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The Value of Change Management

The value of change management is a challenge with 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 being 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 getting 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 productivity of the workforce before and after a change was suggested.
  • 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.

Prosci – 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:

A guide to leader-led behaviour change

Janellis have run a series of transformation related events attended by a cross-section of organisations.

Most organisations have cited that the ‘change management aspects’ of strategic execution are one of the most difficult and unresolved areas. This area appears to be the ‘least understood and invested in’ part of transformation initiatives – but recognised as being critical to success.

Traditional change management approaches are occurring at tactical levels across business units, and some EPMO’s have this oversight and responsibility.

A more sophisticated, effective and enterprise-wide approach to change management now includes: strategic change management oversight; leader-led change; clearer links between financial benefits and the behaviours required to achieve them; tools to enable the behaviour changes to occur and tracking of the behaviour change success indicators.

A guide to leader-led behaviour change

1. CLARIFY STRATEGIC OBJECTIVES

Ensure the strategic objectives are measurable and that there is Executive and Board level support and the scale of the change required is understood.

2. IDENTIFY STAKEHOLDERS AND DEFINE CAPABILITY

Behaviours should be a visible manifestation of strategy, so it is important that the strategic objectives are aligned strongly with capabilities and behaviours. Identify all the key stakeholders to be impacted by the change and the critical capabilities required.

3. DETERMINE BEHAVIOURS THAT BUILD CAPABILITY

The process of behaviour-led transformation is driven by clear definitions and metrics. Once the behavioural definitions are made measurable, the organisation can set about the process of influencing and driving them.

Select a group of people who are already exhibiting some of the key desirable behaviours. Develop the explicit behaviour’s required and keep the number of behaviours to a limited and achievable number to track. Use examples and stories to illustrate the behaviours and to help reach consensus. Ensure that there are clear links from the desired behaviours to the capabilities required to achieve the strategic and financial objectives.

4. PROVIDE ENABLERS TO DRIVE THE BEHAVIOR CHANGE

SKILLS: Are the behaviours aligned to the current skills of the leaders? Do they have the skills to demonstrate the new behaviours? Do they need further training? Do they have sufficient ‘softer skills’ or leadership skills for this type of change? Do they recognise the gap in their current skills and are they willing to develop further professionally?

ENVIRONMENT: Does the current environment enable and support the desired behaviours? Are there any cultural or power based factors that need to be addressed? Is there an effective support team dynamic with an appropriate recognition and reward program? Do they have the tools that they would need to be effective?

MOTIVATION: Are the behaviours aligned to individuals personal values? Is there a peer support group in place that supports the new behaviours? Are the desired behaviours aligned with their personal KPIs? Are the consequences of non-compliance clear? Are there (financial) rewards or recognition for changing these behaviours?

SYSTEMS: Do the business systems and work processes align with, and enable the desired behaviour? Is there a visible and approachable escalation point to get help when required or when further clarity is needed or issues can’t be resolved easily? Is there a process to manage individuals who are unwilling or unable to exhibit the desired behaviours? Is behaviour alignment being monitored and reported at an Executive level?

5. LEADING AND COACHING NEW BEHAVIOURS

Leaders need to exhibit the desired behaviours and the concept of ‘self-monitoring’ needs to be introduced and; it needs to be visible and transparent to all involved in the change. Individuals who are already exhibiting the desired behaviours need to be acknowledged as change leaders and involved as key influencers. Existing communications channels need to be used as well as facilitating highly targeted stakeholder engagement activities that focus on behaviours.

Change leaders need to provide on-going coaching on the new behaviours using stories and examples that are current and directly linked to those individuals involved. There needs to be an on-going peer review process that recognises rewards and celebrates the people who are demonstrating the desired behaviours. Leaders need to use the ‘do not promote’ strategy for individuals not willing to change.

6. EMBED AND SUSTAIN THE CHANGES

Link and include the desired behaviours within the individual KPIs. Monitor and review those unwilling or unable to change their behaviours and have a process to manage where necessary. Continue to promote and reward individuals and leaders exhibiting the desired behaviours. When hiring new team members ensure they already exhibit the desired behaviours.

Linking behaviours to results makes behaviour measurement a leading indicator of success.

Download full paper here.

 

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.