The Keys to Successful Organizational Change: OCM Consultants Drive Positive ROI

In our first installment of this three-part series, we learned organizational change management (OCM) consultants are critical to a successful organizational transformation. In fact, of the 30% that execute organizational change, only 15% of that change meets or exceeds expectations (Prosci and Harvard Business School).

“Organizations that get the leading, measuring and sustaining activities right will be the ones that experience the greatest success (Towers Watson).”

When looking at any organizational change plan, anticipated return on investment (ROI) is a key factor in choosing to implement a change or not. Understandably, knowing whether your change will be conducive to continued growth is important. ROI is often an argument that also determines whether a change management consultant will be consulted during an organizational transformation.

The ROI of OCM consultants

While companies hear they should, or need, to either enlist or hire an internal OCM consultant to manage their change, the reasons why are often not clear. The main reason the ROI of a change management consultant is hard to quantify is that an OCM consultant doesn’t have a direct product with metrics that can easily be tracked. Instead, we must look at the stats about project success and the various ways companies allot their budgets.

Successful change stems from well-managed initiatives

When polled, 87% of businesses stated that not enough focus is placed on change management and, as a result, on average, only 5% of total project budgets are allocated for a change manager (IBM). Yet, the statistics also show that 76% of businesses who invested over 11% of their budget “Achieved as expected benefits or more (90% and up) (IBM).” In other words, the amount invested in change management directly correlates to the success of the change.

In a study conducted by McKinsey of 40 companies, it was found that the 11 most successful companies in the study gained an average of 143% ROI while an additional seven gained 129% ROI. While organizations with little or no change management only achieved 35% of the expected ROI. This is because the OCM consultant enlisted managed the change across all levels of business, ensuring all were involved, had clear responsibilities, and communication across all levels was clear.

OCM consultants manage more efficiently

While some companies do train project managers and department managers in OCM-related skills, only 36% find this an effective approach. As mentioned in our first article, when the manager is a part of your company, they cannot see the entire organization without bias or supposition. Instead, a change manager who comes in and sees your business and determines the path to change with a fresh perspective is critical. As a result, companies who invest in external OCM consultants are 2.5 times more likely to outperform peers and achieve better than anticipated ROI (Towers Watson).

Managing the people and the process of a change is the hardest part of an organizational transformation and is also the part that suffers the most when not properly prepared for. 84% of highly effective companies’ change management has a clear vision of what their change management initiative is intended to achieve (Prosci). Bypassing an experienced OCM consultant, whether external or internal, is statistically proven to lead to decreased productivity, suffering employee morale, high turnover, and other negative effects that could affect customer relationships.

The positive correlation between change management effectiveness and meeting objectives

Studies and statistics illustrate a direct correlation between change management effectiveness and ROI. Though any change is better than none, even poorly managed change, to exceed ROI expectations, an OCM consultant is critical. Organizations that employ an OCM consultant are six times more likely to meet objectives than those with poor change management (Prosci). Furthermore, 81% of organizations rated their OCM consultant’s ability to stay on schedule and within budget as excellent, with those rating as poor experiencing negative ROI (Prosci).

ROI is a key factor for businesses engaging in organizational transformation. Without successful change, growth becomes more difficult. Negative change can severely impact day-to-day operations, the ability to reach long-term goals, and impact your bottom line. Whereas positive change, organized and effectively managed, will most likely result in a positive ROI.

Read the next blog in The Keys to Successful Organizational Change series.

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