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Want better results from change programs? Focus on the right measures of success

Blake Lindsay

Implementation and electric power expert who helps major utilities and merchant power companies design, implement, and sustain large-scale transformations of their performance, health, and capabilities.

David A. Shore

Founding member of McKinsey’s external implementation advisory board and a former associate dean at Harvard University, where he continues to teach.

Eugene Smit

Helps major industrial companies design and deliver large-scale, multi-year transformation programs to strengthen operational performance and profitability.

A recent survey of global executives asked participants what the most influential factors were that attributed to an unsuccessful implementation. Many respondents said leadership decreased over time and that the impact wasn’t sufficiently tracked.

One company recently implemented a new enterprise resource planning (ERP) system—a massive under- taking for any organization. A substantial amount of resources had been dedicated to the project to help reach the company’s goals of improving overall operational planning and execution, streamlining back-office functions, and capturing significant annual savings. The project team had calculated how much money the new system was going to save the organization over the next several years as a result of efficiency gains: an estimated 10 percent of its total annual operations spending. After years of planning and hard work, the project was hailed as a complete success by leadership on its “go-live” date. And by all measures it was—the system launched on time and within budget.

However, six months after the system was implemented, employees still didn’t know how to tap into its full potential. Instead, individuals were creating workarounds to make the process easier for themselves, which negated the value promised at the program’s launch. And because employees did not change their workflow, the company had to spend more money recovering from a failed implementation. The experience revealed that the organization was more focused on achieving milestones than on the performance outcome, leaving employees to figure out the system on their own.

This scenario is all too common for most organizations undertaking a transformation. Leaders often direct all their focus on achieving specific goals but don’t clearly define what success means to their organization. Instead, they track whether a change initiative meets the “triple constraint”—if it is delivered on time, on budget, and to specifications, companies declare victory.

Yet a change program that meets or exceeds these goals can still fail. Companies frequently focus much of their time on meeting arbitrary timelines or using all of the instruments in the project manager’s tool kit, such as Gantt charts and the Responsibility Assignment matrix (RASCI chart). Indeed, leaders who find change difficult often reach for a new process or tool to lead them out of the woods to victory. While these tools help measure progress, they tend to be process oriented rather than outcome oriented, and they often provide a false sense of security to the program managers and leadership teams. In fact, relying solely on a tool kit usually translates to problem-solving for the wrong problem.

Prioritization and outcomes

Next time your organization embarks on a new change effort, take the time up front to lay the groundwork for a successful transformation effort that extends long after you reach the go-live date.

Ensure the desired outcome is clear and measurable. At the onset of a transformation, leaders should decide what a successful outcome of the change program will be. Executives should identify the aspects of a project that matter most to the organization (such as greater efficiency gains), decide how that will be measured (proficiency, ubiquity), and determine what resources are needed to support that outcome (training, outreach). Instead of simply focusing on schedule, budget, and scope, success should be based on value delivered, culture changed, and health improved. In the case of the ERP project, for example, the organization could have decided that one year after the go-live date, all business leaders should be proficient in the ERP system.

Lead from start to finish. It’s critical that a leader engages in and supports the program management of a change initiative from planning to execution. Ensure that everyone who will provide resources agrees on the focus areas and how to measure success. This way, you won’t fall victim to the triple- constraint fallacy as a measure of achievement. Once the initial phase of the program is complete, leadership should set clear expectations on what is required to sustain the change program.

Change is difficult. As such, leaders should resist the temptation to create deadlines and metrics that provide the illusion of progress. Instead, they should keep a laser focus on outcomes and end- user benefits. The results will likely be longer lasting and sustainable.

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