Calculating the Value of Change Management

Calculating the value of change management is a challenge for executives and leaders who need to quantify their investments in this area. How do they know they are getting a true return on investment? Even some of the largest change teams, where there are high levels of change maturity and awareness, are constantly scrutinised to provide tangible visibility and metrics.

The greatest fear is to invest in key initiatives that do not provide the expected benefits. This could be a $1B enterprise-wide Transformation program where the new structure and processes are not understood or adopted, or could be a $1M Technology project where staff then do not use the newly implemented system.

What is the ‘opportunity cost’ of not getting it right, and not getting it right the very first time? There is obviously a huge financial saving to an organisation when they do get it right, and that financial number will depend on the scale of the initiative.

Success over Failure

In my last article titled Strategy Execution Trends for 2017, I summarised the current top trends that executives are driving to improve organisational performance and execute strategy ‘better’. A key trend was the investment in change management:

‘Taking a proactive and integrated change management approach to business transformation and project delivery is providing savings and an increased return on investment (ROI). Change management effort and output is being quantified by measurement of these savings, and also the ‘opportunity cost’ of failed delivery directly resulting from a lack of change management investment.’

Change management expertise is critical to the success of organisational programs, projects, and initiatives. Investment in change management has increased as a direct result of executive acceptance that this is now proven and can be evidenced. Change management expertise provides a higher likelihood of change adoption and benefits realisation.

Measuring Change Management

Change management has in the past been measured through soft or qualifiable methods and key indicators rather than quantifiable methods and hard numbers. Change management is not a one-size-fits-all approach and can be scaled to fit different organisations. There is also not one standard benchmark formula that provides a hard value measurement on Change Management.

Typically the measurement has been linked to key outcomes. For example: a project was delivered on time and within budget, 10 key strategic benefits were realised, productivity increased by 20%, there was an 85% employee uptake, project waste or re-work was reduced by $500,000.

Some industry approaches to measuring change management include:

  • Measuring the productivity of the workforce before and after a change was implemented.
  • Measuring progress and adoption rates.
  • Surveying engagement levels.
  • Developing tools that assess the effectiveness of specific change management activities and measure the outcome of a change initiative.
  • Building scorecards for change and creating a set of metrics to gauge effectiveness.
  • Quantitative measurement linked to reaching key goals.

According to Prosci – the world’s leading change management research company:

‘The top trend identified in our global benchmarking studies was a greater recognition of the value of change management.’ 

‘A discipline focused on enabling and encouraging employees to embrace, adopt and utilise change required by a project or initiative will directly contribute to higher return on organisational investment through faster adoption, greater utilisation and higher proficiency. Change management directly contributes to ROI.’

For more information on Transformation and Change Management please visit:

Building an Agile Culture

In today’s highly competitive marketplace, business leaders are looking to strip back traditional and cumbersome business process, and create new work cultures and mechanisms that enable faster execution and faster delivery – many are turning Agile.

Agile is hardly a new term. Agile has become a proven approach to nimble execution for executives and senior managers, and is also one of the most popular and effective project and change management methodologies. It may be one of the most over-used terms in business today – along with Transformation – and gets a mention in every executive strategy, and forms prominently in the internal vocabulary across almost every organisation.

Leaders and executives want their organisations to ‘be Agile’ and to ‘work Agile’.

For organisations to ‘be Agile’ and to work in an agile way, they require a culture of agility. 

Creating a culture of agility requires the changing of attitudes, behaviours, and habits of those within an organisation. These changes need to be underpinned by the improvement or re-engineering of business process across the entire organisation, creating a quicker and more responsive way of working and an environment that enables the acceleration of strategy.

