Shingo model).

  6. After three months, evaluating maturity in relation to the management model has allowed teams to identify key elements that explain either stagnation or progress in the projects. As a result, corrective actions have been implemented to capture meaningful value for each ongoing project, focusing on adherence to expected practices and behaviours within the dimensions of Leadership, Continuous Improvement and Organizational Alignment.

    Elements such as adherence to practices help drive results and create opportunities for interaction, which enhances the maturity of the client's productivity management model. Additionally, the relevant stakeholders, which include clients, support services and contractors, play key roles with significant interactions in daily routines. These interactions serve as catalysts for achieving desired results through fundamental behaviours.

  7. Conclusion

    People at the centre: The behaviours of individuals play a crucial role in achieving objectives. As such, teams must fully understand how their actions create value.

    Multifactorial approach: Gaps can be identified in both the adherence to practices (push elements) and the expected behaviours (pull elements) exhibited by various team members.

    Purposeful interventions: Targeted intervention plans can be developed to optimize time and enhance the effectiveness of actions aimed at addressing specific gaps, rather than relying on generic solutions.

    Catalyst: Recognizing key roles that facilitate visibility of relevant interactions within routines is vital. These interactions serve as catalysts through ideal behaviours that lead to optimal results.

    In short, intentionally implementing systematic evaluation strategies and working with individuals contribute to achieving results and capturing value.

    Sources:

    1 Project Definition Rating Index (PDRI, Final Report 366, Project Definition Rating Index for Mining Projects Construction Industry Institute – Africa Chapter Prepared for Construction Industry Institute.

    2 The Shingo Prize for Operational Excellence (Application Guidelines)

    3 The scale based on the Shingo Model ranges from 1 to 10. A score of 8 indicates a sufficient level of development that ensures stable adherence and consistent behaviours over time. The gap to reach a score of 10 is determined by the specific results of the project.

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