Dr Bev Smallwood

How To Calculate the Cost of Transition

Unfortunately, many organizations make detailed plans for “change”, yet they fail to take into account the impact that transition will have on the people who are charged with carrying out the change. These are some of the costs that can accrue to the organization in times of change.

1. Impact on customers

ustomers feel the atmosphere in the workplace. They are often the victims of the confusion that results when systems are in flux. However, the impact on them is made much greater when employees and leaders alike are upset and negative about their experience in the organization. For your organization, what does it cost to lose one customer?

2. Organizational inefficiency

During times of transition, people are less knowledgeable about how to do things efficiently. Because familiar structures tend to be out of order, there are bottlenecks in the service delivery systems. This can result in lost opportunities to build and maintain loyalty with existing customers as well to acquire new customers.

3. Diminished value among managers and employees

At the core of workplace morale is the perception of value. Employees and managers are constantly asking themselves, “Do the benefits here outweigh the cost?” In periods of stressful change, that value equation often drops to dangerously low levels, impacting commitment, teamwork, performance, and loyalty.

4. Personal stress

When individuals become personally stressed, as they often do during change processes, the organization feels their stress. In the organization, the results are low morale, illness, absenteeism, high turnover, increased interpersonal conflict, poor performance, loss of focus on goals, and lack of commitment. All of this has a cumulative impact on the bottom line.

What all of this means is that leaders who are planning a change effort are critically short-sighted if they do not count the costs as well as the potential benefits of the planned change, taking steps to address the issues that can rob the organization of a net gain from even “good change.”

Dr. Bev Smallwood is a psychologist and professional speaker who is the author of “This Wasn’t Supposed to Happen to Me.” Visit her website, www.DrBevSmallwood.com; or contact Bev at 601.264.0890 or by email, Bev@DrBevSmallwood.com. Also connect with Bev on Twitter, Facebook, Linkedin, and her blogs, Shrink Rap and New Morning Devotionals.

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