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Management of Change
for Complex Organizations
Source: Chemical Engineering Transactions (CET) data
80% of all large scale incidents are traced
back to failures in the execution of
Management of Change processes
Essential components of effective
Management of Change
2
3
1
How to manage change across
different departments, business
lines and geographies
Why Management of Change is
a business imperative /
strategic driver
5
4How employee engagement
and alignment are essential to
lasting change
How to measure if changes
are working and successful
The extent to which organizations execute
the Management of Change holistically is
directly correlated to their ability to
achieve reliability in operations by
reducing risk and uncertainty.
©2019 Sphera©2019 Sphera 2
Management of Change for Complex Organizations
“Management of Change is a systematic approach to
organizational changes with the aim of ensuring the
continued safety of the workforce throughout the
process. These systematic processes ensure that the
change is dealt with in a proactive fashion.”
(Safeopedia)
“The systematic approach and application of
knowledge, tools, and resources to deal with change.”
(Society for Human Resource Management -SHRM)
Definition of “Management of Change” Varies According to Experts…
©2019 Sphera 3
“The process, tools and techniques to
manage the people side of change to
achieve a required business outcome.”
(Prosci)
Introducing a change in an
organization will ultimately
impact one or more of the
following:
• Processes
• Systems
• Organizational Structure
• Job Roles“Management of Change (MOC) is a best
practice used to ensure that safety, health
and environmental risks are controlled when
a company makes changes in their facilities,
documentation, personnel or operations.”
(Washington State Department of Labor and Industries)
©2019 Sphera 4
Definition of “Management of Change” Varies According to Experts…
KURT LEWIN
Kurt Lewin, was a German-born American social
psychologist known for his field theory of behavior, which
holds that human behavior is a function of an individuals
psychological environment. 1
Developed an early model for organizational changes in
the 1940s, defined with three phases:2
• “Unfreezing”: create an awareness of how the current
state could be hindering process or even making the
process unsafe
• “Changing”: implementing the change; when the change
becomes real
• “Freezing”: the “new norm”1 Encyclopedia Britannica
2 The Change Management Coach
Management Of Change is Not a Recent Concept
5©2019 Sphera
The original MOC requirement covers five
triggers to review changes that are not
“Replacement-in-kind”:
• Process Chemicals
• Technology
• Equipment
• Procedures
• Facilities
The executive order has now proposed an
additional trigger for Organizational
Changes, such as an organizational
restructure staffing and policies that
affect process chemicals, technology,
equipment or procedures.
Management of Change for Complex Organizations
Management of Change, as applied to PSM-regulated facilities, was enacted in 1992 under
OSHA 29 CFR 1910.119, Process Safety Management of Highly Hazardous Chemicals.
The original MOC process requirement has remained largely unchanged since OHSA 1910.119
was first issued.
OSHA issued a RFI in November 2013 for public input for improvements to the PSM standard,
identifying 17 areas for improvements, including management of organizational change as part
of the MOC process.
OSHA Regulations
Was issued in response to a fatal chemical incident including the ammonium nitrate explosion
at the West Fertilizer Storage Co.
Executive Order (EO) 13650, “Improving Chemical Facility Safety and Security”
©2019 Sphera©2019 Sphera 6
7
Communication must begin at the onset of the MOC
process and maintained throughout the life of the MOC.
Auto-notifications are typically included in an electronic MOC
application; however, the intent of the notifications is not to take
the place of communication but instead is intended to help keep
the process moving from phase to phase and hold stakeholders
accountable.
Communication
All components of Management of
Change share one common component:
©2019 Sphera
Essential Components of
Management of Change
The components of MOC are not related to the size
of an organization but instead are related to the
complexity of the change.
• Replacement-in-kind: Like-for-like change
• Doesn’t require an MOC
• Not-in-kind replacement: Could be the same
manufacturer’s part but with a different spec
• Always requires MOC
TYPES OF CHANGE:
• Permanent
• Emergency
• Temporary
TYPES OF MOC WORKFLOWS:
88©2019 Sphera
PRE-APPROVAL
Approval to evaluate, not
approval to make change
EVALUATION
What do we need to consider
when making the change or what
will be affected by the change?
IMPLEMENTATION
Do the work
INITIATION
Identify what will be changed
PRE-STARTUP
SAFETY REVIEWDid we do what we said we
needed to do?
APPROVAL
Approval to start the work
Components of Management of Change are not related to the size of an organization but
instead are related to the complexity of the change.
