How focusing on people in the midst of an organizational change leads to a greater return on investment
Organizations don’t change, people do. On average, more than 75% of the return on investment (ROI) of any major business transition is tied to the user adoption, and only 25% is attributed to the actual installation or implementation. A formal benefit realization plan drives greater understanding, engagement, awareness, excitement, and ultimately adoption, which will lead to impacts that align with expectations. On the contrary, the lack of a formal focus on business transition leads to confusion, low morale, resistance, and a tendency to revert to old ways. Empowering employees to embrace change minimizes the disruption to the business and maximizes the financial yield of a major change effort.
At every step of the process, business executives must consistently ask themselves, “are we achieving the desired results?” to ensure that reality adequately aligns with objectives (i.e., drive more sales, reduce costs, increase sales pipeline, eliminate errors, etc.). Focusing on people in the wake of a change is the key to ensuring a healthy business return. It is important to identify how a day in the life of an employee or user will change across all dimensions. In order to measure the impact on employees, we have to understand how each person or group could be affected.
The People Factors
As detailed by Tim Creasey, three main people factors determine the financial return of a specific business transformation: speed of adoption, utilization, and proficiency.
Speed of Adoption
Speed of adoption has a direct and measurable impact on the return a project delivers. Once the transition, deployment, or migration of a solution is complete, clients will only be able to reap the expected ROI if end users have fully adopted the new way of doing business. Define, track, and monitor relevant, measurable metrics to determine the answers to these critical questions:
How quickly are people up and running on the new systems, processes, and job roles?
How many people have completed a desired task within a given period of time?
When new technologies go live, how long does it take employees to adopt the change?
Positive and negative employee reactions to change will become the building blocks for ongoing change management and create a feedback loop that reinforces initial reactions. It is critical to understand your stakeholders and their needs or anticipated responses. Analyze the number of users who complete trainings within a period of time. Survey employees and evaluate the acceptance scores. If the results suggest slow adoption, assess methods to address this issue. Credera has seen success addressing such nonconformities through incentive methodologies: Offer an award to the first team who completes their training regimen or implement a training attendance raffle for employees who attend all required sessions.
Measuring and reacting to the percentage of the total target population using the new solution will provide insights for the business. Imagine a client implements a new process that intends to drive revenue growth. In this example, predictions indicate that revenue will increase by $5,000 per month following the installation. This means that if all targeted users adapt to the new process successfully, the benefit generates $50,000 over the course of the next 10 months. On the contrary, if the business anticipated 1,000 users adopting the new process, but only 500 actually adjust to the change, the lower utilization could reduce the ROI to only $20,000 over the same period of time.
Consider the following questions as you evaluate the effectiveness of your business transition:
How many people logged in on the first day?
How many people completed a desired scenario end-to-end?
What happens when people opt-out or find work-arounds that enable them to continue doing their job as they had before the change?
The higher the percentage of users that use the new system or process, the more benefits you will realize from this change. Furthermore, the better the reactions of initial users, the easier adoption will become. For example, let’s imagine a company is determined to transition to a full Salesforce integration. First, we must set a clear go-live date to differentiate between the true before and after. We can measure the percentage of users in the total target population that used the new functionality end-to-end within the first week following the go-live date.
Depending on the outcome of this analysis, leaders will be responsible for reinforcing positive actions through incentives or interrupting negative behaviors with consequences. In the above example, let’s assume the analysis points to a percentage of users below a defined threshold. At this point, manager action tied to employee performance objectives for non-compliance could be a reasonable reprimand. Lean into the monitoring features associated with the new product or implement an internal logging system that tracks usage in a time-stamped database.
The proficiency factor suggests how well individuals are performing using the new technology or process. When results are driven by employees doing their job differently, proficiency is directly tied to the success of a project. Our clients must feel empowered to define the communications, training, support, and incentive tactics to enforce the new behavior, drive higher user proficiency, and ultimately secure the expected ROI. Credera uses several tools to help companies plan for and assess progress in each step in the process. For instance, a stakeholder readiness tracker is used to segment groups of stakeholders and respond to their needs in a personalized, and therefore more applicable, fashion.
Projects that are heavily dependent on changes in human behavior are more likely to deviate from the originally forecasted ROI. People are less predictable than systems, so benefits realization is largely dependent on effective people management. Credera validated the importance of focusing on this factor when helping a client with a customer relationship management (CRM) implementation by creating an audience-centric messaging and engagement plan to ensure high user proficiency. Change management seeks to enable and encourage those individuals to not only understand and adopt the new behaviors but ultimately become a champion for change, moving the needle closer to the desired monetary or productivity improvements.
Considering the People Factor
Focusing on the people while navigating a significant change will set a business up for greater success. Employees need to feel confident in their abilities to transition technologies, behaviors, or processes in order to commit to the switch. Conducting thorough training will better equip and prepare employees prior to introducing new technology. Hosting in-person online training with users can improve overall transition efforts. Ongoing education will provide users with the support they need to feel capable and informed. Providing guides, templates, or other training materials gives users something to reference in times of confusion. Speed of adoption, maximum utilization, and a high level of proficiency are the three main people factors a company must manage successfully during a business transformation in order to capture the expected ROI.
How Credera Can Help
A successful business transformation requires investment in both installation and value realization efforts. Failure to pay attention to value realization efforts will result in a poor ROI or diluted value.
When technology implementation alone accounts for only 25% of progress toward the ROI, our clients won’t be able to harvest the intended return on investment. From an organizational change management perspective, Credera can help clients reach benefit realization in line with their original ROI by addressing the people factors of the deployment that, if left unattended, would result in a loss for the business. Our Credera subject matter experts can help our clients reach greater heights by partnering to address difficult business transformation challenges. Reach out to us at email@example.com and we can help talk through your next organizational change.