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IBM Global Change Management Study Making Change Work  Closing the Change Gap Full Storyline June 7, 2009
Executive summary – Key Findings Global Making Change Work Study |  2008 <ul><li>Our Global Making Change Work Study exami...
Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How ...
Today’s dynamic environment is causing organizations to re-frame the traditional view of what “normal” is Global Making Ch...
How the Enterprise of the Future faces change Global Making Change Work Study |  2008 The IBM CEO Study 2008 found that ou...
The ability to manage change must become a core competency in the Enterprise of the Future <ul><li>8 out of 10 CEOs antici...
Market outperformers have less of a gap to close, however it is still significant Global Making Change Work Study |  2008 ...
Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How ...
Our Making Change Work study looks more closely at the enterprise trait, “Hungry for Change,” by polling practitioners <ul...
How our research was conducted : Sample and demographics Global Making Change Work Study |  2008 Source: IBM Global Making...
Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How ...
Practitioners reported that on average only 41% of projects were considered successful <ul><li>44% of all projects failed ...
The top 20%—the  Change Masters —reported an 80% project success rate, nearly double the average  Global Making Change Wor...
The critical barriers to change involve people—what is generally considered the “soft stuff” is hard Global Making Change ...
Global Making Change Work Study |  2008 Factors for Successful Change <ul><li>Change Masters have realized that behavioral...
Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How ...
Analysis identified four important focus areas that were highly correlated with project success—helping to close the chang...
We found a strong correlation between successful projects and a realistic awareness of the change challenge,… Global Makin...
… However, being merely aware of change complexity is insufficient Global Making Change Work Study |  2008 Does Awareness ...
Making change work: From Insights to Actions Global Making Change Work Study |  2008 Source: IBM Global Making Change Work...
Formal change management methods improve project success when applied consistently Global Making Change Work Study |  2008...
However, change management methods are usually informal,  ad hoc or improvised Global Making Change Work Study |  2008 Use...
The Methods Gap: The difference between the perceived level of formal methods required and the actual level being applied ...
Making change work: From Methods to Benefits Global Making Change Work Study |  2008 Source: IBM Global Making Change Work...
Change managers improve the rate of project success Global Making Change Work Study |  2008 <ul><li>Deploying experienced ...
Cascade change leadership responsibility to all levels of the organization <ul><li>A shared responsibility for change lead...
Making change work: From Skills to Change Global Making Change Work Study |  2008 Source: IBM Global Making Change Work St...
Change Masters consider money spent on change management as an investment, not an expenditure Global Making Change Work St...
We found project success rates were higher when moderate investment is made in the change effort Global Making Change Work...
Making Change Work: From Investment to Impact Global Making Change Work Study |  2008 <ul><li>Tackle complexity before it ...
Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How ...
Mastering Change: Greater focus on the four facets of the Change Diamond drives project success <ul><li>By concentrating a...
The Change Diamond: Greater than the sum of its parts <ul><li>Although action on individual facets brings benefit, only in...
Practitioners achieved significantly higher rates of success when focusing on the four facets of the Change Diamond  Globa...
Conclusions <ul><li>Closing the change gap requires organizations to focus on soft, people related factors where the great...
