The Value of Change Management – Part 1
Organisations realise the benefits of their projects only when the required changes actually materialise in the behaviours of its people but how do we ensure this people side is managed correctly?
As a change manager, how do you answer when an executive or a project manager asks you, “What is the value of Change Management?” Generally, they are looking for information to help them decide how many resources to allocate, or whether to account for change management on the project.
This is a series of free tutorials that provides the overview, context and methods for making the case for change management. Discover how to build your discussions by connecting change management to project results and organizational outcomes. Learn how to make a strong and concise case to gain buy-in from others in your organization by demonstrating that the benefits of change management far outweigh the costs.
The first tutorial focuses on how to build your change management discussions around project results and desired outcomes while keeping the bottom line up front.
Why do we do change management?
We apply change management in order to ensure that the foreseen benefits are realized the outcomes of change are achieved. This is the reason that, when embarking on our change management journey, we begin with the end in mind. The end, in the case of change management, is driving successful change – this means is applying a structured approach in order to help individual employees adopt and proficiently use changes that impact them.
Prosci defines change management as “the application of a structured process and set of tools for leading the people side of change to achieve a desired outcome.” By framing change management in this results- oriented way, we not only overcome the assumption that change management is merely the “soft side of change,” but we also build a framework which has led to the growing credibility of the field of change management over the last decade.
There is a very strong connection between the people who are involved in a project that results in a change, and the realization of the desired outcomes of that change. To explain the connection, outlined below are two examples of comparable projects with very different outcomes.
If change management is not applied on a project
Organization A attempted to implement a change where expense reports were to be submitted electronically where traditionally they had submitted in hard copy form. The potential benefits for the organization were great: processing costs would be lower, error rates would decline, and the timeline of expense tracking would be drastically shorter.
The project team ensured that the proper software was in place and functioning and employees were mandated to attend training on the new process. Over the next couple of months, about half of the employees at the organization participated in the new expense reporting system, and 25% of those submitted their reports incorrectly, resulting in the accounting office having to re-do many of the reports manually. Ultimately, the more efficient reporting system did not meet its desired objectives. The change had greatly surpassed the projected time allotted for implementation, and, due to the rework involved in retraining and managing resistance, was pushed over budget.
If change management is applied on a project
Organization B also attempted to implement an electronically submitted expense report system. Change management was accounted for by the project team from the beginning. Before sending employees to training, they built an awareness campaign sharing the reasons why the change would be happening and how it would affect the employees. Meanwhile, the project team, with the help of change management resources, ensured that all the key sponsors and managers were on-board. This enabled them to create desire and excitement around the change and coach individual employees who needed more attention. The project team designed a training session tailored to the specific needs of the workforce, and worked with managers and supervisors to ensure that the speed of adoption, ultimate utilization and proficiency of the workforce were aligned with the desired outcomes. Following the change implementation, the project team ensured that the change was reinforced in person and publicly by rewarding and acknowledging compliance, in addition to collecting feedback on how the system or process could be improved.
Begin with the end in mind of change management
If a new process or a new system is not used by anyone what is the benefit to the organization? How much has the organization have lost in term s of money, time and effort? Ensuring that employees embrace, adopt and proficiently use the solution is where benefit realization occurs.
“The intended results and outcomes of change are inextricably connected to whether that change becomes part of how employees do their jobs – which means that the return on investment (ROI) of a project or initiative is directly related to how well the people side of change is managed.”
This relationship is further confirmed by correlation analysis showing that more effective change management increases the likelihood of meeting project objectives. The ROI of change management then, in a way, is the ROI of the project or initiative.
Correlation of change management effectiveness to meeting project objectives
Organizations change for a reason, whether that is to:
- be more competitive in the market,
- improve business processes,
- cut costs or
- all the above.
Organizational change requires individual change
Organizational outcomes are being realized because of the individual changes. After all, individual employees are the heart and soul of organizations, without them to do the work, the work will not get done.
Change management is a supporting framework for managing individuals through change.
From this perspective, we see how the application of change management contribute to an increase in the ROI by meeting project objectives so the project can stay on budget, on time, and in scope.