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Poorly managing change: The cost of the REs


In a time where organizations are facing tremendous pressure to change - more frequently, more quickly and at a larger scale than ever before - tolerating inefficiencies in the change process is unacceptable. However, inefficiencies are created each time a project launches and moves through the design, development and implementation phases without applying change management and addressing the people side of change. Addressing the people side of change early in a project helps to avoid or eliminate the "RE"s that appear when individuals do not adopt a new process, system or behavior. This tutorial presents the causes and costs of the REs that result from not managing the people side of change from the initiation of a project.


Individual transitions: the building blocks of successful change

Projects and initiatives create change in a variety of ways by introducing some sort of solution to the organization. These solutions often emerge in the form of new or altered processes, new systems or tools, new reporting structures, new job roles, or new ways of operating. There is often tremendous focus placed on designing the "right" solution to the change. The goal of the solution is to improve performance in the organization and to achieve some sort of desired results and outcomes that triggered the change in the first place.

In the end, though, these solutions each ultimately require individuals to change how they work. A newly designed and documented process delivers improved efficiency only when individuals follow the process. A newly developed technology or tool comes to life only when it is used by individuals in the organization. Conversely, a perfectly designed process that no one adheres to does not deliver the intended results and outcomes. Likewise, a perfectly designed tool that no one uses results in no improvement (and a hefty, negative ROI). Change does not result from the solution, but rather from employees exhibiting the new behaviors, adhering to the new processes, following the new workflows or using the new tools that were triggered by that solution. Said another way, the individual is the unit of change, and thus individuals are the building blocks of successful change.

It is this reality of how change occurs in the organization that results in the costly REs when the people side of change is ignored. When the people side of change is addressed early in the project lifecycle, decisions are influenced and guided by issues related to usability, adoption and functionality for the end user. However, if the end user only enters the conversation late in the design effort, the result is the costly REs of mismanaged change.


Example RE costs that can be avoided

Below are a number of the costly REs that result from addressing the people side of change too late. Think about your experience working on projects and initiatives. Have you ever experienced any of the RE costs? Could the costs have been avoided if the people side of change was addressed earlier in the project lifecycle?

REdesign Addressing the people side of change too late results in numerous RE costs that are avoidable. These RE costs are unnecessary, inefficient, do not add value and are discouraging to the project team, leaders, managers, supervisors and employees.

Repeating any activity adds cost. Both time and financial resources are wasted. Schedules and budgets have to be expanded to account for additional costs. The opportunity costs are high when potential revenue is missed during the time it takes to REdo and REwork. Project team members are tied to the project longer than expected and unable to take on a new project. The anticipated benefits of the project are achieved later. The return on investment is delayed. 

The reason that many of these RE costs can be avoided is simple: the people side of change is where changes ultimately occur. It is the bridge between installing a solution and realizing the benefits of that solution. It is the critical ingredient that ensures that a great solution ultimately delivers the intended results and outcomes. When the people side of change becomes part of the strategy early in the project, individual change processes can be managed correctly the first time and, collectively, the project's business results can be achieved without costly REs. 


Why start change management early

Benchmarking data is quite clear - change management should be applied as early in the project lifecycle as possible. In Prosci's 2009 benchmarking study with 575 participants, 82% of respondents indicated that change management should begin during project initiation, with 14% recommending change management start during project planning. The advantages of applying change management early in the project lifecycle include:

  • Being more proactive
  • Sequencing people side activities with project activities
  • Delivering the right information in a timely manner
  • Mitigating resistance before it has an impact
  • Ensuring adequate sponsorship
  • Providing input to solution design decisions

Addressing the people side of change late in the project lifecycle is costly and inefficient, ultimately undermining the success and Return on Investment (ROI) of the project. When change management is applied late in the project lifecycle, the focus is typically "fighting fires" and damage control. Change management activities are limited. Without early attention to the people side of change, the project creates more resistance, confusion, stress and fear with employees in the organization. Change fatigue can set in.



In organizations with a high value placed on efficiency, the concept of avoiding the RE costs is an effective tool for building support for change management and the people side of change. Organizational changes are realized through the collection of individual employees making individual changes. Project plans, budgets and schedules are frequently thrown off course by the people-side problems that inevitably arise. The costs and implications of the REs can be significant when the people side of change is neglected or ignored until late in a project life-cycle.


Read other tutorials for making the case for change management:

Module 1 - The case for change management overview: results and outcomes

Module 2 - The individual is the unit of change

Module 3 - Correlating success and change management effectiveness

Module 4 - ROI of change management

Module 5 - Costs and risk of poorly managing change




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Program highlights:
  • Apply the methodology as you learn it on a real project
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Offerings for applying Prosci's change management methodologies:


  • Change management certification ($2800)- 3-day program where you bring a project you are working on and apply all of the assessments and tools as you learn them - taught by former fortune 500 executives at locations across the US - includes over $1000 in products, including the Best Practices in Change Management benchmarking report, the Change Management Toolkit and the Change Management Pilot Pro 2010
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Methodology tools:

  • Change Management Toolkit ($389) - hardcopy 3-ring binder presenting Prosci's change management methodology, includes templates, checklists and assessments for managing the people side of change (includes USB drive)
  • Change Management Pilot Pro 2010 ($449) - online tool including Prosci's change management methodology, eLearning modules and downloadable templates, assessments, presentations and checklists
  • Change Management Guide for Managers and Supervisors ($189) - tools to help supervisors engage and coach their direct reports through change (includes 4 copies of the Employee's Survival Guide)
  • PCT Analyzer ($149/$349) - web-based tool for collecting PCT Assessment data, analyzing results, identifying risks and developing action steps

References and books:

  • Best Practices in Change Management benchmarking report ($289 / quantity discounts available) - journal-style report with lessons learned and best practices from 650 participants, presented in an easy-to-use format - reads as a checklist of what to do and what not to do
  • Change Management: the people side of change ($18.95 / quantity discounts available) - a primer for anyone involved in organizational change that addresses why manage change, individual change management and organizational change management
  • ADKAR: a model for change ($18.95 / quantity discounts available) - the definitive work on Prosci's ADKAR® Model
  • Employee's Survival Guide to Change ($14.95 / quantity discounts available) - a handbook to help employees survive and thrive during change, answers frequently asked questions and empowers employees to take charge of change



*** Prosci also offers leadership packages - groupings of products at discounts that offer you some of the most helpful and common combinations of Prosci change management resources



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