Why Change Management
Written by Tim Creasey
Updated: January 11, 2024
Published: May 20, 2021
Change is taking place in your organization every day with new projects and initiatives to improve performance, increase profits, and enhance your competitive advantage. You could be implementing technology to enable a more mobile workforce, re-engineering a process to ensure regulatory compliance, or pursuing an enterprise-wide transformation around customer experience. In all of these changes, people are the common denominator for achieving intended outcomes—which is why you need change management.
Why Do You Need Change Management?
Change management is the discipline that guides how we prepare, equip and support individuals to successfully adopt change in order to drive organizational success and outcomes. Helping individuals through their individual change journeys enables organizations to:
Address different impacts on people and teams
Your projects and initiatives have a significant impact on the ways individual people do their work on a day-to-day basis. Change can impact processes, systems, tools, job roles, workflows, mindsets, behaviors and more. And each change impacts different groups within your organization differently. A new electronic medical records system will affect people in the IT department in some ways and clinical users in completely different ways, while the change may be insignificant to the finance team.
Change Management Starter Bundle
Even when organizational changes meet technical requirements and milestones, they can still fail to deliver results and benefits. What’s missing? Change management. You can start applying change management to your projects today with free resources from Prosci.
Prosci's 10 Aspects of Change Impact
To manage these impacts during times of change, change management professionals employ a structured approach that includes helpful knowledge, processes and tools.
Thrive in an ever-changing world
The days of implementing one large change every 36 months are long gone. Organizations are facing faster, more complex, more interdependent and more cross-functional change than ever before. By applying change management, organizations deliver results on each change more effectively, even while managing multiple unique changes. And an organization that works to build change competencies in their people will improve over time, maturing into a change-ready organization with the capacity to handle faster, more complex, more interdependent and more cross-functional change—and achieve strategic advantages.
Deliver people-dependent ROI
Organizations undertake initiatives to capitalize on an opportunity, solve a problem, or improve performance. You can achieve some of the desired outcomes simply by installing the solution. However, much of the benefit is tied to people changing the way they do their jobs. In the Prosci CMROI Model, this is the “adoption contribution” of the project—the percentage of project benefits that depend on people changing their day-to-day work. For important projects, that number is commonly 80% to 100%. Applying change management prepares, equips and supports people, so they can successfully change how they do their jobs. This enables you to capture the adoption contribution and people-dependent portion of the project's return on investment (ROI).
Close the gap between requirements and results
All too often, organizational changes end up meeting requirements without delivering expected results. They deliver the necessary outputs without delivering expected outcomes. This is what happens when the organization focuses efforts on the solution itself, rather than its benefits. Closing the gap between requirements and results, between outputs and outcomes, and between solutions and benefits requires focusing on the people who must use the change every day. How will you reap benefits from a solution if people don't adopt and use it? Applying change management enables you to close the gaps by preparing, equipping and supporting people through the change, so they can bring it to life in their daily work.
Increase the likelihood of project success
The proof is in the data. Prosci’s Best Practices in Change Management research consistently shows that initiatives with excellent change management are seven times more likely to meet objectives than those with poor change management. In fact, by simply moving from “poor” to “fair,” change management increases the likelihood of meeting objectives three fold. The better you apply change management, the more likely you are to deliver on project objectives.
Mitigate mission-critical risk
Ignoring the people side of change creates costs and risks. When you ignore adoption and usage of a solution, you focus exclusively on meeting technical requirements. This leads to what Prosci calls “RE” costs from redesigning, reworking, revisiting, redoing, retraining, rescoping, and in some cases, retreating. Failing to plan for and address the people side of change leads to greater absenteeism and attrition, reduced productivity, lower morale, and disengaged employees. And customers feel the impacts along with the organization. Change management helps you mitigate those mission-critical risks.
Limit variability in change
Change is difficult. To the extent possible, you want to remove the chance or variability associated with project changes and initiatives. Project management accomplishes this through sequencing milestones, deliverables, activities and resources over the project or initiative's lifecycle. But these actions only address the technical side of a change as you design, develop and deliver it. Unless you proactively support and guide people through the impacts from project changes, you leave success to chance. Change management mitigates or removes variability by preparing, equipping and supporting employees, so they can engage, adopt and use the change successfully.
Prosci's Unified Value Proposition
Applying Change Management Is the Right Way To Treat People
How many times have you heard, “Our employees are our most important asset”? Yet, when a change gets implemented, employees typically receive an email on Monday for training on Tuesday and go-live on Wednesday. That is not the right way to treat people—especially your organization's most valuable asset. By proactively engaging, equipping and supporting people during times of change, you demonstrate in words and deeds that you truly value them. And the entire organization benefits as a result.