The Change Formula

Formulas can play a surprisingly important part in our lives. The formula below is arguably the most famous formula of all time. Einstein derived it directly from his Special Theory of relativity. It states that energy can become mass and vice versa under the right conditions. This discovery ushered in the nuclear age.

We can all probably remember learning Pythagoras' theorem at school. That is, the square of the length of the hypotenuse of a right triangle equals the sum of the squares of the lengths of the other two sides. In later life, mainly if you work in finance or project management, you may have used a net present value (NPV) formula to determine whether the anticipated financial gains of a project will outweigh the present-day investment. Those working in start-ups will use many formulas, including Customer Lifetime Value (CLTV) and Customer Acquisition Cost (CAC).

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However, we don't see formulas often used in organisational change management (OCM). This is perhaps not surprising given that OCM has a focus on people. The exception to this is Beckhard-Harris Change Formula. The formula was initially described in the 1960s by management consultant David Gleicher, and was further developed by Richard Beckhard and Reuben T Harris in the 1980s (Beckhard & Harris, 1987). I have seen different variations of the formula, but I generally prefer this version:

C = [ABD] > X

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The basic premise of the formula is that for any change to be successful, factors A, B and D must outweigh the cost of the change (X). When we consider the cost of change, we must consider the financial and emotional costs and the friction inherent in changing something that already exists. This also includes the contribution this change will make towards change saturation in the organisation. The three key factors, A, B and D, are as follows:

A???Level of dissatisfaction with status quo

B???Desirability of proposed change or end state

D???Practicality of proposed change

I first encountered the formula while undertaking one of my first training courses in change management way back in 2010. I have been surprised that it is not more commonly used; perhaps it has fallen out of favour with the OCM community. However, it has been one of my go-to tools when leading and delivering change for organisations. It is incredible to see the value you get from bringing a project team together and merely articulating, agreeing and documenting all five elements. In my experience, the real benefit derived from the frameworks, toolkits or formulas we use is in the conversations they help structure and facilitate.

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The change formula can be applied to any organisational change. Still, I feel it is particularly useful for digital adoption, i.e., when you address the people side of technology implementation.

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Who Can Use the Formula?

Several roles can benefit from using the change formula. If you are a change manager or project manager tasked with introducing a new IT solution into an organisation, then you can benefit from using the formula. If you are a CIO or executive considering the impact of a new technology, e.g., Robotic Process Automation will have on your organisation can also leverage the formula. Tech start-up founders can also benefit from the formula as it can help them understand the impact your product will have on your clients' employees and ultimately help you know if your product will be a success or not.

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The initial step for a start-up to use the change formula to determine the likelihood of your product being successfully implemented and adopted in your client's organisation is to articulate all five formula elements. Can you do this for your product? You can conduct the exercise generically or ideally with a willing customer with whom you have a great relationship. The table below suggests questions under each heading to help articulate each item and get a gut feeling about whether the change formula predicts success for your product.

Questions To Ask

The following table shows you some of the typical responses you might get to these questions and the corresponding rating.

While working on technology implementations, I have often found that although the users had no overt objection to the new system, they were very comfortable with their existing system and reluctant to move from the legacy system to a new one. The user's level of dissatisfaction with the status quo was low. Low desirability (B) will occur when the features or benefits of new technology have not been clearly articulated or the 'what's in it for me?' (WIIFM) has not been made apparent to each stakeholder. Of course, there are occasions when a product is simply impractical for an organisation, either because the timing is not right, or the product doesn't meet the client's requirements. This leads to the low practicality of the proposed change (D).

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How To Apply It

Once you have articulated and considered all the elements, you will have a good sense of how easy your product is to adopt and identify potential blockers. Inevitably, there will be instances where using the formula will indicate a low chance of success for your product, e.g., due to low dissatisfaction with the status quo. This might suggest that your project or product is unsuitable for the context, and it is always better to know this sooner rather than later.

At Humology, we have developed a Change Formula Tool that enables you to quantify the strength of these elements and predict the likelihood of success in a relatively objective manner. Try the tool for free on our website (www.Humology.com).

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For start-up founders in a competitive marketplace, you need to take advantage of all the valuable tools you can to set yourself apart from the competition and grow your brand. The Change Formula is a great tool to have in your arsenal. Armed with these insights, you can adjust your product features, improve how you implement your product and adapt how you communicate about your product.

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Indeed, for all technologists, whether you are a change manager, project manager, founder, CIO or CTO, I feel strongly that the change formula is a tool you should use.