The case for change management:
Correlating success and change management effectiveness

In Prosci’s 2007 and 2009 benchmarking studies, the top trend identified by study participants was a greater recognition of the need for and value of change management. While some find themselves in a situation where change management is being requested, many other practitioners are still working diligently to make a compelling case for the need for change management. For these practitioners, Prosci is releasing a five part series on the case for change management. Learn how to effectively “sell” change management to project leaders and executives in your organization by directly connecting change management to project and organizational outcomes.

This is the third tutorial of the series. The focus of this tutorial is presenting data that shows the correlation between change management effectiveness and three critical success factors for projects and initiatives: meeting objectives, staying on schedule and staying on budget.

The correlations

As a change management practitioner, you know in your heart that the work you do on a project is crucial for delivering results and outcomes. You know that when you do change management well, good things happen. And you know that when change management is done poorly or ignored, there are negative consequences. Your experience tells you that the more effectively change management is applied, the more successful a project will be. But, despite what you believe and know from experience, the question remains: does the data support you?

Below is data from Prosci's 2009 edition of the Best Practices in Change Management benchmarking report that supports your belief: the more effective change management is, the more success is achieved. The charts present data from four questions:

1. To what degree did the project meet objectives?
2. To what degree was the project on schedule?
3. To what degree was the project on budget?
4. What was the overall effectiveness of the change management program?

In the analysis of the data, Prosci correlated the final question - change management effectiveness - to the three previous dimensions of success - meeting objectives, on schedule and on budget. The results are stunning and quite clear; projects and initiatives are more successful the more effectively the people side of change is managed. Read on to see the charts, perhaps the most compelling case available for investing the time, resources and energy in change management (order the full report for only $289).

Meeting objectives

Figure 1 below shows the correlation of change management effectiveness to meeting project objectives. The points that are plotted represent the percentage of participants who met or exceeded objectives for each of the overall change management effectiveness categories - poor, fair, good and excellent.

Figure 1 - Correlation to meeting objectives

Here is how you would read the chart in words:

Of the participants that had excellent change management programs in place, 95% met or exceeded objectives. 80% of those with good change management programs met or exceeded objectives, and 51% of those with fair change management programs met or exceeded objectives. Only 16% - or about 1 in 6 - of those with poor change management programs met or exceeded objectives.

This means that with excellent change management, your project is six times more likely to meet objectives than with poor change management. And, with only fair change management you are three times more likely to meet objectives. This chart is so compelling that it is the third slide in the deck for the 1/2 day program Prosci teaches to executives and senior managers. It clearly connects how well we manage the people side of change to project, financial and strategic success. In the first tutorial of this series, we made the case that results and outcomes must be central in the case for change management. With this graph, you now have data to support that connection.

Staying on schedule

Figure 2 shows the correlation between change management effectiveness and the ability to stay on or ahead of schedule. Again, the data shows a stark and direct correlation - the more effectively the people side of change is managed, the more likely you are to finish on time.

Figure 2 - Correlation to staying on schedule

The correlation to schedule adherence is a powerful counter-point to one of the main objections you may hear from project leaders. This is not an uncommon statement to hear from a project leader: "While I understand why change management is important, I have deadlines and a go-live date I need to hit and applying change management will slow me down." At first glance, it might seem that addressing the people side of change could slow down project progress. But, the data shows quite clearly that projects with effective change management are actually more likely to stay on schedule.

Staying on budget

Figure 3 shows the correlation between change management effectiveness and staying on budget. As before, there is an observable correlation between effectiveness of change management and the ability to stay on budget.

Figure 3 - Correlation to staying on budget

Again, this chart provides an important counter-point to another main objection to change management from project leaders. A project leader may respond: "While I understand why change management is important, I do not have the budget to dedicate to those soft aspects of the change." Certainly, project managers must be attentive to budget constraints, and there are costs to assigning resources to change management. However, the data again clearly shows that projects with effective change management are in fact more likely to remain on budget than those with poor change management.

Two costly letters - R & E

The correlations between change management effectiveness and schedule and budget adherence may seem counter-intuitive at first. The letters R & E help us understand why this correlation exists. When the people side of change is ignored and only comes to light when a go-live date is greeted with outrage and resistance, teams have to go back to the drawing board. REwork, REdesign, REevaluate, REvisit - these are the costly R & E consequences when the people side of change is neglected. Each of these R & E consequences - rework, redesign, reevaluate, revisit - add cost and time to a project. By proactively building employee support and commitment with change management, these R & E costs can be avoided and mitigated. This is why, despite how it might seem to a project leader, effective change management actually increases the likelihood of finishing on time and on budget.

Conclusion

Organizations implement change for a reason - to improve performance, seize an opportunity, address an issue, etc. These changes ultimately come to life through individual behaviors and work process. The logic behind why change management is a critical success factor for projects and initiatives is sound. But many in your organization - namely executives and project leaders - are looking for real data to support the contention of value of change management.

This tutorial presents three compelling charts that show a direct correlation between change management effectiveness and project success in terms of meeting objectives, staying on schedule and staying on budget. With this compelling, quantitative argument - you are in a better position to build support and commitment for change management.

Coming up: the three "people side" ROI factors, and the costs and risks of poorly managing change