As the global landscape continues to evolve, so too does the field of change management. The year 2024 promises a shift in the way organizations approach change, driven by a combination of economic factors, continued technological advancements, and the ever-increasing need for adaptability. In this article, we explore the background factors influencing the upcoming changes, and delve into seven key predictions that are set to reshape the realm of change management in the coming year.
Background
Inflation Continue to Drop: A Ray of Economic Hope
One of the pivotal factors shaping the economic landscape in 2024 is the anticipated drop in inflation. After grappling with economic uncertainties, organizations can breathe a sigh of relief as the pressure from rising costs eases. This economic respite paves the way for strategic investments and initiatives, creating a conducive environment for change.
Avoiding Recession: Building Resilience Through Change
The specter of recession has loomed large in recent years, casting a shadow on organizational stability. However, as we step into 2024, the concerted efforts to avoid recession is forecasted to have paid off. Organizations have become more resilient, honing their ability to weather economic storms through strategic change initiatives. This backdrop sets the stage for a transformative year in change management.
Key Predictions
Agile Change as Business as Usual
In 2024, the concept of Agile Change is no longer a mere ‘work in progress’ but rather an integral part of Business as Usual (BAU). Organizations have recognized the need for agility in the face of rapid change, and Agile change methodologies have transitioned from experimental to foundational. This shift represents a change in mindset, emphasizing iterative processes, collaboration, and responsiveness to evolving circumstances. After more than 10 years of agile project methodology in the market place, agile change practices are starting to become ‘the norm’.
The Rise of Adaptive/Hybrid Change Models
Building on the previous point, agility applies beyond at an ‘intra-methodology’ perspective, but also how change approaches and methodologies need to be mixed and matched to work.
The increasing pace of change demands a more flexible approach from change practitioners. The dichotomy between structure and flexibility, innovation and process-focused strategies, gives rise to adaptive and hybrid change models. The emergence of terms like “wagile” (a fusion of waterfall and agile) underscores the need for a balanced approach that combines the best of both worlds. Organizations must strike a delicate balance between structure and flexibility to navigate the complexity of modern change initiatives.
For example, in regulated business functions there may need to be quite rigid planning of exactly when the changes must take place as well as the level of consultation and engagement required. However, the actual design of different engagement, positioning and employee involvement strategies may be tested in an iterative way.
Expanding Skill Sets for Change Practitioners
To meet business needs change practitioners will need to have a broader range of skills beyond ‘people skills’. In 2024, the demand for change professionals with a broader skill set encompassing strategic thinking, digital/data literacy, and business acumen will continue to be on the rise. As change initiatives become more complex, practitioners must equip themselves with multifaceted skills to address the diverse challenges that emerge during the change process.
For example, stakeholders are increasingly looking for data for reporting purposes to get a clearer sense of how changes are tracking. Beyond sentiments and opinions, stakeholders are looking for adoption indicators as well as precise indications of the nature of impacts across the employee population.
The Ascendance of Change Portfolio Management
Change portfolio management will continue to gain increasing visibility and importance in 2024. Organizations are recognizing the need to manage change initiatives collectively, aligning them with strategic objectives. The holistic oversight provided by change portfolio management enables organizations to prioritize, monitor, and evaluate change initiatives in a comprehensive manner, ensuring that resources are optimally allocated for maximum impact.
Whilst stakeholders may not be clear of the differences between transformation, portfolio management and change portfolio management, they are clearer of the benefits required in managing people impacts, against the need to maximise business performance and change adoption.
Leveraging Change Data for Informed Decision-Making
In the evolving landscape of change management, data is no longer just a nice-to-have; it’s a necessity. In 2024, the norm becomes leveraging change data to make informed decisions. Organizations recognize the value of data analytics in understanding the impact of change, identifying patterns, and proactively addressing challenges. This data-driven approach enhances the efficacy of change initiatives and provides a foundation for continuous improvement.
It is no longer that the expectation for data-led decision making rests in project functions such as technical development, business analysis, testing and user-experience. Change management teams are also expected to demonstrate the impact of their work through data.
Increasing Use of Software in Change Implementation
The leverage of software in change implementation should see an uptick in 2024, along with general increase in software usage rates in organisations. Organizations are leveraging technology to streamline and enhance various aspects of the change management process. From change project management tools, change measurement platforms, as well as change portfolio management tools the role of software can accelerate the pace of change initiatives and supports the realisation of benefits.
