Impact assessment and risk assessment go hand in hand. Imagine a person driving at 100mph. A risk assessment will evaluate what the likely outcome of this will be (a crash), under what circumstances will it happen (probably when the driver gets to a sharp bend), and what could be done to control the risk (slowing down the vehicle). These evaluations may not be enough to get the driver to avoid the risk, but an impact assessment is likely to do so. An impact assessment will evaluate the severity of the crash (which would most likely be severe), who will be affected by the crash (the driver, maybe his family or friends, or even a random person), and how they will be affected (death, disability).

Risk assessment provides information about the risk, but an impact assessment explains why the risk should be avoided. Thus, you cannot skip this assessment during your change control process, because according to Karl Wiegers, “skipping impact analysis doesn’t change the size of the task. It just turns the size into a surprise.”[1] He went further to state that “in product development, surprises are rarely good news. Before a developer says, “Sure, no problem” in response to a change request, he or she should spend a little time on impact analysis.”

David Streatfield and Sharon Markless stated that measuring impact is about identifying and evaluating change.[2] This means that an impact assessment of a change control assesses the change that will occur to involved parties due to your change. Simply put, what change (effect) will your change (organizational procedure) cause? An impact could be negative or positive, and it could be wide-ranging, affecting many parties; or specific, affecting just a group.[3]

The importance of impact assessment

We have already stated that one of the major reasons for impact is to explain why a risk should be avoided. Impact assessment is also necessary to:

  • Check the effectiveness of the change program: How effective will the change be if implemented? Will it achieve the aim for which it was created in the first place? In this series of articles concerning risk and impact assessments of change control, I have used the “New Coke” story as an example. The first article, “Risk and Impact Assessments of Change Control” tells this story in detail. But for the sake of this article, I will give a summary. In 1985, the giant soda brand wanted to outperform its biggest competitor, Pepsi, and decided to change its secret formula. The new formula received so much criticism that Coca-Cola had no choice but to revert to Old Coke. Coca-Cola thought that the change would increase their revenue and put them miles ahead of Pepsi, but that did not happen. An impact assessment might have avoided the loss of resources channeled into creating the new formula.
  • Check the difference the change program will bring: Impact assessment analyzes the effect of a change on not just the company but its clients and stakeholders. A change program may be effective to a company, but it will not cause any change (negative or positive) to other parties involved. The change only flopped in the Coca-Cola story because it caused an unwelcome difference in the consumers’ taste buds. If the consumers had preferred the taste to Old Coke, then the change would have been effective in achieving the reason it was created initially.
  • Use the results of the assessment for future assessments: We learn by history and experience. To avoid repeating a mistake, it becomes expedient to document the results of impact assessments for future reference. Coca-Cola has made changes to its product over the years, but it has not tampered with its original recipe. Why? They learned from history. They saw the impact of a change capable of putting them out of business, and they do not want to go down that road again.

The goal of impact assessment

Although impact assessment analyzes the effectiveness and efficiency of a change process, its primary goal is to determine the extent the program changed the lives of parties involved. It measures the program’s effect on parties and seeks to understand the change processes to improve on them.  At this point, it is necessary to differentiate between effectiveness, efficiency, and impact.

The effectiveness of a change program deals with the extent to which the program achieved the intended objective. New Coke did not achieve the intended objective of increasing the market share of Coca-Cola because, with its release, only 13% of soda drinkers liked the new recipe.

Efficiency relates output to input and checks whether the same output could be achieved with a cheaper input.  The efficiency of a program comes into play when the program has been implemented. Thus, the relationship between efficiency and impact can only come after implementation. Implementing a change becomes unnecessary if the impact assessment shows that the change would negatively affect concerned parties.

Which parties are likely to be affected by a change program?

Throughout this article, we have emphasized that impact assessment checks how a change program would affect certain players or actors. Now, who are these actors? For your organization or company, these actors include your employees, your customers, and your stakeholders. Depending on your organization and change program, you could have more actors.

