1. Introduction

This document describes the CALM methodology for robust organizational change management.  CALM stands for Change Adaptation Learning Model, an advanced organizational change management methodology developed by Dr. Koehn.

We have implemented the CALM model as a decision support software application using DecisionPath´s ForeTell-DSS platform. ForeTell provides an innovative scenario-based "what-if" simulation capability. Consultants schooled in CALM use the software to project and analyze the likely consequences of candidate change strategies for client organizations within alternate scenarios of the future.  In effect, they apply CALM to help clients conduct low-risk "test drives" of prospective or ongoing transformational strategies. Clients can thus practice how best to enable change, and apply the lessons learned from these low-cost "dry runs" to validate and refine plans.

Of equal importance, ForeTell also allows CALM scenarios to be updated periodically to re-project and re-assess likely outcomes in light of current knowledge. This mode allows CALM consultants to track the execution of transformations across their lifecycles; detect and diagnose problems promptly; and make suitable "mid-course" corrections to ensure continued success. When applied thusly to ongoing transformations, CALM promotes a proactive "early warning" or "sense and respond" approach. This methodology promotes change effectiveness, improved consistency, rigorous auditability, continuous learning and improvement.

In short, the CALM solution helps organizations enhance both tactical and strategic change planning and execution processes, reducing risk and improving confidence in their transformational decisions.  

2.      CALM Details 

CALM was designed to address several recurring limitations in conventional change management methodologies that lead to high rates of failure in transformation projects:[1]

•  Focusing tactically on a specific pending transformation, rather than strategically, on general organizational preparedness and receptivity to continuous change
• Applying the same mechanistic techniques developed to manage systems integration projects to the complex behaviors displayed by organizations and individuals facing disruptive changes (e.g., fear, uncertainty, resistance, and even sabotage)
• Capturing change planning and status information in passive document-based work products that are static, hard to update, and contribute little to continuous learning about coping with change.
• Effectively ignoring decades of research on "new sciences" that focus expressly on modeling social and personal behaviors (complex adaptive systems, system dynamics, probabilistic models)

CALM addresses these problems through three primary processes - modeling, simulation, and analysis.  Each process is comprised of a set of tasks that are directly supported by the ForeTell CALM software.  Experienced consultants employ the CALM software to support their implementation of CALM methodology tasks, summarized in Figure 1.  

Figure 1. Phases of CALM Methodology

Modeling.  CALM explicitly captures available knowledge about both static and dynamic aspects of situational contexts and transformations.  Capturing situational dynamics is clearly critical for CALM´s second task - projecting the likely outcomes of organizational changes.[2]  CALM´s modeling methodology focuses on the following critical tasks:

• Depicting the pending (or ongoing) transformation facing the client organization
• Depicting the change enablement strategies that have been proposed (or are currently being executed) to help the organization prepare for and carry out the transformation
• Tailoring CALM´s built-in model of situational dynamics to the client´s specific change context

CALM models for a particular client situation are called scenarios.  CALM scenarios are comprehensive, encompassing the following types of situational data, summarized pictorially in Figure 2:

• Relevant organizational units (e.g. an agency, its member departments or groups) 
• The transformation at issue (e.g., new IT systems or other technology, reorganization)
• Metrics for measuring organizational performance and readiness to change
• Goal metric values (i.e., the values required in order for the transformation to succeed)
• Environmental forces acting on the organizational unit on a continuing basis
• Possible events that might occur and disrupt the transformation and change strategies
• Candidate change enablement strategies.

Figure 2. CALM Elements for Modeling Organizational Change

Environmental forces include both external factors (e.g. social, political, legal, economic) and internal factors (e.g., leadership, resources).  Examples of disruptive events include new legislation or regulations, changes in leadership or economic conditions.  

Change enablement strategies are defined relative to assumptions about the future.  The CALM methodology helps assess the robustness (or sensitivity) of candidate plans to variations in assumptions.  Specifically, CALM consultants project outcomes for change strategies under alternate assumptions about situational forces, trends and disruptive events, and then compare outcomes to confirm resilience of strategies.

Metrics are critical for measuring an organization´s initial, goal, and evolving states surrounding a transformation. Existing change methodologies focus primarily on metrics relating to business "infrastructure", which measure capabilities and flexibility of organizational technology processes, structures, and policies.  However, the dominant causes for transformation failures typically trace back to less obvious organizational and workforce readiness factors, such as cultural dissonance, inadequate leadership support, poor communication, fear of change, lack of confidence, or inadequate skills or empowerment to carry out the necessary adaptations.