AI for Change: From Wait-and-See to Full Adoption
Artificial Intelligence (AI) for change management is no longer a ‘wait-and-see’ proposition; it’s a reality in 2024. In 2023 a lot of users have sat on the fence as others argue about the risks in using AI and data security. The launch of Microsoft Co-pilot and the continued adoption of Chat GPT 4 signal a paradigm shift in how organizations approach AI. Users will over time be used to asking a chat bot, using prompts to form analysis and other AI features to augment their work. Advanced AI change tools can also assist in decision-making, predictive analytics, and even virtual facilitation, revolutionizing the efficiency and effectiveness of change processes.
In addition, there will be significant interest in change management tools that have incorporated AI features, from data and trend analysis, risk analysis to recommendations on change approaches.
As organizations navigate the complexities of 2024, change management emerges as a critical linchpin for success. The predictions outlined in this article reflect an emerging shift in the approach to managing change, from the integration of Agile methodologies to the widespread adoption of AI. Change practitioners must equip themselves with a versatile skill set to thrive in this dynamic environment, where strategic thinking, digital literacy, and adaptability are paramount. As we stand on the cusp of a transformative year, organizations that embrace these predictions are poised not only to weather the winds of change but to harness them for sustained success.
In this Change Practitioner Q&A series, we talk to change managers to ask them how they approach their work. This time we are talking to Annah Kaspar.
Change Compass: Describe yourself in 3 sentences
Annah: I’m curious and a little irreverent because I want to know everything (except, controversially, about football). I love to hear people’s stories and tend to empathise deeply. Happiness is going to places I’ve never been, and hanging out with kind and interesting people.
Change Compass: What has been the most challenging situation for you as a change practitioner? Tell us what happened and how you fared through it.
Annah: It was not due to a type of change or a stakeholder group. It was working with a Program Manager who believed change management was an independent addendum of sorts, separate from the ‘main work’ of technology and process. They didn’t see how project stream interdependencies have a direct correlation to the quality of change outcomes, or that the best change outcomes occur when all project team members collaborate. This played out dreadfully when the PM refused to prioritise a gap analysis, despite this being a dependency for identifying changes and impacts.
The PM was unfamiliar with the flow-on effects. Unclear changes and impacts create ineffective change strategies, poor forecasting of time/effort/budget, ineffective stakeholder engagement and misaligned key messages. This creates low confidence in project solutions and poor adoption and change experience.
How did I fare? Suffice it to say it wasn’t fun for me or the stakeholders, and by that time the root cause (no gap analysis) was an abstract concept. I believe delivery alignment within a project team is one key indicator for delivery effectiveness across an organisation. When there are transparent and integrated project delivery plans and open dialogue about how all project team members play a valued role, then I know we can deliver superb change outcomes.
Change Compass: What are the most useful things to focus on when you first start on a project, and why.
Annah: I make a beeline for the project Business Case, or if there isn’t one, I work with others to get clear on the project drivers, especially the benefits. This is the ultimate ‘why’. If there are no connections between the project’s Business Case and the organisation’s strategy then I look to create these, otherwise the project is in trouble before it has even started.
All project outcomes, scope and solutions flow from the case for change. The next most important is a High Level stakeholder scan and a High Level impact scan. This requires data, data, data! The more the better, as it increases the odds of making better judgments. So even though it’s early days, it’s never too soon to capture data, and for that, you need the whole project team onboard with the critical role of collecting and validating it so you can optimise the delivery approach.
Change Compass: As change practitioners we don’t often get to stick around to see the fruits of our labour, but from your experience what are the top factors in driving full change adoption?
Annah: I was once on the receiving side of change, so I have strong views about this! If these four things are covered, then you’ve achieved sustainability:
Active & visible leaders who advocate for the changes and put their reputation on the line to support success,
A project team who co-creates integrated delivery strategies with impacted people
Direct feedback loops for impacted people. These need in-built response mechanisms and complete psychological safety. No feedback should ever be punished or dismissed
Post-project monitoring of key performance indicators (team and individual) with corresponding rewards to reinforce desired results and support where required to uplift results
Change Compass: You’re known to remain calm when there is a lot of stress and project drama around. What is your advice for others?
