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They say it’s important to measure what matters most. But what change metrics matter most in the world of change management? Businesses are wanting to see a visible measurement of the value of change management. Sponsors want to be convinced that the money they are spending on change management, is worth the investment. In addition to this, project teams and business stakeholders want information at their fingertips that can help them track and manage the journey of change their people are going through.
Three key areas of measurement are ROI, value and business readiness.
Let’s begin by looking at key metrics for measuring change management return on investment. What metrics can we use to measure change management ROI? Statistics indicate that without change management, around 70% of projects are likely to fail or not realise their intended business benefits. Change management ROI can be determined through a combination of change metrics.
The speed it takes to adopt the new change is directly linked to the achievement of the project benefits. If the goal of a project, for example, is to implement a CRM leads management system that will increase sales, the faster the adoption of the new processes and systems, the greater the likelihood of achieving the project benefits. Change management and project management work hand-in-hand to achieve this.
Key metrics are:
Another way to quantify the value of change management is to measure the financial consequence of having no change management on a project.
If you compare the implementation of one project without change management, against a project of a similar nature that has change management, you can compare the difference between the benefits realised as a direct result of change management. An example is a project I had the privilege of managing a few years ago. We implemented a new global check-in system for an airline company. There had been an attempt to implement the very same system 2 years prior, without change management, and the adoption had been so low, that the company reverted back to the old check-in system. When we were chosen to lead the change management efforts for the second attempt, we were able to get all the users to adopt the system within the project time frames. The net result was that the spend on the first attempt yielded no business benefit and money was wasted, however, the success of the second implementation illustrated the value of change management.
A second metric is the project burn-rate. If users aren’t adopting the system due to no change management being in place, each day/month that the project is delayed can be quantified as a burn rate. This is the monetary value of the resource spend needed to keep the project going beyond it’s expected end date. Effective change management can ensure user readiness and user adoption of the change, reducing burn rates compared to previous attempts.
Key metrics are:
The metrics shared above however, are lag indicators. You can only measure the results once the project has been concluded. What about lead indicators? Lead indicators can be used to get visibility of what might happen in the future and so that you can quantify the value of change management ROI to secure buy-in and funding.
A way to measure this is to determine the financial value for realising the project benefits by quantifying project benefits that are reliant on change management. If for example, you are implementing a CRM system and without adoption, you are unlikely to achieve 80% of your benefit case, then the value of change management is directly linked to 80% of the financial project benefit.
Key metrics are:
What about measuring the value of change management? These metrics can roll-up into the ROI metrics we have mentioned. For example, a measure of value is how many active users there are on a system. That rolls up into the adoption of the system, which in turn, supports the ROI metrics.
Key metrics for measuring the value of change management are:
If a business wants to achieve the intended business benefits of a change, they need to make sure employees who are impacted by the change are ready for the change. It is the responsibility of both leaders and change managers to implement activities that ensure this, but how do we measure that our efforts are in fact successful? Business readiness is the final gate before implementation and adoption, so it is a critical moment for measurement. It happens throughout the lifecycle of a waterfall style project, and it happens prior to each release when using the Agile methodology.
By measuring business readiness, we can identify where employees are ready for the change, and where more work is needed to ensure readiness. Readiness not only looks at communication, education and skills transfer, but also at the environment and the support available to employees.
Key metrics include:
Measurement is becoming more topical in change management as the discipline evolves into a science and the level of organisation maturity increased. Data sciences can advance the discipline of change management and quantify the importance of it as a must-have versus a nice-to-have in organisations. Let’s measure what matters most!
