The change architecture

Investments generally lead to far-reaching changes. This is particularly true for public investments, as they are subject to a different perception than private investments and require a high degree of transparency and responsibility in the use of resources. In addition, current social issues, such as climate change and pandemics, present us with new challenges. The pressure on the public sector to invest in a targeted manner will therefore continue to increase.

So how can public investment decisions be optimally planned and implemented in order to meet these demands? Our hypothesis is that the use of change management methods can increase the effectiveness and efficiency of public investments.

So what would such an investment project look like if it were organized according to the principles of change management? We have developed a change architecture that outlines a number of elements which go beyond the usual technical and business management instruments of investment planning and implementation:

Diagramm, das die Change Artchitektur anhand einer Tabelle erklärt

So what are the key elements of investment projects that are based on change management principles?

  • Well-founded needs assessment at the beginning
  • Early discussion and clarification of strategic changes to be achieved by the investment, i.e. the vision of the investment project. For example, what overall economic and social effects are expected for a region after an investment in transport infrastructure, such as the Koralm railroad tunnel.
  • Systematic surveys and dialogue-oriented stakeholder events. The aim should not just be persuading and convincing when resistance becomes too great in the focus of public discussions (often the case with major investments in transport and energy infrastructure – e.g. transition to renewable energy, Stuttgart railroad station, etc.). And why not let citizens or other affected stakeholder groups decide between (equivalent) investment alternatives?
  • In order to analyze the investment requirements in this way, appropriate preparations, such as a well-founded stakeholder analysis, are necessary. This also creates the basis for professional, supportive communication throughout the entire project (not just at the beginning). In many cases, it is also necessary to manage different interests in order to avoid groups of winners and losers emerging during the project.
  • It can be assumed that the accounting reforms in recent years (budget reforms which switched to a private sector-oriented accounting system) have promoted and boosted the use of business management tools for investment accounting. But what about the far more complex analysis of the effects and macroeconomic and social benefits of investments? Public investments without prior, thorough analysis of the impact structure in the respective area neglect this crucial factor of assessment. For example, as mentioned above, what enhancement does a region experience as a result of an investment in infrastructure in the transportation sector, etc.?
  • For larger investment projects, a well-founded analysis is essential, overall costs can be optimized through a comprehensive life cycle assessment. It is important to clarify in which organizational and legal form this can best be achieved. For example, how can it be ensured that the “qualities” that enable cost-efficient operation are financed during the investment phase? Does it make sense to invest in public-private partnership (PPP) models in which the private partner has a vested interest in creating optimal investment conditions for cost optimization in ongoing operations, etc.?

In summary, it can be said that public investments regularly lead to profound changes and, at the same time, are facing new challenges such as climate change and pandemics. The use of change management methods can increase the effectiveness and efficiency of these investments and create a lasting impact. Professional communication and stakeholder involvement, as well as consideration of the life cycle and private sector organizational and financing structures, are crucial in order to meet the increased demands and ensure long-term social benefits.