PantaRhei – it’s all running! Heraclitus knew from BC that everything is always changing and that we cannot step into the same river twice. Until today, not much has changed. Only the river is flowing faster. Change is therefore the only constant. New ideas and projects to improve operations, increase profits and improve competitive advantages are constantly emerging and being implemented. You may be implementing a new way of communicating, new technology, changing processes or changing the customer experience in your organisation right now.
The introduction of change has the common goal of improving the performance of the organisation and achieving the desired results. People make these goals happen. The culture, processes, workplaces, reporting structures, people’s behaviour and even their identity within the company are strongly influenced by the initiatives and projects implemented within the company.
Change management is an integral part of any project or initiative that changes people’s behaviour in any way. Change management makes it easier, cheaper and faster to get to the project’s objectives. However, change management focuses on achieving expected results and business impacts rather than project objectives.
Why change management is essential:
Growth in a constantly changing environment
The days when a big change happened every 36 months are over. Organisations are facing faster, more complex, interdependent and interdisciplinary change than ever before. The ability to deliver results in an environment where multiple changes are taking place simultaneously enables an organisation to execute its strategy and vision and deliver its growth ambition. Implementing a change management process enables an organisation to effectively deliver project results, while building competences that enable the organisation to implement multiple changes simultaneously.
Achieving the people-powered share of project value
We make changes in companies to improve their performance. While part of the added value of a project comes from the newly implemented change itself, often the lion’s share of the planned value of change lies in changing the way people work. The Prosci CMROI model (a tool that calculates the added value of the change management process) calls this the adoption value (the percentage of the project’s value that is linked to the adoption of the solution or to changed people behaviour). For major projects, this percentage often ranges between 80% and 100%.
Change management therefore focuses on helping people to change the way they do their work, and thus to realise the people-related part of the project’s ROI.
Closing the gap between requirements and project results
Often, organisational changes meet project requirements but do not deliver the expected business impact. The focus of the change is therefore on the implementation of the solution rather than on the business benefits of the solution. The gaps that arise between requirements and results, results and business impacts, and between solution and benefits, are the people who ensure that the change is applied in their daily work. Change management enables the gap to be closed by effectively supporting and empowering employees to successfully implement the change and apply it in their daily work.
Improving the chances of project success
The data is unwaveringly clear. The better we manage change, the more likely a project is to achieve its objectives. In a study of over 2,000 projects over the last 10 years, Prosci found that projects with excellent change management are 6 times more likely to achieve their objectives than projects with poor change management. Simply moving from “poor” to “sufficient” change management increases the likelihood of achieving project objectives by a factor of 3.
McKinsey research shows a similar picture. The ROI achieved with excellent change management is significantly higher than with poor change management. Effective change management in a project significantly increases the success rate for the same effort.
Reducing critical risks
Neglecting the human side of change creates risks. When our focus on a project is solely on delivering the project solution and we forget about changing people’s behaviour, the result is increased risk and higher costs. There are so-called ‘re-costs’ when it comes to re-planning the solution, re-educating users, re-designing the solution, re-scoping and so on. In the worst case, the project may fail completely and stopped or delayed. This further exhausts employees, leading to a drop in productivity and morale. All of the above is usually passed on to our service, which is also felt by our customers.
The absence of planning and addressing the human side of change is costly. Change management is a discipline that helps to mitigate the above risks.
Reducing the unpredictability of change
Change as such is difficult. That’s why we want to take the unpredictability out of change as much as possible. Project management has achieved this by prescribing guidelines on defining milestones, objectives, activities and resources throughout the project life cycle. When we “forget” to actively nudge and guide people through their change, we introduce unpredictability into the project. Change management provides the skills and techniques to actively support employees on their journey through personal change. This actively reduces project risks and optimises the business value of the project.
Care for employees
How many times have we heard the phrase “our employees are our greatest asset”? Yet we often fail to act in this spirit. Here’s how we’re making the change: we’ll inform employees about the training on Monday, and on Wednesday about the change we’ll make on Friday. We can help people through the change, proactively involve and support them during the change, showing them their value to the company.
