The value of Change Management in contributing to a project’s success is now largely recognised, but it has been hard to quantify for various reasons. While the benefit of introducing a technology or process change can be estimated in terms of its return on investment, the value that Change Management adds relates to enabling and supporting that change in the organisation. It deals with people, mindsets and behaviour, and that is harder to measure. This challenge with quantifying its value has, at times, lead to it being seen as a ‘nice to have’, rather than a necessity for achieving the business case. As a result, Change Managers have been looking for ways to quantify the value of Change Management and to interpret its benefits in more tangible terms. Given the human nature of the change, and the variables that need to be considered, is it possible to quantify the value of good Change Management for a specific project or programme, and how important is this?

Firstly, let’s look at the role of Change Management. Projects are initiated to make changes in an organisation that will result in business benefits. The Return on Investment (ROI) is usually calculated based on the anticipated benefits of implementing the specific change or solution (for example the technology change). Where there is no significant impact on staff, this may be an accurate reflection of the potential ROI. When the change requires a shift in the way employees work or the tools they use though, an extra factor is added to the equation for project success, and that is adoption of the change. A new system may have the potential to bring substantial benefit, but if people don’t use it, take a long time to start using it, or don’t use it to its full extent, the benefits of the system (and the ROI) may not be fully realised. Managing adoption and the ‘people side of change’ is where Change Management comes in.

When faced with a change, people take time to adapt and learn new skills and ways of working, and they usually require support in this regard. Productivity and morale often decline when a change is introduced, due to initial uncertainty and the need for a change in mindset, knowledge and skills for the people affected. Change Management helps impacted stakeholders move through the process of understanding and accepting the changes and their impact; upskilling where necessary and adopting new ways of working. This minimises the time that it takes for stakeholders to regain full productivity levels and reduces the degree to which productivity initially drops (i.e. minimises the ‘Valley of Despair’). It enables staff to adapt more quickly and effectively and supports a smooth and successful transition to the new way of working. Without Change Management, ‘adoption’ is not managed or supported, and may either take place more slowly and less effectively or may not take place at all.

This provides some insight into the difficulties of measuring the value of Change Management. As indicated above, it’s value may be equated to the extent and speed with which impacted stakeholders adopt the change, in order to realise the business case. Unlike changing technology or processes, this introduces a factor that is not fully within the Change Manager’s control. In other words, while Change Managers may supply all relevant information, training opportunities and support to encourage change, impacted stakeholders need to receive, accept and internalise the information before changing their behaviour. This process may differ from person to person based on factors such as emotions, preconceptions and personality traits. According to Everett Rogers (author of Diffusion of Innovation), some people are Innovators who are eager to try out new ideas and ways of working, and who are more proactive in managing their own change journey. Others may take a while to change or may resist change as far as possible. This may influence the speed with which adoption occurs, although Change Management offers ways to monitor and minimise resistance.

Another complexity is that part of this change process is internal and not easily observable until it leads to behaviour change and adoption, so early data may include mostly feedback from stakeholders and the results of learning assessments etc. This shows progress but cannot yet link Change Management to the realisation of financial value.

Lastly, Change Management is not a ‘one size fits all’ approach that can be replicated in a standard way across all companies and projects. A customised approach is developed around factors such as the changes a specific project will introduce; available timelines, what works in the organisation, and the stakeholders impacted. The effectiveness and value of Change Management may therefore vary depending on the skills and knowledge of the Change Managers involved. Ultimately, it deals with people and all of their complexities, and this adds a variable that makes it difficult to measure its direct impact and value.

Given the challenges, why is this measurement important? The main reason is that, while project leadership generally acknowledges Change Management’s value in helping to prepare staff for change and promote a smoother implementation, they don’t always understand its contribution to the project’s ROI. Without being able to quantify its value, it is often deprioritised as a ‘nice to have’ when funds are limited. It would help raise awareness about its value and motivate for its inclusion in promoting a project’s success, if we could quantify the value we know it brings.