9 Essential Components of Management of Change
1 2 3 45 6 7
8 9POST-STARTUP CLOSURE
APPROVAL TO
STARTUP
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10
INITIATION
• Idea from an operator
• May include several questions to determine whether
the change is a “like-in-kind” change or a change that
requires an MOC
• Result of a regularly scheduled MOC meeting in which
changes or improvements to the process are discussed
• Originate from a PHA or HAZOP or result of an incident
or audit
• Required for new construction or change of equipment,
process, procedure or organizational change
• Includes detailed description of change (the what) and
technical basis for the change (the why)
• May include pre-screening checklist to determine who
needs to be involved and what evaluation checklist
questions should be addressed
• Include enough information to “sell” the idea
• Provides a means of identifying additional “affected”
units or business entities
• Notification delivered to pre-approver in electronic MOC
application (pre-approver set up in configuration of
application)
Identify what will be changed
©2019 Sphera 10
11
PRE-APPROVAL
• Optional for some companies if the MOC
process includes a meeting and discussion of
the change prior to the MOC being initiated
• Review of information entered by Initiator
• MOC owner / evaluator identified either by
Initiator or pre-approver
• In many cases, the initiator’s immediate
supervisor
• Options for pre-approver are: approve “as is,”
send the MOC back to the initiator for more
information or cancel the MOC
• Notification delivered to MOC owner / evaluator
and Initiator if approved; notification delivered to
initiator if more information is needed or MOC is
canceled
©2019 Sphera 11
Approve to Evaluate
12
EVALUATION
• Most complex component of an MOC
• Large number of stakeholders are
involved
• Can take an extended period of time
based on the complexity of the change
• Decision is made as to whether or not a
formal risk assessment (What-if, HAZOP,
PHA) is required to thoroughly evaluate
the change and risk associated with
making the change
• Formal risk assessment must be
completed and Recommendations from
risk assessment are incorporated into
the MOC record (as action items)
What do we need to consider
when making the change or
what will be affected by the
change?
©2019 Sphera 12
EVALUATIONCHECKLISTS• Includes evaluation checklists / questions
which are assigned to subject-matter experts
(SMEs) to answer and/or address
• May be configured to be pre-assigned by
Initiator’s response to pre-screening checklist
questions in Initiation phase or assigned by
MOC owner / evaluator in evaluation phase
• Checklists can be configured at site or
corporate level
• Responses to questions could generate
additional checklists and involve additional
SMEs
• Evaluation checklist questions should be
configured to generate Action items based on
SMEs’ response to the question
• Default action items could be created based
on each checklist question and should be
identified as required to be completed in
evaluation, pre-startup or post-startup phase
• SME can create additional action items as an
evaluation checklist question could require
more than one stakeholder’s input
• SME creating any additional action items must
identify when the action item must be closed
VALIDATION
• Validation required at each phase which
prevents MOC from progressing until all
action items assigned to that phase are
addressed
• Approver is notified when formal risk
assessment, if required, is completed,
evaluation checklist questions are
addressed and all action items identified
as evaluation action items are closed
13
APPROVAL
• Approval to start the work, based on the
results of the evaluation phase and budget
• Typically a high-level manager such as Unit
Supervisor or Business Unit Manager
• May require multiple approvers
Approver’s options include:
• Approve the MOC, signaling the work
required to complete the change can
begin
• Send the MOC back to the MOC owner /
evaluator and requiring additional
evaluation of the change
• Cancel the MOC
Notifications delivered by decision of
Approver
• MOC is approved – MOC owner or
responsible person is notified that work
can begin
• MOC sent back to MOC owner / evaluator
with instructions (based on comments
entered by approver) on what additional
evaluation must be completed
• MOC is canceled – MOC owner / evaluator,
initiator and pre-approver (if required) are
notified of cancelation
©2019 Sphera 13
Approve to start the work
14
IMPLEMENTATIONDo the work
• Phase in which the work required to
complete the change is done
• Includes construction or installation of
equipment, training of employees and
contractors, and publication of a
procedure, if a procedural change or
change to a procedure is required by the
change
• Includes action items from evaluation
phase that must be completed prior to
starting up the equipment / process
• Additional action items can be added by
MOC owner as needed; option to require
pre-startup or post-startup closure
• Any changes to scope must be approved
and appropriate action Items created and
closed if required prior to startup
• Notification is sent to the person
responsible for completing pre-startup
safety review when last pre-startup action
item is closed
©2019 Sphera 14
15
PRE-STARTUP SAFETY REVIEW
• Includes pre-startup walk through activities
• A checklist is used by the person responsible to
complete the walk through activities
• Typically a paper-based checklist completed
while in the unit/area where the change is
made even if an electronic MOC application is
used
• Additional general PSSR checklist can be
incorporated into the pre-startup phase in an
electronic MOC application
• Includes standard tasks such as whether
construction meets the intent of the design and
within regulatory requirements, training,
notification delivered to affected employees,
and validation that related documentation has
been updated
• Checklists can be configured at site or
corporate level
• Notification is delivered to startup approver when
checklists are completed and copy of PSSR walk
through checklist, if required, is uploaded into the
electronic application
Did we do what we said we
needed to do?