Keys to building an Agile culture:

  • Shifting the focus onto measuring ‘leading’ rather than ‘lagging’ indicators of success – Determining what the leading indicators of success are and reporting on those in a pro-active and visible way allows the organisation to be adaptive, to adjust and change outcomes.
  • Framework that provides visibility, transparency and accountability across the enterprise – Having a framework is necessary to provide visibility, drive accountability and track results. For example; formalising the structure into an Enterprise Program Management Office or Transformation Office creates transparency and enables the organisation to prioritise investments and resources as well as facilitate fact-based decision making faster and with more accuracy.
  • Ideas generation – Implement a pipeline of business improvement ideas, and ensure this pipeline is always building and being maintained and that a robust process is in place to prioritise and select the ideas for execution depending on the organisation’s environment and market position at that time.
  • Speed to value – All the effort must translate into improved business performance. This can be dependent on the system of measurement that has been agreed and implemented top-down. For example; organisational financial performance, operational performance, customer satisfaction, etc.  This also must work both ways in that if initiatives are not providing value (not working) then the concept of agility becomes important in shutting down these initiatives and starting new ones based on the ideas pipeline above.
  • Visual and interactive tools to engage teams, facilitate decision making and maintain momentum – The use of visual tools as well as personal and verbal interaction allows for rapid decision making and sharing of information. There are different ways that visual tools can be integrated into the framework above.
  • Strategic approach to change management – A more strategic approach to change management looks at change across the enterprise and clarifies specific desired behaviours and provides ‘enablers’ to support these to occur. For example; success can be attributed to communicating the ‘why’ very clearly and with a strong support system in place everyone is more likely to commit to the change journey.

Enterprise Transformation – Executing Strategy more Efficiently through the Enterprise Program Management Office

A framework that provides visibility and transparency is often necessary to drive accountability and track results. Each organisation tends to have a slightly different approach to this but the objectives and characteristics of the frameworks are very similar. The framework needs to have as ‘light a touch’ as possible on the organisation and needs to create alignment as well as provide the right level of visibility and accountability.

There is a trend towards formalising the structure into an Enterprise Program Management Office [EPMO] or Transformation Office. The value of this structure is that it creates transparency and enables the organisation to prioritise investments and resources as well as facilitating fact-based decision making. This structure also allows for the regular reporting of leading indicators of success such project health information.

The drivers for setting up an EPMO have primarily been to:

  • have greater visibility and of the current programs of work and investments;
  • ensure the project benefits are established and are aligned with the strategic objectives;
  • provide strategic oversight and dependency analysis across key projects; especially where ‘whole of business’ changes are occurring;
  • ensure that the investments are occurring on the right projects, achieving the stated benefits within budget and agreed timeframes;
  • provide ‘thought leadership’ on project prioritisation;
  • provide executive level reporting and decision making tools;
  • support the business with frameworks and tools that allow for consistency and efficiencies in delivery.

A research initiative on Enterprise Transformation – Executing strategy more efficiently through the Enterprise Program Management Office had the following key findings:

  • the EMPO is considered to be strategic and critical to the successful execution of strategy for many organisations;
  • establishing an EMPO has delivered notable improvements in the benefits realisation process, financial tracking, the prioritisation process and executive level reporting; although most agreed that all of these areas could be improved further;
  • ideally the accountability for delivery sits within the business units; with the EPMO providing strategic oversight and alignment between key areas;
  • the greatest area of ‘pain’ and ‘opportunity to do things better’ to execute strategy, drive efficiencies and gain value in the shortest period of time; is having an effective change management capability; investing in strategic and enterprise-wide change management capability is being seen as a way to accelerate the execution of strategy.

Download the full paper here. 

Is your project set up for success?

With 87% of the perceived value of programs being unrealised when organisations move from strategy to execution, many organisations are looking to ‘do things better’.

Billions of dollars are being invested in projects on a daily basis. The financial and ‘opportunity’ cost to invest in programs of work that fail to deliver on strategic outcomes is a problem that needs solving.

Many of the programs and projects start well, with defined strategic benefits and outcomes that have been agreed to by the executives and key sponsors. Many of the ‘drivers’, objectives and benefits are based on known assumptions at that time.

Over the course of the program however the following questions and concerns get raised:

  • Are the drivers for this program still relevant, considering the change occurring within our business and externally?
  • Is this program setup for success?
  • Do we have the right resources and expertise to meet the objectives set and realise the benefits documented?
  • Have we engaged the right stakeholders and are they aligned to this program of work in order for us to succeed?

