Business Change Manager Video Series: Do People Affect Return on Investment?
“What does it mean by people Affect return on investment?
Do people really Affect return on investment?”
Common questions I get asked as a business change manager, and this blog is here to answer them.
Firstly, what is return on investment. Return on investment is the benefit received from an investment, it is a performance measure evaluating the efficiency of an investment. A high return on investment means the gains are larger than its cost. Putting this in terms of change management, it is the value created by the adoption and usage of a product, ultimately quantifying the people side benefit of contribution.
So back to our original question, essentially, when particulars of a project include people, return on investment will always be affected. You may ask why; well people are fundamental to the adoption of a product and the project benefits are fundamental to people using that product.
According to a study by Prosci, with excellent change management your project is six times more likely to meet objectives than poor change management and even fair change management is 3 times more likely to meet objectives.
See: https://blog.prosci.com/the-correlation-between-change-management-and-project-success
Here is an example:
Imagine a property developer setting out to build a set of houses. Their return on investment will be from making money from the project benefit, selling these houses. Now imagine two scenarios, one in which they don’t advertise, excite and equip the potential buyers with the knowledge they need with the what's in it for them and how they can purchase a house and one in which they do.
Scenario 1:
The building commences with the target audience having little knowledge of the project, they aren’t being excited or drawn into these beautiful houses, resulting in no potential buyers’ interest.
Once the houses are built, they start their sales pitch. Desperately trying to sell the properties to make money. However, this causes them to not make money at the rate they expected to, therefore, not meeting their return on investment quickly but prolonging the process.
Scenario 2:
As soon as the building starts, they start promoting their houses, creating billboards, images of what these houses will look like. They are exciting and drawing people into the wonderful idea of buying these houses. They build a showroom for people to view, capturing their desire to live there prior to them being built. The result, they have invested their time into potential buyers, the target audience feels part of the project and can’t wait to move in. They start making their money sooner, meeting their return on investment at a quicker rate.
The fundamental difference: Engaging the people.
Now, taking this back to project areas and technology,
I could work on a project for years without engaging anyone, then when it comes to the launch, people just aren’t ready to use the product, they don’t feel confident in it. This results in the adoption of this product being slower with buy-in and use beginning to start happening once the people have adopted the product. Meaning for a time I’m not making my return on investment.
The golden question, how can I improve that, well I can take people on the journey with me. By including change management plans within my project plans this will excite people and equip them with the necessary knowledge, power and understanding from the beginning, so by the time of the launch they are hugely anticipating giving it a go.
The outcome, people are prepared, the adoption of the product happens, meaning my return of investment is, most likely, going to be met quicker than if they were not engaged.
In conclusion it is evident that including the people involved in the change will affect your return on investment for the better. Again, showing that as a business change manager, people are key.
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