©2019 Sphera
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5
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• Critical step requiring management
approval
• Point in the process where incidents
happen if stakeholders fail to exercise
due diligence throughout the MOC
• Must review all phases of MOC to
ensure the equipment / process is
ready to start up and all regulatory
requirements have been met
• Must ensure that all employees have
been trained on the change and are
aware the equipment / process is
ready to start up
• Notification is delivered to all affected
employees that equipment is ready to
startup
APPROVAL TO STARTUP
©2019 Sphera
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6
17
POST-STARTUP
• Final items are addressed prior to closing MOC record
• Includes action items generated from evaluation, approval,
implementation, or PSSR phases which were designated as
post-startup action items
• Additional action items can be created by MOC owner /
PSSR coordinator and must be addressed prior to closing
the MOC
• Includes tasks such as uploading procedures and updated
piping and identification diagrams (P&IDs) to the
appropriate repository, ensuring any household tasks are
completed after startup and MOC is ready for closure
• Notification is delivered to MOC owner or person responsible
for closing MOC
©2019 Sphera 17
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CLOSURE
• The MOC record in an electronic application is ready to be
closed; in a paper-based system, the MOC is signed-off as
closed
• Review of all phases to ensure record is complete
• Include record of lessons learned
• In an electronic application, MOC is closed and all
appropriate employees have read-only access to the
record in the future
• If the MOC is an MOC with “child” MOCs, the “parent”
MOC will not be closed until last “child” MOC is closed
©2019 Sphera 18
19
• Emergency MOC is initiated after change is made due to
the physical change having to be made in an emergency
situation
• Does not require pre-approval as approval to make the
change is made prior to the MOC being initiated or
entered into an electronic MOC application
• Supervisor or manager’s name who approved the
emergency MOC is recorded in the Initiation phase of an
emergency MOC
• All phases of the MOC must be completed to ensure a
complete record of the change
Emergency MOCs
©2019 Sphera 19
20
• Additional workflow steps are required for
temporary MOCs
• A temporary MOC workflow must provide for change
being extended, removed or made permanent
• If temporary change becomes a permanent change,
the temporary MOC should be closed and a
permanent MOC created
• Electronic MOC applications should provide a field
for identifying permanent MOC numbers in the
temporary workflow for future reference
Temporary MOCs
©2019 Sphera
Communication becomes even more important in managing change that affects multiple
locations due to the number of stakeholders.
Even the most simple change may involve multiple departments or
business units. In the case of large corporations, this may include
various business units at the same site, departments or business units
that are common in multiple sites, departments or business units at
sites in different countries, departments at the corporate level, or even
different entities of the parent company.
Managing Change Across Business Units or Locations
©2019 Sphera 21
• Financial
• Maintenance
• Environmental Health & Safety
• Regulatory agencies
• Affected business units
Change Across
Business Units
Management of Change Across Business Units or Locations
©2019 Sphera 22
• Change in like-in-kind process
units
• Financial
• Maintenance
• Environmental Health & Safety
• Regulatory Agencies
(state or country)
Change Across
Business Locations
• Financial
• Environmental Health & Safety
• Business plan or roadmap
• Employee buy-in at site level
• Acquisitions / mergers
Corporate Driven
Change
Factors to be considered when proposing change across Business Units, Locations or at the
Corporate level include:
23
Regardless of where change is initiated, if additional
business units or locations are involved:
• Ensure that stakeholders of all departments, business lines or
locations are all involved in all phases of managing the
change, beginning at the initiation phase
• Understand that an even bigger challenge is to involve all
affected employees
• How that additional regulatory agencies may be involved
• Recognize that it will be more difficult for companies using a
paper-based system to manage change since it would require a
collaborative effort to ensure all stakeholders are involved in
decisions and notified of tasks requiring their input
Managing Change Across
Business Units or Locations
©2019 Sphera 23
24
• Easier to manage than paper-based system
• Hierarchical structure used in electronic MOC applications can be set
up to reflect all departments, locations, and business lines
• MOCs can be associated with any level in the hierarchy, including the
corporate location, business line or unit levels
• Ability to identify and link entities affected by the change
• Ability to include all stakeholder names in one database, providing
ability to assign tasks to appropriate stakeholders
• Ability to create “parent” / “child” MOCs, used extensively in large
construction projects
Managing change across different business units or
locations when using a robust electronic MOC application:
©2019 Sphera
Managing Change Across
Business Units or Locations
“a major change or goal a
business undertakes”
Business
Imperative is defined as
• Mitigates risk: the MOC process requires some level of hazard analysis to identify risk
when proposing a change. Risk not previously identified in the evaluation phase may
require modifications to the MOC in order to mitigate the risk.
• Safety: ensures that changes to processes, equipment or procedures are made in a
safe manner.