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    1. 1. IBM Global Change Management Study Making Change Work Closing the Change Gap Full Storyline June 7, 2009
    2. 2. Executive summary – Key Findings Global Making Change Work Study | 2008 <ul><li>Our Global Making Change Work Study examined how organizations can manage change and identified strategies for improving project outcomes and closing the “Change Gap” </li></ul><ul><ul><li>Between 2006 and 2008, the share of CEOs expecting substantial change climbed from 65% to 83% </li></ul></ul><ul><ul><li>The disparity between expecting change and feeling able to manage it – the “Change Gap” – nearly tripled between 2006 and 2008. Most CEOs consider their change execution inadequate </li></ul></ul><ul><ul><li>Both the key change challenges and the key success factors are “soft” issues that are difficult to manage and measure – the soft stuff is the hard stuff </li></ul></ul><ul><ul><li>The top 20% of our sample - Change Masters - reported an 80% project success rate, nearly double the average while the bottom 20% - Change Novices – reported 8% </li></ul></ul><ul><ul><li>We identified 4 key success factors that differentiate Change Masters from Change Novices and that can help companies to make change work </li></ul></ul>Source: Global CEO Study, 2008 / Global Making Change Work Study, 2008; n = 1,532 practitioners
    3. 3. Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How our research was conducted </li></ul><ul><li>How practitioners deal with change </li></ul><ul><li>Why the Change Masters excel: The Change Diamond </li></ul><ul><li>Making the diamond shine for extraordinary results </li></ul>Global Making Change Work Study | 2008
    4. 4. Today’s dynamic environment is causing organizations to re-frame the traditional view of what “normal” is Global Making Change Work Study | 2008 Continuous change is the new normal. Companies must abandon the notion of predictability in managing day-to-day operations Forces impacting today’s organizations GLOBALIZATION TECHNOLOGICAL ADVANCES ENABLING AND ACCELERATING CHANGE CROSS-COMPANY AND CROSS-NATIONAL PARTNERSHIPS COMPLEX MULTINATIONAL ORGANIZATIONS
    5. 5. How the Enterprise of the Future faces change Global Making Change Work Study | 2008 The IBM CEO Study 2008 found that outperforming companies are capable of changing quickly and successfully and they also shape and lead trends Source: IBM CEO Study, 2008; n = 1,100 + CEOs worldwide Core Traits of the Enterprise of the Future Hungry for change Innovative beyond customer imagination Globally integrated Disruptive by nature Genuine, not just generous 1 2 3 4 5 Making Change Work continues the Enterprise of the Future conversation, particularly regarding how companies face being hungry for change
    6. 6. The ability to manage change must become a core competency in the Enterprise of the Future <ul><li>8 out of 10 CEOs anticipate substantial or very substantial change in the next 1 – 3 years </li></ul><ul><li>CEOs rated their ability to manage change as 22% lower than needed </li></ul><ul><li>The broader set of challenges exposes companies to more risk and uncertainty </li></ul>Global Making Change Work Study | 2008 The Change Gap has Tripled Source: IBM CEO Study, 2008; n = 1,100 + CEOs worldwide An inability to close the change gap can mean cost overruns and missed objectives, ultimately destroying business value EXPECT SUBSTANTIAL CHANGE CHANGED SUCCESSFULLY IN THE PAST 65% 57% 83% 61% EXPECT SUBSTANTIAL CHANGE CHANGED SUCCESSFULLY IN THE PAST 2006 2008 8 % CHANGE GAP 22 % CHANGE GAP
    7. 7. Market outperformers have less of a gap to close, however it is still significant Global Making Change Work Study | 2008 <ul><li>Financially outperforming companies had a much smaller change gap than their peers </li></ul><ul><li>Outperformers: </li></ul><ul><ul><li>Anticipated more change </li></ul></ul><ul><ul><li>More effective at managing it </li></ul></ul>Change Success by Company Performance Source: IBM CEO Study, 2008; n = 1,100 + CEOs worldwide EXPECT SUBSTANTIAL CHANGE UNDERPERFORMERS OUTPERFORMERS CHANGED SUCCESS- FULLY IN THE PAST 85% 83% 66% 54% 29 % CHANGE GAP 19 % CHANGE GAP
    8. 8. Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How our research was conducted </li></ul><ul><li>How practitioners deal with change </li></ul><ul><li>Why the Change Masters excel: The Change Diamond </li></ul><ul><li>Making the diamond shine for extraordinary results </li></ul>Global Making Change Work Study | 2008
