A new look at the ROI of Change Management

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Prosci Change Management Webinars A new look at the ROI of Change Management Presented by Catherine Smithson December 2015 Introducing Being Human Founded in 1993

1 Prosci Change Management Webinars A new look at the ROI of Change Management Presented by Catherine Smithson December 2015 Introducing Being Human Founded in 1993 Our mission: develop change-capable people and organisations so they achieve the benefits of change. Exclusive Prosci Primary Affiliate Australia and New Zealand. 2 1

practitioners worldwide 4,000+ Certified practitioners Australia/New Zealand 3 Topics Why care about the ROI of

2 Prosci by the numbers 1994 Founded in Loveland (Denver) Colorado, USA 8 global Benchmarking Reports 16 years of longitudinal research 3,400+ research participants 63 countries 80% Fortune 500 companies 30,000+ Certified practitioners worldwide 4,000+ Certified practitioners Australia/New Zealand 3 Topics Why care about the ROI of Change Management? Connecting Change Management to benefits and outcomes Q&A Getting back to Normal it s a town in Illinois USA. 2

3 2/12/15 Prosci 2014 Best Practices in Change Management Benchmarking Report 822 participants 63 countries Top 3 roles: 2% 2% 3% 5% Middle East Latin America 34% 14% Asia and Pacific Islands Change Management team leader Africa External consultant Project team leader 244 pages 38 new topics Europe 15% Canada Australia and New Zealand 25% United States The largest body of Change Management knowledge in the world. 5 Snapshot of participants - ANZ 6 3

4 2/12/15 Change has changed 7 8 4

Work Report While the Work Keeps Changing Report

5 The amount of change is expected to increase 9 Yet success rates of change remain low IBM Making Change Work Report While the Work Keeps Changing Report August ,400 organisations globally, over 20 industries, 5

for investing in enterprise change capability 76% 90% Our ability to adapt is a key source of

6 And many organisations lack change capabilities IBM Making Change Work Report While the Work Keeps Changing Report August ,400 organisations globally, over 20 industries, 11 Leaders see the need for investing in enterprise change capability 76% 90% Our ability to adapt is a key source of competitive advantage. Pricewaterhousecoopers 2008 Organisational agility is critical to business success. McKinsey

employee engagement 13 Reframing Change Management Change Management is a

Change Management is a deliverable of Project Management.

7 Moving from hit and miss change. to consistent, successful implementation and benefit realisation with high employee engagement 13 Reframing Change Management Change Management is a required consultation process in our Enterprise Agreement. Change Management is a deliverable of Project Management. Change Management is primarily training and communications. Change Management is a nice to have Change Management is performed by Change Managers. 7

8 Organisations change for a reason Current state Transition state Future state Performance > Performance Prosci Inc. All rights reserved Expected Results and Outcomes Results and Outcomes Benefit Realisation Value Creation Return on Investment (ROI) Delivering on the project promise Future Prosci Inc. All rights reserved

Results and outcomes depend on employee adoption and usage Solution must be: Designed Developed Delivered and Embraced Adopted Used Future Effectiveness = Quality x Acceptance General Electric 1980s

10 Results and outcomes depend on employee adoption and usage Solution must be: Designed Developed Delivered and Embraced Adopted Used Future Effectiveness = Quality x Acceptance General Electric 1980s Prosci Inc. All rights reserved 19 Soft side drives success on hard side How much value does a new process deliver if no one follows it? How much value does a new technology or system deliver if no one uses it? How much benefit is realised if the people drift back to the old ways? With a very large, negative ROI Prosci Inc. All rights reserved 10

The Swiss Cheese Syndrome Most teams implemented, but the team in {Sydney} are still in transition. Key users are still struggling, they need more support.

There is a wide variation in the benefits being realised in different parts of the business. We need to start Phase 2 to capture all the expected benefits.

11 The Swiss Cheese Syndrome Most teams implemented, but the team in {Sydney} are still in transition. Key users are still struggling, they need more support. The new operating model has rolled out but teams are still operating in silos. There is a wide variation in the benefits being realised in different parts of the business. We need to start Phase 2 to capture all the expected benefits. 21 Poll: What is the people dependence of the expected benefits of your change? Select a current or completed change Estimate the % of benefits that are dependent on people doing their jobs differently, i.e. adoption and usage. 0 25% 26-50% 51 75% % 22 11

How much do we need to invest in Change to achieve the required employee adoption and usage? What do we risk if we underinvest in driving behavioural change?

