Why is change management so important?
Change is happening in your organisation. Every day, new initiatives and projects are launched to improve performance, increase profits, and enhance your competitive advantage. You could be implementing technology to enable a more mobile workforce, reengineering a process to ensure regulatory compliance or pursuing an enterprise-wide transformation around customer experience.
There is a common denominator for achieving the intended outcomes of your initiative: people. Your initiatives impact how individual people do their work: their processes, job roles, workflows, reporting structures, behaviors and even their identity within the organisation.
Change management is the approach to driving adoption and usage so initiatives deliver expected results and outcomes. Here is why you need change management:
Thrive in an Ever-Changing World
Gone are the days of one large change every 36 months. Organisations are facing faster, more complex, more interdependent and more cross-functional change than ever before. Being able to deliver results on multiple changes allows an organisation to achieve their strategic vision and thrive in today’s changing landscape. Applying change management enables organisations to deliver results on each change more effectively and build competencies that grow the organisation’s capacity to tackle more changes at one time.
Deliver the People-Dependent Portion of Project ROI
Changes in organisations are undertaken to improve performance. Some of that improvement comes from just installing the solution. However, much of the benefit and expected improvement is tied to people changing how they do their jobs. In the Prosci® CMROI Model, that is the “adoption contribution” of the project: the percentage of a project benefits that depend on people changing how they do their jobs. For important projects, that number is commonly in the 80% to 100% range. Change management focuses on helping people change how they do their jobs, allowing us to capture the adoption contribution and the people-dependent portion of project ROI.
Close the Gap Between Requirements and Results
All too often, organisational changes meet requirements without delivering expected results. They deliver the necessary outputs without delivering on expected outcomes. The focus of the change effort is on the solution rather than the benefits of the solution. The gap that exists between requirements and results, between outputs and outcomes, between solutions and benefits is the people who bring the change to life in their day-to-day work. Change management enables the closing of this gap by effectively supporting and equipping those people impacted by a change to be successful in bringing it to life in how they work.
Increase Likelihood of Project Success
The data is abundantly clear. The better we apply change management, the more likely we are to deliver on project objectives. Prosci’s correlation data from over 2,000 data points and eight years shows that initiatives with excellent change management are six times more likely to meet objectives than those with poor change management. By simply moving from “poor” to “fair,” change management increases the likelihood of meeting objectives by three fold. McKinsey data also shows that the ROI captured from excellent change management is significantly more than with poor change management. Change management, when applied effectively on a project, significantly increases the success rate of the effort.
Mitigate Mission-Critical Risk
Ignoring the people side of change creates risk. When the adoption and usage of a solution is ignored, and the focus is exclusively on meeting technical requirements, the result is excessive risk and cost. Projects are subjected to “RE” costs like redesign, rework, revisit, redo, retrain, rescope, and in some cases, retreat. Absenteeism and attrition increase. Productivity declines. Customers feel the impact when they were not supposed to. Morale suffers. Employees disengage.
Failing to plan for and address the people side of change is costly, and change management is the discipline to help mitigate those mission-critical risks.
Take the Chance out of Change
Change is difficult. To the degree that we can, we want to remove the chance or variability associated with change. Project management has accomplished this by providing direction on sequencing milestones, deliverables, activities and resources over the lifecycle of an effort. Unless we proactively support and guide people through the changes our projects bring, we leave them embracing change to chance. Change management removes the chance from change by providing employees with the preparation, support and skills they need to succeed in change.
Treat Employees Right
How many times have you heard, “our employees are our most important asset”? Then, when it comes time for a change to be implemented, employees are sent an email on Monday for training on Tuesday for go-live on Wednesday. That is not the right way to treat people, especially the people that are your most valuable asset. By proactively engaging and supporting people in times of change, we demonstrate in action that we value them.