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Rethinking ROI and change management

Converting anticipated ROI to actual ROI

By Miwand Hussaini , Kelsey Vercia , John Rothera and Craig Keller | June 6, 2023

In this article, we explore how enterprise change management can unlock value and help you achieve its expected return on investment.
Employee Experience
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Organizations are expected to continuously drive results and outperform competitors. To decide how best to achieve this end and prioritize efforts, leaders optimize limited resources by thoughtfully considering derived value: if we invest X, we will achieve Y. Simple enough, right? Not exactly.

All too often, decisions and delivery are overly focused on tangible and technical outcomes of projects. Missing from consideration is how employees will react to and adopt the changes. Changes are delivered, but the new mindsets, behaviors and ways of working required to ensure the sustainable success of the changes are missing (or they’re included as an afterthought) and anticipated ROI does not transform into actual ROI. When this happens consistently, the impact – and losses – compound. But get the balance right and the rewards are clear to see.

We tend to overvalue the things we can measure and undervalue the things we cannot.”

John Hayes | The Theory and Practice of Change Management

Recent WTW research shows that organizations highly effective in change management deliver revenue growth over a three-year period 2.5x greater than organizations with below-average change effectiveness.

Delivering these results doesn’t happen by chance. It requires intentional effort and investment to develop change management as a core enterprise competency.

Let’s consider how enterprise change management can unlock value and keep your organization ahead of the pack.

Growing your change management capabilities

Moving from ad-hoc reactivity to enterprise success

An organization’s ability to manage change can be viewed along a spectrum. As organizations move up the spectrum, they manage change with greater efficiency and effectiveness, increasing their chances of delivering sustained success and a project’s anticipated ROI.

Three boxes with increasing height from left to right along a spectrum.
Along the horizontal axis is change capability and along the vertical axis is competitive advantage. The first box on the left and smallest shows ad-hoc change management viewed as an afterthought. The second and middlebox is local, reactive change management. The third and tallest box depicts enterprise change management as a core competency, embedded in programs from the outset.
Change maturity spectrum

At one end of the spectrum, change is managed on an ad-hoc basis without centralized expertise, a formal approach or sponsorship from leaders. Often in ad-hoc organizations, a project’s workstreams are launched independently and without considering the employee experience. This approach risks having employees who are not receptive to the change or don’t understand its goals, which can impact adoption and return on investment due to the costs of rescoping and reallocating resources.

Organizations at the height of the spectrum take an enterprise approach where change management is embedded into programs from the outset. There is dedicated change expertise, a centralized change philosophy with universal tools, and executive sponsorship focused on sustainable change. In these organizations, anticipated ROI becomes actual ROI, and time and money are saved by not having to recreate practices.

The compounding effect of successful change management

The value of developing an enterprise approach to change management goes beyond the benefits delivered in a single project.

Employees remember successful and unsuccessful changes and use that to indicate what to expect from future initiatives. Providing positive, consistent change experiences generates momentum, engagement and the discretionary effort crucial to landing the change. When the balance tips the other way, you risk change fatigue, resistance and attrition.

Further, when change is centralized within an organization, each project provides an opportunity to iterate, improve and grow your organization’s ‘change muscle.’ When change is managed on an ad-hoc basis, issues are addressed in isolation, learning is not shared and avoidable mistakes are repeated.

Delivering enterprise change management capability

Key features of mature change organizations

Organizations that have developed change management as a core enterprise competency share several key features:

  • Change is seen as a form of risk to be intentionally and rigorously managed
  • Change management is embedded in all major projects from the outset
  • Consistent change methodology, tools and measures are deployed across projects
  • Leaders are equipped and capable of leading change

Building and delivering this capability requires a focused center of expertise that delivers interventions and builds knowledge grounded in a common change management method with proven effectiveness across the organization.

Operationalizing a change center of expertise

Where your center of expertise is located and what form it takes can vary depending on factors such as organization size, structure and change maturity.

A common approach is developing a change management office (CMO) – a team of trusted change partners with a dual mandate to:

Deliver change management support for major changes

  • Define parameters for directing change resources to maximize adoption and ROI
  • Deploy CMO resources as light touch ‘consulting support’ or hands-on resources (based on the project’s scope/size)
  • Partner with the business to develop an end-to-end change management plan fully integrated into the project plan
  • Enable leaders to understand organizational change capacity and readiness

Build organizational capability for change management at every level

  • Build and socialize a common methodology and tools for managing change
  • Design and deploy a model for evaluating change impact and support needs
  • Develop skills across the organization on how and when to deploy change interventions

The CMO is executed through a lean and leveraged model (e.g., an organization of 50,000 might have a CMO of five people) that blends central, local and external resources to allow it to scale up without creating a resource and cost-heavy central team.

Due to its mandate and enterprise-wide remit, the CMO is typically positioned in an organization’s project management office (PMO), strategy office or HR function. Any of these placements provide the CMO with visibility into upcoming changes, allow it to define and coordinate required change efforts at the group and local level, and supply program-level oversight and reporting.

When not actively engaged in a change effort, the CMO builds the change capability of the organization through outreach, training and communities of practice.

The change management office in action

The CMO coordinates change activity across the organization, working closely with the PMO to identify the right level of support required for projects and coordinating activity with local change management resources and partner functions.

Here’s a quick overview of what that can look like in practice.

This org chart highlights where the change management office
sits within an organization and how it liaises with partner functions and local change management resources. At the top of the org chart sits the PMO, Strategy office or HR function. The CMO reports to the PMO, Strategy office or HR function providing two-way communication. The CMO also interacts with the Partner functions and local change management resources creating two-way communication. The partner functions and local change management resources also have two-way communication.
The change management office in action

Change Management Office

  • Develops and drives a standardized change management approach throughout the organization
  • Creates and maintains change management governance structure
  • Works with PMO to scope projects, determines the level of CMO support required and deploys change resources
  • Leads the change impact assessment process
  • Provides up-to-date information to the PMO, including elevating risks
  • Leads the design and maintenance of an integrated change management plan, working with local change management resources and partner groups
  • Owns involvement networks

Local change management resources

  • Executes standardized approach in assigned area of the business
  • Participates in change impact assessment process
  • Leads the design and maintenance of an integrated local change management plan by working with partner groups
  • Provides up-to-date information to the CMO lead and to the business

Partner functions (e.g., Training, Communications, HR, Analytics)

  • Partners with the CMO and local change management resources to develop change management plans
  • Provides expert resources to develop and deliver interventions required to execute the change plan e.g., communications, training, employee listening, broader HR changes

In conclusion, the ROI on successful change management spans from employee experience to financial performance. Moving up the change maturity curve requires dedicated expertise to coordinate efforts across the organization and continually build and improve capability. When you get it right, the benefits stretch beyond individual projects to deliver enterprise-wide gains, increasing your chances of converting anticipated ROI to actual ROI.

Authors


Senior Associate, Change Management
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Senior Associate, Employee Experience
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Director - Employee Experience

Global Leader of Change Management and Organizational Transformation, WTW

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