Result based management (RBM) for Change management

Result based management (RBM) for Change management

Many reports assert that about 70% of all change management efforts fail. The reasons for failure could be many. Studies cite lack of champions, inadequate or inconsistent senior management support, and top down change push without involving the people at all levels or paucity of high quality resources review and guide the change management process as contributors for failure. Many senior managers acknowledge that inappropriate balancing of expected results with resources at hand or inappropriate alignment of resources and the activities are most common reasons for failure. Aligning the individual’s role and responsibilities, ownership and accountability with the intended change or outcomes is a tough task. A change management program progress from defining strategy and setting goals at different levels of organization. Change management must include plan for identifying of appropriate departmental and individual roles and changed behavior consistent with intended results. While many approaches to change management exist, no single tool fits all companies. Common drawback of many tools is their inabilities to monitor progress and adjust activities to ensure the expected results are achieved. Many tools do not facilitate learning, documenting evaluations, changes so that important knowledge is codified and used in subsequent planning phase. Tools also have a limited capability in linking the intermediate results (lead indicators) achieved and their contribution to the expected goal.

Result based management (RBM) is a management approach that can be adopted to drive change management. RBM is aimed at improving managerial effectiveness, ownership and accountability in achieving results. Largely used in Not-for-profit sector, RBM adopts a life-cycle approach to integrating strategy, resources, process, people and results. RBM focus is on integrating measurements that can improve decision making, transparency of the case and effect, and accountability at various levels. RBM uses a logical relationship between inputs, activities, outputs, outcomes and impact.

Inputs could be financial, manpower, plant, partnerships, etc. that are required to conduct various business activities. The activities would be promotional programs, creation of new sales teams, partner program structures or marketing events which are expected to deliver certain short-term results. These short term results in RBM parlance are termed outputs. Outcomes are mid-term results that indicate the direction and scale of achievement. Impact is what the company wants to achieve by undertaking the change. For example, a company may want to achieve a state of high profitability and de-risk itself from marketing and customer segments. Towards this the company has identified 3 strategies that would yield results. For each of this program, certain resources in terms of additional manpower, investment into branding, channel development etc. may be required. The company may identify certain activities that may need to be done in the next 2 years. Let us say the company has chosen to be present in an industrial event with an investment of $25,000 showcasing its products and solutions.  It would have invested in resources including manpower, exhibits, sales and marketing collaterals, etc. Post the event, the number of walk-ins, number of product demos are output measures. Number of new customers gained is an Outcome measure that is captured over next couple of quarters. The outcome measure reflects the causal effect between resources marshalled and activities pursued to reach certain objectives. The output indicates the results in short-term. Mid-period review using output and outcome measures are useful indicators of what is working and what is not working. The company can quickly calibrate alignment between activities, resources and outputs to see the returns are on expected line.

For companies attempting business transformation over longer horizon, RBM offers certain advantages. Group and individual KPI can rightly aligned with the change management process and modified based on the level of change. RBM drives individual ownership and focus on results so that managing for results by directing right staff behaviour and initiative taking is facilitated. RBM interlinks individual, departments and program level performance with low cost of data collection and monitoring.  RBM supports management learning and decision making, emphasizing more on reporting and fixing accountability. Measurement of effectiveness, efficiency, equity and sustainability at various levels becomes easy. RBM facilitates cascading down with measures that drive and capture the status of activities and outputs (short term results) so that progress can be measured and rewarded.  Large and complex change management programs can immensely benefit from RBM to interlink at various stages of hierarchy, and aggregate data and disaggregate reporting wherever required.

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