Annah: My tough but fair mentor once advised me to think up worst-case scenarios to prepare for challenges. It seemed counter-intuitive and overly negative at first, and would stress me out more! But over time, I saw that I too fall into the category of a perfectly nice and reasonable person who is overwhelmed by fear.
This mostly leads to unhelpful perspectives (cognitive distortions or ‘thinking traps’), unhelpful behaviours (character assassination, shutting down, unnecessary displays of overt authority etc) and ultimately a toxic workplace culture. So in difficult situations, the habit of thinking through not-so-great scenarios, combined with mindfulness, is just a basic form of risk management.
I’m now a huge advocate for speaking up early about risks and applying risk management to all aspects of project delivery. It’s not about ticking boxes. It’s about protecting us by counter-intuitively facing discomfort, creating emotional space for ourselves and others to regulate responses, and removing thinking traps so we can make those trade-off decisions to solve a project drama.
Change Compass: Thanks for sharing your experiences and wisdom with us Annah!
Not too long ago, ‘change’ was predominantly linked to technological breakthroughs and process optimizations. Companies were driven to adopt new technologies and methodologies to stay ahead of the competition and meet the growing demands of consumers. The focus was on efficiency, productivity, and achieving higher profits through innovation. Terms like ‘digital transformation’ and ‘disruption’ frequently dominated boardroom discussions and industry conferences.
It has been that the focus was mostly on technology and process. These were considered the ‘hard’ levers that can be pulled to gain significant business improvements. Companies have been spending big on digitizing their business to save costs and investing in streamlining processes as well.
However, the narrative has shifted.
While technology continues to advance at an unprecedented pace, ‘change’ has taken on a more profound and holistic meaning. Today, companies and people, in general, are recognizing that the ability to adapt, evolve, and respond to the world’s myriad challenges is the true essence of progress.
One reason ‘change’ has become a prevailing buzzword is its resonance with a broader audience. Unlike technical jargon, it connects with people on a more personal level, emphasizing that change is not just about adopting new tools and strategies, but about embracing growth and personal development. It speaks to the capacity of individuals to navigate uncertainties, adjust their mindset, and embrace continuous learning.
Moreover, an increasing percentage of companies are aware that their success hinges on the collective ability of their employees to adapt and remain agile. Leaders now recognize that fostering a culture of change and learning is crucial for attracting and retaining talent, boosting employee morale, and nurturing innovation.
Looking around us, the word ‘change’ is everywhere. Not only are people a lot more comfortable talking about change, but there is also a general acknowledgment of change as an overt occurrence.
Advertising and Slogans: Embracing the Spirit of Change
Companies are also quick to adopt the word ‘change’ in their jargon. Here are some examples.
Cisco “Changing the Way We Work, Live, Play, and Learn”
Cisco, a multinational technology company, explicitly uses the word ‘change’ in its advertising and philosophy. The slogan “Changing the Way We Work, Live, Play, and Learn” highlights Cisco’s focus on transforming various aspects of modern life through their technological solutions.
2. Accenture – “Let there be change”
Accenture, a global consulting and professional services firm, uses the phrase “Let there be change” in its advertisements and marketing materials. This tagline reflects the company’s focus on driving transformative change for its clients and within the industries it serves.
3. T-Mobile – “Change starts now”
This encapsulates the company’s commitment to driving transformation and initiating positive changes in the telecommunications industry. The slogan suggests a sense of urgency and empowerment, encouraging customers to take action and embrace the benefits of a new era in mobile communication.
4. PwC – “Solving for global change starts with you”
This tagline conveys the idea that PwC believes individuals have the power to drive positive change on a global scale. It encourages people to take action and play an active role in addressing global challenges and making a difference. By emphasizing that “you” are the starting point for solving global change, PwC highlights the importance of individual responsibility, innovation, and collaboration in creating a more sustainable and equitable world.
5. University of Technology Sydney “Think. Change. Do.”
This represents UTS’s commitment to fostering a transformative learning experience that prepares its students to be active contributors to society and catalysts for positive change. However, please note that taglines can be updated or changed over time, so it’s a good idea to verify the most current information from UTS’s official sources.