    9. 9. Our Making Change Work study looks more closely at the enterprise trait, “Hungry for Change,” by polling practitioners <ul><li>Most CEOs consider themselves and their organizations to be executing change poorly </li></ul><ul><li>And yet a few outperformers do excel at delivering and benefiting from meaningful change. But how is this actually accomplished? What are the critical challenges and which key factors can lead to change that actually works?   </li></ul><ul><li>The Making Change Work study continues the conversation from the CEO Study. Based on input from over 1500 practitioners, it describes practical steps to take to prepare for the increasing pace, variety and pervasiveness of change </li></ul>Global Making Change Work Study | 2008 Source: IBM CEO Study 2008, IBM Global Making Change Work Study, 2008 Exploring the ‘Hungry for Change’ trait
    10. 10. How our research was conducted : Sample and demographics Global Making Change Work Study | 2008 Source: IBM Global Making Change Work Study, 2008, (n = 1,532) Making Change Work Study 2008 Demographics Methodology The Making Change Work study investigated real-life experiences of practitioners worldwide from organizations of all sizes, across industries Job roles Geographic regions Organizational size Breakdown by industry SUBJECT MATTER EXPERT/REVIEWER 7% PROJECT TEAM MEMBER 7% CHANGE MANAGER 17% INITIATOR/PROJECT SPONSOR 25% OTHERS 6% PROJECT MANAGER 38% AMERICAS 29% EUROPE 34% ASIA PACIFIC 37% COMMUNICATIONS 17% DISTRIBUTION 13% FINANCIAL SERVICES 16% INDUSTRIAL 18% PROFESSIONAL SERVICES 8% PUBLIC 21% OTHERS 7% UP TO 100 7% 100-1,000 15% 1,000-10,000 32% 10,000-100,000 32% MORE THAN 100,000 14% <ul><li>Key attributes of the sample </li></ul><ul><li>- 1,532 experienced project practitioners </li></ul><ul><li>- 15 countries worldwide </li></ul><ul><li>- 21 different industries </li></ul><ul><li>- Companies of all sizes </li></ul><ul><li>Methods </li></ul><ul><li>- Face-to-face interviews </li></ul><ul><li>- Survey </li></ul>
    11. 11. Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How our research was conducted </li></ul><ul><li>How practitioners deal with change </li></ul><ul><li>Why the Change Masters excel: The Change Diamond </li></ul><ul><li>Making the diamond shine for extraordinary results </li></ul>Global Making Change Work Study | 2008
    12. 12. Practitioners reported that on average only 41% of projects were considered successful <ul><li>44% of all projects failed to meet either time, budget or quality goals, while 15% either stopped or failed to meet all objectives </li></ul>Global Making Change Work Study | 2008 Project Success Rates Source: IBM Global Making Change Work Study, 2008, (n = 1,532) PROJECTS THAT EITHER MISSED ALL GOALS OR WERE STOPPED 15% PROJECTS THAT DID NOT MEET EITHER TIME, BUDGET OR QUALITY GOALS 44% PROJECTS THAT FULLY MET THEIR OBJECTIVES 41%
    13. 13. The top 20%—the Change Masters —reported an 80% project success rate, nearly double the average Global Making Change Work Study | 2008 Share of Successful Projects <ul><li>The top * 20% of organizations reported an average project success rate of 80%, reflecting a 95% increase above the average number of successful projects </li></ul><ul><li>Conversely, the bottom * 20% of our sample is the group we describe as Change Novices —their reported project success rate was a dismal 8% </li></ul>Source: IBM Global Making Change Work Study, 2008, (n = 1,532) ‘ Success rate increase’ is the relative difference * ’Top’ and ‘bottom’ organizations of sample as defined by project success rates 95 % SUCCESS RATE INCREASE BOTTOM 20% CHANGE NOVICES 8% 41% 80% AVERAGE TOP 20% CHANGE MASTERS Share of successful projects
    14. 14. The critical barriers to change involve people—what is generally considered the “soft stuff” is hard Global Making Change Work Study | 2008 Major Change Challenges <ul><li>Key barriers are changing mindsets & attitudes, corporate culture, and underestimated complexity </li></ul><ul><li>These “soft factors” are rated more important than resource constraints, illustrating they are inherently hard to manage and measure even with sufficient resources </li></ul>“ Leaders are unrealistic about how change is going to happen. They move ahead anyway and get into problems.” — Change Manager, Energy and Utilities company Source: IBM Global Making Change Work Study, 2008, (n = 1,532) Changing mindsets and attitudes Corporate culture Complexity is underestimated Shortage of resources Lack of commitment of higher management Lack of change know how Lack of transparency because of missing or wrong information Lack of motivation of involved employees Change of process Change of IT systems Technology barriers 58% Soft Factors Hard Factors 49% 35% 33% 32% 20% 18% 16% 15% 12% 8%
