How to prove the value of change management

How to prove the value of change management

Thanks to the growing frequency and magnitude of organizational changes the change management profession have been undergoing growth.  However, some organizations are still struggling with understanding the value of change management.  Subsequently, some change practitioners are still challenged to prove ‘their worth’.

Those working in the projects organization will be familiar with the scenario of being involved towards later stage of project delivery when things are starting to go wrong, or when it may be too late to put in effective change interventions.  For those working within business units, common experiences may be difficulty influencing stakeholders on the importance of change management.  Senior stakeholders focused on top line and bottom line challenges may not be convinced of the value that change tactics may bring.  With the focus of senior leaders to meet financial goals and other ‘tangible’ business measures, change management practices may often be seen as a nice to have rather than a must-have.

What is a change practitioner to do in these situations?

ROI approach

One approach to proving the value is to use the return of investment calculation.  In this approach, the dollars spent on change management is used, compared to the expected project benefits.  Within this, it proportions the part of the benefits that are dependent on adoption and usage.  For a great example refer here.

Whilst this is a good way to examine the return on investment, the problem is that the focus is on a project context.  It does not take into consideration the value of change management from an overall business capability improvement perspective.  It also does not call out the tangible and measurable parts of change management in adding business value.

Many organizations only realize the value of change management with experience of failed change attempts, and from this start to realize the risk of not having effective change management.

Here are 2 other ways to tangibly prove the value of change management

1) Planning and sequencing benefits

With quantitative data of change impacts on the business, this allows the change practitioner to work with the organization to better plan for change roll out.  With one view of change impacts across different parts of the business, it is clearer to see when, what and how change is happening.

This data enables the identification of potential risks of having too much change in the plan.  With historical data it is possible to see what happened to business performance last time it experienced a particular level of change.  With this analysis, better sequencing and prioritization based on change impact may be made.  It is important to call out that this process requires taking into account a range of business factors and not just change data.  Critical factors to take into consideration include resourcing, customer or work volumes, and business performance indicators such as customer satisfaction scores, service response times, sales volume, etc.

It is easy to collect data on the negative impacts of having too much change on the business from these business indicators compared with other times where there is less change volume.  For example, the business could have suffered negative work performance as a result of change magnitude that is not optimal.  Anecdotally managers may understand the impact of having too much change on the business.  However, the collective totality of all the business indicators can paint a convincing picture of what happens when effective change planning is absent.

2) Impacts of change on business performance

In previous examples, we’ve illustrated the impacts of too much change. For example, regulatory changes could mandate additional processes and customer communication content that could slow down service provision.  However, sometimes the impact of change can also be positive (assuming there isn’t an overwhelming amount of change).  For example, implementing technology automation and improved user interface on systems can improve user performance and customer satisfaction.

Correlations may be made between quantitative change impact data and business performance indicators.  With a forward view of change impact data, it is then possible to predict the impact on business indicators.  This is possibly the ultimate in proving the worth of change management.  Senior business stakeholders will absolutely pay attention when the clear link between change and business performance is put on the table.

The same can also be said for change impacts on customers.  With the right data, the change practitioner can provide a definitive analysis of what are the changes impacting a segment of customers at any given time, whether there could be too many changes, and whether the changes may be perceived as having positive or negative impacts.  An increasing number of organizations are jumping on the bandwagon of customer centricity and customer experience.  This is another way to prove the value of change management.

We at The Change Compass are working on incorporating machine learning and artificial intelligence so that change impact data may be used to predict business performance.  This means that you are able to inform the business the likely scenario of business performance trends given the forecasted picture of changes.  We anticipate the launch of this portion of the tool in early 2019.  Stay tuned.


