How can you calculate the cost of change?

One of the most challenging things about change for any organisation is facing the unknown.

You may know what needs to change, or why you want to change, but can you ever really be sure how the process will go – and, more importantly, what it will cost?

This uncertainty is never more acute than when you look at the human factors which can influence the way change is implemented. Some people are simply more adaptable to change than others – and some have a stronger attachment to their current ways and bad habits.

Whenever any change is implemented, the workplace itself goes through a transition process which may take longer than the change itself. For example, if a workplace were introducing a change in working hours or shift patterns, that might happen overnight. The transition for the team, however, will take much longer, as they accept the change and adapt to it.

Any manager considering change needs to weight up the potential costs of change against the costs of not implementing that change. While it can seem easier to maintain the status quo rather than causing upheaval, the reality is that doing nothing could be costing you money.

So where do you start?

Looking at the costs of change can feel daunting, so we’ve created a simple formula to help you make sure the numbers stack up and give you the confidence to implement change as effectively as possible.

Calculate your answers to the following questions:

  1. How many employees are likely to be affected by the changes in your organisation?
  2. On average, how much non-productive time is spent per week by each employee reacting against the changes – or on worrying, gossiping, speculating and rumour-mongering activities?
  3. How many weeks has this been going on for?
  4. How many weeks will it continue for if you do nothing?

Then use these numbers in the following formulae:

  1. The number of hours lost so far: a x b x c = x
  2. The number of additional hours that could be lost in future: a x b x d =y
  3. How much it could be costing you financially: (x + y) x average employee hourly rate

Of course, this doesn’t take into account any additional potential revenue which you may have missed, such as if your sales team has failed to focus on the needs of your customers in the way that would have generated more profit for you. In reality, the cost is probably even higher than these calculations suggest.

In considering change, no doubt you’ve done some calculations of your own, looking at how your new system, set-up or project could make the business more successful. Compare those figures with the amount you’re currently losing and suddenly, the need to manage change effectively becomes even more urgent. Resistance from employees not only costs you money now, but also delays the benefits you should be getting from your plans.

If you’re preparing for change, our advice would be to consider all the costs first. Weigh up the cost of staying as you are against the cost of change, then analyse how much higher the cost of that change will be if you don’t implement it effectively.

Rather than waste money down the line as your employees struggle to get to grips with transition and resist a change they have never fully embraced, invest from the outset in getting everyone on board. It will reward you with significant savings in the long run and enable you to reap the benefits of change much sooner.

Don’t worry if you looked at this and thought, Oh no, maths!  We have created a worksheet that will help you with the calculation.  This is a great exercise to complete with your colleagues, as it builds the momentum to take control of the change and do something different.  So, once you have downloaded it, print out a few copies.

Why do people go looking for evidence that supports their point of view?

Change in the workplace can take people out of their comfort zone and make them feel uncertain, powerless and, even, angry.

In this podcast, Rob and Ricky discuss why people look for evidence that supports their perception that change is difficult and undesirable. They also offer suggestions about how leaders and managers can help their teams to navigate and embrace change.

Resistance to change is a natural reaction in most of us. We like doing things the way we’ve always done them, and we don’t like having to learn something new or do something in a different way. It makes us feel like we’re not in control.

So when change is foisted upon us, we look for evidence that supports our deep-held belief that things were fine the way they were. We don’t like being made to accept someone else’s point of view and we want everyone to conform to our perception of the world. It’s classic ‘comfort blanket’ behaviour!

Change in the workplace is often viewed by employees as inconvenient and detrimental to their ability to carry out their job effectively. They’ve made that assumption and they go looking for proof to back it up.

Managers can address these concerns by helping their staff to see change as an opportunity. They can ask people to look for evidence by all means – but evidence that supports the positive outcomes of change. Explaining the reasons why things have changed can also be very effective: perhaps it has helped eradicate a problem, streamlined a system or opened up new opportunities. Usually change is about progress. Give people the answers they need. Explain how change might help them to do their job more effectively or simply. Show them the bigger picture.

