In the real estate business, everyone knows, the most important principle is “location, location, location.” In managing organizational change, it’s “communication, communication, communication.”

According to author and Harvard Business School Professor John Kotter, communication is one of the critical “support struts of any successful reengineering effort.” Without it, he says, employees’ energy cannot be harnessed, and powerful “guiding coalitions” cannot be created to sustain change. That’s certainly what the Educational Testing Service (ETS) of Princeton, N.J., the world’s largest private educational measurement institution, has found as it reengineers the way it develops standardized tests.

Each year, ETS administers about 9 million achievement, occupational and admission tests – many of them household names such as the Scholastic Aptitude Test (SAT) and Graduate Record Examination (GRE). Test creation is at the very heart of what ETS does. About 500 of its 2,650 employees produce more than 300 tests each year.

Creating tests involves an elaborate mix of checks and safeguards to ensure test quality and accuracy. The steps include planning what will go into tests, who will do the work, and when the tests are needed; writing and selecting test questions; creating paper-and-pencil or computer-based tests and the scoring for them; evaluating the effectiveness of tests and questions; and preparing interpretive information about tests.

Until recently, ETS never asked itself: “Does it still make sense to develop tests this way?” But tremendous changes in technology and the education industry forced the company to reevaluate. Traditional paper-and-pencil testing – administered nationwide on certain dates – is yielding to on-demand testing at computer-based test sites. This requires many more test questions than before. In addition, the schools and students using and taking the tests were telling ETS that the tests were too expensive.

To increase customer satisfaction while maintaining or increasing quality, ETS decided in 1994 to radically reengineer its test creation process to cut development time and costs. The effort continued through 1996 and will extend into 1998.

ETS decided to involve its employees intimately in the process, to glean the best ideas and suggestions on improving efficiency and speeding test development. The company also wanted employees to understand why changes were being made and be involved in trying out new ideas. To achieve these goals, the company adopted the model of “cascading communications” – efforts to get people throughout the organization to accept change and act as sponsors of change to those below and around them in the organizational hierarchy. In partnership with consultants from Coopers & Lybrand, ETS embarked on a three-stage approach to reengineer its test creation process that incorporated cascading communications techniques.

High-Level Planning and Preparation

In the first stage, 12 high-level test creation staff members formed a task force to gather data, analyze and plan. They talked to the staff responsible for test creation about the current process, held focus groups to get ideas for improvements, and identified best practices. Finally, the task force developed a vision of what it wanted to achieve.

Toward the end of this stage, the chair and vice chair of the task force held open forums for all employees to review its research and explain its proposed new vision statement.

Process Redesign and Change Management Planning

Next, task force members used the collected data as the basis for chartering two reengineering teams to advance the change effort. The task force then became a steering committee.

A redesign team focused on the nuts and bolts of the new test creation process and dealt with technology issues. At the same time, a change management team developed a plan to align various human resource and organizational policies inside ETS to support reengineering efforts.

The change management team examined everything from organizational structure to job redesign. It looked at human resource policies reward and recognition systems, and training to see how these things could be revamped and aligned to support a new test creation process. The team also formulated a communications plan.

Enhancing Communication With Employees

During the second phase of the project, the chair and vice chair of the steering committee and members of the redesign team served as principal communicators about reengineering. They held open employee forums to outline progress, solicited input, and placed articles in the employee newspaper to highlight project milestones and answer questions.

A change readiness assessment. To understand internal issues it might face in reengineering, the change management team conducted a change readiness assessment, collecting data from roughly 150 people involved in the test creation process. This assessment, which polled people about the organization leadership, mission, strategy, culture and structure, did more than give insights into how people felt about the changes under way. It elicited ideas from employees about change management priorities, and identified “disconnects” inside the organization that needed to be addressed before the project could succeed.

The readiness assessment revealed that some people weren’t very clear about the new vision and strategies being put in place to redesign the test creation process, even though reengineering plans had been announced and discussed months before. Some employees expressed cynicism about the reengineering project. Pockets of distrust that lingered after a downsizing two years earlier were revealed. Still others saw the organization’s middle management as either unable or unwilling to explain the need and rationale for change in a credible, “hands-on” way.

Employees’ comments suggested that the organization needed to significantly beef up the content, clarity, consistency and frequency of communications with employees, to ensure that people understood what ETS was trying to do.

Cascading communications. The fact that people faulted the leadership for not being more visible was particularly significant, because hands-on leadership is clearly a pivotal element of any change effort. Up to this time, the chair and vice chair of the test creation process task force had handled the “hands-on” work of communication for line managers, believing they were doing the managers a favor.

Clearly that strategy had backfired, creating a perception that neither company leaders nor many line managers were involved in or cared about the change effort. As a result of the readiness assessment, leadership got more actively involved in championing the change efforts. Beginning in September 1995, top managers began holding meetings with employees to provide them with updates on reengineering efforts. While the change management team polled people about potential obstacles to reengineering, the test creation redesign team held meetings, or “labs,” with a wide range of employees to introduce them to different aspects of the new test creation process, including software prototypes. People were given the chance to experiment with new software templates and offer feedback. The team also staged mock test creation sessions with employees.

“The redesign team conducted this laboratory stage of its engineering efforts to avoid the potentially disastrous effects of jumping right from conceptual design of the new process to development and implementation,” notes ETS president Nancy Cole. “In product manufacturing, engineers develop mock-up versions of their new product ideas to test, validate and improve them in a ‘safe’ environment. ETS decided to apply this same principle to its new process design... to ensure it creates and produces tests of equal or better quality – faster, more flexibly, and at lower cost.”

“These labs were critical to ensuring that the process we develop is both user-friendly and cost-effective,” says redesign team leader Linda Tyler. “Giving people exposure to new technologies and processes not only encouraged involvement in the redesign process, it set the stage for their buy-in and ownership of new work approaches.”

Development and Process Implementation

Once a reengineering plan that included communications, change management and process redesign had been developed, it was time to commission a development and implementation team to spearhead the third phase of the change strategy. The organization took six months to design an early version of test creation software, which it began piloting in March 1996. This effort, involving about 25 people, continues to collect employee feedback to use in fine-tuning software revisions.

Between now and August 1998, when the new processes are expected to be fully implemented, many members of ETS’s assessment division will take part in design teams, pilots and roll-outs of various parts of the new test creation process.

Addressing Employee Concerns

Throughout its redesign efforts, the change management team has tried to incorporate the best thinking of employees, while being sensitive to their concerns. For example, in announcing the reengineering of test creation processes, the team made it clear that the new procedures would emphasize teamwork. Some employees expressed concerns about job security, training, promotion and career development opportunities, while others wondered where they would land when redesign efforts were completed.

To allay concerns, the team has tried to be open and honest with people about its plans and has encouraged employee feedback. The team learned that while concerns must be acknowledged, specific questions cannot always be answered, such as those about jobs that could be created, lost or redefined.

A Communications Report Card

Employee surveys can help gauge the effectiveness of efforts to communicate information throughout the organization. Are messages about the importance of change getting through to employees? Are effective communications channels being used? Are employees in sync with the strategic direction of the organization?

The change management team has used a variety of methods to elicit input from employees as the test redesign process goes forward. Over time, survey and poll results indicate that employees understand more and more clearly the new directions ETS is moving in. They feel comfortable asking questions about the reengineering process and feel that their questions have been handled in an open and honest manner. Most important, they have come to believe that middle management is highly committed to making reengineering work.

Does ETS still have challenges? Of course. In a recent poll, only 47 percent of employees felt nonsupervisory employees were committed to making the redesign process successful. Other challenges remain as well. ETS has yet to fully cascade responsibility for communicating the specifics and goals of reengineering to all supervisory levels in the assessment division. And the efforts the organization undertakes aren’t always uniformly carried out or measured.

However, ETS has reorganized its line management, and begun devolving responsibility for change management activities from the development and implementation team to the assessment division line managers. This shift will ensure that change efforts proceed at a grassroots level. As line managers take more ownership and responsibility for change management efforts, employees’ redesigned job responsibilities will be linked with the attainment of ETS’s new goals and objectives for test creation.

Cheryl Wild, Ph.D., is the leader of the change management team for the Educational Testing Service, Princeton, N.J.

Nicholas Horney, Ph.D., is senior managing associate, Coopers & Lybrand, L.L.P., Arlington, Va.

Richard Koonce is an author and consultant for RK Haviland and Associates, Arlington, Va.

Reprinted with the permission of HR Magazine, published by the Society for Human Resource Management, Alexandria, Va.