The prevalence of ‘change’ in advertising and slogans reflects companies’ desire to connect with their audiences on a deeper level. By evoking the spirit of change, these companies emphasize their commitment to innovation, customer-centricity, and positive societal impact. They appeal to consumers who seek purpose-driven brands and are eager to embrace progress and sustainability.
Change as a Catalyst for Resilience
In an ever-changing world, adaptability is synonymous with resilience. Companies that can quickly adjust to market shifts, economic downturns, and unforeseen challenges are more likely to thrive. ‘Change’ has thus become the rallying cry for building organizations that are not only successful but also capable of weathering storms and bouncing back from setbacks.
What this means for change practitioners
Change practitioners are in an excellent position to help organisations to shift their change capability and deliver on business improvement objectives. Change is increasingly acknowledged across organisations as a critical competency. The focus on change is there and change practitioners should use this to spearhead the momentum.
What next?
To take things to the next level, change practitioners must complement the upscaling of digitization and AI in organisations by augmenting the same in their work. This means incorporating more machine learning and AI, more digitization, and greater usage of data.
Change practitioners should ensure data is a core part of their practice and a foundational way of formulating change approaches and recommendations to their business stakeholders. Business leaders will increasingly leverage data across all business facets in business management, enabled by digital solutions. In a similar manner, change practitioners must also leverage digital solutions to automate and increase the effectiveness of change work.
Within an increasingly complex change environment, change practitioners should be well-versed in collecting and analysing data and generating data insights, again leveraging digital solutions. With the promise of AI and machine learning, there is already plenty of current opportunities to improve the effectiveness of change work, today. The uptake of this is up to each change practitioner.
The rise of ‘change’ as a popular buzzword reflects the transformative times we live in. As technology continues to shape the world around us, it is the capability of human beings to adapt and evolve that has taken center stage. From technological advancements to human adaptability, ‘change’ has transcended industries and become a part of our collective consciousness. For change practitioners, this is an opportune time to use this momentum to ramp up their own adoption of the digitization of change work and use this to improve the effectiveness of change.
Change management professionals often struggle with proving the worth of their services and why they are needed. There are certainly plenty of reasons why change management professionals are required and most experienced project managers and senior leaders would acknowledge this. However, for the less mature organisations that may not have had effective change management experts leading initiatives, the rationale on the additional value of change management may be less clear.
When we look across different project members and project teams, it is easy to argue that without developers, the technical project cannot progress. Without business analysts, we cannot understand and flesh out the core business steps required in the initiative. And of course, we definitely need a project manager for a project. But, what’s the justification for a change manager? Many projects have other project or business representatives do the change work instead.
As an attempt to justify in a very direct way, the value of change management, many resort to ROI calculations and aim toward higher ROI. This ROI of change management may seem like a great way to convey and show in a very direct and financial way, the value of change management towards project success. After all, we use ROI for calculating projects, why not use the same for change management as well to value the people side of change?
There are plenty of articles on how to best calculate change management ROI. Here are a couple:
1. PROSCI
Prosci has a good, clear way of calculating change management ROI within a project (though it doesn’t take into account speed of adoption). You simply evaluate to what extent employee adoption is important to the project. Then you take the overall expected project benefits and deduct the part of the expected benefits if there was no adoption. This is termed “people side benefit contribution”.
People Side Benefit Contribution = Expected Project Benefits – Expected Project Benefits (if adoption and usage = 0)
People Side Benefit Coefficient = People Side Benefit Contribution / Expected Project Benefits
2. Rightpoint
Rightpoint has a variation to this calculation. They have added ELV (Employee Lifetime Value) to the calculation.
Using ROI may be useful when the cost of the initiative is the critical focus for the organisation for its strategic investment. However, it is not the only way to convey the overall value of successful change management. In addition, the ROI method limits the value of change management to focus on the cost invested versus the value created. Also, this type of calculation limits the value of change to a project by project perspective.
So, how else do we show the direct financial value of change management? Let’s look to research. It turns out there are plenty of research examples. Here are some:
McKinsey & Company. (2016). The people power of transformations. This study found that transformation initiatives are 5.8 times more successful if CEOs communicate a compelling change story, and 6.3 times more successful when leaders share messages about change efforts with the rest of the organization. Link here.
Korn Ferry. (2018). Engaging hearts and minds: Preparing for a changing world. This study found that calls out change as a key trend found that companies with high levels of employee engagement had 4.5 times higher revenue growth compared to companies with low levels of engagement, noting that all companies are undergoing change. Link here.
