Friday, 6 February 2015

Ten Tips on How to Measure Change Management Success

I have an opportunity to present "How do we Measure Success in Change Management?" to a group of change management consultants, my peers.

Selecting key performance indicators (KPIs) continues to be a hot topic for organizational initiatives, from learning & development to large scale transformations: how do you measure the benefits of this type of investment?

There are many ways to do this incorrectly, such as measuring things that:
  • aren't directly connected to the initiative, e.g. an office relocation measured by website traffic levels;
  • are influenced by multiple factors, e.g. leadership training measured by net profit gains;
  • can't be measured with data, e.g. goodwill;
  • leaders do not care about;
  • no one is responsible for measuring;
  • are not reviewed with leaders after they are measured; or
  • claim to calculate return on investment (ROI) without stating how.
ROI is the Holy Grail of performance measurement because it implies financial significance and accuracy. A good investment is one where the tangible benefits gained are greater than the costs incurred to secure them.

Measuring change in this way is challenging, if not impossible, because the numbers are typically based on subjective estimates. For example, I heard someone proclaim that sales training resulted in 25 percent of his company's annual sales increase. Based on what? Usually these estimates are guesses based on impressions, or wishful thinking, versus facts, which negates the significance and accuracy they are intended to establish.

Here are some suggestions on how to measure change management success:
  • Set expectations that change management (or any organizational initiative) is a contributor to hard results, not the only contributor.
  • Pick a few strong KPIs versus a long list of them―it focuses the evaluation exercise and reduces resource requirements.
  • Focus on the metrics that leaders value―others may help you but they will be viewed by the organization as irrelevant.
  • Gain agreement on what data will be tracked by whom at the beginning of an initiative―the data and the resources to collect it may not exist.
  • Include tracking responsibilities in people's goals―it will increase the likelihood they will be tracked well and people will be rewarded for doing so.
  • Be clear on how long KPIs will be measured―most benefits are realized months or a year past implementation.
  • Gain leaders' commitment to review results for the duration―what gets reviewed by leaders gets measured.
  • Gather anecdotal feedback from people who are working with the changes―verbatim comments help describe benefits and lessons learned.
  • Use tracked results to support business cases for future initiatives―this is often a missed opportunity.
  • Communicate results to the entire business―it increases engagement and invites people to celebrate wins and learn from mistakes.
I am looking forward to discussing the measurement of change management with my peers. It will be difficult to measure how much I will learn, but I know it will be a lot. 

Phil

7 comments:

  1. Great blog!!! It is very important post about Change management which you have mentioned. Thanks for sharing us. Change Management Training Program In India

    ReplyDelete
  2. Thank you Eshan. I am delighted you found my post helpful.

    ReplyDelete
  3. When you say KPIs, are you referring to business KPIs? Or change management KPIs? If change management, I'm interested in knowing what KPIs you typically measure and how you measure them.

    ReplyDelete
  4. Hello Mrs Wallace. Change Management KPIs are a subset of the business KPIs that the Leadership Team members (or sponsor of the change) routinely follow. With the help of the project team, they decide which ones will accurately measure the initiative's impact on performance.

    Change Management KPIs are defined at the beginning of the initiative and reviewed by the leadership team throughout (and after) the project.

    ReplyDelete
  5. The success or failure of an organization depends on how effective the management is. The management team of a company is responsible for propelling the future growth in the right direction. It also responsible for administering and controlling the business activities and accounting for the results. An ineffective management at the top results in failure of the company. Such is the importance of management.

    ReplyDelete
  6. Hi Shadhin, thank you for your comment. An effective management team is essential for sustainable future growth.

    ReplyDelete