Key Performance Indicators for Change Management ? - Blogs Pages

Recently, an increasing number of visitors to my website have been searching for KPIs relating to organization change management. This has prompted me to reflect on the idea and offer my thoughts. I believe they are asking the wrong question. The KPIs they need lie in the success model for the new strategy.

As a long time HR professional, in addition to my business strategy interests I have been involved in many organizational change projects. Whether the project has been described as ?organization change?, ?restructuring?, ?reorganization?, or ?retraining?, there has been an underlying theme; it has always been driven by a change in strategy.

Either the business needs to do something different, or it needs to do the same thing in a different way.

I suggest that HR professionals need to think about organisation change from a strategic perspective. Classic ?soft? performance indicators from the HR tool kit such as employee satisfaction. employee engagement, change in deployment or even employee cost savings fail to measure the success or failure of the strategic change or even progress towards it.
I know this to be true because I have just reviewed over 100 entries in the Human Resources KPI class at kpilibrary.com. I found fewer than 5 entries that could track the strategic impact of a significant organization change program. Check this for yourself if you wish. This seems surprising because we know that these programs are very expensive and usually take the business some time to recover the costs.

Rethinking KPIs for change management.
I am going to wear my strategy consultant?s hat to write this section.
When we develop a new strategy, good practice says that we:

• Gather evidence to prove that the change is needed.
• Work out what needs to be changed to make it work.
• Estimate the costs.
• Estimate the benefits in business and financial terms.
• Work out a sequence and timeline.
• Set business goals with hard and soft targets.
• Measure the results.

If all these sensible steps are in place, the means of evaluating the strategic impact of the change are in place before the decision is taken.

A good principle for major organizational change programs is that line managers should drive the process, with HR taking a guiding role, and providing specific services outside the scope of normal line management activity. If this is how it works in practice the KPIs are the measures of how well the new strategy is working.

How does a KPI based business model assist with this process?
Regular readers will know that a KPI model is a business model that mirrors the operational structure of the organization. When we change strategy, we make changes to this operational structure; we change who does what to achieve a different result.
We need to build a new model, a model of what the business needs to look like and what it needs to do. This is the way the best strategy consultants work, because their clients demand this level of detail before they are convinced that the strategy will work. They then use the model to set the targets that must be achieved to show that the strategy has worked.
Building the KPI model not only makes the KPIs, the ?must do? parts of the new process, crystal clear; it also enables the effect of alternative combinations to be tested, on paper or in an interactive model.
We measure the effect of our change using a new set of KPI relationships that show how the new strategy will work. The KPIs flow out of the strategy development process. They are the measures that tell us how well the new process or structure is working. They are operational measures. If they are not clear to everyone involved in the change process, then the business is taking a giant leap in the dark.
You would not do that in your business, would you?

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