13.4 Step 2: Change Impact Severity
Key Takeaways
- Cost types include time, productivity dip, financial, reputational, safety and wellbeing, and opportunity
- Organisational factors are the environment, change ability, history of change, individual responses to change, and the nature of change
- Stakeholder factors are complexity, coverage, do nothing, and overall
- Coverage is the percentage of people in the organisation or stakeholder group impacted by the change, whether perceived or actual
- The do-nothing assessment covers the consequences of not acting and reinforces buy-in and burning platform messaging
Organisations can handle change in many ways. The particular solution chosen and the approach taken depend on the organisation, its culture and level of change maturity. Co-design can help ensure the solution meets stakeholder needs and will be usable, and a range of ideas will emerge from stakeholder groups that the change team must evaluate for viability.
When assessing the impact and severity of each idea, review the cost against the value obtained from implementing the change. This supports good prioritisation and informs the Minimum Viable Change Process.
Sub-step 2.1: Categorising costs
Types of cost, monetary and non-monetary:
| Cost type | Definition |
|---|---|
| Time | The level of effort required to implement, adopt, or reinforce a change |
| Productivity dip | The fall in job performance for an individual or team before basic competence is achieved |
| Financial | A monetary figure associated with, for example, the use of a resource, lost output, or non-compliance |
| Reputational | A threat or actual negative opinion on the standing of an organisation |
| Safety & Wellbeing | An actual or near-miss event that puts an individual at danger |
| Opportunity | The missed return from the second-best option |
Three observations. Time covers implement, adopt and reinforce — the reinforcement phase is a real cost and it is the one most often left out of estimates. Productivity dip is the learning dip given a cost label, which is why timely and effective training provision has a directly measurable value. And opportunity cost is defined precisely as the missed return from the second-best option, not from all alternatives.
Sub-step 2.2: Determining organisational factors
Five factors:
| Factor | What to assess |
|---|---|
| The environment | External factors, the culture of the organisation, the strategy and vision, and what else is going on that might impact change capacity |
| The change ability of the organisation | Does the organisation have the leadership, structures and frameworks in place to support this specific change? |
| The history of change in the organisation | How well leaders have managed change previously, and how much cynicism or buy-in to the change is visible |
| The individual responses to change | Each person will be at different stages and will respond in different ways. The environment, change ability and history will all affect an individual's response |
| The nature of change | The scale, purpose and speed of the change. Does the organisation or the impacted stakeholders have previous experience of this size, shape or type of change — evolutionary versus radical, incremental versus big bang? |
Note that culture sits inside the environment factor, not as a separate organisational factor of its own. This is a distinction the exam tests.
Note also the causal chain in the fourth factor: the environment, change ability and history of change all affect an individual's response. Individual responses are not independent variables; they are downstream of the other three, which is why organisations with poor change histories see stronger individual reactions to objectively similar changes.
Sub-step 2.3: Determining stakeholder factors
The change team must also consider severity at the stakeholder level. An effective change team will also think about the impacts of not doing the change.
| Factor | Definition |
|---|---|
| Complexity | An assessment of the impact of the change, the volume of impact areas affected, and the change activity and the unintended consequences |
| Coverage | The percentage of people in the organisation, or a given stakeholder group, that are impacted by the change (perceived or actual) |
| Do nothing | The consequences of not acting and continuing as is. An important consideration when looking at change saturation and prioritisation. It can also reinforce buy-in and messaging on the 'burning platform' where the severity of not acting is high |
| Overall | A combination of the complexity, coverage, and result of not doing anything. Important in showing high-risk stakeholders and change overload if looking at a portfolio of change |
Coverage includes perception
The parenthetical (perceived or actual) matters. If a stakeholder group believes it is affected, that belief drives its response regardless of the technical facts. A change that objectively touches 5% of a department but is widely believed to affect everyone has high perceived coverage and will behave accordingly. Correcting the perception is then a real piece of change work.
Do nothing is not filler
The do-nothing assessment is easy to dismiss as rhetorical, and it is genuinely useful for two reasons. It supports honest prioritisation in a saturated portfolio — a change whose do-nothing consequence is mild should give way to one whose consequence is severe. And where the severity of not acting genuinely is high, it supplies the evidence for burning-platform messaging, which in change-formula terms builds A, dissatisfaction with the status quo, and in Schein's terms provides the disconfirmation needed to raise survival anxiety.
Overall as a portfolio instrument
The overall assessment combines complexity, coverage and do-nothing. Its value is explicitly at portfolio level: identifying high-risk stakeholders and change overload across multiple initiatives. A group that appears moderately affected by each of four changes may be severely overloaded in aggregate, and only a portfolio view reveals that. This is the analytical basis for the work-role conflicts and role overload barriers to engagement, and it is what a sponsor needs in order to sequence competing initiatives.
When determining organisational factors for impact severity, which of the following is NOT listed as a separate consideration?
How does CM3 define coverage as a stakeholder severity factor?
Which cost category does CM3 define as the fall in job performance for an individual or team before basic competence is achieved?