Why Change Management Matters

There are numerous reasons to employ effective change management on both large- and small-scale efforts. Here are three main reasons to employ change management:

1. Organizational change happens one person at a time
2. Poorly managing change is costly
3. Effective change management increases the likelihood of success

Organizational change happens one person at a time

It is easy to fall into the trap of thinking about change exclusively from an organizational perspective. When one thinks about a merger or acquisition, they can focus on financial structuring, data and system integration and physical location changes. However, organizational change of any kind actually occurs one person at a time. Success of an organization effort only occurs when Adam and Betty and Charles and Deborah (for example) do their jobs differently. Organizations don’t change; people within organizations change. It is the cumulative impact of successful individual change that results in an organizational change being successful. If individuals don’t make changes to their day-to-day work, an organizational transformation effort will not deliver results.

The cost of poorly managing change

There are countless consequences of ignoring the people side of a change:

• Productivity declines on a larger scale for a longer duration than necessary
• Managers are unwilling to devote the time or resources needed to support the change
• Key stakeholders do not show up to meetings
• Suppliers begin to feel the impact and see the disruption caused by the change
• Customers are negatively impacted by a change that should have been invisible to them
• Employee morale suffers and divisions between “us” and “them” begin to emerge in the organization
• Stress, confusion and fatigue all increase
• Valued employees leave the organization

Projects also suffer as due to missed deadlines, overrun budgets and unexpected and unnecessary rework to get the effort back on track. In some cases, the project itself is completely abandoned after large investments of capital and time. All of these consequences have tangible and real financial impact on the health of the organization and the project. And each of these consequences can be addressed and mitigated if a project includes a structured approach to the people side of change.

Effective change management increases the likelihood of success

There is a growing body of data that shows the impact that effective change management has on the probability that a project meets its objectives. Prosci’s longitudinal benchmarking studies show a strong correlation: Data from the 2013 benchmarking study showed that 96% of participants with excellent change management met or exceeded objectives, while only 16% of those with poor change management met or exceeded objectives.

In other words, projects with excellent change management were six times more likely to meet objectives than those with poor change management. Regardless of the change at hand, focusing on the people side of change increases the likelihood of being successful. Additionally, Prosci’s research shows a direct correlation between effective change management and staying on schedule and on budget.