IBM. (2016). Making change work … while the world keeps changing. This study found that 76% of successful projects include change management activities at the beginning of their overall project plans, which is 33% more than less successful projects. Link here.
IBM. (2015) Why a business case for change management. The article references a survey carried out in 2010 where companies that apply a value (benefit) realization approach (of which change management is a core component) complete projects at least twice as quickly and under budget by a factor of at least 1.9 times, Compared to those that don’t. Link here.
Towers Watson. (2013). Change and communication ROI. Organizations with highly effective communication and change management practices are more than twice as likely to significantly outperform their peers in total shareholder returns, versus organizations that are not highly effective in either of these areas. Link here.
Prosci. (2020). Best Practices in Change Management 11th Edition. The paper referred to a Prosci study that found that projects with excellent change management practices 6 times more likelihood of meeting project objectives than those that are poor. Link here.
So the value the importance of change management, let’s take a comparison to see the difference in using a ROI calculation of the value of change management versus using findings from the above research findings to demonstrate the derived value.
Let’s take a typical project example. Company A has ….
Annual revenue of $1 billion with 5% profitability
The revenue growth is 1%
Project A costs $1Million and is targeted for $3 million in benefits.
If the expected project benefits without adoption would be $1Million, then, the people-side contribution is …
$2Million / $3Million = $667K.
Let’s contrast this to other calculations using research.
Research findings | Calculation
Korn Ferry study where companies with high levels of employee engagement had 4.5 times higher revenue growth compared to companies with low levels of engagement. Taking a very conservative approach of portioning on 1/3 of employee engagement linked to change, this means 1.5 times higher revenue growth. | Taking a very conservative approach of portioning 1/3 of employee engagement as linked to change, this means 1.5 times higher revenue growth. This means if the revenue growth is 1%, then the additional revenue is $15 Million per year.
You can see that $15 million in value is much higher than the $667K in initiative ROI. From these examples, you can see that the financial value dwarfs that from the ROI calculation. On top of this, these are from research findings, which may have a stronger perceived validity and be easier to be trusted by stakeholders than the ROI calculation.
To point out, it is not an apple-to-apple comparison between the change management ROI from one initiative to the organisational value of change management across initiatives. However, the call out is that:
The financial value of change management does not need to be limited to individual initiatives
The sum may be greater than its parts. Rather than measuring at initiative levels, research findings are looking at organisational-level value
The value of change management may be more than cost, but also other value drivers such as revenue
As change management practitioners we should not shy away from calling out and citing the value of change management. Cost may be one value, but the true benefit of change management is both the top line as well as the bottom line. Directly referring to the research-backed findings also helps to highlight its value size and importance.
To do this, we should also work to deliver organisational value in managing change and not limit ourselves to one initiative. Focus on uplifting change management capability in the forms of leadership styles, change governance, change analytics, and change champion network capability, just to name a few.
Change management is often seen as a ‘soft’ discipline that is more an ‘art’ than science. However, successful change management, like managing a business, relies on having the right data to understand if the journey is going in the right direction toward change adoption. The data can inform whether the objectives will be achieved or not.
Data science has emerged to be one of the most sought-after skills in the marketplace at the moment. This is not a surprise because data is what powers and drives our digital economy. Data has the power to make or break companies. Companies that leverages data can significant improve customer experiences, improve efficiency, improve revenue, etc. In fact all facets of how a company is run can benefit from data science. In this article, we explore practical data science techniques that organizations can use to improve change outcomes and achieve their goals more effectively.
Improved decision making
One of the significant benefits of using data science in change management is the ability to make informed decisions. Data science techniques, such as predictive analytics and statistical analysis, allow organizations to extract insights from data that would be almost impossible to detect or analyse manually. This enables organizations to make data-driven decisions that are supported by empirical evidence rather than intuition or guesswork.
Increased Efficiency
Data science can help streamline the change management process and make it more efficient. By automating repetitive tasks, such as data collection, cleaning, and analysis, organizations can free up resources and focus on more critical aspects of change management. Moreover, data science can provide real-time updates and feedback, making it easier for organizations to track progress, identify bottlenecks, and adjust the change management plan accordingly.
