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Abstract
The Cornerstone Program represented a signicant business transformation for Hydro One. Just as a cornerstone helps determine the
position of an entire structure; the Cornerstone Program has helped shape the future strategic position of Hydro One. This strategy and
vision includes supporting the business infrastructure through improvements to rapidly respond to business needs, enabling rapid access
to information for strategic decisions, and streamlined business operations enabling the organization to deal with growing requirements.
This case study introduces a conceptual framework that draws from theoretical change models but is also grounded in the reality of the
change environment at this organization. Realizing major organizational change is a complex process inuenced by the characteristics of
an organization, the integrated project and change management framework, and the importance of key leadership roles throughout the
change process. Results from this study suggest that eective change implementation was enabled by leadership, program management,
and change ownership, integrated with project implementation.
2010 Elsevier Ltd and IPMA. All rights reserved.
Keywords: Integrated change management framework; Second-order change; Change leadership
1. Introduction
Organizational change is a constant challenge in the business world today and plays a signicant role for organizational leadership. On a daily basis organizations are
challenged to improve their business performance, and take
on new and exciting projects, often as a result of a change in
strategy or to increase business eectiveness. With change
becoming an increasingly important part of what leaders
do, current organizational change literature is suggesting
that senior management commitment is critical to the success
of organizational change eorts (Herold and Fedor, 2008;
Herzig and Jimmieson, 2006; Karp and Helgo, 2008; Raes
et al., 2007).
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presented in this paper are the initial results of an exploratory action research study that investigates the relationship between project and organizational change
frameworks during a signicant business transformation.
2. Project rationale the case for change
Hydro One Networks, located in Ontario, Canada is
responsible for 97% of Ontarios electricity transmission
system and about one-third of the provinces distribution
system (Hydro One, 2008). The 29,000 km high voltage system transmits electricity from generating facilities across
the province to local distribution companies, municipal
utilities and large industrial consumers. Hydro Ones low
voltage distribution system brings electricity to approximately 1.3 million homes or businesses across rural Ontario
(Hydro One, 2008). They are Ontarios largest distributor,
$14 billion of assets and 122,000 km of distribution lines
(Hydro one, 2008). The organization is wholly owned by
the Province of Ontario, Canada.
The environment in which an organization operates,
including its rich past and culture, has a signicant impact
on its ability to manage change. This organization has not
been without change since the late nineties. In 1998, the
Ontario Government passed legislation that would govern
the provinces electricity industry, and Ontario Hydro (the
predecessor company to Hydro One) was dismantled and
Ontario Power Generation and Hydro One were created.
All of that changed mid 2002 when the provincial government announced an action plan to not proceed with its
1998 direction to privatize the industry. Since that time a
number of signicant events aecting the stability of the
organization occurred and there was a need to manage these
unexpected events as well as maintain a focus on performing
and improving the core operations of the business. These
events included: the business response to September 11,
2001; government redirection of Hydro One and the Electricity Industry in Ontario in 2002; a new Corporate Strategic
Plan implementation; key senior leadership turnover and
transition; Severe Acute Respiratory Syndrome (SARS) in
2003; the August 14 Blackout in 2003; a labour dispute in
2005; business changes aecting the environment and culture
at major work centres; and challenges associated with updating and enhancing facility technology, practices and
processes.
Currently, the organization faces external pressure to
achieve excellence in a rapidly changing environment.
The customers they are so proud to serve want more information, more service and better quality service. Processes
and systems must be capable of responding. The accomplished work program is ramping up exponentially; however, it is a challenge to nd the skilled resources in the
market. They face greater industry demands from customers, regulators and the public. Internal pressures include a
large portion of the workforce that is eligible for retirement; a geographically dispersed workforce; and, inconsistent system and business processes, all increasing the risks
through a variety of perspectives on organizational development and change leadership theory. Literature supporting the integration of the internal structures and the
context of an organization contributing to successful
change outcomes (Gareis, 2009) are highlighted in both
the project management and change management literatures. Finally, the literature associated with participatory
observation and action research and the value it brings to
the study of organizational change initiatives is summarized. This literature review only briey summarizes the
rich empirical research, the gaps and limitations in current
knowledge, but introduces and encourages the development of new and innovative approaches through this
research study that will expand our present understanding
of leadership roles and their contributions to organizational change success.
