Building Your Argument for Change Management
The executives in your organisation probably buy into the idea of using professional project managers to guide your projects. The discipline has been in place for a long time, and the advantages of following best practices are well documented. But when it comes to persuading the same leaders of the need for a professional approach to change management, they may balk.
Frequently, they assume the work of change is part of the project manager’s job, so they don’t necessarily support a separate change management approach. The benefits of change management aren’t well understood, and when the project budget gets squeezed and cost cutting takes place, that portion dedicated to change management activities is an easy target and often the first to go.
In this brief article, we lay out a strategy for making the case for change management. If you haven’t read up lately on key Change Management Principles, you can start with our Change Management Guide.
This is different than making the case for change — which is something you do among all of the stakeholders in a given project. What we’re talking about here is persuading your leadership of the value of change management. As with other aspects of organisational transformation, without enthusiastic sponsorship by executives, you’ll struggle to get anybody else to support the pending changes, and your project stands a good chance of failing or at the very least not delivering the benefits you anticipate.
Step 1: Who will do this work if not a Change Management Team?
It’s important to get across that change management isn’t an alternative to strong project management. It’s carried out in conjunction with other management activities to create an environment where the changes introduced add the highest value to the organisation and help maximise benefits.
So it’s important to continuously express the change management benefits in business metrics, not in “project speak.” For example, when discussing project risks, you can put it in terms such as this: “Change management is key to managing these risks…”
Often, experts in transformational change talk about the need to create a “burning platform for change.” We discuss this in our 10 lessons for change management article. While this is often translated to mean that people should be scared into going along with the new programme, fear hardly ever works in the long-term. We prefer to think of the burning platform as creating a sense of urgency. The idea is to generate the energy to get people thinking that change is necessary because the market is changing, regulations are changing, customers or clients are demanding new products or new services or something similar — and they’re in a position to help put those changes in place
That sensibility leads to the second part of the equation: what the benefits are for making the change. The change manager helps paint a clear vision for success: more revenue, new customers, more exciting careers, company appreciation, whatever it is.
The role of the change manager is to identify that burning platform and get people to accept its existence. Next, their job is to help participants understand what role they play a role in the project or what their part is in the change process. From there, their challenge is to help people move across the “chasm” of emotion that exists in any transformational initiative with as little friction as possible. The sooner people move through the process of reacting to change, the sooner the benefits begin to accrue. That’s a message that should resonate for company leaders.
Because the emotional state of these stakeholders make up a major risk to the success of the project, it’s up to the change manager to communicate status on where people stand regarding the change and to recommend tactics for addressing concerns, problems and obstacles.
Step 2: The ROI sums it up nicely
Sometimes change management is viewed as a “soft” activity, a nice-to-have, not a need-to-have. Research has proven otherwise. Share these results to help educate your management.
MI-GSO | PCUBED and its 2,500 project managers have a long history of working with dozens and dozens of companies on their projects. A survey of those PMs in 120-plus organisations looked at the results of projects where change management was implemented and where it wasn’t. (In our case, value was measured over a period of five years.)
Three out of 10 projects saw increases in performance directly tied to an effective change management approach. In large projects, the return on investment (ROI) was 6.5 times higher if an effective change management approach was in place.
Organisations saw an average return of about (AUD)$10 for every (AUD)$1.5 spent on change management. We have discovered that even a small investment gives you a much larger return in terms of what your business will gain from that total delivery.
Other studies showed similar results. A McKinsey & Company survey done in 2002 examined the difference between the expected value of a project and the value claimed by the company when the project was done. The consulting firm also rated each company’s “strength” in 12 “widely recognized factors” related to managing change effectively. As the report noted, nearly six in 10 companies didn’t meet target; two in 10 achieved a third or less of the target; and four in 10 reached target or exceeded it. The researchers concluded, “Not surprisingly, perhaps, companies with the lowest returns also had poor change-management capabilities, and companies that gained big returns had strong ones.”
A Changefirst report done in 2010 asked the question: “Can we prove that change management has a beneficial effect?” Those taking part in the survey included PMs, human resources and learning specialists, Six Sigma practitioners and consultants. They were asked to look at projects six to nine months after launch to see what impact change management was having.
The “top line” indications were that in those projects where spend was more than £1 million, the organisations had added about £2.5 million in savings by month nine, a 2.5-to-1 return. Projects classified as “smaller” (less than £50,000 spend) got “equally spectacular results”: an average of £250,000 gains or savings attributed to the project — a 5:1 return in less than nine months after launch.
In all of these studies, there’s a direct correlation between change management effectiveness and the gap between ROI expected and ROI delivered. McKinsey found that projects that were above average in change management effectiveness on all management levels realized 143 percent of expected value. Those with the lowest scores in change management effectiveness realised only 35 percent of expected value.
Remember: Ask for Support
As you build your case for supporting change management as part of the project, be clear about what it is you need: investment; the commitment to move forward; executive sponsorship; more staffing, a regular segment in the project agenda. Be clear about what you want and why it’ll pay off for you to get those things. Share industry success stories and show your leadership that the projects they’re anxious to get off the ground have more than just scheduling, budgeting and resource aspects. The professional project managers can manage those aspects. But the projects also have an emotional side to them. That’s where a change management programme will prove its worth.
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