    15. 15. Global Making Change Work Study | 2008 Factors for Successful Change <ul><li>Change Masters have realized that behavioral and cultural change are crucial to project success and are considerably tougher to address than the so-called “hard” factors, such as structure, performance measures and incentives </li></ul><ul><li>Practitioners place a key responsibility for successful change right at top management’s door </li></ul>“ If you don’t have leadership support, you’re doomed” — Project Manager, U.S., Media and Entertainment Source: IBM Global Making Change Work Study, 2008, (n = 1,532) Top management sponsorship, employee engagement and honest and timely communication are critical for successful change Change supported by culture Efficient training programs Adjustment of performance measures Efficient organization structure Monetary and non-monetary incentives Top management sponsorship Employee involvement Honest and timely communication Corporate culture that motivates and promotes change Change agents (pioneers of change) 92% Soft Factors Hard Factors 72% 70% 65% 55% 48% 38% 36% 33% 19%
    16. 16. Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How our research was conducted </li></ul><ul><li>How practitioners deal with change </li></ul><ul><li>Why the Change Masters excel: The Change Diamond </li></ul><ul><li>Making the diamond shine for extraordinary results </li></ul>Global Making Change Work Study | 2008
    17. 17. Analysis identified four important focus areas that were highly correlated with project success—helping to close the change gap Global Making Change Work Study | 2008 <ul><li>Detailed analysis of our study results revealed a highly significant correlation between project success and four important areas of focus: real insights, solid methods, better skills and right investment </li></ul><ul><li>These four change-related focus areas are represented graphically as four facets of what we call the Change Diamond </li></ul><ul><li>When combined effectively, taking actions to address each of the diamond’s four facets can help guide the Enterprise of the Future in its quest to make change work </li></ul>Why the Change Masters excel: The Change Diamond Source: IBM Global Making Change Work Study, 2008
    18. 18. We found a strong correlation between successful projects and a realistic awareness of the change challenge,… Global Making Change Work Study | 2008 Challenge and Complexity Awareness <ul><li>Lack of early insight leads to a high risk that complexity will be underestimated or even overlooked </li></ul><ul><li>In particular, the complexity of behavioral and cultural change is often underestimated in the early project planning and scoping stages </li></ul><ul><li>Project success rates drop as organizations’ awareness levels decrease </li></ul>Source: IBM Global Making Change Work Study, 2008, (n = 1,532) Percentage of successful projects YES TENDING TOWARD YES TENDING TOWARD NO NO 52% 43% 35% 25% “ Within your organization, do you think there is sufficient awareness of the challenges associated with implementing and sustaining change?” REAL INSIGHTS REAL ACTIONS
    19. 19. … However, being merely aware of change complexity is insufficient Global Making Change Work Study | 2008 Does Awareness Lead to Action Source: IBM Global Making Change Work Study, 2008, (n = 1,532) Change Masters take advantage of awareness and insights to better guide actions Within your organization, do you think there is sufficient awareness of the challenges associated with implementing change? <ul><ul><li>Does this awareness of the challenges of implementing change normally lead to the introduction of specific measures to support the change? </li></ul></ul>TENDING TOWARD NO 26% Yes Tending toward yes Tending toward no No NO 13% YES 18% TENDING TOWARD YES 33% 30% 55% 13% 2% REAL INSIGHTS REAL ACTIONS
