QUESTION
We need an overhaul of our policies and procedures. Our company merged with another company, and our policies are different in many ways, from the text itself to the format. It is tough enough to have the merging of two cultures, we are now banging into one another over what policy applies and what procedures to follow.
As the Compliance Officer and General Counsel, I am involved in harmonizing these documents, and the task is almost overwhelming. Every project impacts our policies. We have had to update our Change Management policy five times in the last six months just to adapt to the merging of documents.
What I need is some kind of checklist that I can get stakeholders to agree to or at least accept by consensus. I consulted with experts in policy development, but it was frustrating. If they knew the regulatory requirements, they disagreed on the text, and if they knew the formatting requirements, they disagreed on the best format. They seem oblivious to the implications of Change Management.
A member of our Board of Directors referred me to you. She believes you can help resolve these issues. So, I'm writing you for guidance. I also want to schedule a call with you to discuss your services.
Can you help us understand how our policies and procedures are linked to our Change Management requirements?
SOLUTIONS
·
Customized
Compliance Library
RESPONSE
There are a few aspects to your circumstances. Not only do you mention the issue of merging policies and procedures resulting from a merger and the impact on projects, but you also note how many times you have had to update your Change Management requirements because of this debacle. We have handled and resolved matters such as yours many times. Your situation often happens.
Many clients come to us for our customized compliance library. Since you are new to our services, it is worth knowing that we pioneered the effective drafting and implementation of a compliance library. So, you have come to the right place! I'm sure we can help!
Let's start with Change Management. What is it? Essentially, it is the governing methodology that provides an infrastructure to support and sustain change throughout multiple phases in your financial institution while focusing on achieving a set of defined and desired business results.
There is a good reason why you mention Change Management. That is because your policies and procedures are an intrinsic part of it.
To clarify, a financial institution is under pressure from regulators, borrowers, shareholders, and investors to improve its business continuously. These pressures lead to companies initiating a wide range of company projects, including small, targeted updates, process enhancements, large, complex system implementations, and major business process re-engineering initiatives. Thus, an institution's ability to standardize its process and project management practices mitigates the risk of project failures and maximizes the value delivered to its organizational processes.
Therefore, you have hit on the two primary purposes of Change Management:
· Process Management, and
· Project Management.
I am going to offer a way to think about Process Management and Project Management and how they link to Change Management. Merged policies and procedures will be given their due consideration.
BUILDING A CHANGE MANAGEMENT FRAMEWORK
Before understanding the operational
framework of Change Management, its two primary purposes, and its derivative
structures, such as policies and procedures, you must determine:
1. Define and describe what changes will be implemented.
2. How to coordinate the input from stakeholders.
3. What will constitute a formal change plan.
4. The resources and data that will be used and available.
5. The overall communication strategy at all operational levels.
6. A review of budget risks associated with change.
CHANGE MANAGEMENT METHODOLOGY
As the company's Compliance Officer, it would be your responsibility to establish controls to ensure a viable Change Management methodology is applied consistently between individuals and work groups.
I recommend that your methodology contain the following guidelines.
· Determination of business ownership and governance responsibilities.
· An impact analysis prior to the implementation of process changes.
· Communication of new or revised processes to impacted business units or areas.
· A process that ensures policies, procedures, and processes are updated to reflect remediated control deficiencies.
· A procedure for approving new or revised processes.
· A procedure for managing and introducing process revisions.
· The identification of training needs based on creating or updating policies and procedures.
· The validation of new or revised policies and procedures prior to implementation.
PROCESS MANAGEMENT
Once the Change Management framework is completed, you can move on to interfacing them with Process Management and Project Management.
The primary purpose of process management is to group specific operational components for implementing interlocking institutional bases and contributing to an institution's activities. This means, in theory and practice, the setting up of the requirements needed to effectuate change throughout the company.
Our reviews of Process Management have
shown that there are at least eight structures needed for executing efficient
institutional activities. This is a list that we use to ensure the stability of
Process Management.
1.
There
should be a centralized repository for all policies and procedures. In our
work, we keep our clients' Masters in an encrypted, secure extranet.
2.
A
dedicated group that oversees changes related to processes, systems, and
policies. You must have a point person or persons involved in oversight. The contact
information should be in writing and ratified by the board and/or management.
3. Policies, procedures, and support documents are "mission-critical" key processes. They must be continually evaluated and updated with current revisions.
4. All policies, procedures, and support documents should evaluated for completeness and accuracy. Inactive, dormant, and inoperative policies should be formally retired. Abeyant and suspended policies should be mothballed.
5. Quality assurance reviews should be conducted periodically to ensure the actual performance of employee work processes is consistent with process flows and descriptions.
6. The oversight team should draft a change management manual or tool to manage and track process updates. The board or management must ratify the manual.
7.
A
standardized template should be modeled for policies and procedures throughout
the organization.
8. Be sure that the appropriate staff
responsible for change management processes is well-trained or has the
necessary skills to perform these functions.
PROJECT MANAGEMENT
There are many ways and means to build project management structures. We have project managers who are credentialed in this task; however, you can create basic elements that interface with the Change Management framework.
You don't need to be overwhelmed by this undertaking. Everything can be accomplished gradually so long as you have a logistical approach. A generic outline of project management should contain at least the following components:
· A project management manual or tool to track and manage projects.
· Referenced policies, procedures, and systems affected by a project.
· Project management tracking reports.
· Centralization of project activities in an oversight group.
· Training of relevant staff for project participation and management.
· Periodic project tracking reports are communicated to stakeholders.
· Updates to the inventory of projects subject to tracking.
I also recommend that your project management methodology include:
· Communication of project goals and status.
· Milestone reviews and approvals.
· Identification and mitigation of project risk.
· Identifying stakeholders, including their operational relevance.
· Documenting procedures for change control documentation.
· An escalation process for projects where there are tracking errors.
· Log of activities with a column for remediation information and implementation.
Jonathan Foxx, Ph.D., MBA
Chairman & Managing Director
