Delve into a real-world example of how harnessing the Theory of Change can help to align project actions with desired outcomes, mitigate risks and foster organisational adaptability and resilience.
If the term Theory of Change is new to you, think of it as a series of events, conditions and strategies that must be present to create the desired cause and effect. It’s a bit like a blueprint that outlines the necessary steps and resources to achieve a desired outcome (or change).
In project terms, every business case is written with the underpinning assumption that if scope is delivered (cause) then a benefit will be realised (effect). The Theory of Change is a detailed understanding of all the things between cause and effect.
In a time when organisations are pulling in the reins on project investment and raising the bar on business case approvals, the Theory of Change will prove to be a crucial tool for getting a business case for change across the line. It gives project leaders, change managers and executive decision-makers the right information to help prioritise and sequence projects for their organisation.
Theory of Change provides a strategic lens that links specific actions to anticipated results – and a clearer roadmap of how to get there. That’s why we like it.
Understanding the Theory of Change
Every project has a Theory of Change at its core. Understanding the change and how it will likely unfold, as well as the drivers or obstacles to success, is key to developing a strong business case. It also supports planning and prioritising action throughout the project life cycle.
When developed and understood, the Theory of Change essentially becomes a framework that outlines both the “how” and the “why” of a desired change in a particular context, mapping out the path from the identified need through to its desired outcomes.
The concept has been around for a long time, focusing on the analysis of program logic. However, the term Theory of Change is largely credited to Carol Weiss, who was working with community change leaders to find ways to better analyse and evaluate complex social change initiatives. We use an adapted version of Weiss’ framework in the world of enterprise project delivery.
Applying the Theory of Change to digitisation projects
You might be thinking this all sounds pretty abstract, so let’s make it more practical with a recent, real-world example provided by one of our practitioners. Company A is a financial services organisation that wanted to digitise customer service interactions that were previously managed manually or by paper-based forms. .
The following diagram provides an illustration for the factors and elements at play for this project, many of which would apply to any type of digitisation program.
Let’s break that down:
Identify the need for change and project goal
Company A had identified that the current ways of working using PDF-style “paper” forms had a high cost-to-serve and an outdated user experience, and the project was established to address that concern. To keep this simple, we will focus on the goal to reduce the cost-to-serve.
In order to understand how to achieve its goals, the project team needed to clearly identify the drivers of change, through understanding the current state and the issues and opportunities that need to be addressed. For this project, they needed to increase quality by reducing errors; and by preventing incomplete or incorrect submissions with poor data, such as forms with the wrong account numbers, or illegible handwriting. In addition to this, the project team needed to reduce the effort required to complete the corresponding tasks for each transaction.
In simple terms, high-quality means less re-work; and reduced effort through automation means less resources. Both factors will reduce the overall cost-to-serve by reducing the amount of labour required to serve customers.
Define the scope of change
Scope refers to the specific actions and deliverables of the project. In this example, Company A wanted to digitise customer interactions by moving away from PDF forms to a more contemporary solution. This sounds simple, but it was not a like-for-like replacement.
To improve the quality of interactions, forms needed data. Data requires security, so new interactions had to occur in an authenticated environment. Digital forms could also be a lot smarter – e.g. eliminating the need to ask the customer for information Company A already has – so they could branch and error-correct more efficiently. Thus, there was an opportunity to rationalise the forms into more logical and easier-to-use interactions.
Now that transaction data can be validated and captured correctly, many tasks that previously had to be handled manually could now be automated. In many cases, forms could be processed without any human intervention.
Each of the elements described above were required to achieve the goal of the project. Benefit realisation would be compromised if a part were missed or not delivered.
Realising the benefits requires addressing crucial conditions as risks
The Theory of Change framework for this project also highlighted critical risks and conditions that needed to be met to deliver on the goal. They were:
- Adoption risk: If customers do not embrace the digital interactions (and continue to use old forms), then none of the intended benefits would be realised. This was mitigated by removing many of the old forms and interactions, driving clients to the new forms and providing them with step-by-step assistance when calling the contact centre for help. Another key mitigation was ensuring good design and user experience, so that using the new forms was as easy and intuitive as possible
- Technology / quality risk: As technology was the major enabler of this project, quality had to be high to ensure accuracy; and so that effective automations could be built, tested and operated with high availability. Should the solution not operate at that standard, Company A would require more labour at short notice to deal with exceptions and outages. The reduced cost-to-serve benefit would never be fully realised.
The project’s success hinged on customers transitioning from paper-based to digital forms. The Theory of Change framework identified this dependency early on, which prompted the team to address it proactively with important inclusions in the scope, as well as robust customer-facing and internal change strategies to embed the behaviour required to deliver the desired outcomes.
Building your theory of change into the business case
When preparing business cases, there is a tendency to provide a summary to leaders who review those cases and decide which projects are approved and which projects are set aside. This case was no different. The Theory of Change framework enabled the project team to articulate clearly what it was going to take for the project to be successful. This helped to help justify the anticipated costs and scope inclusions.
Some leaders (rightly) questioned the proposed rebuild of the website and app. The team already had the answer to this: namely, because it was built to accommodate hundreds of paper-based forms. Therefore, authentication capabilities were limited and a simple switch of PDF for digital interactions would not make logical sense to the user. This could compromise adoption, and as the Theory of Change rationalised, poor adoption means poor outcomes.
The project’s Theory of Change also specified the timeline for achieving certain benefits. It accomplished this by identifying which scope elements contributed the most benefits, linking interaction types to volumes, and mapping components to benefit readiness milestones. This made proportioning of spend-to-benefit far easier.
Ultimately, Company A could prioritise high-volume transactions with significant automation opportunities. A definition of complete was also clear: both the formand the automation capabilities were required.
Aligning theory and reality
As a framework, the Theory of Change is a helpful set of guiding principles to guide your business case development and align the organisation’s goals to the project realities. Project leaders can draw a straight line from objectives to desired outcomes, by clearly identifying and articulating the need for change and a clear scope; and linking both to the anticipated benefits.
Delivering great projects is about more than managing the process from start to finish. For project sponsors or teams driving projects, the Theory of Change offers an opportunity to ensure that every action is purposefully and strategically aligned.
It’s also a valuable way to build a strong change culture to foster agility and resilience in despite the challenging times, paving the way for more successful outcomes and ensuring that every investment of dollars, effort and time delivers the maximum possible value.
Quay Consulting is a professional services business specialising in the project landscape, transforming strategy into fit-for-purpose delivery. Meet our team or reach out to have a discussion today.