    20. 20. Making change work: From Insights to Actions Global Making Change Work Study | 2008 Source: IBM Global Making Change Work Study, 2008 <ul><li>Hook into the history. Provide change leaders with access to historical data, people surveys, culture assessments and “war stories,” and people involved in previous projects, if possible </li></ul><ul><li>Open your eyes…wide! Examine the project’s scope, likely impacts and expected outcomes carefully. Assess the people, culture, behavior and organizational aspects, process and technology impacts </li></ul><ul><li>Plan and adjust. With a thorough understanding of project complexities, build a change plan to address them </li></ul><ul><li>Take a long view. Build and execute plans to address the “soft stuff” well beyond the formal end date of the project to deliver business value </li></ul>Practical steps from insights to actions: REAL INSIGHTS REAL ACTIONS
    21. 21. Formal change management methods improve project success when applied consistently Global Making Change Work Study | 2008 Having a structured approach to change management alone is insufficient if not applied consistently. When used regularly, the likelihood of project success increases to 52%, compared to less than 40% in other instances. Consistent application of solid methods vs less consistent or none at all There are specific and formal change management procedures which are always followed Although there are specific and formal change management procedures, they are often not followed I know someone I can ask Actions are improvised according to the situation 52% 39% 38% 36% Formal change management approach <ul><ul><li>Informal change management approaches </li></ul></ul>SOLID METHODS SOLID BENEFITS Source: IBM Global Making Change Work Study, 2008, (n = 1,532)
    22. 22. However, change management methods are usually informal, ad hoc or improvised Global Making Change Work Study | 2008 Use of formal methods in Change Management vs Project Management “ Following a good solid methodology that integrates with the project really helps to make a quicker start on the change journey....“ --- Change Manager, Australia, Government <ul><li>3 out of every 4 organizations still use a change management approach that is typically informal, ad hoc or improvised </li></ul><ul><li>In contrast, 1 out of every 2 organizations use formal project management methods consistently, double the number that use formal change management methods. For more effective change management, formal change methods have to be applied more consistently as done in project management </li></ul>76% Formal methods used consistently Informal approach (formal methods not used conssitently, ad-hoc or improvised) 24% 49% 51% Change Management Project Management SOLID METHODS SOLID BENEFITS Source: IBM Global Making Change Work Study, 2008, (n = 1,532)
    23. 23. The Methods Gap: The difference between the perceived level of formal methods required and the actual level being applied Global Making Change Work Study | 2008 <ul><li>Despite almost 90% of practitioners recognizing the value in using formal change management methods, in practice the consistent use of a systematic approach is low </li></ul><ul><li>There is a wide gap between what is thought to be required and what is actually being applied. By employing formal change management methods and using them more consistently, organizations can close this methods gap and increase the chances of project success </li></ul>The Methods Gap 63 % METHODS GAP 87% Percent answering “yes” 24% Need Formal Methods Use Formal Methods SOLID METHODS SOLID BENEFITS Source: IBM Global Making Change Work Study, 2008, (n = 1,532)
    24. 24. Making change work: From Methods to Benefits Global Making Change Work Study | 2008 Source: IBM Global Making Change Work Study, 2008 <ul><li>Integrate, integrate, integrate. Manage change as a formal workstream, integrated closely with project management </li></ul><ul><li>Keep all eyes on “the prize.” Control the scope of the change effort to remain focused </li></ul><ul><li>Drive consistency . Develop and promote a standard change method that can be applied consistently. Communicate this widely and monitor its adoption </li></ul><ul><li>Embed in the culture . Include the change method and associated competencies as part of the development program for future leaders </li></ul>Practical ideas for closing the methods gap SOLID METHODS SOLID BENEFITS
