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Measuring Change Management Effectiveness

March 31, 2018

Change management must be paired with structured measurement to determine its effectiveness

As with all company initiatives, organizational transitions must be measured. However, many organizations struggle to define and apply the appropriate metrics to evaluate this change. Transition efforts vary in frequency, objective and scope, and since change measurement is not a regular practice, it often lacks the same methodical approach used for other measurement efforts. In this issue of SiriusPerspectives, we provide guidance on the three key categories of change effectiveness measurement: business objective, project performance and individual/team stakeholder adoption.

Business Objectives Metrics

Business objective metrics provide fundamental guidance for all change management efforts because they demonstrate the results of the transition effort against desired business outcomes. This category also may include readiness metrics to evaluate how prepared the organization is to achieve the intended business results. While this is not a comprehensive list of metric options, consider the following areas and examples that correspond to typical drivers and goals for making a transition:

  • Growth. Common business objectives for transitions include impact against growth metrics such as net revenue, retained or existing customer revenue, new customer revenue, key segment revenue, revenue mix and new logo customer counts. For example, a company may decide to change its business model from a perpetual license to a subscription model and measure overall transition success by tracking growth in retained customer revenue and evolution of the revenue mix.
  • Position. These metrics assess transition performance against goals in market share, market position, market penetration, customer satisfaction, brand strength and product utilization. In this case, an organization may initiate a change to enter into a new geographic market and measure success by its penetration of target accounts in the new market, as well as buyer awareness of its offerings in this region.
  • Efficiency. Organizations also initiate change efforts to improve organizational efficiency. Metrics in this area include higher profitability, lower customer acquisition cost and gains in revenue per employee. An example is an organization that establishes a telequalification team to improve the quality of leads passed on to sales and reduce the time that field reps spend on non-selling activities. The success of this effort can be measured by tracking reductions in the cost to acquire new customers.
  • Performance improvements. Another business objective for transitions is to improve organizational performance and effectiveness. What constitutes performance improvements varies by organization but can include achieving measurable goals on desired end-state readiness such as productivity increases, competency improvements, service-level agreement (SLA) adherence or internal policy compliance. Many organizations have transition goals around growth/position/efficiency, as well as performance improvement objectives. In the prior example of establishing a telequalification team, this change could also be measured by the new team’s productivity and adherence to SLAs with sales and marketing.
  • Technology implementation. The successful acquisition and integration of technology is another common business objective for change efforts. Metrics in this area include completion of the integration in the promised timeframe or budget, successful integration with existing systems, incorporation of the new technology into existing workstreams and processes, and user adoption. Technology implementations may also support other growth/position/efficiency goals for a transition. An example is the implementation of a marketing automation platform that is measured on its impact to drive additional demand in support of growth goals, as well as its on-time delivery and successful user adoption.
  • Legal/regulatory compliance. Organizations may also have to initiate changes to comply with new or revised laws or regulatory practices that impact their industry. As with performance improvements, compliance changes vary by organization but may include metrics such as development of new product offerings, revision and governance of internal procedures, and new legal review processes. An example of this type of change measurement is a marketing function implementing organization-wide policies for permission-based data management to comply with the European General Data Protection Regulation.


Project Performance Metrics

The next category of metrics tracks the organization’s ability to drive the change effort. This is how the organization assesses its performance against the deliverables and critical milestones specified in the transition plan. The metrics in this category are primarily focused on project management activity and output metrics.

  • Progress and adherence to plan/timeline. These metrics track the status of the different activities established in the transition plan – including task progress (e.g. tasks initiated, completed or delayed), changes in task ownership, and issues that are surfaced, escalated and resolved. Any adjustments made to deadlines and project scope are also tracked.
  • Milestone achievement. Milestones are tools used in project management to mark specific points along the project timeline that must be reached to achieve success (e.g. start/end dates, reviews, project phase completions). When combined with project scheduling methodologies, milestones allow project managers to accurately determine whether a project is on schedule. Specific metrics include the calculation of critical path, schedule variance and the amount of slack/float time in the schedule.
  • Budget/resource utilization. In addition to measuring against schedule, organizations must also measure against project budget. Large transitions frequently have dedicated budget allocated to the change effort, and key metrics include actual spend against the allocated budget, the number and amount of budget transfers and accruals, and overall cost variance.
  • Training completion. Other project management activities to report include stakeholder participation in any training classes conducted to support the transition. Specific metrics include stakeholder training course attendance, satisfaction, training completion and certification.
  • Communication effectiveness. Track the creation, delivery and effectiveness of transition communications with a change management communications plan that segments stakeholder audiences, identifies key messages for each, establishes the optimal communication frequency, determines the appropriate messengers for the communication and ascertains the mix of communication vehicles. Key metrics include execution against the communications plan, collection of stakeholder feedback, and responses to the communication deliverables and messages.


Individual/Team Stakeholder Adoption Metrics

The final category of change effectiveness measures the adoption of the change from the perspective of individual stakeholders and teams. Organization leaders measure how the change is being understood, embraced and utilized by key stakeholders. Measurement in this category leverages all metrics levels and identifies where stakeholders are in the change process and how they are progressing. Given the performance management implications, partner with the human resources function when measuring stakeholder adoption.

  • Individual and team progress tracking. It is useful to have transition leaders or frontline managers track individual and team progress against the transition tasks assigned to them. Metrics include the completion of individual and team activities and deliverables to support the change.
  • Support requests. As stakeholders endeavor to adopt new tools, processes and policies in support of the transition, it is useful to monitor help desk calls and other requests for support to understand change adoption problem areas.
  • Employee feedback and behavioral shifts. Feedback can be collected about the progress of the change effort as well as issues that have surfaced. Transition leaders and managers also can make observations about individual and team behavioral shifts as the change effort unfolds. Collect feedback in a non-threatening manner through surveys, focus groups, anonymous suggestion forms and question boards.
  • Job performance improvement. Individuals and teams can be measured on goal achievement and job performance improvement against specified transition objectives (e.g. employees are proficient in using new tools as part of their daily work or focused on delivering against desired business objectives). Depending on the scope of the change, organizations may set additional readiness metrics such as SLA adherence for new processes, or skills assessment to ensure that individuals and teams are prepared to execute against post-transition roles and responsibilities.
  • Employee engagement/satisfaction/attrition. Employee satisfaction and engagement scores measure employee job satisfaction and the degree of commitment employees bring to their work and the organization. Track any differences in employee satisfaction and engagement before, during and after major transitions as employee awareness and understanding of the change matures. An additional metric to look at in this area is voluntary employee attrition during times of transition.


The Sirius Decision

Applying change management metrics can help organizations develop the visibility and clarity required to demonstrate the effectiveness of their organizational change efforts. Leaders of the transition must set expectations, making clear that the change effort is a contributor to business results – but it is not the only contributor. Gain agreement on what data will be tracked by whom at the beginning of the transition effort, and communicate results to the entire organization throughout the change effort. Don’t forget that less can be more: Be sure that measuring the effectiveness of change management efforts includes focusing on a few strong metrics – and ones that the organization’s leaders value – vs. a long list of less relevant metrics.

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