Being Human ROI of Change Management 081015
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(1) Change management helps organizations achieve project benefits and outcomes by driving employee adoption of new processes, technologies, and ways of working. (2) The level of "people dependence" of project benefits varies depending on factors like the number of employees impacted and the degree of change required. (3) Organizations are increasingly quantifying how much they should invest in change management based on which benefits depend most on employee adoption and which employee groups are critical to benefit realization.
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Being Human ROI of Change Management 081015
- 1. Change Conversations: The ROI of Change Management Presented by Louise Geoghegan Senior Consultant October 2015
- 2. Introducing Being Human • Founded in 1993 • Our mission: develop change-capable people and organisations so they achieve the benefits of change. • Exclusive Prosci Primary Affiliate Australia and New Zealand. 2
- 3. Prosci by the numbers • 1994 – Founded in Loveland (Denver) Colorado, USA • 8 global Benchmarking Reports • 16 years of longitudinal research • 3,400+ research participants • 63 countries • 80% Fortune 500 companies • 30,000+ Certified practitioners worldwide • 4,000+ Certified practitioners Australia/New Zealand 3
- 4. Topics • Why care about the ROI of Change Management? • The three ages of Change Management • Connecting Change Management to benefits and outcomes • Q&A Getting back to Normal… it’s a town in Illinois USA.
- 5. Prosci 2014 Best Practices in Change Management Benchmarking Report • 822 participants • 63 countries • Top 3 roles: • Change Management team leader • External consultant • Project team leader • 244 pages • 38 new topics The largest body of Change Management knowledge in the world. 5 2% 2% 3% 5% 14% 15% 25% 34% Middle East Latin America Asia and Pacific Islands Africa Europe Canada Australia and New Zealand United States
- 6. Snapshot of participants from Aus & NZ 6
- 7. In 2015, every business is in the change business 7
- 8. Yet success rates of change remain low IBM Making Change Work Report While the Work Keeps Changing Report August 2014 1,400 organisations globally, over 20 industries,
- 9. And many organisations lack change capabilities 9 IBM Making Change Work Report While the Work Keeps Changing Report August 2014 1,400 organisations globally, over 20 industries,
- 10. Most organisations invest 5% or less of total budget in Change Management 10 IBM Making Change Work Report While the Work Keeps Changing Report August 2014 1,400 organisations globally, over 20 industries,
- 11. Major gap between Change Management at project and enterprise levels 11 of organisations apply a Change Management methodology of organisations applying Change Management methodology to all projects 2014 Best Practices in Change Management Report. 822 participants in 63 countries. Prosci copyright 2013.
- 12. Changing the conversation from what we do to what we deliver 12 Communications Plan Training Engagement Workshops Impact Assessments Stakeholder Management Manage resistance Town Hall Meetings Readiness Assessments
- 13. How do you explain yourself? By what you do 13 Stakeholder Analysis Impact Assessments Change Management Strategy Communications Plan Sponsor Roadmap Coaching Plan Training Plan Resistance Management Plan Feedback Collection Sustainment Activities
- 14. How do you explain yourself? Or by what you deliver (“Why”) 14 Drive benefit realization Ensure ROI Enable results and outcomes employee adoption and usage of change …through…
- 15. What would you say… you do here? 15 “I conduct readiness assessments, complete impact analyses, build strategies, create change management plans and support integration into project plans.” “I help us capture the portion of project benefits that depends on employee adoption and usage.”
- 16. WHAT DO YOU DO? 16
- 17. 17
- 18. WHY Address Misperceptions 18 “Nice to have” Optional Just communication and training LIFO-able “That’s the soft side of change”
- 19. “Knowing what to do with a toon is easy. It's getting them to do it that's hard.“ Ender to Bean in Ender’s Game, Orson Scott Card19
- 20. PMI Research shows the connection • “Organisations reporting higher-than-average success rates for projects also report higher-than- average adoption of organizational Change Management practices.” Pulse of the Profession Report 2012
- 21. Change Management increases success rates by a factor of 6 Change Management increases the probability of success • "Of the 165 research participants who reported having excellent change management effectiveness, 96% met or exceeded project objectives" • "Participants with the highest level of change management effectiveness were 6X more likely to meet or exceed project objectives" 21 16% 46% 77% 96% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Poor (n=244) Fair (n=653) Good (n=834) Excellent (n=165) P e rc e n t o f re s p o n d e n ts th a t m e t o r e xc e e d e d p ro je c t o b je c tiv e s Overall effectiveness of change management program * Data from 2007, 2009, 2011 and 2013 Copyright © 2014 Prosci. Best Practices in Change Management – 2014 Edition. Correlation of change management effectiveness to meeting project objectives 2014 Best Practices in Change Management Report. 822 participants in 63 countries. Prosci copyright 2013. 21
- 22. 22 Change Management drives staying on budget 48% 63% 71% 81% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Poor (n=258) Fair (n=737) Good (n=1001) Excellent (n=180) P e rc e n t o f re s p o n d e n ts th a t w e re o n o r u n d e r b u d g e t Overall effectiveness of change management program * Data from 2007, 2009, 2011 and 2013 Copyright © 2014 Prosci. Best Practices in Change Management – 2014 Edition. Correlation of change management effectiveness to staying on budget Percentageofrespondentsthatmetorexceeded projectobjectives
- 23. Change Management drives staying on schedule 23 16% 32% 54% 72% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Poor (n=293) Fair (n=793) Good (n=1032) Excellent (n=181) P e rc e n t o f re s p o n d e n ts th a t w e re o n o r a h e a d o f s c h e d u le Overall effectiveness of change management program * Data from 2007, 2009, 2011 and 2013 Copyright © 2014 Prosci. Best Practices in Change Management – 2014 Edition. Correlation of change management effectiveness to staying on schedule Percentageofrespondentsthatmetorexceeded projectobjectives
- 24. Getting more specific on ROI 24 What’s the connection between Change Management and project results and outcomes? Do all projects need Change Management to succeed? How do we quantify the Change Management investment required in a project? How can we target Change Management investment on a project so it delivers the best return?
