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The Return on Change

“If you can tell me exactly what benefits you’ll gain, then you’ve won!” That was my—admittedly somewhat provocative—response to a CFO’s question about what the time and money invested in change management and our consulting services would yield. But what does change management really deliver?

Just as it is impossible to pinpoint the exact contribution of a single euro in change projects and programs, it is equally impossible to isolate the individual contribution of a CFO on the balance sheet.

You might say that this isn’t even necessary.

The indirect effects of change management as an “enabler” of a company’s actual performance are essential—such as through information and engagement, and the development of convictions and competencies. In reality, however, during restructurings, strategic shifts, mergers, or IT projects, a precise assessment is made of which measures contribute to the targeted goal. And in this context, so-called “soft topics” such as change management or communication often take a back seat.

But we—change consultants, participants, and those affected—can be helped—beyond simply defending our position with subtle trick questions for decision-makers. For example, through a comprehensive study by specialists who are highly knowledgeable about numbers—the auditing firm PwC and the private university WHU. A high capacity for change is fundamental to sustainable economic success and even leads to cost reductions. Three key findings from their 2012 study “Return on Change” are supported by quantitative and qualitative financial data:

  • With proactive change management, the success rate of change initiatives is 83%; without change management, it is only 38%.
  • With proactive change management and forward-looking action, less effort is required (11% of total effort) than with conventional change management (23%), which reacts to events.
  • Companies with institutionalized change management have increased their market share by 67% over the past three years; without continuous change management, however, the figure is only 33%.