(5 Best Practices) Conducting a Change Management Risk Assessment

Did you know that only 34% of change initiatives succeed?

Change is inevitable, but how you manage and implement it makes a world of difference. The importance of a well-executed change management risk assessment cannot be overstated when it comes to successful implementation.

In this blog, we’ll examine the top five best practices for performing a change risk assessment professionally. 

TL;DR – 5 Change Management Risk Assessment Best Practices

In this blog, we have explored the concept of change management risk assessment in detail, provided relevant tools and techniques, and discussed these best practices to apply while assessing change risks:

1. Personalize your approach as per your company’s risk tolerance levels
2. Use data-driven insights to perform risk assessment
3. Streamline change management processes
4. Measure risk management and control metrics
5. Revamp the change advisory board

Interested in kickstarting your learning journey as a change initiative champion? Our Executive Coaching program helps you efficiently identify, analyze, and minimize risks. 

Learn more about our executive coaching solutions today.

What Are the Risks in Change Management?

Poorly implemented change initiatives come with significant risks. Here are six significant risks of poor change management:

1. Exceeding the Budget

An ill-planned change management process often leads to unanticipated large costs.

Here’s how: incorrectly assessing time, resources, and potential bottlenecks causes budget overruns. Unsuccessful changes also require additional costs to fix errors and inefficiencies, putting more strain on resources.

2. Limitations on Future Changes

If you have a history of unsuccessful change initiatives, it can lead to skepticism and a lack of trust from key stakeholders. Simply put, they may become resistant or uninterested in future change initiatives, which, in turn, slows down progress.

Here’s the issue: distrust from key stakeholders makes it nearly impossible for managers to gather the necessary resources and support for future change initiatives.

Save these articles for later to learn about how to build trust as a leader:

• 5 Key Strategies for Building Trust and Effective Communication in Agile Teams 
• 5 Strategies to Elevate Leadership and Executive Teams

3. Higher Resistance to Change

Employees resist change, especially if they aren’t fully informed about or involved in the process. This can directly cause higher turnover, decreased morale, and a steep drop in productivity.

You must encourage active engagement and communication to resolve issues and build buy-in.

4. Change Fatigue

When people continuously keep adapting to new processes and systems, they can start feeling overwhelmed and disengaged at some point. 2/3rd of all employees end up experiencing burnout, which ultimately leads to change initiative failure, as data suggests.

Organizations should prioritize change initiatives, communicate effectively, and give enough support to employees to reduce such fatigue.

5. Losing Skilled Employees

Poor change management can affect staff morale and job satisfaction. Employees who feel unappreciated or overwhelmed by change may search for other job options. 

When talented people leave, an organization’s strength to execute future initiatives takes a serious hit.

6. Declining Customer Experience Levels

Lastly, but most importantly, poorly managed change initiatives can potentially disrupt operations and customer service. 

Delays, errors, or low-quality service can harm the company’s reputation and incline customers to leave.

Why is a Change Management Risk Assessment Crucial in the Workplace?

OSHA (Organizational Safety & Health Administration) regulations mandate that organizations perform in-depth risk assessments to identify potential risks and hazards that can harm staff and customers.

That said, a change management risk assessment includes identifying, assessing, and mitigating any risks that could compromise the change initiative’s success.

Organizations that manage these risks proactively have the following benefits:

• Gaining insights into potential challenges for more informed decision-making throughout the change process.
• Identifying and minimizing risks beforehand to avoid costly detours, rework, and other unplanned expenses.
• Showcasing their commitment to effective change management to gain stakeholder support.
• Reducing the negative effects on staff, customers, and key stakeholders.

Change Management Risk Assessment Questions to Ask

Before we discuss anything further, let’s remember that “Normal Changes” mandatorily require a “Risk Assessment,” whereas such assessment is optional for “Emergency Changes.” 

That said, the assessment comprises ten common questions for assessing risk related to normal changes:

1. If the change fails, will revenue be affected?
2. How many users will be affected by the change?
3. Has this change ever been put into effect before?
4. If this change failed, how difficult would it be to roll back?
5. In case of failure, can services be reinstated within the proposed timeline?
6. If the change implementation fails, could it potentially disrupt any business services?
7. How much/how many resources will be needed for this change?
8. Is the change program thoroughly documented?
9. Is the change visible to the customer base?
10. Has the change undergone testing?

Once you’ve asked these questions, remember to assign a risk score of “Low, Moderate, High, or Critical” based on the answers. This risk score helps set priorities for changes and allocate resources needed for implementation.

List of Change Management Risk Assessment Techniques

We’ve created a list of common change management risk assessment techniques that you can apply to measure risks on all types of organizational change:

What-If Analysis

Although the “What-if analysis” is widely recognized as a basic strategy, it’s often beneficial for brainstorming worst-case scenarios and their consequences. Asking “What if?” questions help companies identify possible risks and create mitigation plans. 

Here are a few examples:

• What if the new software system doesn’t integrate with old systems?
• What if key employees are against the change?
• What if unexpected budget constraints arise?

Failure Modes and Effects Analysis (FMEA)

Next on our list, the FMEA strategy helps identify potential failure modes, their causes, and their effects. It involves choosing a specific process or system, putting together a cross-functional team, and documenting the process stages.

