Value Realization using effective Organizational Change Management

Value, Organisational Change Management and Benefits Realization: the Bermuda Triangle of organizational effectiveness. Physical things go into the Triangle but manage to disappear!

Whenever discussing benefits realization or value delivery, I’m reminded about Oscar Wilde’s play Lady Windermere’s Fan (1892) and the remark made by the character, Lord Darlington: “A cynic is a man who knows the cost of everything and the value of nothing.”

Fast forward to 2019 and Mariana Mazzucato’s book (2018) “The Value of Everything”. In the book she defines value creation as “the ways in which different types of resources (human, physical and intangible) are established and interact to produce new goods and services”.

The reason for mentioning Oscar Wilde and Mariana Mazzucato with a difference of some 100+ years in-between is, in my experience, organizations have significantly more clarity on cost than the equivalent level of clarity regarding value delivery. It is completely understandable to focus on operating costs. However, the potential mis-match on clarity between costs and value creation and delivery can be a significant barrier to benefits realization in the fullest sense.

Think about a conversation between yourself as a member of the Change Team and any of those with the title ‘Sponsor’ for your change. What is the likelihood of engaging them in conversation about costs and benefits realization (aka value expected from the change delivery)? My experience tells me there will be more clarity regarding costs than benefits and value. Even more so if they happen to be budget holders or responsible for a cost centre. Even the name “cost centre”; why not “value centre”?

Let’s have a few words on business cases. In most organizations, at one level, the business case is held as the immutable statement of fact regarding the change delivery. The business case can also be seen as the responsibility of one function, perhaps with input from other areas. Or the business case can be seen as a necessary process evil to be completed, and subsequently ignored.

How about this as a more reality-based practical use for a business case. The most senior organizational people acknowledge the business case, even if done thoroughly, as a “best-guess” at a moment in time. They could also acknowledge that, due to delivery reality (in its broadest sense) “bumping into” the business case, the business case could be benchmarked for a later review following delivery as a planning process review, while the various emerging reality-based iterations of the business case are matched with emerging clarity regarding value and benefits realization?

Two high profile projects (more like portfolios) in the UK have run into trouble. They are Cross Rail and HS2. Both are extremely complex pieces of work. Yet both have, and are having, a crisis of effective leadership at the most senior levels, particularly concerning the transparency of delivery performance to the major sponsors (Transport for London for Cross Rail and the UK Government Department of Transport for HS2).

Both of these portfolios reflect significant technical complexity. However, by and large, the issues are not with the technical complexities, more with leadership and reporting transparency. Both Cross Rail and HS2 have “suddenly” reported significant projected delays and overspend. Apparently, the delays and overspend have come as a surprise to the respective sponsors.

This brings the business case, emerging reality, portfolio management and organisational change management together for me. Doubtless there will be lessons learned reviews and, more than likely, these will be opportunities lost. The effort that could be spent creating value by really learning lessons will, more than likely, be lost in protecting reputations and “the politics of the thing”. This, unfortunately, is the operating environment for most best efforts at project, programme, portfolio and organizational change management. Little wonder value and benefits realization are so challenging.

However, a change agent is at hand. This change agent is arguably one of the most important in the change management toolkit. It is the realization and practice of open, transparent stakeholder engagement as an iterative part of the change process, and not a one-off tick-box exercise. The ongoing facilitation of aligning stakeholder mindsets to the reality of ongoing delivery, connected to shifts between the business case and benefits realization, is where the magic sits.

Good luck with your magic wand!