Improved Accuracy
Data science techniques can improve the accuracy of change management efforts by removing bias and subjectivity from decision-making processes. By relying on empirical evidence, data science enables organizations to make decisions based on objective facts rather than personal opinions or biases. This can help reduce the risk of errors and ensure that change management efforts are based on the most accurate and reliable data available.
Better Risk Management
Data science can help organizations identify potential risks and develop contingency plans to mitigate those risks. Predictive analytics can be used to forecast the impact of change management efforts and identify potential risks that may arise during the transition. For example, change impacts across multiple initiatives against seasonal operations workload peaks and troughs.
Enhanced Communication
Data science can help facilitate better communication and collaboration between stakeholders involved in the change management process. By presenting data in a visual format, such as graphs, charts, and maps, data science can make complex information more accessible and understandable to all stakeholders. This can help ensure that everyone involved in the change management process has a clear understanding of the goals, objectives, and progress of the transition.
Key data science approaches in change management
Conduct a Data Audit
Before embarking on any change management initiative, it’s essential to conduct a data audit to ensure that the data being used is accurate, complete, and consistent. For example, data related to the current status or the baseline, before change takes place. A data audit involves identifying data sources, reviewing data quality, and creating a data inventory. This can help organizations identify gaps in data and ensure that data is available to support the change management process. This includes any impacted stakeholder status or operational data.
During a data audit, change managers should ask themselves the following questions:
What data sources from change leaders and key stakeholders do we need to support the change management process?
Is the data we are using accurate and reliable?
Are there any gaps in our data inventory?
What data do we need to collect to support our change management initiatives, including measurable impact data?
Using Predictive Analytics
Predictive analytics is a valuable data science technique that can be used to forecast the impact of change management initiatives. Predictive analytics involves using historical data to build models that can predict the future impact of change management initiatives. This can help organizations identify potential risks and develop proactive strategies to mitigate those risks.
Change managers can use predictive analytics to answer the following questions:
What is the expected impact of our change management initiatives?
What are the potential risks associated with our change management initiatives?
What proactive strategies can we implement to mitigate those risks?
How can we use predictive analytics to optimize the change management process?
Leveraging Business Intelligence
Business intelligence is a data science technique that involves using tools and techniques to transform raw data into actionable insights. Business intelligence tools can help organizations identify trends, patterns, and insights that can inform the change management process. This can help organizations make informed decisions, improve communication, and increase the efficiency of change management initiatives.
Change managers can use business intelligence to answer the following questions:
What insights can we gain from our data?
What trends and patterns are emerging from our data?
How can we use business intelligence to improve communication and collaboration among stakeholders?
How can we use business intelligence to increase the efficiency of change management initiatives?
Using Data Visualization
Data visualization is a valuable data science technique that involves presenting data in a visual format such as graphs, charts, and maps. Data visualization can help organizations communicate complex information more effectively and make it easier for stakeholders to understand the goals, objectives, and progress of change management initiatives. This can improve communication and increase stakeholder engagement in the change management process.
Change managers can use data visualization to answer the following questions:
How can we present our data in a way that is easy to understand?
How can we use data visualization to communicate progress and results to stakeholders?
How can we use data visualization to identify trends and patterns in our data?
How can we use data visualization to increase stakeholder engagement in the change management process?
Monitoring and Evaluating Progress
Monitoring and evaluating progress is a critical part of the change management process. Data science techniques, such as statistical analysis and data mining, can be used to monitor progress and evaluate the effectiveness of change management initiatives. This can help organizations identify areas for improvement, adjust the change management plan, and ensure that change management initiatives are achieving the desired outcomes.
Change managers can use monitoring and evaluation techniques to answer the following questions:
How can we measure the effectiveness of our change management initiatives? (e.g. employee engagement, customer satisfaction, business outcomes, etc.) And what method do we use to collect the data? E.g. surveys or focus groups?
What data do we need to collect to evaluate the change initiative progress?
How can we use statistical analysis and data mining to identify areas for improvement?
How can we use monitoring of ongoing support or continuous improvement?
The outlined approaches are some of the key ways in which we can use data science to manage the change process. Change practitioners should invest in their data science capability and adopt data science techniques to drive effective change management success. Stakeholders will take more notice of change management status and they may also better understand the value of managing change. Most importantly, data helps to achieve change objectives.