At every stage, the team brainstorms potential failures and uses the Risk Priority Number (RPN) to quantify their risk, considering its severity, frequency, and detection. You can then create action plans to minimize or eliminate high-risk failure types.

Bow Tie Analysis

Bow-tie analysis is a more visual technique for helping organizations understand the adverse effects of a certain risk or incident. It involves identifying the initial events, their propagation, and their consequences.

Organizations can use the bow-tie diagram to set control measures to minimize risks and prevent incidents.

Layers of Protection Analysis (LOPA)

Lastly, LOPA is a quantitative risk assessment approach that measures the efficiency of safety barriers/safeguards in reducing accidents. 

Analyzing the layers of protection can help organizations find underlying gaps in their safety systems and adopt extra safeguards to decrease risk.

Best Practices to Conduct Change Management Risk Assessment

While performing a change management risk assessment, we recommend following these five best practices for ensuring successful implementation:

1. Personalize Your Approach

Start by identifying the types of risks your company is most likely to encounter, whether operational, financial, or reputational. 

Once you know your organization’s risk appetite, you can adjust your change management approach to avoid unnecessary exposure. This ensures that the risks are managed in a way that aligns with your company’s overall goals and culture.

2. Use Data-Driven Insights to Perform Risk Assessment

Rely on concrete data to assess potential risks. This means gathering historical data, analyzing current processes, and looking at similar situations within your industry. 

With this information, you can make informed decisions about possible risks and their impact during the change management process. Moreover, you can use this data to predict future challenges and address them before they become major issues. 

3. Streamline Change Management Processes

Avoid complex and slow-moving change management processes. Instead, break down the steps clearly and ensure each stage of the change is simple to follow. 

Define roles and responsibilities early on so everyone knows what’s expected. This will help you stay agile and better manage potential risks that may arise during the process.

4. Measure Risk Management and Control Metrics

Set clear metrics to track and measure the effectiveness of your risk management efforts. This could include tracking risk response times, the effectiveness of your mitigation strategies, or how well teams are adhering to risk management plans. 

These metrics should also be regularly reviewed to see if adjustments are needed. If you spot areas where risk is not being effectively managed, take action to address it quickly.

5. Revamp the Change Advisory Board

Traditional Change Advisory Board (CAB) models frequently become bottlenecks, slowing change initiatives. Instead, ensure the board consists of individuals with the expertise and authority to make decisions.

Plus, make sure the board is proactive in identifying risks and has the flexibility to adjust plans as needed. To do this, you can keep communication lines open so the board can swiftly address any risks that emerge during the change process.

At Tandem Coaching, our personalized “Executive Coaching” program can help you spot possible problems, create strong contingency plans, and confidently lead your team through change. Book a free consultation today and take the first step towards driving sustainable organizational change.

Change Management Risk Assessment Matrix to Track

A change management risk matrix is a visual tool for ranking risks based on their potential impact and likelihood of occurrence. Each risk is plotted on the matrix to visualize the risk level (low, medium, high, or critical).

Here, we’ve added a risk matrix you can use while performing a risk assessment for an organizational change project:

*may add/remove categories as required

Use Tandem Coaching to Enhance Your Change Management Risk Assessment Process

When managing complex organizational change, it takes a sharp eye to assess potential risks. Our “Executive Coaching” program prepares executives like you to successfully identify, analyze, and minimize these risks.

Partner today with Tandem Coaching to learn how to acquire key insights into your organization’s strengths, weaknesses, and vulnerabilities while dealing with change. Our professional coaches will help refine your change management strategies, improve decision-making skills, and build team resilience.

Sign up for a consultation to start making more informed decisions, building team strength, and creating sustainable change.

Frequently Asked Questions (FAQs)

We’ve answered some of the most frequently asked questions about change management risk assessment:

What is Change Risk Management?

Change risk management is a safety-first method for identifying, analyzing, and minimizing potential risks regarding organizational change projects. 

In this scenario, executives analyze multiple factors, such as technical barriers, human factors, and external factors, to discover underlying risks and decrease their effect on the project’s success.

What Tools Are Used for Change Management Risk Assessment?

A change management risk assessment uses various tools, such as:

• Risk matrix
• SWOT analysis
• FMEA analysis
• Stakeholder analysis
• Bow-tie model analysis, and more.

How Often Should Risk Assessments Be Conducted During Change Management?

The overall project duration and complexity determine how frequently one should perform risk assessments during change management. It’s recommended to undertake risk assessments at key milestones like:

• Initial planning (identifying potential risks, including mitigation strategies into the process design early on).
• Implementation (assessing ongoing risks, optimizing processes as needed).
• Post-implementation (analyzing the efficacy of mitigation strategies, identifying any lingering risks).

Conclusion

Congratulations! You’ve learned the key techniques and best practices for performing change management risk assessments. These guidelines will help you identify risks, select mitigation strategies, and drive successful change initiatives.

Join Tandem Coaching’s Executive Coaching program today to strengthen your change management skills. Our experienced coaches offer personalized coaching and support to help talented executives like you easily address complex changes.