The CALM methodology measures organizational readiness to deal effectively with change across three "dimensions" - infrastructure, organizational and personal (workforce) mindsets. Each CALM change readiness dimension consists of three to six metrics, which Dr. Koehn extracted from the literature on change methodologies. His selections and synthesis provide a manageable number of metrics that reflect diverse categories of organizational transformations and their associated risks.  CALM also provides metrics for "bottom-line" performance (e.g., cost competitiveness, customer satisfaction.[3]

CALM depicts Transformation Plans using a process-based model that builds on, but extends the pioneering work of Dr. John Kotter at the Harvard Business School.[4]  A transformation plan is made up of eight phases, defined by Kotter:

• Initiate change (i.e. define business case)
• Build a coalition (of change agents)
• Formulate vision
• Communication and educate
• Empower others to act
• Create short-term wins
• Consolidate and further change
• Institutionalize change

Each such phase decomposes into finer-grained tasks, which have projected schedules and estimated costs. 

CALM dynamics project the likely impacts on the target organization (and its readiness measures), of changes in the situational environment induced by forces, events, and the proposed change enablement strategy.  CALM exploits ForeTell´s dynamic architecture to project likely impacts, combining simulation techniques including complex adaptive systems (agents), event modeling, system dynamics, and Monte Carlo methods. 

Each environmental Force in CALM specifies its (assumed) causal impact. That is, it dictates how a change in magnitude (e.g., of bold new leadership, increased competition) is likely to impact the organizational performance and readiness metrics described earlier. Similarly, each change initiative (e.g., communicating vision, empowering employees to carry out change tasks) specifies how that activity is likely to impact CALM metrics over their scheduled times. 

As in the real world, these effects may take some time to manifest (i.e. time delay or latency), have bounded durations, and display cumulative build-up (i.e., non-linear response). The data to drive these specifications comes from expert judgment and other sources (e.g., surveys, benchmarking exercises, data warehouses) that may be available. 

2.1    CALM Software 

Assembling CALM scenarios would appear, at first blush, to be a daunting task.  However, the CALM software Graphical User Interface (GUI) provides diverse user support features to address this concern.  The CALM Scenario Editor provides extensive on-line help including example data is available for all of the CALM modeling entities, metrics and other attributes. Validation logic catches errors in Scenarios and instructs users on how to correct them before simulations can be run. CALM provides influence diagrams and other graphics that expose the simulation logic to users on demand (i.e. transparency). Users can create a baseline Scenario, copy it via a single operation, and then edit copies selectively to create alternate assumptions about future trends and events and alternative change strategies. 

The CALM software also allows users to annotate every piece of data with certainty factors, comments, and sources. These notes flesh out CALM scenarios into vivid stories about current situations, possible futures, and change strategies, and promote reusability and maintainability.

Lastly, but perhaps most importantly, the CALM software provides a library of pre-defined Forces and Change Initiatives, all pre-populated with validated causal models. This allows CALM consultants to build scenarios rapidly using a "Lego^TM building block" paradigm that exploits best practices knowledge codified in library components.

Simulation. The CALM software provides a separate GUI to control the engine that simulates scenarios. Users can run simulations week by week or all at once (in "cruise control" mode). The GUI provides gauges and time series plots for monitoring projected changes in readiness metrics. 

Analytics.  Once a simulation is finished, users access a point-and-click GUI to generate plots and reports that allow them to assess how particular Scenarios played out.  Equally important, users can compare results across scenarios to identify the relative strengths and weaknesses of alternate change strategies and how they fare in alternate futures.

This type of comparative analysis is a key benefit of the CALM methodology.  All change involves risk. Risk is unavoidable. What is important is to understand the possible costs and benefits of taking particular risks and ensuring that organizations only assume risks for which the rewards are commensurate.  The CALM methodology and software provides a framework for exploring the consequences and possible pitfalls of change strategies, so that the client can face transformations with the least possible risk and high confidence in their planning and execution processes.

3.      Carrying out the CALM Methodology 

CALM is a rapid, iterative methodology.  Skilled consultants work closely with client leadership teams in cycles to gather information. They then use the CALM software to populate CALM scenarios, perform simulations, and analyze projected outcomes of change strategies.

