MAKING THE BUSINESS CASE FOR CHANGE
MANAGEMENT
INTRODUCTION
SPEAKER:
Beth Banks Cohn• Founder and President of ADRA Change Architects• 20+ years of change management and coaching experience• MA in Human Resources Education, MA in Organization
Development, PhD in Human and Organizational Systems• Clients include Johnson & Johnson, Novo Nordisk, Shire,
Fougera• @bethbankscohn
MODERATOR:
Sarah Welstead• Communications strategist• @sarahwelstead
OVERVIEW
The problem
The reality
The big question
How do you get to the ROI of Change?
5 tactics to get buy-in from almost everyone
THE PROBLEM:No one wants to pay for change management
• “A project manager and some software will do it all, right?”
• ‘Change goals’ are often confused with ‘change strategy’
• Change has become just another workstream
• Leaders don’t always equate successful change with a better bottom line
THE REALITY:
‘Change’ without ‘change management’ means less money on the bottom line
• Unmanaged change means• Lost productivity• Lost top talent• Lost clients• Lost revenue
• Companies who practice change management typically see 15-35% more revenue on the bottom line than those that don’t
THE BIG QUESTION:
Why doesn’t everyone know this?
• Change management is still seen as a touchy-feely HR function – and a cost centre
• “Business moves at the speed of change – employees are used to it by now.”
• When change fails, no one takes a holistic look at ‘why?’
• Start with a business case – don’t ‘build’ a business case
• Focus on the bottom line• Communicate in business
terms – and don’t be vague• Keep it simple
CHANGE AS A STRATEGIC BUSINESS FUNCTION:
How do you get to the ROI of Change?
But how do you convince the eye-rollers who think you’re just another cost centre?
Start talking in terms your audience will understand:Dollars and cents.
5 tactics to help you get buy-in from almost everyone
• Badly managed change can drive your ‘A’ players and critical employees out the door
• Using the Drake staffing calculator, losing 5 senior managers with an average salary of $110,000 each represents a cost of $5.7 million
TACTIC #1:
Quantify the cost of losing key employees
• This doesn’t have to be some vague, possible outcome
• You can quantify it - and the numbers start to add up:
• 2000 employees• Each spends 30 minutes a week for 3 months
overcoming change challenges (lost productivity, lack of engagement)
• That’s 12,000 hours of lost time• At a blended cost of $150/hour, that just cost the
company $1.8 million
TACTIC #2:
Quantify the loss of productivity
• “Company X seems to be in some sort of transition period and I’m not sure where they’re going. So instead I’ll…
• …take my business elsewhere.”• …take my A-list employability elsewhere.”• …take my investment dollars elsewhere.”
TACTIC #3:
Cost of the loss of market confidence
TACTIC #4:
Demonstrate how it will meet business goals- and what this means for revenue
• Look beyond the 3- or 6-month change timeline: • A successful change will lead to $X million
increased sales in Year 1• …which will lead to $X million increased sales in
Year 2• Today’s change investment will deliver ROI for
several years to come• Focusing on change management makes your project:
• More efficient• Run smoother, faster• Able to hit milestones effectively
• When communication around change isn’t handled skillfully, negative leaks can cost money, reputation and PR fees
• Change communication can’t be managed with an Excel spreadsheet or MSProject Plan from the PMO
• Change communication is also not typical PR. It is a specialized type of communication.
TACTIC #5:
Cost of potential PR disasters
• “What’s in it for me?”• Spend less time talking about concepts like ‘the
employees’ or ‘the shareholders’ and more time demonstrating how the people in the room will personally benefit from well-managed change
BONUS TACTIC:
The WIIFM approach
THE BOTTOM LINE
• Effective change management directly affects success and the bottom line. The ‘bottom line’ never goes out of style.
• It’s easier than you think to quantify the ROI of good change management
• Change handled badly is never over – and never stops costing money. Change handled well delivers an immediate, measurable and sustained ROI
DON’T LOSE HOPE
• Good change management is about increasing a company’s bottom line. Period.
• Change management isn’t dying – it’s changing
• It’s easier to get what you need when you make the business case – not the emotional one
DISCUSSION
END