Various studies have been conducted to quantify the value of Change Management. For example, Prosci’s 2016 edition of the Best Practices in Change Management benchmarking report links the achievement of project objectives on time and within budget, with the quality of Change Management on a project. Their results show that ‘of the participants with “excellent” change management programs in place, 94% met or exceeded objectives [while only] 15% of those with “poor” change management programs met or exceeded objectives’. This research also shows that the more effectively Change Management is managed, the more likely a project is to stay on schedule, and within budget.

These results highlight the overall value of Change Management across a range of past projects and provide a tangible link between effective Change Management and the realisation of a project’s business case on average. Without effective Change Management supporting adoption of change, there is a significantly lower chance of the project realising its objectives (and therefore its ROI) and of finishing on time and within budget. These statistics argue for the inclusion of good Change Management resources on a project, despite additional resource costs and the additional time required for Change Interventions. The studies are conducted in hindsight though, (i.e. retrospectively looking at the results of past projects), which allows for simpler measurement and more accurate results. It doesn’t allow us to quantify the specific value of sound Change Management for a future project.

In their Change Management ROI Calculation Guide, Prosci ask ‘what amount of the project benefits (or ROI) depends on employee adoption and usage?’. Or in other words, how much of the expected project benefits would be realised if no-one adopts and uses the change? The Boxley group offer an approach to help quantify the value of Change Management on a specific project, beginning with this calculation (‘The Value of Organisational Change Management’, Boxley Group). They suggest understanding the project’s objectives and identifying the stakeholders who need to adopt the change for the objectives to be achieved. In very simple terms, the amount of project value that is dependent on adoption is divided by the number of people who will need to adopt the change, to obtain a savings value per person and a total saving based on the percentage of adoption. For example – if adoption is required for a project ‘to deliver $10 million dollars in value and the estimated user base is 3000 employees, it can be calculated that every employee who adopts the solution will bring $3333 in savings. If the company has only 40% adoption they are only saving $4 million dollars and they are leaving $6 million dollars unrecognized’. Measures of adoption are identified based on project objectives and metrics and are measured on an ongoing basis so that Change Management can continually address the gap once the change has been implemented.

This offers a tangible way to quantify the potential financial value of adoption as a result of Change Management. It also helps provide motivation for continued Change Management after a change has been implemented, to realise the full Return on Investment (where this is dependent on adoption). Too often, Change Managers are ‘rolled off’ a project too soon after implementation.

It is assumed that the metrics consider the extent of adoption and level of proficiency per user. For example, an impacted stakeholder may be quite slow on the new system or may use it for some parts of the process but find workarounds for others, thereby reducing the expected benefit. While the potential value per person may be $3333, the actual value realised per person may be less.

It may also still be difficult to account for some of the human variables that complicate measurement in this calculation. For example, in cases where a system is replaced and then discontinued, users may have little choice but to adopt new tools or ways of working, regardless of the level of Change Management involved. Innovators and Early Adopters may adapt more easily than most, and it may take staff a much longer time to achieve a lower level of comfort and proficiency (thus decreasing the project’s ROI), but a minimum level of adoption is still likely. Two variables involved may be the complexity of the change (i.e. to what extent stakeholders can figure it out on their own) and the amount of choice that stakeholders have regarding adoption. Even with the potential for a minimum level of adoption due to other factors though, the project’s chances of achieving their objectives, and realising their business case decline significantly. This is supported by Prosci’s research, correlating excellent Change Management to a much higher success rate in terms of achieving project objectives, on schedule and within budget. These difficulties with quantifying the exact value contribution of Change Management do not detract in any way from its value.

Studies, such as those mentioned, are enabling insightful conversations about the specific value that Change Management can bring and are important for swaying decision-makers regarding the value of, and need for, Change Management in realising a project’s ROI. It is exciting to think that further developments are likely, especially given an increasing focus on the importance of data for enabling decisions.

At the end of the day though, there is the danger that with too much of a focus on the numbers and quantifying Change Management’s value, we may lose sight of our ultimate goal – enabling a smoother and more successful transition for the people who are impacted by a change. Change Management’s value is dependent on helping impacted stakeholders adopt new ways of working, and when we focus too much on the numbers, we may lose sight of the human elements that set apart our role and our value in the first place.