ROI of Change Management
Rethinking our position - Repositioning our thinking
I was recently discussing the ROI of change management with a
colleague who expressed frustration with incessantly being
challenged for the ROI of managing the people side of change. We
know that for a project to be successful, it requires leadership
and sponsorship providing direction and guidance, project
management providing the technical-side solution and change
management providing the people-side solution (these are the
three corners of the Prosci PCT Model™). While there are rarely
challenges to proving the ROI of "project management" and of
management still faces the challenge of justifying the return on
the budget, time, work and effort required to manage the people
side of change.
There has been much discussion and debate about the ROI of
change management (Prosci even delivered a pre-conference
workshop on the subject at the 2011 ACMP Global Conference). But
perhaps it is the question that is all wrong. To see how we
might shift the conversation, remember that the
reason we do change management is to increase the benefits
realized and the value created by a project or initiative. Project
ROI (or benefit realization or value creation, whatever you
choose to call it) is directly tied
to people embracing, adopting and using the solution. So, the
ROI of change management is not really separable from the ROI of
the project. The ROI of change management really is the ROI of
the project - because the result of applying change management
is the achievement of intended results and outcomes for the
Perhaps we can change the conversation based on the answer we
provide and by reframing the question. Maybe, just maybe, we can tip the scales
we begin answering the "what is the ROI of change management?"
question in direct relation to the ROI of the project. This tutorial presents some new thinking on how we can
reposition the conversation about the ROI of change management
by focusing our response in terms of the project benefits that
depend on adoption and usage.
Shifting the ROI of Change Management Conversation
Fundamentally, the notion of rethinking our position and
repositioning our thinking around the ROI of change management
comes down to this: are we answering the ROI of change management
question in terms of project ROI?
See if you can make this shift:
Away from: What is the ROI of change management?
Toward: What expected benefits of the project
depend on the people side of change?
The ROI of change management cannot be separated from the ROI
of the project. We may be able to describe the unique
contribution to project ROI that results from focusing on
employee adoption and usage. But, in the end, we are still talking
about the ROI of the project. So, can we shift the mental framework
of those we are engaging by
defining the ROI of change management in relation to the ROI of
The task for you, then, is this:
Express the benefits of change management in terms of
expected project benefits.
ability to express the benefit of change management in terms of
expected project benefits is what will enable you to change the
conversation, to tip the scales. For example, think about how each of the following
statements translates change management ROI into terms of expected project
X% of expected project benefits are
directly tied to employees embracing, adopting and using the
change. This X% of project benefits is what investing in
change management can deliver.
The expected project benefits are
more likely to be achieved on time and on budget when effective change management
is applied, as demonstrated by various industry research
(including Prosci's 2012 edition of
Practices in Change Management).
Investing in change management increases the likelihood of
The expected project benefits depend
on how quickly (speed of adoption), how many (ultimate
utilization) and how effectively (proficiency) employees
begin doing their jobs in the new way required by the project. Investing in change
management helps to drive faster speed of adoption, higher
ultimate utilization and greater proficiency which all
generate higher project ROI.
The expected project benefits are
diminished if we do not address the RE costs (revisit,
redesign, redo, rework) and the inefficiencies that result from
ignoring end user adoption or bringing it to the table to
late. Investing in change management
minimizes RE costs and inefficiencies in the change process.
The expected project benefits are put
at significant risk, and we may incur more costs for the project, if we
do not proactively address the people side of change (for
example, resistance, attrition, productivity dips, etc). Investing in change management helps mitigate
project risks and avoid excessive project costs.
If we can shift the conversation - if we can rethink how we
position the impact of ROI - then the decision/challenge is no longer
one of investing in change management but instead a
decision to realize expected return on the project.
Collecting Your ROI of Change Management Data
If you are ready to make the shift - to move from "the ROI of
change management" to the "portion of the project ROI that is
dependant on employees adopting and using the solution" - the
next step is to begin your investigation and data gathering. Below are several
places you can start to look for answers to the question "how much of our expected project benefits are
tied to the people side of change?"
Overall project benefits - Start at
the highest level by examining the overall project benefits.
Look at project documentation and ask the question: What
percentage of the overall expected project benefits are tied
to employee adoption and usage? Then, come at it from a
different direction by asking the question: How much of the
expected project benefits will be realized if no one adopts
and uses the change (if adoption and usage are zero)?
Specific project objectives - Next,
get more granular by looking at the specific project
objectives. Most projects have defined a handful of specific
objectives that constitute success for the project.
For each of the project objectives, ask: Who in the
organization (which individuals or groups) must adopt and
use the solution for this objective to be achieved?
Project metrics - Finally, examine
the project metrics. Again, well crafted projects have
specific and measurable metrics that will be measured and
evaluated to determine if the project is delivering the
intended results. Ask: Is this metric tied to employees
adopting and using the solution, or can this metric be
achieved without adoption and usage?
This is a powerful exercise that creates the
foundation for discussing the ROI of the project that is based on employee adoption
and usage (hence, the ROI of change management). The amount of the project ROI that is dependant on
the people side of change is the value that change
management can enhance or deliver.
Where do you get this information? Begin with
the existing project documentation. If you are unable to answer
the questions, then take the next step and begin asking project
team members. Even if you do not arrive at dollar amounts to the
cent or percentages to the hundredths, simply starting to ask
the questions and have the conversation plants and important
seed for your discussion of the value of change management.
Once you begin to think about the value of change management
in terms of the expected project benefits, you are ready to
shift the ROI of change management conversation away from "what
do we get by doing change management" and toward "what portion
of the Project ROI depends on adoption and usage."
The ROI of Change Management is measured in terms of the
project benefits that are tied to adoption and usage. Rather
than chasing a value for Change Management ROI, see if you can
change the conversation by refocusing your position on project
benefits. If you can, it is no longer a decision to fund and
resource change management, but a decision to fund and resource
a large percentage of the expected Project Benefits.
Share your thoughts: this interactive poll will update
with reader's responses. Share your thoughts and check back to
see what others have to say.
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Offerings for applying Prosci's change management methodologies:
- Prosci's site licenses are a great solution for building change
management capabilities and competencies throughout your
organization. With a site license, you can customize and integrate
Prosci's world-leading research and methodologies to fit your
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management certification ($2800) - attend Prosci's 3-day
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References and books:
Best Practices in Change Management benchmarking report
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Change Management: the people side of change ($18.95 /
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ADKAR: a model for
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