Between Healthcare and Business Transformation, the amount of money currently being spent on organizational change is staggering. Unfortunately, as the amount of money being spent on transformation continues to rise so do the number of unsuccessful implementations. Recent studies confirm only 25-30% of all business changes achieve full benefit realization. Yes, you read that correctly.
Change is hard. Enterprise-wide, transformational change is geometrically more complex. While big changes such as Agile, Mergers & Acquisitions and Shared Services may make strategic sense for an organization, there is no doubt they can be time consuming and incredibly challenging.
Hint: it may not be when you think!
What is the end goal for your strategic initiatives? While it may seem like an obvious question, you’d be surprised at the number of organizations that get it wrong. Whether it is new technology, Agile, continuous improvement such as Lean/Six Sigma, restructuring or a business/clinical transformation, most organizations focus on getting to go-live. Shortly after that date, the project team is dismantled, and the initiative is checked off as complete and probably “successful.”
We’ve all heard the statistic 70% of all organizational change projects fail. This figure was first reported by Hammer and Champy in 1993 and, unfortunately, recent research confirms the staggering statistic hasn’t changed by much. The ugly truth of the matter is today’s organizations are still plagued by projects that are sub-optimized, if not facing outright failure. “Spotty” implementations are all too common with success in one area but not in all areas impacted by the change.
The business value in using a disciplined project management protocol, such as Agile or Waterfall, is undeniable. Project management ensures projects are completed on time, on budget and to scope. And with the amount of investments being made on large, complex organizational change at an all-time high, these metrics are critical. But, what about using a change management process? Is there a value there as well?
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A program director from a global industry leader made this somewhat startling admission in a recent call with IMA President Don Harrison: at least 80% of their change projects fail to fully achieve value realization. This really got us thinking about the challenge for Change Agents, and not just at this organization. Where do you start to make a difference when you may not be in a position of organizational power?
Your organization probably has very specific metrics and measurement tools surrounding project management. Measuring if your project is on time, on budget, and technically sound is pretty straight forward. But how do you measure change management success? One thing we can tell you for sure…it is much more important to measure business results than how well change management worked on a project.
In our 35+ years of change management consulting, we have never once come across an organization who told us they have way too many resources with too little to do. Who are we kidding? We’ve never even met a client who had the right amount of resources for their current portfolio of initiatives!
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.
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Whether your organization uses Agile or a more traditional Waterfall approach to project management there is no doubt the end goal is the same. Getting to value realization for every business initiative is, of course, the name of the game. But, while project management protocols focus on delivering projects on time, on budget and to scope, as change management professionals, we know that is not going to be enough. In order to get to full value realization there is more that needs to be done!