The Return on Investment of Change Management

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One of the barriers to effective change management on a project is getting the authorization to begin. Many leaders resist investing in managing change without a clear picture of the return on investment (ROI) – a picture that can be fuzzy and hard to clarify because it’s hard to quantify in hard numbers. But there are four areas where you can demonstrate the value – with measurable clarity – of applied change management for your leaders: reduce the negative impact on productivity; achieve benefits sooner; exceed your expectations; and ensure the sustainability.

Reduce the negative impact on productivity
Unless you’re never gone through one, you know change is disruptive. Experience teaches us to apply good project management and risk mitigation to our projects. We develop cost estimates and put dollar figures on the expected productivity losses in areas like quality, capacity or even customer satisfaction. In practice, leaders tend to underestimate the true costs of change.

With those numbers in hand, we have the first opportunity to bring the change management ROI into focus for our leaders. Whether by percentage or duration, a well managed change will mitigate the negative effects on productivity. Tell your leadership you have a plan to achieve a 10 or 15% reduction in the expected dip in customer satisfaction during the new system implementation, and you’ll get their attention.

Achieve benefits sooner
Every project or program undertaken has benefits. The trick is executing the project successfully enough to claim those benefits. Good change management practices mitigate the risks associated with both the project team and the organization that has to change. The team functions better and the project runs smoother because there is less resistance. And that could lead to the project coming in ahead of schedule. Who wouldn’t like to tell their program management office how to convert the benefits from ‘proposed’ to ‘realized’ sooner, rather than later?

Exceed your expectations
Research and surveys demonstrate that most projects are completed less than successfully. A well managed change prepares the organization to accept whatever adjustments are being asked of it. In fact, you may even surpass the level of expected benefits by exceeding your expectations. How often do leaders hear that message?

Ensure the sustainability
Even the most spectacularly successful project can have trouble maintaining the benefits over time. Just about every organization has had that feeling of déjà vu as they complete nearly identical projects over and over because the gains are never sustained. When the resistance to change is alleviated through good change management, you can get off the treadmill once and for all. By showing leadership how many projects can be avoided completely, you have another opportunity to demonstrate the value of thoughtful, intentional change management.

What other ways do you think you can show the value of change management in your organization?

Author: eric.hansen

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