By turning a problem-orientated mindset into a positive one, we can understand that change may mean different, but it doesn’t have to mean difficult or bad.

Why do some managers allow people to opt out of change?

Change can mean upheaval for everyone in a team. But why is it that, while some people engage and do their best, other people simply opt out and carry on as if nothing has happened?

In our latest podcast, Richard and Ricky discuss the reasons why these situations arise – and what can be done to tackle them.

There are several reasons why a manager would allow certain team members to opt out of change. It could be that the manager doesn’t have the skills to challenge the behaviour of the team members resisting change, or that the manager views this team member as a crucial player in the team and tackling them could reduce their productivity or even make them leave.

Whatever the reason, Richard and Ricky say allowing some people to get away with this creates a two-tier system, where some team members are allowed to do things in a way that other team members are not able to get away with.

So how do you tackle it?

Richard and Ricky discuss how to engage with resistant team members and get them to want to be part of the solution. Giving them some responsibility that will mean they have to behave in the right way and show those behaviours to others can be crucial, as Ricky describes through one of his own experiences.

They talk about sitting down with the person and talking through the reasons for the change, as well as their concerns. By unpick their thinking and talking about the impact of their behaviour on the team, you can better understand their thought process and help them to see that they do need to engage with the plans.

If you can’t engage with them and they won’t change despite your efforts, you need to be clear about what that means – is this the right role for them? Even the highest achievers need to be team players, otherwise the benefit of their achievements can be undermined by the negative impact of their attitude.

Why do some people think that change can be bad for their career?

When workplace change is announced, some people assume it will mean their career progression is taken off course – but is that always the case?

In our podcast, Ricky and Richard discuss how combating your initial reaction can help you to embrace the opportunities that change presents and even use them to benefit your career.

Change often means uncertainty – what if the change that’s coming doesn’t match up to how you see your career mapping out? Perhaps you’re happy with where you are, or you know the steps you need to take to reach your career goal. Change may take you in a different direction and leave you feeling unsettled.

Fear of the unknown triggers an emotional reaction and can lead to soul-searching. But instead of allowing your emotions to take hold, Ricky and Richard discuss how you can take control of your reaction to what lies ahead. If you feel confident in your own ability and where your skills lie, you can find a way to have a positive impact.

Essentially, instead of seeing change as a threat, look at it as an opportunity.

Recognise that your initial reaction will be concern, which is only natural. Depending on the scale and nature of the change, you may feel shock or fear. Our brains are programmed to feel comfortable with the status quo and, when something disrupts that, we fear loss – losing colleagues, losing the type of work we’re used to and so on – rather than anticipating gain.

Ricky and Richard remind you to have an open mind to what is being proposed, rather than making negative assumptions and looking for evidence to back them up. Embrace the ways in which you can be part of the change and even benefit from it. The steps you need to take may not be the ones you imagined, but you can plan out new steps and even find a better goal than you had initially.

Why do some people think an emotional response will get them what they want?

Emotions are a normal part of change but in the workplace some people believe an emotional response will allow them to get their own way. In our podcast, Richard and Rob explore why this happens and how managers can respond when emotions are running high.

There are times in the workplace when some people think stamping their feet and shouting loud enough will get them what they want. In the podcast, Richard and Rob discuss how change can often trigger an emotional reaction and this is completely normal. In some cases, it can even be helpful as it may be a way of releasing the pressure people feel they are under.

They go onto explore how given time most people will arrive at a more considered and rationale response where they can start to make sense of the situation. Richard explains how it’s useful to get clarity about what is happening and to surround ourselves with people who are a positive influence. It’s helpful to recognise an emotional reaction as normal, write down everything that’s going through the mind and then question whether our perceptions are real. An emotional response might be triggered because our view of the future has been threatened and is different to our imagined version.

Rather than stewing in an emotional state, Richard and Rob examine how we should seek out answers to any questions and gain greater clarity about the situation. By bringing back a level of control, we can make plans, help to re-direct things and search for meaning.

The pair summarise their discussion by exploring how leaders and managers have an important role to play when it comes to being aware of other people’s behaviours and offering support.