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How to undergo and manage change using Buddhist principles

How to undergo and manage change using Buddhist principles

I recently visited my brother and his family in Queensland near the North Eastern tip of Australia. Other than enjoying the nice beaches and tropical surroundings I spend some time with my 2 nephews. One of them is still in secondary school participating in various swimming carnivals over the same weekend.  It seemed like yesterday that I had to hold his hand and walk him across the street. And now he is 6 foot three tall and still growing. Like many others undergoing change I reminisced the old days when he was small and cute and cherished the past. Not that the present isn’t great – but a part of us always miss the past and long for some of it to come back.

This made me wonder how generations have undergone change through the ages. Change is a fact of life as we grow and age – life and death. The Kubler-Ross model of the change curve is based on death and grief. This is often utilised to model the experiences that people undergo during change.  However, the experience of change is an individual one and one that is dependent on the nature of the change and also how we perceive it. The same change event can be interpreted by one as a positive one and another as a negative one. As a result, for the same change event, for one the Kubler-Ross model of emotional experience can be valid, whilst for another completely the irrelevant.

How do we best deal with the constant changes in our lives? Buddhism is steeped in the philosophy that change in life in inevitable. Our thoughts are constantly changing, as are things around us. Friends and even family can come and go, so can our belongings. It teaches us that the more we try and hold on to things the more grief and suffering this will cause us. The more we cling on to the past the more it will cause us pain. This pain results from not adjusting to the change and the new state of being.

“When we meet real tragedy in life, we can react in two ways–either by losing hope and falling into self-destructive habits, or by using the challenge to find our inner strength.” Dalai Lama.

In Buddhist meditation training we are taught to be mindful and notice each moment, each sensation and the environment that we are in. With the ebb and flow of each changing thought or changing moment, we simply notice it, acknowledge it and apply the same mindfulness to the new state. We notice any feelings we have, acknowledge it as a part of how we react to the situation and move on to continually focus on the new state.

Building change readiness

In the modern organization we are constantly facing a multitude of different changes at the same time. How might we apply the same buddhist philosophy to these changes? We can do this by building awareness within ourselves and our employees that changes are constant, like life itself.

  • Draw attention to the various changes in an open and matter of fact way.
  • Build broader consensus of the environment that we are in.
  • Establish expectation that there will continue to be ongoing changes.
  • As needed establish routines and operating rhythms to bring the information about the changes to everyone (mindfulness of changes) and acknowledge the environment and challenges that the organization is facing.
  • Investigate and analyse what channels are required to bring the changes to light so that everyone is well aware and ready for the changes.

“If you want others to be happy, practice compassion. If you want to be happy, practice compassion.” Dalai Lama.

At the same time we need to highlight and prepare employees for the new changes. And as the changes happen, make these explicit.  Acknowledge any reactions to the change, address these head on and reference back to what is happening currently. Show compassion for those impacted by the change by being open and supportive. In corporate lives we often only focus on profit and bottom line.  Being profitable and financial successful can create good for the organization and its people.  However, we can also do a better job at being compassionate about people’s work lives.  We can do this by HOW we implement changes.  Are we open about what the change is?  Or do we hide behind corporate jargon?  Do we continuously engage with impacted parties so that they have an optimal change experience?

To build capability for constant changes, we need to consider how leaders message and story-tell the journey of the changes employees have faced, past, present and what the future holds. Link this to the theme of constant change.

Build employee resilience through mindfulness of change. Just like the theme of life and death, draw out the need for constant evolvement within the organization to stay current and relevant.


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The big elephant in the room on managing agile changes

The big elephant in the room on managing agile changes

There is now a lot of content out there on how to manage agile changes, including agile methodology and agile ways of working.   This includes early and continuous engagement, creating a multidisciplinary team and designing smaller iterative changes.  There are kanban and scrum approaches.  What actually happens in organizations in terms of how people experience this?  Most organizations experience this is a series of multiple initiatives going on, all iterating at the same time.  The effect is various ripples of changes coming from different directions, with each initiative driving separate ripples.

