Ask 100 people to define Change Management, and you'll get 100 different definitions. At the end of the day, the definition is just semantics. What really matters is whether you can implement a Change Management program in a practical way that allows you to support your organization in successfully achieving its goals. Whether you're a Change Manager, a consultant, or the tech. guy who was told to "figure out some Change Management stuff," this blog will help address common issues and topics you're likely to run into along the way.

Saturday, July 30, 2011

Art or Science? The Exciting Conclusion...

It turns out, Readers, that you are a quiet and moderate group.  The dominant refrain from reader response and conversations I've had with clients and colleagues is that Change Management must be a combination of art and science in order to be truly effective.

This is great progress from a few years back when many of the people at the firm I worked for had a tendency to interpret CMS - Change Management Strategy - as Chicks Making Slides.

I agree that Change Management requires a combination of the science of methodology and planning with the art of people management and flexibility.  Today, though, I'll focus on the science side.  Specifically, I'd like to call your attention to an area I feel has been greatly lacking in Change Management - the science of Return on Investment (ROI).

Heads up, all you Change Management grad students (does such a thing exist?), because I'm about to depart from my practical advice to lay out my Change Management ROI thesis proposal.

A (Theoretical) Approach to Measuring CM ROI 

Perhaps one of the most difficult questions I receive from clients is, "How can you prove the value add of Change Management?"  I can provide a large number of anecdotes.  I can point to surveys such as IBM's Making Change Work study.  I can list dozens of articles and books that discuss the value of Change Management.

What I cannot do is authoritatively say that if you invest X dollars in Change Management, you will receive X value in return.

What we are sorely missing is a comprehensive, quantitative study of the value Change Management brings to a project or organization.

The Subject
I propose a study that is undertaken using a large organization such as IBM, Accenture, or Johnson & Johnson as the subject.  IBM and Accenture have the benefit of having an extensive and diverse portfolio of projects that include Change Management.  A non-consulting firm such as Johnson & Johnson has the benefit not needing to get permission from other organizations to use their data.

Even better - study more than one organization.  This would help control for differences in methodology and execution.

The Data
The chosen organization would need to gather a few major pieces of data for each project they implemented:
  • What was the total cost of the project?
  • What was the total spend on Change Management activities, broken down by Change Management, Communications, Training, etc.?
  • What were the project's objectives for itself (e.g., schedule, budget, team morale, etc.)?
  • How well did the project meet these objectives throughout the project lifecycle?
  • What were the project's business goals and/or Key Performance Indicators (KPIs) (e.g., save X amount of money, reduce process time by X minutes, increase customer satisfaction by X %)? 
  • How well did the project meet these goals and or KPIs at go-live, one month post-Go-live, one year post-Go-live, etc.?
As a control group, they should gather the same data for projects where they did not have any Change Management, as well as for projects that only had training.

This data should allow them to compare how well a project with Change Management met its internal and business objectives versus projects that did not utilize Change Management.  It would also allow them to do a cost/benefit analysis of the money spent on Change Management as a percent of overall budget versus the level to which they achieved their objectives.

I would recommend projects where objectives are very concrete, making them easy to set and measure.  It's much easier to determine how much a procurement system implementation will save you by reducing maverick spend than it is to determine how much happier your employees are after implementing a culture change.

The Roadblocks
There are a number of hurdles a researcher would have to overcome to implement this type of study.  First, my experience tells me that many projects don't set clear business objectives or KPIs.  I've been on a number of projects where there was no defined business case for the system implementation.

Second, on projects where business objectives are clearly set, I believe it's relatively rare for consulting firms to go back to the client on a regular basis post-Go-live to determine how well those objectives have been met.

Third, there are a large number of variables.  Would different consulting companies have different results based on their methodology?  How much of an impact does the experience of the Change Manager have?  How exactly would we define Change Management for the study?  And the list goes on.

The are other challenges, but the final one I would point out (and this is completely personal opinion) is that I think many Change Managers have a nagging fear in the back of their minds that a study like this might not conclusively demonstrate a positive ROI. 

We shouldn't let that stop us, though.  I believe we would find a correlation between including Change Management on a project and the project's ability to help an organization meet its KPIs.  And if we don't, that at least would point out to us areas where we can improve our methodology and practice.

Do you think this type of study would work?  Have you seen any good, quantitative research on the value of Change Management?

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