12 How much do we need to invest in Change to achieve the required employee adoption and usage? What do we risk if we underinvest in driving behavioural change? 23 Change Management increases the probability of success 100% t 90% e s m e t 80% a tiv c th je 70% ts b n o e t d c 60% n je o p ro 50% s p re d f e o d 40% t e n e x c 30% rc e e r P o 20% 10% 0% 16% Poor (n=244) Correlation of change management effectiveness to meeting project objectives 46% Fair (n=653) 77% Good (n=834) Overall effectiveness of change management program * Data from 2007, 2009, 2011 and 2013 Copyright 2014 Prosci. Best Practices in Change Management 2014 Edition. Change Management increases success rates by a factor of 6 96% Excellent (n=165) "Of the 165 research participants who reported having excellent change management effectiveness, 96% met or exceeded project objectives" "Participants with the highest level of change management effectiveness were 6X more likely to meet or exceed project objectives" 2014 Best Practices in Change Management Report. 822 participants in 63 countries. Prosci copyright

13 Change Management drives staying on budget Correlation of change management effectiveness to staying on budget Percentage of respondents that met or exceeded project objectives 100% 90% t a t 80% th e g ts d n u 70% e b d r n e o d 60% p n s u re r 50% f o o n t o 40% n e re rc e e w 30% P 20% 10% 0% 48% Poor (n=258) 63% Fair (n=737) 71% Good (n=1001) 81% Excellent (n=180) Overall effectiveness of change management program * Data from 2007, 2009, 2011 and 2013 Copyright 2014 Prosci. Best Practices in Change Management 2014 Edition. 25 Change Management drives staying on schedule Percentage of respondents that met or exceeded project objectives re e w t a le u th d e ts h n c e s d f n o o d p s a e re h f a o r t o n e n o rc e P 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 16% Poor (n=293) Correlation of change management effectiveness to staying on schedule 32% Fair (n=793) 54% Good (n=1032) 72% Excellent (n=181) Overall effectiveness of change management program * Data from 2007, 2009, 2011 and 2013 Copyright 2014 Prosci. Best Practices in Change Management 2014 Edition

So, does anyone else feel that their needs aren t being

resistance Improve employee engagement CM as an

project risk Build a change capable workforce &

14 So, does anyone else feel that their needs aren t being met? Current approaches to selling CM Reduce employee resistance Improve employee engagement CM as an engagement driver Drive culture change Mitigating project risk Build a change capable workforce & organisation Compliance or governance Deliver business results and outcomes 28 14

15 29 Changing the conversation from what we do to what we deliver Communications Plan Engagement Workshops Training Readiness Assessments Manage resistance Town Hall Meetings Impact Assessments Stakeholder Management 30 15

A new definition of Change Management Change Management is how we capture the behavioural change portion

Change Management how we assist people to make the individual transitions required for the change to

Change Management Process and Plans Leadership at all levels 31 Getting more specific on ROI What s the

16 A new definition of Change Management Change Management is how we capture the behavioural change portion of the expected results. Change Management how we assist people to make the individual transitions required for the change to succeed. Change Management Process and Plans Leadership at all levels 31 Getting more specific on ROI What s the connection between Change Management and project results and outcomes? Do all projects need Change Management to succeed? How do we quantify the Change Management investment required in a project? How can we target Change Management investment on a project so it delivers the best return? 32 16

17 New directions in quantifying the ROI of Change Management Which benefits are most significant? What is the dependence on Adoption and Usage? Which employees are most critical to realising these benefits? What is the risk assessment for these groups? What level of investment in Change Management will support those employees in making the transition? 33 The unified value proposition Project management Current Transition Future Change management Solution is designed, developed and delivered effectively (Technical side) + Solution is embraced, adopted and utilised effectively (People side) Complementary disciplines with a common objective Prosci Inc. All rights reserved 17

Prosci CMROI Calculator www.portal.prosci.

18 Prosci CMROI Calculator Enter expected benefits Estimate % of benefits that depend on people change, ie adoption and usage Scenario analysis: with no CM with excellent CM Calculate the ROI of CM Single or multiple benefits Financial or non financial benefits 35 More info Being Human beinghuman.com.au Prosci change-management.com prosci.com portal.prosci.com 36 18

Introducing Being Human

Change Community of Practice Webinars Getting Executives on Board with Change Management Presented by: Catherine Smithson Managing Director October 2016 Introducing Being Human Founded in 1993 Our mission: