A great solution and a well managed project are not enough to ensure the success of a project. It is a common misconception that ‘A great solution + effective management = project success’. However the missing piece of this equation is Change Management. Managing the human side of change is key to meeting objectives. Why change management? The table below outlines some of the most common implications of either effective or ineffective change management.
Return on Investment (ROI)
There are a number of human factors that limit or contribute to the ROI a project can realise:
- Speed of adoption – how quickly people do their job the new way, whether it is a new process, system tool or job role
- Ultimate utilisation – how many of the entire group participate in the change
- Proficiency – how effective is every employee at doing their job the new way
You can calculate the implication of change management by looking at the cumulative net cash flows in the three scenarios. Simple scenario analysis on your own cash flow projections can show the dollars you are putting at risk by not managing the people side of change. Experience shows that the ROI has a tremendous impact on senior leaders and project members who think in terms of financials and cash flow.
If change is not managed:
- Productivity declines as people become more consumed with the change being introduced.
- Passive resistance festers.
- Active resistance emerges and sabotages the change.
- Valued employees leave the organisation, a very costly proposition in terms of the lost contribution and the cost to replace them.
- Employees become disinterested in the current state and the future state.
- Employees begin arguing about change and the direction of the company.
- People are left to wonder why the change is happening.
- More people begin taking sick days or not showing up for work.
- People find work-arounds to avoid implementing the ‘new way’ of doing things.
- Employees revert back to the ‘old way’ of doing things.
- Changes are not fully implemented.
- Changes are scrapped and cancelled due to the lack of support throughout the organisation.
- Divides are created in the organisation between ‘us’ and ‘them’.
- The organisation builds a history of failed and painful changes.
Many types of risk are created – risk to the project, to the organisation, to the employees involved and to the individuals supporting or chartering change.
If change is effectively managed:
- Employees have a solid understanding of why change is happening.
- Employees engage in both the solution and the change.
- Training is used to build knowledge after employees have made the personal decision to support the change.
- Resistance is identified and dealt with early in the process.
- Senior leaders demonstrate their own and the organisation’s commitment to the change.
- Communications are segmented and customised for different audiences, answering the questions that they care about.
- Momentum is built throughout different areas and levels within the organisation.
- Changes are less painful to the organisation and to the employees.
- A coalition of support among senior leaders and managers creates momentum throughout the organisation.
- Probability of meeting project objectives is increased.
The organisation begins to build a history of successful change, creating a better ‘backdrop’ for the next change initiative.