Impact of agile changes

Let’s dive deeper into what this experience feels like for the organization.  For the employee, changes are becoming more rapid than before with agile changes.  Most organizations have at least several initiatives going on at any one time. Therefore, the employee will likely experience different changes at the same time.  This could feel very overwhelming and hectic as the employee tries to keep up with a myriad of initiatives that are all working on the goals of the particular initiative.

For team managers this could also be equally overwhelming as various sources of initiative information is handed down and they are expected to be delivering and engaging their teams on the changes.  Getting the details right is often a challenge and it is easy to just ‘pass down’ the given write-up about the initiative without talking through what it means specifically for the individual.

On top of this in a typical agile environment, there are always release changes and changes in the timeline.  So, one of the challenges is that what is communicated through the various channels to engage employees will often be inaccurate as the dates change.  This could create frustration and lack of trust as what is communicated keeps shifting.

For business unit managers the trick is to balance business-as-usual activities for employees and the demands of change initiatives.  There can be occasions when there are simply too many changes at the same time impacting the same group of employees, whilst other times there seems to be little change – feast or famine.  In this situation, there can be significant business performance impacts if there is too much change.  Customer service levels may drop, customer satisfaction levels may be impacted, or work efficiency and work allocation may be impacted.

In a nutshell, the different ripples from different directions could all intersect and meet in one particular part of the business and create potential turmoil and business disruption.  Which initiative is trying to do what?  Which one benefits us more than the other?  Which one requires more effort to get ready?  These are typical questions faced by the business.

So how do we resolve this?

Planning and prioritization

Effective planning across initiatives is critical to managing the various ripples. There needs to be effective agreement across the organization which initiative has the priority using a set of agreed criteria.  Typical factors include benefit size, strategic importance or any non-negotiables such as regulatory requirements.  Both businesses and projects need to be part of this process. Data to support this process need to include all initiatives impacting a particular part of the business, whether it is deemed a ‘program’, ‘project’, or ‘BAU initiative’.  The groups should look for opportunities to potentially ‘package’ certain changes that are more alike so that it is easier for employee absorption and adoption.

A key part of the input into this discussion is change impact.  With clarity of the quantum and nature of change impact at any given time, along with other initiative information, decisions may be made on prioritization and sequencing.  To read more about change portfolio management click here.

Communication and engagement

To effectively communicate with employees within an agile environment where there is constant shifting of timeline some use monthly release blocks versus communicating actual dates.  Another way of addressing this challenge is to continuously remind employees the ‘why’ of the shifting timeline.  This is focused on building employee expectation for the agile environment that there will often be constant shifting of dates and releases.

With multiple changes, it is also important to effectively link initiatives to their intent and goals.  An overarching grouping or linking of initiatives to organizational strategies could be one way of doing this.  In this way, it is easier to draw linkages for employees to seemingly disparate initiatives.

Business forums and routines

As a part of running an effective business operation, it is important to establish the right forums and routines to ensure that there is ongoing visibility of change impact.  The routine should focus on examining the data on what the changes are at any given point in time, what happened previously in implementing changes, what will happen in the next quarter or month, and what actions are required to get the business ready.

There should also be regular examination of the level of ‘change heat’ to effectively manage business performance.  Where there is a lack of heat there could be opportunities to fast-forward certain changes to balance the overall change loading.

The discussion on business readiness and capacity for change should be a balanced one, taking into account any operational challenges.  These could include sales target stretches, resourcing levels, customer contact volumes, and other operational activities.  In this way, the understanding of the employee capacity for change is taking into account a range of activities and focus areas at a given point in time.

The importance of change data

A critical part of creating an agile environment is a reliance on data.  Agile teams are reliant on data in how solutions are developed, tested, deployed and evaluated.   Without data it is not possible to test the hypothesis. In a similar way, the organization also needs to look at how it is collecting and analyzing change data to make effective business decisions.  Managing the various ripples within the organization requires data-based decision making and not gut feel and hunches.

Read more about agile and change management in our article ‘The ultimate guide to Agile for change managers’ or ‘What we need to know about agile we learnt from change management’.

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