In a time where organizations are facing tremendous pressure to change - more frequently, more quickly and at a larger scale than ever before - tolerating inefficiencies in the change process is unacceptable. However, inefficiencies are created each time a project launches and moves through the design, development and implementation phases without applying change management and addressing the people side of change. Addressing the people side of change early in a project helps to avoid or eliminate the "RE"s that appear when individuals do not adopt a new process, system or behavior. Below are the causes and costs of the REs that result from not managing the people side of change from the initiation of a project.
Projects and initiatives create change in a variety of ways by introducing some sort of solution to the organization. These solutions often emerge in the form of new or altered processes, new systems or tools, new reporting structures, new job roles, or new ways of operating. There is often tremendous focus placed on designing the "right" solution to the change. The goal of the solution is to improve performance in the organization and to achieve some sort of desired results and outcomes that triggered the change in the first place.
In the end, though, these solutions each ultimately require individuals to change how they work. A newly designed and documented process delivers improved efficiency only when individuals follow the process. A newly developed technology or tool comes to life only when it is used by individuals in the organization. Conversely, a perfectly designed process that no one adheres to does not deliver the intended results and outcomes. Likewise, a perfectly designed tool that no one uses results in no improvement (and a hefty, negative ROI). Change does not result from the solution, but rather from employees exhibiting the new behaviors, adhering to the new processes, following the new workflows or using the new tools that were triggered by that solution. Said another way, the individual is the unit of change, and thus individuals are the building blocks of successful change.
It is this reality of how change occurs in the organization that results in the costly REs when the people side of change is ignored. When the people side of change is addressed early in the project lifecycle, decisions are influenced and guided by issues related to usability, adoption and functionality for the end user. However, if the end user only enters the conversation late in the design effort, the result is the costly REs of mismanaged change.
Below are a number of the costly REs that result from addressing the people side of change too late. Think about your experience working on projects and initiatives. Have you ever experienced any of the RE costs? Could the costs have been avoided if the people side of change was addressed earlier in the project lifecycle?
Repeating any activity adds cost. Both time and financial resources are wasted. Schedules and budgets have to be expanded to account for additional costs. The opportunity costs are high when potential revenue is missed during the time it takes to REdo and REwork. Project team members are tied to the project longer than expected and unable to take on a new project. The anticipated benefits of the project are achieved later. The return on investment is delayed.
The reason that many of these RE costs can be avoided is simple: the people side of change is where changes ultimately occur. It is the bridge between installing a solution and realizing the benefits of that solution. It is the critical ingredient that ensures that a great solution ultimately delivers the intended results and outcomes. When the people side of change becomes part of the strategy early in the project, individual change processes can be managed correctly the first time and, collectively, the project's business results can be achieved without costly REs.
Benchmarking data is quite clear - change management should be applied as early in the project lifecycle as possible. In Prosci's 2009 benchmarking study with 575 participants, 82% of respondents indicated that change management should begin during project initiation, with 14% recommending change management start during project planning. The advantages of applying change management early in the project lifecycle include:
Addressing the people side of change late in the project lifecycle is costly and inefficient, ultimately undermining the success and Return on Investment (ROI) of the project. When change management is applied late in the project lifecycle, the focus is typically "fighting fires" and damage control. Change management activities are limited. Without early attention to the people side of change, the project creates more resistance, confusion, stress and fear with employees in the organization. Change fatigue can set in.
In organizations with a high value placed on efficiency, the concept of avoiding the RE costs is an effective tool for building support for change management and the people side of change. Organizational changes are realized through the collection of individual employees making individual changes. Project plans, budgets and schedules are frequently thrown off course by the people-side problems that inevitably arise. The costs and implications of theREs can be significant when the people side of change is neglected or ignored until late in a project life-cycle.
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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.