Insane Change Management
Updated: Apr 23, 2020
Go ahead and recite the definition of insanity as you roll your eyes: It's doing the same thing over and over again and expecting a different result. Organisations continue running huge, ambitious projects that make fundamental changes to processes, technologies, and organisational structures.
Yet more projects fail than succeed in achieving their objectives. Time and time again, we see that people-related issues such as inadequate leadership involvement and poor stakeholder engagement are reasons for projects missing the mark. Yet we continue to expect project managers to handle these aspects in their spare time and just over one in three projects use a structured approach to change management.
Why aren't we getting the message?
Organisations and their change managers are showing symptoms of insanity. The organisations are seeing mediocre results (or worse) from most projects and choosing to use the same delivery approaches. Change managers are failing to have enough influence over project delivery. Yet they choose to use the same ineffective tactics to justify their change management tactics.
How is it that we intuitively understand that project management provides the necessary structure to deliver high value solutions to business problems while we struggle to justify applying change management to ensure that those solutions are actually adopted and used by the business to generate tangible benefits? Let's examine the root causes of this phenomenon and work towards a shift in our views of change management and its role in project delivery.
The Problem is Perception
Employees, managers, executives, consultants, contractors - I've heard all of them refer to change management as the "soft stuff" or the "touchy-feely stuff." That's not completely inaccurate. Change management does focus on people in terms of communications, sponsorship, leadership alignment, stakeholder engagement, skills, behaviours, culture, etc. With that said, I'd argue that people are at the very heart of every high-value change a business would ever want to make.
With budgets under pressure, skipping the "soft stuff" (or minimally ticking the box) might be seen as an opportunity for avoiding discretionary cost. I suspect the reason is because most people are challenged to articulate tangible value from change management; and they expect that getting others to accept and embrace a good solution will require very little effort. It is very flawed thinking, but that doesn't make them insane.
But organisations are, on the whole, showing serious signs of insanity. Even though historical project success rates are unacceptable, we continue to make the same investment decisions around how they're managed. It's not just the decision makers that are challenged here. Change managers also have an important role to play in this. If change management is indeed seen as "the soft stuff," there's an even more pronounced need to effectively identify its real value. Why do we continue to describe change management in the same ways that have so far earned it a rather limp reputation?
Surely a more powerful description of change management and its value will help. However, if we intend to overcome insanity, we can't rely on propaganda.
The Hard Facts
If perception is the problem, perhaps at least part of the solution can come through an objective view of reality.
According to McKinsey & Company, only two in five projects meet schedule, budget, and quality goals; IBM says that large projects end up on average 45 percent over budget, seven percent over on time, and 56 percent less valuable than expected.
Businesses have been documenting the outcomes of projects for long enough to have data on what's going wrong. Prosci benchmarking has found that well over half of the resistance put up by employees and managers is found to be avoidable in project lookbacks; and the top reason for project failure is lack of leadership commitment.
Prosci has also shown that in projects with robust change management:
80 percent meet their objectives;
82 percent fall within budget; and
75 percent meet schedule targets.
Call it soft, touchy-feely, or whatever you like; but the numbers strongly imply that the soft aspects of delivery have a hard impact on outcome and value. Therefore, there must be very tangible value in change management activities.
Thinking More Like a Project Manager
Compared to change management, project management is widely perceived as more essential - even though I find most people are equally challenged to articulate the bottom line business impacts of traditional project management. In fact, while discussing the importance of project plans with identified dependencies and constraints, a client once said to me, "There's no value in making a plan. It doesn't impact the bottom line, which makes it a waste of my time. I'm far too busy delivering to bother with having a plan."
Fortunately, it's pretty rare to have that sort of dialogue in the project management world. Most people see the intrinsic value in planning, reporting, managing risks, etc. based on their experiences. In other words, they have seen the results of not doing it and have decided to learn from the mistake. In other words, most of us are not insane when it comes to the fundamentals of project management.
I'd even go a step further to say that project management is rather "soft" and "touchy feely" compared to the base operations of any business that has more easily traceable links to profit and loss. Still, the vast majority of us would agree that attempting to make a big change in an organisation without appropriate project management would have an adverse impact to the bottom line.
So why then does change management struggle to have its intrinsic value acknowledged? It probably starts with the way that we choose to define it. Common definitions include: "driving the people side of change", "managing people risks", "winning hearts and minds", and "bringing people along for the journey".
If I'm the sponsor of a project on a constrained budget, those definitions describe "nice to have" aspects of my project. They seem rather soft, and I'm not sure I would see bottom line value beyond making a noble attempt to keep people happy. Ultimately, as an executive, my "warm and fuzzy" feelings tend to derive from meeting objectives and hitting deadlines.
So is change management soft and touchy-feely? Or is it on the critical path to maximising value? The answer is yes.
Allow me to make a rather non-controversial statement. Any project which makes changes to technology, policy, processes, or organisation will require those who are impacted by the change to do something differently. If you agree, then we are at least halfway towards articulating why change management is so critical.
Super Socks: A Tale of Olympic Project Delivery
The most profound levels of understanding come from experience. Let's consider a hypothetical situation.
Imagine an Olympic team of distance runners who suffer from chronic foot injuries, causing a large amount of time away from practice and decreased performance during competitions. The team's owner enthusiastically kicks off a $1 billion project to solve this issue. The world's most experienced (and expensive) project managers come together to deliver a solution. They work with leading scientists and propose a solution that will decrease injuries by 80 percent and increase the team's win rate by 300 percent through the introduction of new, technologically advanced socks.