• Reliability: ensures that processes and equipment are updated or upgraded in a
manner that ensures reliable operation which could affect not only the unit / area in
that the change is made but the entire facility.
• Organizational: ensures that the appropriate employees are involved in MOC,
especially when mergers or acquisitions result in major personnel changes.
• Financial: the management of change process provides a method to look at the cost of
a project in its entirety.
• Additional tasks required to complete the change may surface during the MOC
process. These changes may be outside of the initial budget and have an affect on
units / areas where finances are controlled by another budget.
• MOCs are required when new units are constructed in a process safety management
regulated facility. The MOCs are typically broken down by one “parent” MOC with
multiple “child” MOCs. Each child MOC requires evaluation of the budget required to
make the change, then rolls up to the total budget of the project. Any deviation from
the budget is recorded in the appropriate child MOC but also rolls up to the parent
MOC.
• Reputation: a company’s reputation in the surrounding community and in some
instances throughout the world, can be severely damaged if a robust MOC process is
not in place, resulting in an incident.
“business goal, object or target
with the highest priority”
Strategic
Imperative is defined as
Management of Change Is a Business Imperative & Strategic Driver
©2019 Sphera 25
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Module focuses on transition, not change
• Change is something that happens to people, regardless of
whether they agree on the change
• Transition is what happens in people’s mind as they go
through change
• Change can occur quickly; transition occurs more slowly
• Three stages of transition:
• Ending, losing and letting go
• Neutral zone
• New beginning
ESSENTIAL TO LASTING CHANGE
EMPLOYEE ENGAGEMENT
William Bridges, an American author and organizational
consultant, wrote the book Transitions, in which he
describes his “Transition” model.
©2019 Sphera
First stage of transition: Ending
Employee Engagement:
Essential to Lasting Change
©2019 Sphera 27
• Occurs when employees are first presented with change
• Causes uncertainty--not doing the same process that has
been done for years
• Causes a sense of loss--employees who were part of process
and ensured the process worked are losing a process or
equipment they know well (identify)
• Causes frustration--especially if employees are not involved
with the decision to make the change
Second stage of transition: Neutral Zone
Employee Engagement:
Essential to Lasting Change
©2019 Sphera 28
• Bridge between old process and change being implemented
• Users cling to “they way we have done it for years”
• Users may be resentful if they didn’t initiate the change or don’t
feel they were included in the decision
Third stage of transition: New Beginning
Employee Engagement:
Essential to Lasting Change
• Time of acceptance
• Affected employees are provided training
• Strive for opening to learning
©2019 Sphera 29
To help employees stay engaged from
the inception of the change:
Employee Engagement:
Essential to Lasting Change
• Ensure communication lines are open between employees and
management
• Understand why there is resistance
• Emphasize need for employees to stay engaged as they have
knowledge and experience
• Assist workers in guiding them through the change via
communication
©2019 Sphera 30
Employee engagement within MOC process:
Employee Engagement:
Essential to Lasting Change
• Who can initiate MOC?
• When are employees engaged in the evaluation process?
• How are tasks assigned to the employees?
• Who is involved in the pre-startup safety review?
• What is done to ensure employees are trained and how is the acknowledgement of the training captured?
• How are employees notified of startup?
• Who is responsible for capturing lessons learned?
• Where is the MOC data stored, and how do employees access this records?
©2019 Sphera 31
Measuring Successful Changes
Measuring the quality of
changes at the
organizational level
Effects on the
environment
• New equipment =
more energy
efficient, reducing
carbon footprint
• New process =
less emissions
Benefit realization and ROI
Accountability
KPIs – easier to track in an
electronic MOC application
• Tasks within the MOC
are assigned and
completed within the
schedule
• Action Items are
completed on a timely
basis
• Supervisors have access
to real-time information
via dashboards and
reports
Performance
improvement
Changes are within
schedule and budget
©2019 Sphera 32©2019 Sphera 32
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Measuring Successful ChangesMeasuring the quality of changes at the employee / contractor Level
EMPLOYEE /
CONTRACTOR
ENGAGEMENT
©2019 Sphera
EMPLOYEE /
CONTRACTOR
FEEDBACK
EMPLOYEE /
CONTRACTOR
OBSERVATIONS
AWARENESS AND
UNDERSTANDING
OF THE CHANGE
COMPLIANCE AND
ADHERENCE
REPORTS
ACCOUNTABILITY
About Sphera
Sphera is the largest global provider of Integrated Risk Management
software and information services with a focus on Environmental
Health & Safety (EHS), Operational Risk, and Product Stewardship.
For more than 30 years, Sphera has advanced Operational
Excellence by serving more than 3,000 customers and over 1 million
individual users across 70-plus countries to create a safer, more
sustainable and productive world.
www.sphera.comFor more information, contact us at: sphera.com/contact-us/
©2019 Sphera. All Rights Reserved.