- 25. Organisations change for a reason PerformancePerformance > © Prosci Inc. All rights reserved www.change-management.com Current state Transition state Future state
- 26. Expected Results and Outcomes Results and Outcomes Benefit Realisation Value Creation Return on Investment (ROI) Delivering on the project promise 26 Future © Prosci Inc. All rights reserved www.change-management.com
- 27. Individuals make their own transitions: Adoption and usage The individual is the unit of change © Prosci Inc. All rights reserved www.change-management.com
- 28. Results and outcomes depend on employee adoption and usage Solution must be: • Designed • Developed • Delivered and • Embraced • Adopted • Used 28 Future Effectiveness = Quality x Acceptance General Electric – 1980s © Prosci Inc. All rights reserved www.change-management.com
- 29. Making the connection between employee adoption and usage and achieving benefits 29 Future © Prosci Inc. All rights reserved www.change-management.com
- 30. The Swiss Cheese Syndrome 30 “Most locations implemented, but the team in Sydney are still in transition.” “Key users are still struggling, they need more support.” “The new operating model has rolled out but teams are still operating in silos”. “There is a wide variation in the benefits being realised in different parts of the business.” “We need to start Phase 2 to capture all the expected benefits.”
- 31. “Soft side” drives success on “hard side” • How much value does a new process deliver if no one follows it? • How much value does a new technology or system deliver if no one uses it? • How much benefit is realised if the people drift back to the “old ways”? With a very large, negative ROI © Prosci Inc. All rights reserved www.change-management.com
- 32. Benefits have two components: Technical and People (Adoption and Usage) 32 Dependent on adoption and usage Technical Contribution Future © Prosci Inc. All rights reserved www.change-management.com
- 33. “People dependence” of project benefits varies 33 Dependent on adoption and usage Technical Contribution Dependent on adoption and usage Technical Contribution Dependent on adoption and usage Technical Contribution Few employees impacted Many employees impacted Single location Many locations Few aspects of work impacted Many aspects of work impacted Small transition from current state Transformational change © Prosci Inc. All rights reserved www.change-management.com
- 34. Activity: What is the “people dependence” of your project benefits? • Select a current or completed change • Estimate the % of benefits that are dependent on “people doing their jobs in a new way, i.e. adoption and usage. • 0 – 25% • 26 - 50% • 51 – 75% • 76 -100% 34
- 35. How much should you invest (budget, people, focus) in driving adoption and usage? 35
- 36. Back to those ROI questions 36 What’s the connection between Change Management and project results and outcomes? Do all projects need Change Management to succeed? How do we quantify the Change Management investment required in a project? How can we target Change Management investment on a project so it delivers the best return?
- 37. New directions in quantifiying the ROI of Change Management • Which benefits are most significant? • What is the dependence on Adoption and Usage? • Which employees are most critical to realising these benefits? • What is the risk assessment for these groups? • What level of investment in Change Management will support those employees in making the transition? 37
- 38. Shifting the conversation Why should we … How much should we … What value do we get when we …. Can’t we just send an email and not …. Invest in Change Management 38 Because a significant portion of organisational benefits and project objectives (x%) and organisations outcomes depends on employee adoption and usage, and change management helps us drive adoption and usage
- 39. The unified value proposition Solution is designed, developed and delivered effectively (Technical side) Solution is embraced, adopted and utilised effectively (People side) + Complementary disciplines with a common objective Project management Change management Current Transition FutureCurrent Transition Future © Prosci Inc. All rights reserved www.change-management.com
- 40. More info Being Human www.beinghuman.com.au Prosci www.change-management.com www.prosci.com Change Management Institute www.change-management- institute.com Association of Change Management Professionals www.acmp.info/