  • Employees: These are one of the principal actors because they are vital in implementing the change. Employees are often the last point of communication between the company and its clients, so they often have vital information about how a change program may likely affect the clients. But this doesn’t mean they cannot also resist the change. This is why you need to effectively manage your employees and carry them through the entire process.
  • Customers or clients: These are the ones directly impacted by the change. You cannot sideline them when creating a change that would affect them directly. Imagine a situation where Coca-Cola had gotten some Coca-Cola fans and given them the new formula to taste before launching it into the market; they would have sampled what the entire market perception of the product would be. Then they would have gone ahead to seek other ways to stay ahead of the competition without altering their recipe.
  • Stakeholders: These are people who may or may not be direct clients of your company but are also affected by any change you make. They include investors and members of the community where your business domiciles. A change program doesn’t only have to do with a product, it can also deal with a service or even a company culture that affects your stakeholders. A typical example was what happened with Starbucks in 2018. In Philadelphia, a store manager denied two black men access to the bathroom, and when the men protested, the manager called the police and arrested the men. This event sparked outrage not only from Starbucks’s customers but also from members of the community. As a result, Starbucks swung into action. They apologized, issued a new bathroom policy, and conducted an anti-bias training that led to the shutting down of 8,000 Starbucks stores.  Racial discrimination is a sensitive issue; the manager’s action and Starbucks’s response were two events that had a huge impact on the stakeholders—with one mitigating the effect of the other.

How to conduct an impact assessment

Just like risk assessment, conducting an impact assessment follows a stepwise approach. Here are the steps to follow when conducting an impact assessment:

  1. Select the change program to be assessed: What is the change supposed to achieve? Is it to increase company revenue? Is it to expand the company? Is it to create new lines of products or services? Every change program is unique, therefore impact assessments are tailored to specific programs.
  2. Carry out an evaluability assessment: This assessment analyzes whether it is necessary to conduct an impact assessment on the change and, if so, what method should be used for the assessment. This assessment involves brainstorming with your team to determine the objectives of the change, its lifespan, expected outcomes and impacts. The assessment also considers the parties that would be affected, the cost-effectiveness of the change program, and the best timing for conducting the impact assessment. Also, it evaluates the possible outcomes of the change, identifies all that needs to be modified (including files, models, and documents) to implement the requested change, identifies the tasks required, and estimates the effort needed to implement the change. If the results of this assessment show that the change and its impact are unrealistic or unsuitable, then conducting an impact assessment becomes unnecessary.
  3. Prepare a research plan: This plan includes a causal model of the impact assessment and a realistic plan for carrying out the assessment. The causal model will be used to develop hypothetical outcomes and impacts that will be tested in the assessment. After testing these hypotheses, the plan would define measurable indicators to determine if the impact has been achieved. The plan would also involve selecting a sample of actors that will be impacted by the change to get a quantitative view of the likely impact of the change program. The plan will also include survey questionnaires, interviews, and focus group discussions.
  4. Select assessors to carry out the assessment: After the plan is drawn, you would have to select the needed personnel to carry out the fieldwork.
  5. Conduct field research and result analysis: This involves impact assessment survey and qualitative data collection activities like informant interviews and focus group discussions. After this is done, collect the results and analyze them. It is expedient to carry out an in-depth data analysis to get a holistic view of the assessment.  
  6. Report impact assessment findings: Communication is key. Disseminate your findings to the principal actors involved. You can disseminate this information through conferences, seminars, workshops, published papers, blog posts, or other company resources.  
  7. Document findings: This will come in handy for future assessments and decision making.

Conclusion

A person driving at 100mph may be having fun cruising at such a high speed. Such a person may not know that they are posing a risk to themselves and those around them. Telling them that they are a threat to life may not be enough. However, showing them how they are a risk to themselves and others may work the magic. In a moment of epiphany, they may realize what they would lose if they continue on that path.

This is the same for your change process. You may be excited at the prospects of a change program that you wouldn’t realize how risky it is. A risk assessment will tell you that it is a risk, and you may dismiss it with the mantra, “Life is a risk.” But will you still make that comment after an impact assessment paints a vivid image of how harmful the risk will be?


[1] Ut supra, 1

[2] Streatfield, David & Markless, Sharon. (2009). “What is Impact Assessment and Why is it Important?” Performance Measurement and Metrics. 10. 134-141. 10.1108/14678040911005473.

[3] ibid

[4]  Kate Bird. (2002). “Impact Assessment: An Overview.”

[7]  Paul A. Argenti. “When Should Your Company Speak Up About a Social Issue?” Harvard Business Review, 16 October 2020.