Given the complexity of organisations and people within those organisations and the rate of change occurring; these questions are all valid and relevant and need to be answered on a regular basis to ensure that the perceived benefits are realised within the timeframe and budget allocated.

How can you ensure Strategic Alignment throughout the project life-cycle?

Janellis has an approach to strategic alignment that seeks to answer these questions at any time in the life-cycle of a program. Our approach builds on investments already made and creates alignment; facilitates consensus and builds confidence for all who have a stake in the program.

The Janellis Strategic Alignment Review (or Project Health Check) is a consultative discovery process with key stakeholders, and includes a review of documentation, one-on-one meetings and workshops, where relevant.

The key questions that we seek to answer through the meetings and documentation review are:

  • Strategic Alignment – Does the program still link to strategic objectives of the executive team, and is it being prioritised appropriately within an enterprise project portfolio?
  • Stakeholder engagement – Are the key stakeholders engaged in the program at the levels that they need to be. Is there a change management plan that identified all relevant stakeholders?
  • Ownership – Have the people and teams responsible for owning the outcomes been identified and are they clear on how they will maintain and sustain the solutions?
  • Benefits Realisation – Are the projected benefits still relevant and achievable? How are they being measured, how will they be embedded and who will own that accountability?
  • Resources – Does the project have the right people sponsoring, leading and working on the program? Are their roles and deliverables clear and do they have the capability to ensure success?
  • Risk Management – Are the real risks of success being identified? Beyond a risk plan and issues log, are risks being communicated, managed and mitigated for the program?
  • Governance – Is the governance framework following best practice in terms of management structure, documentation, quality assurance, procurement and requirements gathering?

What will a Strategic Alignment Review provide you?

A Strategic Alignment Review will highlight significant issues that require immediate attention, uncover areas of excellence to be applied more broadly and provide assurance on the areas that do not require further work.

Anyone sponsoring, managing or delivering a project or program of strategic initiatives would benefit in undertaking a review such as this to provide assurance on the likelihood of success, alignment to objectives and meeting executive expectations.

A review will raise awareness of the issues and provide confidence to those working on the project as well as stakeholders including the board, regulators and critical suppliers or clients, where relevant.

How have other businesses used this approach to create Strategic Alignment?

Many of our clients are spending a significant amount of money on project-based activities. Statistics for projects being delivered on time, on budget and delivering the expected benefits indicate that there are still many challenges in this area.

Consultants working in team in the office

Janellis project specialists and executive coaches

Right now, those responsible for the outcomes and benefits realisation of projects are facing increasing pressure to provide assurance to a range of key stakeholders. By initiating the Janellis Strategic Alignment Review, our clients have generated a level of transparency and clarity that has allowed them to address the issues, highlight the wins and set the project on course for success.

Why Janellis?

  • We have been working in this field for the past 17 years with some of the most complex organisations in Australia and are experts in this niche area of strategic alignment.
  • Our unique tools have been widely used and can help accelerate the strategic benefits of any program.
  • Our consultants are highly skilled and experienced in all stages of a project life-cycle and can review, lead or support critical initiatives.

For more information on our Strategic Alignment capability, Project Health Checks and our Subject Matter Expertise in this area please follow the links below, call us to request a meeting – info@janellis.com.au

 


4 Simple Steps to Engage Key Stakeholders

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Driving transformation and managing change

Janellis use the VisionScope process for business critical initiatives, major change or transformation.

It is a framework that gives rigour to the development of a clearly articulated strategic and tactical plan that links the short term activities to the longer term strategy.

Beyond strategic, financial or resource requirements, the VisionScope process is a powerful tool for initiating and fostering communication, collaboration, and consensus among key stakeholders within an organisation.

It is particularly powerful when the outcomes are dependent on input from a diverse group of people including representatives from vastly different parts of the organisation or external stakeholders who may not have worked together before.

Download the full paper here.