Why is change management so hard for pension organizations?
Here's our top five reasons, and how to make it easier!
Change management is hard – and, in our experience, it can be uniquely difficult for pension organizations.
It’s easy to empathize with leaders who find change management a frustrating and nebulous topic: it’s important but an afterthought, with frameworks but also so many thoughts and feelings! Is it a leadership, or technology, or HR accountability? Is it addressed in our everyday transformation work, or does it require special effort?
Change management is an enabling framework for managing the people side of change (prosci.com) – or, more specifically, planning and activity that allows you to prepare, equip and support individuals as they transition from the current state to a future state.
Pretty straightforward, right? We wish, and definitely not for pensions organizations. But what is it that makes change so uniquely challenging for pensions? We see these five reasons in the course of our work:
1) Governance vs. Change
Getting governance right is a key ingredient of the Canadian pension model overall; the same is true for change programs. The best ones have clear change leadership and well defined decision-making structures to set priorities and accelerate delivery. But often, the appropriately regulated, risk-averse and fiduciary context of pension organizations can prove averse to change – with governance structures inadvertently slowing down or constraining the support required to help stakeholders change.
2) So many stakeholders!
All change programs must consider stakeholders – their unique needs, expectations and capacity to influence outcomes. Pensions, however, have the extra challenge of a truly complex stakeholder ecosystem to navigate, where there are diverse and deeply held views across important issues. Extra effort is required to understand and engage these parties – as decision-makers, influencers and recipients of change.
3) The Operator Mindset
Pension organizations are optimized for activities that run the business – and for good reason. Our primary objective is to administer the pension, implementing processes that collect and pay pensions in a compliant, accurate and timely fashion. This operator mindset is very different from the transformer mindset required to evolve those processes, implement new technology or expand service offerings. Inexperience with significant or large-scale change can lead to slower mobilization, increased resistance and communication hurdles, especially in frequently budget and capacity constrained environments. The mindset shift required is in itself a unique change management challenge for pensions – helping teams think differently about the work they are doing, in addition to working differently.
4) Niche and valuable SMEs
Pensions tend to be smaller organizations, with institutional knowledge and specialized skills concentrated among a few key subject matter experts (SMEs). These folks are usually critical to maintaining day-to-day operations, so accessing their support for transformation programs and change programs can be a juggling act! These individuals provide invaluable inputs, but are also prime targets of change management support as they sit at the center of what will be different.
5) Legacy systems and processes
Any change effort requires a clear view of the starting point as the baseline for helping stakeholders understand what will be different and why. For pension organizations, it can be very difficult to pull that picture together: legacy systems and processes are often complex and not supported by proper documentation, making the effort to extract current state knowledge difficult and requiring elevated levels of sensitivity and tact with the individuals involved.
How we structure change management to make it easier, more impactful and even fun
Understanding and overcoming these challenges in governance, stakeholders, mindset, capacity and current state calls for a clear and actionable framework.
Figure 1: Fuse’s Approach to Change Management
At Fuse, we distill change management activities down to the who, what, when, where, why and how – the W5H of change – in an integrated, iterative approach to guiding pension teams through change:
It starts with change leadership, answering why are you changing? Aligned change leaders and an articulated vision for the future and scope of change are key outcomes of this phase.
Stakeholder assessment comes next, considering who will be affected by changes and how they will react. We survey and engage diverse stakeholders to understand and influence the ecosystem being changed.
Change impacts consider specifically what is changing and when across processes, policies, procedures, systems and tools, and the work environment. We take a ‘what’s in it for me?’ lens to define what is changing from the stakeholders’ perspective.
Change monitoring measures where stakeholders sit on the change curve, understanding where actions are required to support change or manage resistance.
Change actions are how we prepare, equip and support individuals as they transition. We draw on a comprehensive toolkit of tactics to communicate changes, train stakeholders and manage the workforce and culture implications of change.
Change management in pensions is uniquely challenging, but that makes getting it right that much more rewarding! In our next post, we’ll share some tales from the trenches of change and practical advice to accelerate your efforts. If your organization would benefit from some extra energy getting from current to future state, we’d love to talk at hi@fusestrategy.co!