I love change and enjoy being part of its implementation process. It’s always fascinating to watch the transformation and improvements to unfold in front of my eyes. One thing that shocks me in this area are the statistics on change and innovation.
Did you know that just about 20 years ago the first statistics on change was published and it stated the horrifying number – only 30% of new initiatives are delivered on time, on promise and on target?
What’s even worse is that the companies rushed into fixing the problem. After over 20 years of investing in training, consulting, project management, people development, the statistics are still disappointing – about 70% of new initiatives still fail to deliver.
Now, don’t get me wrong. There’s actually a difference between the high performers and low performers. The first group delivers about 89% of their projects successfully, while the second group keeps being stuck at about 30% (keeping the statistics the same for over 20 years).
Whether your company invests heavily in change management or it plays by the blow of the wind, the truth is that we all experience change. And while most people despise it, none of us can run away from it. Things like mobility, agility and disruption are just the tip of the iceberg that’s shaking up today’s workplaces. The list goes on with mergers & acquisitions, restructuring and policy changes.
No matter what department you work in, change affects every part of business, government, and even nonprofit organizations. We must embrace change and embed it into company’s processes.
According to Prosci, excellent change management embedded into a project can result in a 6 times greater chance of success than if change is poorly managed.
If this is true, why aren’t more companies getting on board? One of the top reasons is the past failed initiatives. When people have negative experiences with change, it’s harder to get them on board with the exciting new initiative. Let’s look closer at the cost of failure.
The cost of failure
Change done wrong has a cost. Some of the short term costs are pretty obvious:
- wasted time
- missed business objectives and targets
- wasted money
- wasted resources
- stress, confusion, fatique
- morale declines
- loss of employees
- decline in quality of work
- loss of productivity
The cost is even higher once we look at long-term effect of project failure:
- decreased confidence in leadership
- increased resistance to change
- decreased confidence in future changes
I believe that the above is the reason why so many companies still fail innovation. But there are many more reasons why executive leaders keep giving change a “lip love” without actually pursuing it.
Obstacles of change
There can be many reasons, yet the ones we hear most often here at PLC are:
- It’s “just communication” – Business leaders often miss the opportunity because it’s hidden behind the miscommunication or conflict. The two can actually be the first sign pointing out a change management problem.
- Lack of experience – Many companies allocate resources with little or no experience to manage large-scale initiatives and the result can be poorly managed change.
- Lack of awareness – Many companies still don’t understand change management and its role in the organizational life cycle. Others might have a bad experience with it.
There is a way to address and overcome these barriers. You can do so by properly communicating the ROI for change management. Let’s gather the ammunition for presenting the business case.
The importance of change
Before you can convince anyone in your company about the need for change, you’ll need to answer following questions:
- What needs to change? Whether you tackle a specific project, initiative or approach, you need to clarify what it is that is not working. Some stakeholders might be happy to also hear about what is NOT going to change, which will give them more confidence in your plan.
- Why is change needed? What are the reasons behind the change? How will the organization benefit if the change gets implemented? Last thing your company needs is change for the sake of change. In other words, don’t fix what isn’t broken. Doing a cost-benefit analysis is an excellent tactic for showcasing the reasoning behind the change.
- Who is the decision maker? There can be an individual or groups of people. Your business case may vary depending on who you talk to. You should focus on individuals who can provide the support and funding. This means, that most likely, you will be addressing senior leaders or project leaders.
- What action is needed? How can this problem be resolved? What are the next steps?
- When is the change needed? What happens when we delay action? Are there risks associated with the proposed change? What is the proposed timeline?
Once you have all of the information, it’s time to put it together into a compelling business case.
The business case for change
Following are the key steps for communicating your business case for change.
- Assessment of current situation and statement of problem – Quickly summarize the status quo and state the problem that exists.
- Description of project and solution – Describe the project and solution to help resolve the above situation.
- Cost-benefit analysis – This can be done pretty quickly and very powerfully. What is the cost of not taking action vs. what are the benefits of pursuing the change?
- Implementation process with proposed timelines – How will the change happen?
- Risk assessment – What are the potential risks? What could go wrong?
- Recommendations – What are the recommended next steps?
In order to succeed in communicating your business case for change, you need to keep in mind the following.
Key success components of winning a business case for change
- Speak their language – At the end of the day, it’s a business decision. What you say needs to be understood and aligned with the decision makers’ objectives.
- Credibility – Credibility is a matter of perspective. Where one person values experience or proven track record, someone else looks for a certificate or education.
- Be brief – Don’t overwhelm your audience with details. Create space for questions and answers as needed.
- Build allies – When there’s a need for change in the organization, chances are that there are others inside the company who see things from your perspective. Find them.
- Listen – Questions, feedback, recommendations and even concerns might seem annoying at the moment, but they can prove extremely valuable for tweaking the strategy or adapting the implementation.
If you have a change initiative coming up in the next 60-90 days, contact us to discuss the best approach for your organization.