Being Human ROI of Change Management 081015

Change
Conversations: The
ROI of Change
Management
Presented by
Louise Geoghegan
Senior Consultant
October 2015

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

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

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.

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

Snapshot of participants from Aus & NZ
6

In 2015, every business is in the
change business
7

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,

And many organisations lack change
capabilities
9
August 2014

Most organisations invest 5% or less of total
budget in Change Management
10
August 2014

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.

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

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

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…

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.”

WHY
Address Misperceptions
18
“Nice to have” Optional
Just communication
and training LIFO-able
“That’s the soft side
of change”

“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

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

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
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
* Data from 2007, 2009, 2011 and 2013
Correlation of change management effectiveness to staying on budget
Percentageofrespondentsthatmetorexceeded
projectobjectives

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
* Data from 2007, 2009, 2011 and 2013
Correlation of change management effectiveness
to staying on schedule
Percentageofrespondentsthatmetorexceeded
projectobjectives

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?

Organisations change for a reason
PerformancePerformance
>
© Prosci Inc. All rights reserved www.change-management.com
Current
state
Transition
state
Future
state

Expected Results and Outcomes
Results and Outcomes
Benefit Realisation
Value Creation
Return on Investment (ROI)
Delivering on the project
promise
26
Future

Individuals make their own transitions:
Adoption and usage
The individual is the unit of change

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

Making the connection between employee
adoption and usage and achieving benefits
29
Future

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.”

“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

Benefits have two components:
Technical and People (Adoption and Usage)
32
Dependent on adoption
and usage
Technical Contribution
Future

“People dependence” of project benefits varies
33
and usage
and usage
and usage
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

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

How much should you invest (budget,
people, focus) in driving
adoption and usage?
35

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?

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

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

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

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/

Being Human ROI of Change Management 081015

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