    25. 25. Change managers improve the rate of project success Global Making Change Work Study | 2008 <ul><li>Deploying experienced and skilled change managers on projects helps to increase the chances of project success </li></ul>The impact of dedicated change managers 19 % SUCCESS RATE INCREASE 36% Share of successful projects 43% No Professional Change Managers Professional Change Managers BETTER SKILLS BETTER CHANGE ‘ Success rate increase’ is the relative difference Source: IBM Global Making Change Work Study, 2008, (n = 1,532)
    26. 26. Cascade change leadership responsibility to all levels of the organization <ul><li>A shared responsibility for change leadership at all levels of the organization helps to create empowered employees who support and enact change </li></ul>Global Making Change Work Study | 2008 Employee involvement and empowerment makes success more likely “ Facilitate involvement of employees and allow them to exercise influence over the change process&quot; --- Project Sponsor, Canada, Life Sciences and Pharmaceuticals 18 % SUCCESS RATE INCREASE 39% Share of successful projects 46% After consulting their subordinates, managers decide on their own Managers delegate their decision process to their subordinates BETTER SKILLS BETTER CHANGE ‘ Success rate increase’ is the relative difference Source: IBM Global Making Change Work Study, 2008, (n = 1,532)
    27. 27. Making change work: From Skills to Change Global Making Change Work Study | 2008 Source: IBM Global Making Change Work Study, 2008 <ul><li>Get the right skills – everywhere. Enable rapid development of internal skills to keep pace with changes in the external environment. Consider the establishment of a sustainable change management capability within the organization </li></ul><ul><li>Lead from the top . Set vision and direction clearly, allocating resources and driving corporate culture from the top. A change sponsor should be actively and visibly involved </li></ul><ul><li>Involve the people. Emphasize employee involvement to ease resistance to change, at both individual and group levels, and set in place mechanisms to encourage this involvement </li></ul>Practical ideas for closing the skills gap BETTER SKILLS BETTER CHANGE
    28. 28. Change Masters consider money spent on change management as an investment, not an expenditure Global Making Change Work Study | 2008 <ul><li>The majority of practitioners would like to invest more in change management on future projects </li></ul><ul><li>Making more effective investments in change is not about blindly diverting unlimited sums of money into projects. Rather, it is about cutting the diamond precisely, through focused investments in the right things for each specific situation </li></ul>Source: IBM Global Making Change Work Study, 2008, (n = 1,532) Investing for Change—Future Allocations INVEST MORE 72% INVEST LESS 2% INVEST ABOUT THE SAME 26% <ul><ul><li>Compared to current investment in change management, on future projects would you… </li></ul></ul>RIGHT INVESTMENT RIGHT IMPACT
    29. 29. We found project success rates were higher when moderate investment is made in the change effort Global Making Change Work Study | 2008 <ul><li>Top organizations invested only slightly more in change than others, but were rewarded with significantly higher project success </li></ul><ul><li>Our study found that project success rates were 23% higher when the amount invested in change was greater than 11% of the project budget </li></ul>“ The ability to demonstrate the benefits of a change program was key in the shift in thinking” — Project Manager, Canada, Life Sciences and Pharmaceuticals Investing for Change—A little goes a long way 23 % SUCCESS RATE INCREASE 39% Share of successful projects 46% Investment <=11% Investment >11% RIGHT INVESTMENT RIGHT IMPACT ‘ Success rate increase’ is the relative difference Source: IBM Global Making Change Work Study, 2008, (n = 1,532)
    30. 30. Making Change Work: From Investment to Impact Global Making Change Work Study | 2008 <ul><li>Tackle complexity before it tackles you. Invest up front in gaining and acting upon insights that can help you avoid and overcome both expected and unexpected hurdles during the course of a project </li></ul><ul><li>Remember to emphasize the human touch. Invest in skills by using well-trained change managers more consistently and enable widespread communications that engage employees across all organizational levels </li></ul><ul><li>Put some method into your madness. Invest in establishing standardized methods to build more effective and long-term capabilities that support change efforts, and remain vigilant about project spending overall </li></ul>Practical ideas for investing in change RIGHT INVESTMENT RIGHT IMPACT Source: IBM Global Making Change Work Study, 2008
