Are you getting expected benefits from your strategic change programmes?
There is an often quoted statistics by McKinsey Research that 70 % of the organization change programmes fail to meet their objectives. Is there anything you can do to radically increase the chances that your strategic change programme will succeed?
We at Talent Vectia believe that the following three important areas should be well covered in managing strategic projects: professional program management, people engagement and benefit realization. In most change programmes, focus is clearly on activities, content, performance and program management to make sure that WHAT side of the change is clearly understood. To increase your chances of reaching sustainable change, much more focus and time should be spent on accelerating benefit realization by engaging people and creating commitment and excitement. After all, people make the change happen.
Realizing the expected project benefits
Project professional’s objective is to deliver agreed benefits from their project. To do this, it is necessary to review the business case to evaluate from the beginning whether the benefits are achievable, to understand and monitor implementation carefully and to ensure these benefits will result in business value. By doing so, success can be measured through benefit realization.
In most projects benefit realization is still too weakly linked to the business case and the way different stakeholders realize their expected business value. Here are a few easy tips for realizing the expected benefits;
- identify both progress (leading) and performance (lagging) metrics for your project
- shift focus from lagging measures to progress of actions and inputs (leading indicators predicting future success) for faster learning and pulse for tracking employee engagement
- engage, engage, engage to create understanding how each team members’ work contribute to the benefits
- set up criteria and follow-up procedures for concrete targets and measurable actions
- create a transparent implementation plan for realizing agreed benefits, especially when benefits are delivered after the project is completed and closed
Monitoring and tracking benefit realization for organizational value
Many companies struggle to bridge the gap between strategy and day-to-day work. To demonstrate why benefit realization is important, each organization should determine methods to track its overall contribution to business value. Easier said than done. It is often claimed that it is impossible to set up a benefit realization model while there are too many conflicting objectives, projects, priorities and KPIs (Key Performance Indicators). Other obstacles often mentioned are unclear roles and responsibilities, possibilities for sub-optimization and balancing priorities between business continuity and driving strategic change (e.g. urgent vs. important).
Larger and more complex programmes require a sophisticated model and active involvement of key stakeholders to ensure that expected value is derived from the development portfolio. There are several tools and templates available for planning the benefit realization. Based on our experience the following logical principles help to create engagement and commitment to improve chances of succeeding.
- Connect strategic targets and business KPIs to plans and deliverables of strategic change programmes to provide a holistic picture. This approach helps in communicating the organization’s vision, strategic objectives and focus areas (Must Win Battles, MWBs) in a clear and inspiring manner so that the change can be rooted to individuals’ everyday lives. In other words, each person should clearly see how his or her work contributes to the organization’s strategic initiatives and objectives.
- Focus and commit on handful of initiatives that can make a real difference. Categorizing projects into buckets by impact or potential benefit help in keeping focus on prioritized strategic intent and KPI, and communicating the key changes.
- Create alignment and transparency across strategic change programmes and business to ensure right cadence and optimized value delivery. Successful implementation requires systematic monitoring of the implementation progress, phased hand-over to business and monitoring of the realized benefits.
- Demonstrate progress by measuring hard facts and ensure that benefits continue to realize. It is crucial for teams and individuals working on a change to achieve small wins regularly.
A systematic benefit realization model, target setting, and follow-up drives desired behavioral change. Regular pulse surveys are effective for tracking employee engagement and adoption of the new way of working (WoW).
The only way to win is to learn faster than anyone else
Successful transformational change does not just happen, it is hard work. Leaders must connect the strategy meaningfully to the organizational capabilities and make sustainable changes to keep improving and securing that most valuable, business critical initiatives continue to realize benefits.
The implementation of benefit realization is not always easy, given individuals’ natural tendency to resist change. To succeed organizational leaders must see why benefit realization is necessary. They should show the link between benefits and business value so that it can be clearly understood, and be part of the decision-making and even performance evaluation. Not surprisingly, companies that are poorly aligned also report weaker results than their peers.
From management perspective, the designated change agents (such as PMO or portfolio manager) should weigh and prioritize different projects in the portfolio to ensure adequate contribution to each project depending on its value or urgency. It is also expected that change agents describe each benefit in as much detail as possible for easier understanding and implementation.
In order to manage the change programmes succesfully the change agents need greater exposure to why their projects are part of the portfolio and business cases to recognize the benefits they are supposed to deliver.
Are you leading a strategic change programme?
How does your business make the tough choices that will ensure its survival? How do you keep your teams on track while encouraging employees to be fully engaged, even in times of stress and challenge?
Talent Vectia approach to strategic change programmes and benefit realization engages the organizations to create commitment, excitement and expected benefits. Interested in hearing more?