The coach and management are thrilled with the prospect and move ahead with the "Super Socks" project. However, one year later, after spending $1.3 billion, the team has only decreased injuries by 25 percent and the win rate has declined by 10 percent. Demanding a detailed investigation, the coach discovers that only half of the team is wearing the new Super Socks. The reasons why are surprising. A lot of the distance runners have "lucky socks" that they've used for years and they believe that they perform better when wearing them (they don't). Others in the team are wearing the socks, but inside out. Their injuries have decreased by 40 percent.
The rest of the team, which has started wearing the Super Socks properly, has completely eliminated its foot injuries (100% reduction). However, some of these runners feel that they're working much harder due to the other half's constant inability to practice and compete. So they have remedied this by occasionally claiming to be injured when they'd like to take a few days of rest. Although the overall health of the team has increased, the coach suspects that they are winning fewer races than ever due to low morale and a newly developed blame culture.
What went wrong here? How this team and others learn from this failure? A good change manager might summarize as follows:
The team spent a huge amount of money for what turned out to be small improvement in injuries and a decline in wins;
A brilliant solution doesn't guarantee benefits;
In order to realize maximum benefits, the brilliant solution needs to be fully adopted across the board; and
Adoption is completely dependent on people making conscious decisions to consistently change certain aspects of how they do things.
Defining Change Management beyond the Touchy-Feely Stuff
Many leaders have an expectation that their employees will do as they are instructed. Excluding prisons and the military, this expectation is often best characterised as wishful thinking.
So how can we show leaders the value of a structured approach to maximising adoption? We know that change management is focused on people, so we might try to describe it in those terms. We could say, "In order for people to change quickly and efficiently, they need to be engaged, feel capable, and even feel incentivised." It's all true, but it still comes across as quite soft and touchy feely.
But what if I said, "To extract value from our project as quickly and efficiently as possible, we need to focus on making sure that everyone in our organisation is supportive, capable, and compliant"? It doesn't sounds as "soft" this time around, but the message is identical. The only difference is context. The first version focuses on the individual change journey whereas the second version focuses on the organisational change journey. The two versions are completely consistent since the organisational outcome is an amalgamation of individual results.
If our greater opportunity is to define change management in a way that clearly shows its value, let's define it in terms of the organisational change journey:
Change management is the practice of effectively engaging stakeholders, minimising risk to efficient adoption, and maximising benefits from projects through a focus on the organisation, its culture, and its people.
It might now be easier for me as a sponsor to see the value of doing this. And while I would want to tailor the approach to the specific circumstances of my organisation and what I'm trying to achieve, I can also probably understand why it needs to be a bit "touchy feely."
Articulating Tangible Value from Change Management
In the Super Socks example, even if we can't see the tangible benefits of addressing the "people side of change," we can certainly see the potential impacts of neglecting it. For most, that's enough. But how might we articulate the value of change management in a way that would have enough impact to capture the attention of an insane person who is fully committed to doing the same things while expecting different results? I think we may need to be more explicit.
There are a number of ways to estimate the tangible impacts of change management. But let's focus on two that are intuitive and relatively easy to use.
The Business Case Method
This method requires an understanding of the organisation's history with delivering projects and insights to the current project's business case. It uses parametric estimation, so the level of accuracy is highly dependent on assumptions. Still, it is great for having a very benefits-focused conversation and starting to understand the potential impact of neglecting change management.
In speaking with a project manager, program manager, or sponsor, you ask: "What percentage of the benefits described in the business case are dependent on people doing things differently in the future than they do them today?" Unless you're running a project to replace ceiling tiles, you can expect quite a significant percentage to be tied to people changing something.
Then we shift our focus to the organisation's track record with change - specifically, "What levels of adoption have you achieved in the past? The new supplier management process that was deployed last year - what percentage of the organisation is still ignoring it or struggling to use it properly?"
As an example, the executive sponsor may estimate that a project is 80 percent dependent on people changing how they work in order to achieve a $1 million cost savings, but the organisation has typically seen process adoption rates of around 60 percent.
So now we can dig deeper. Has the business case for this project factored in an expected 60 percent adoption? And if the cost savings were $600,000 instead of $1 million, would this be acceptable? If not, we should be focusing on what we can do ensure a much higher level of adoption. Any guesses as to my suggestion?
The Continuous Improvement Method
This method is slightly more complex, but can provide a mature organisation with very accurate ways to assess the value and effectiveness of change management over time in multiple projects.
In thinking through the Super Socks example, we determined that maximum value is extracted only after the solution is fully adopted. So let's break adoption into three quantifiable components based on Super Socks:
Speed of adoption. Once the solution is available, how quickly can we get Super Socks out to the entire team?
Rate of use. How many runners on the team are actually wearing the Super Socks when training and competing?
Internal capability. How many runners on the team can put on Super Socks properly without requiring the assistance of a trainer?
While these components are basic and intuitive, they are major points of failure in project delivery. We can all naturally understand that a lower than anticipated speed of adoption will mean more time spent in the delivery phase, which implies higher resource costs and delays in realising benefits. Likewise, lower than anticipated levels of capability would lead to higher support costs, lower productivity, and potential abandonment of the solution altogether.
Perhaps Super Socks is an unlikely example, but projects can use these components of adoption as critical success factors or key performance indicators. This enables the organisation to track its improvement (or lack thereof) in delivering change over time. It also provides an opportunity to specify clear targets in the project for each component and focus change management activities on meeting or exceeding those targets.
Stopping the Insanity
The proof is in the numbers. Change management is a critical aspect of project delivery. Integrating change management with project management is a powerful way to break the cycle of unacceptable delivery performance.
While we shouldn't shy away from the fact that change management is all about people, we can manage how we describe its business value. If we continue to run projects without a structured approach to and adequate resources for ensuring adoption, we should expect continued recurrence of project failure and inadequate benefits realisation. Let's stop the insanity by discussing change management in terms of how we can use it to end the trend of mediocre project delivery and add value above and beyond what we have come to expect.