    31. 31. Contents <ul><li>Making Change Work </li></ul><ul><li>How the Enterprise of the Future faces change </li></ul><ul><li>How our research was conducted </li></ul><ul><li>How practitioners deal with change </li></ul><ul><li>Why the Change Masters excel: The Change Diamond </li></ul><ul><li>Making the diamond shine for extraordinary results </li></ul>Global Making Change Work Study | 2008
    32. 32. Mastering Change: Greater focus on the four facets of the Change Diamond drives project success <ul><li>By concentrating and acting on all four facets of the Change Diamond, Change Masters achieve project success rates of nearly twice the average </li></ul>Global Making Change Work Study | 2008 Change Masters: Greater focus leads to project success <ul><li>The Change Masters consistently utilized the success factors markedly better than the average organization and were able to report much higher success rates. </li></ul><ul><li>The Change Novices in contrast consistently under-utilized the four facets driving change success and had to report an 8% success rate. </li></ul>Real Insights - Percentage of organizations having a clear understanding of the change challenge Solid Methods - Percentage of organizations using formal methods consistently Better Skills - Percentage of organizations using change managers for change projects Right Investment - Percentage of project budget invested in change management 46% 61% 79% 12% 24% 37% 73% 79% 84% 10% 11% 13% Bottom 20% Change Novices Average Top 20% Change Masters 8% 41% 80% 95 % SUCCESS RATE INCREASE ‘ Success rate increase’ is the relative difference Source: IBM Global Making Change Work Study, 2008, (n = 1,532)
    33. 33. The Change Diamond: Greater than the sum of its parts <ul><li>Although action on individual facets brings benefit, only in combination do they result in an outstanding increase in project success. </li></ul>Global Making Change Work Study | 2008 The individual vs. joint effect of the four facets <ul><li>When they combined the facets, Change Masters attained an 80% project success rate, a marked increase over the sum of their individual effects </li></ul>Real Insights: Awareness of Change Challenge 52% 19 % Solid Methods: Consistent use of Formal Methods Better Skills: Professional Change Managers Right Investment: >11% Change Budget Change Champions: Combining All Four Facets 52% 43% 43% 80% 41% Average project success rate Project success rate of individual facets <ul><ul><li>Increase in project success due to synergy effect of all four facets together </li></ul></ul><ul><ul><li>Sum of the four individual facets </li></ul></ul><ul><ul><li>Increase due to synergy </li></ul></ul>Source: IBM Global Making Change Work Study, 2008, (n = 1,532)
    34. 34. Practitioners achieved significantly higher rates of success when focusing on the four facets of the Change Diamond Global Making Change Work Study | 2008 Allocate the right amount for change management by understanding which types of investments can offer the best return, in terms of greater project success Use a systematic approach to change that is focused on outcomes and closely aligned with formal project management methodology Source: IBM Global Making Change Work Study, 2008) Strive for a full, realistic understanding of the upcoming challenges and complexities, then follow with actions to address them Leverage resources appropriately, including effective top management sponsorship, assigning dedicated change managers to projects and empowering employees to enact change
    35. 35. Conclusions <ul><li>Closing the change gap requires organizations to focus on soft, people related factors where the greatest challenges are being faced </li></ul><ul><li>Organizations can no longer approach change management in an ad hoc manner and still expect to be successful </li></ul><ul><li>Improving project outcomes requires the combination of several facets – taking insightful action, deploying skilled change practitioners, adopting formal methods and smart investment </li></ul><ul><li>Focus on the Change Diamond and application of all four facets will result in greater project success </li></ul>Global Making Change Work Study | 2008

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