The work products that result from each cycle include annotated scenarios, simulation logs, and the kinds of summary analyses that decision support tools typically generate, such as time series plots and tabular reports of key performance and readiness metrics over time.[5]  For example, CALM software can plot the projected difference in readiness metric such as Teaming across alternate change strategies, or isolate how particular forces and change initiatives impact that metric at a particular point in time given different assumptions about intervening trends and events. Analysts interpret these work products to perform cost-benefit and sensitivity analyses, which drive provisional recommendations for a robust change enablement strategy. 

Consultants then share these interim results with client management team to validate results, gather feedback to refine and extend scenarios, and carry out the next analysis loop.  Most cycles typically takes a week or less to complete. This approach also minimizes the time burden on client team members. Figure 3 summarizes the structure of a CALM service engagement, which typically occupies a six to ten week interval.

Figure 3.  CALM Engagement Work Plan

The initial modeling task decomposes into several smaller tasks that we describe briefly.

At the outset of a typical CALM engagement, trained consultants meet with the client team to orient and educate them in the CALM methodology, to illustrate it, and to set expectations. This can be accomplished within a day or two.

Next, the consultants and client team members scope out the modeling effort in terms of scenarios, baseline and custom metrics, and proposed and/or ongoing change enablement strategies. If the transformation in question has not taken place yet, considerable work may go into formulating candidate change strategies.  If the transformation is already underway, with change initiatives already in place, the level of effort for this activity is obviously reduced.

If necessary, the facilitating consultants then extend the CALM modeling framework to reflect custom performance or readiness metrics not already in the baseline.  Finally, these same consultants work with client team members to gather the information necessary to populate the required scenarios, and then carry out iterative process described above.

Finally, it is important to discuss validation and verification issues, which represent critical elements of the CALM methodology. In change management methodologies that do not employ simulation, client confidence derives predominantly in the consultant´s prior track record.

The CALM software provides a second, more tangible avenue for building client confidence in the relevance of the CALM methodology.  Specifically, if the client organization has some history of transformations, the CALM methodology calls for using those historical experiences to calibrate or tune CALM´s baseline dynamics to that organization, its environment, and stakeholders. Consultants develop scenarios that describing past transformation efforts and adjusting weighting factors in the dynamic models so that simulated outcomes match observed outcomes.

Given these baselines, the methodology foresees two types of demonstration trials, called "sanity checking" and retrospective testing.  In sanity checking, consultants construct scenarios that depict extreme conditions or change strategies. While people often lack firm intuitions about the minor variations in forces, they typically have strong instincts as to extreme situations.

For example, suppose employees face a change situation that entails deep pay cuts and/or layoffs.  Given this context, most people would predict with confidence an outcome that includes major drops in employee morale and customer satisfaction.  The calibrated CALM scenarios should project outcomes that match these beliefs. Furthermore, they should adjust gracefully (and sensibly) as the extreme conditions are "dialed back." 

Retrospective testing represents the "acid test".  This technique calls for creating a scenario that depicts an organization´s state and environment several years in the past, at the point of decision for an impending change.  Next, the forces at work and trends and events that actually transpired through to the present are added to the scenario. Finally, the change initiatives that were undertaken (and their actual performance) are added.  Running the CALM simulation should then produce outcomes that resemble the evolution of organizational performance and readiness metrics that actually took place.

Carrying out these validation exercises helps clients develop confidence in the CALM methodology over and above traditional references to past client successes. 

4.      Summary 

CALM provides a disciplined dynamic framework for modeling organizational transformations and exploring alternate change enablement strategies.  It helps organizations practice strategies under diverse possible futures and learn from those low-risk virtual executions. CALM can be applied over the lifecycle of extended transformations, helping organizations sense and respond to continuous situational change. 

CALM studies provide explicit models of leaders´ "world views" and strategic decisions. They thereby provide important tools for achieving buy-in of management teams and for aligning and training workforces to address change effectively.  CALM studies also provide audit trails that enhance corporate governance and continuous learning.  The CALM methodology helps organizations reduce risk and increase confidence in responding to ubiquitous change.

Dr. David J. Koehn is the Chief Learning Officer of CACI´s National Solution Group focusing his attention on driving organizational learning as a key business strategy for the company.  Dr. Koehn has thirty years of experience in education, organizational psychology, transformation, and learning.  He can be reached at dkoehn@caci.com, 410-579-5906.

Dr. Richard Adler is founder and President of Decision Path Inc., specializing in state-of-the-art strategic modeling and simulation software to deal with complex macro problems and opportunities.  Dr. Adler has twenty-five years of experience in artificial intelligence, knowledge management, and advanced software technologies for operations and decision support. He can be reached at rich@decpath.com, 617-794-9036.