The High Cost of Weak Change Management

Posted by Paula Alsher on Thu, Feb 01, 2018 @ 02:03 PM

Enormous investments are being made each year in large scale, complex business and healthcare changes. From ERP Implementations to new patient care models to mergers and acquisitions, the amount of money being spent on organizational change is staggering. With stakes as high as these, organizations simply cannot afford to fail. The Cost of Weak Change Management

But unfortunately, the statistics around unsuccessful implementations continues to be high as well. Recent studies confirm only 25-30% of all business changes achieve full benefit realization. Yes, you read that correctly. Approximately 70% of business and healthcare initiatives are still failing to achieve what has been promised on time and to spec.

These failed implementations happen for a multitude of reasons. Most commonly, organizations just don’t apply the same business-discipline for managing the human elements of their change as they do the timeline, the budget, and the technical objectives for the project. In other words, there is weak or poor change management.

 

Six Warning Signs to Watch For

Change management is the process, rigor and discipline surrounding the people side of a change implementation. But, it’s not about getting people to like the change, it’s about getting the business results and return on investment you set out to achieve.

How do you know what weak change management looks like? We’ve come up with the following six warning signs to watch for:

  • Attempting to Implement Change Without Sponsorship - Sponsorship is the most critical success factor in ensuring a fast and successful implementation of any type of business change. An attempt to implement change without it is destined for failure.
  • Being Seduced by Activity - During any change project, it’s easy to get seduced into thinking that lots of activity means things are going well. But, change management is not about being busy; it's about focusing on the right actions at the right time.
  • Viewing Change Management as Separate from Project Management - Change management plans should not be bolted on or run in parallel to the technical project plan. Instead, they need to be blended with project management from the start of the project.
  • Assuming a Change Will Occur in Isolation - Your project isn't being introduced into some hermetically-sealed environment. Instead, you are implementing your change into a climate that is being significantly shaped by what is going on currently, as well as perceptions of past experiences.
  • Mistaking a Communication Plan for an Implementation Plan - Communication during a change is important. But a communication plan is not at all the same thing as an implementation plan, and should not be used in place of one.
  • Relying Too Heavily on Tools and Checklists - Change Agents can't be effective if they are simply guided by completing checklists and templates instead of being led by principles that give directional guidance.

 

The True Cost of Failure

When an organization employs a weak change management process, more than just money is going to be lost. In fact, there are both short term and long term, direct and indirect costs to the organization. When the business objectives haven’t been achieved, the short term, direct costs are a bit obvious. Wasted resources include:

  • Money
  • Time
  • People

The long term and indirect costs are slightly less obvious, but still significant:

  • Morale suffers
  • Confidence in leadership decreases
  • Resistance to change increases
  • Future changes are more likely to stall or fail

How to Fight Back: Let Change Management Guide Your Actions

So, what can be done to fix the problem? The answer is actually quite simple. You need to employ a structured change management model that is not a lock-step protocol. The goal of change management should never be "to do" a process, but instead to have core principles guide you on what you should be doing, given the day-to-day realities and challenges of the project. The bottom line is you don’t have time to do things that are not driving you toward system optimization.

In the end, leaders must understand that how a change is implemented is just as important as what is implemented. IMA’s proprietary Accelerating Implementation Methodology (AIM) is a robust planning and execution tool for the people side of any change implementation. It provides systemic, systematic principles, strategies, and tactics that can be used as the central cog of every project.

When the people side of a project is mismanaged with poor change management there is a high price to pay. Are you willing to take the chance?

The Real Cost of Transformation and Culture Change

Topics: Change Management Methodology, Accelerating Implementation Methodology (AIM), Value Realization / ROI, Comparing Change Management Methodologies