5. An integrated approach to change
To be eective at leading change, companies need to
design exible change management eorts, based on the
unique characteristics of the change and the culture of
the organization experiencing change (Herold and Fedor,
2008; Karp and Helgo, 2008). There are a growing number
of change management and project management models
(Cooke-Davies and Patton, 2008; Legris and Collerette,
2006; Shenhar and Dvir, 2007) adopted by businesses
today that assist with the integration and management of
the tremendous amount of change projects bring to an
organization. Traditional models of organizational change
(Lewin, 1951) indicate that change processes should be
deliberately planned and managed. The organizational
change literature is extensive with models recommending
various steps or phases for management and change agents
to follow when initiating and implementing change (Huy,
2001; Van De Ven and Poole, 1995). Former models of
change (Galpin, 1996; Kotter, 1996; Nadler and Tushman,
1997) consist of multiple phases, however, in their discussion of change management strategies and the roles that
leaders play, they discuss change as if it is a discrete event,
a series of steps or stages or an easily prescribed process.
Changes faced by businesses today are usually messy
and complicated, aecting every aspect of a business. What
is required is an ongoing process to signicantly manage
this change. In this kind of environment, leadership is crucial. More recent studies of organizational change focus
exclusively on the leadership of senior managers (Appelbaum et al., 2008; Herold and Fedor, 2008; Herzig and
Jimmieson, 2006; Raes et al., 2007). Recognition of the
sponsorship role in improving the success rates of projects
indicates a key theme has emerged around the pivotal role
the sponsor performs in inuencing the success or failure of
the project (Crawford et al., 2008). Changing the attitudes
and values of sta, selling the vision, implementing the
change and sustaining it were concepts added to new
change models (Kotter, 1996; Lacroix, 2001; Mento
et al., 2002). For managing a change successfully, both
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provides guidance in managing the change so that the organization can accomplish intended business outcomes while
simultaneously engaging the people in the organization in
positive ways. The Framework is organized with a project
management and change management methodology at its
core, with each of their important elements identied.
9.1.1. The integrated change framework
The elements of the Integrated Change Framework represent the inherent logic and ow of activities for leading
and achieving real change. This conceptual framework provides a set of coherent ideas organized for communication
purposes, to assist in understanding the interconnections of
activities and elements, and provides a basis for thinking
about what we do and what it means. The researcher developed this integrated conceptual framework for project
change leadership (Fig. 1). Fig. 1 depicts the conceptual
framework of this study, set in the context of a dynamic
organizational environment, focusing on the context of
leaders at work, subject to the employers organizational
change agenda and corporate strategy. The role for leadership operates at every intersection of the framework, however of particular focus in this study was the focus on
leaderships role within the change management
framework.
While implementing this structured approach to change
(Hydro One, 2007), and given the complexity of the Cornerstone initiative, the leadership team recognized the need
for a proven, mature project management methodology
that included eective communications, change management plans, employee engagement, and management
accountabilities. This integrated approach to change
included aligning relevant combinations of people, processes, policies, practices, strategies and/or systems in the
organization. These are all outlined and depicted in the
many aspects of this conceptual framework. Strategic interventions link the internal functioning of the organization to
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ership from a corporate point of view. In addition to providing management level reviews of project status,
approval of major milestones, operational oversight and
guidance, this provided an integrated view of operational
needs across lines of business. Project and Business Leaders
had support and authority to act, worked to achieve consensus toward corporate goals and objectives, and championed the project across line of businesses and corporately,
communicating as one voice with common themes and
messages.
10. Conclusion
The Cornerstone Program called into question the status
quo and disrupted the alignment among organizational
attributes. The organization expects the eventual outcome
of such change to be a transformation or renewed organization. As the organization continues to improve the business they will draw on the extensive experience and deep
knowledge of long-term employees to provide innovative
ideas and drive them to fruition. All the while, those most
critical employees will be retiring at record rates. The work
force presents a major challenge in the companys ability to
orchestrate innovation, and needs to be addressed through
a combination of the broad based involvement of our
employees in designing and implementing the changes
going on now within the organization. There is every reason to believe the organization has the cultural foundation
to support what they are working to achieve, where everyone is making a contribution to not just their own job but
to the entire business.
Second-order change interventions are designed to
encompass the entire internal and external system in which
the organization resides and to create the needed organizational change. This integrated change framework provides
insight into a missing but very necessary component of the
second-order change eort mentioned. Though the organization is in the midst of transformational change, leader-
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organizational change success. In light of all of the challenges, past, current and future, eective change management will represent the most important prerequisite to
success with future change initiatives.
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