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 PCT Model). While there are rarely challenges to proving the ROI of "project management" and of "leadership," change 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, 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, or whatever you choose to call it) is directly tied to people engaging, 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 project.
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 if we begin answering the "what is the ROI of change management?" question in direct relation to the ROI of the project.
Here's how to 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.
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 project?
The task for you, then, is to express the benefits of change management in terms of expected project benefits.
Your 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 benefits:
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.
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 dependent on employees adopting and using the solution," the next step is to begin your investigation and data gathering. Here are three 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?"
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 dependent 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, 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, starting to ask the questions and having the conversations plant an 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.
Tim Creasey is Prosci’s Chief Innovation Officer and a globally recognized leader in change management. His work forms the foundation of the largest body of knowledge in the world on managing the people side of change to deliver organizational results.
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