Why Do 75% of Change Management Programs Fail?

Business & Growth
November 4, 2021
January 6, 2021

75% of change management programs fail, according to a comprehensive study by Towers Watson.

Considering the amount of money businesses spend on trying to manage change effectively, and the decades of research in the field, this apparently slim chance of success is surprising.

So why is it that most change management initiatives seem doomed to fail?

The Need For Change

Valued at over $8 billion, the management industry is big business in Australia. Despite the 75% chance that organisational change will fail, businesses are spending big because they need to.

Why? Because a business that doesn’t change is a business that doesn’t grow.

Companies have to stay agile to gain a competitive edge in a disruptive and evolving marketplace. For managers, however, this simple reality presents a complex problem; implementing change can be a frustrating and costly exercise for all involved.

What Does Failure Look Like?

At its best, organisational change can drive productivity, improve employee satisfaction and fuel growth. At its worst, organisational change can steer a business down the path to bankruptcy. Poor change management presents a suite of problems, beyond the obvious damages to employee morale (and even retention).

Borders Bookstore is a notable example of change-gone-wrong. Borders made the grievous strategic move to acquire CDs and DVDs - formats that would soon plunge into near obsolescence, while negotiating a deal with Amazon and forfeiting their online control.

Kodak, Iridium and even Donald Trump haven’t been immune to similar strategic blunders.

However, failures like these are a failure of change strategy more than a failure of the change process itself.

The two are often discussed interchangeably, but according to Steve Tobak of CBS Money Watch, they should be approached as two very different disciplines.

Focus On The Process

Failure in the field of change management is often met with the simplistic “people hate change” mantra. However, as prolific American systems scientist, Peter Senge says;

“People don’t resist change. They resist being changed.”

Employees of all seniority can meet organisational change with open arms, if management strategies are sound. Yet how can managers maximise their chances of successfully implementing business change? There are a number of essential ingredients all successful change initiatives should have. The following two, however, are arguably the most important:

1. Leadership Involvement In Change Management

The support of leadership is critical if business changes are to succeed. Presenting a united front will inspire trust, motivation and morale. More importantly, it will demonstrate that leadership is collectively confident that proposed changes will succeed.

Leadership can’t afford to delegate the implementation of change management to the HR department. Nor can they afford to outsource the process to consultants. Senior employees should roll up their sleeves and make themselves accountable for the program’s success or failure.

2. A Change Story

The same Towers Watson report also included damaging statistics on how well employees understand the reasons for change:

  • 68% of senior managers felt they were informed on reasons for change,
  • 53% of middle managers felt they were informed on reasons for change,
  • 40% of front-line supervisors felt they were informed on reasons for change.

A change management initiative that enforces change without explaining it will become part of the 75% that fail. Therefore, all organisational changes need a narrative.

Let’s revisit Peter Senge’s change edict, “people don’t resist change, they resist being changed”. If managers action changes on an operational level, without providing context or explanation, that equates to an employee feeling as if they’re “being changed”.

On the other hand, a manager who involves employees in change discussions and shares the rationale of leadership, will inspire a collaborative environment where employees are likely to cooperate and even embrace the initiative.

Change stories should also be emotional. Employees are more inclined to adopt change if they’re emotionally incentivised to do so. This is where the involvement of leadership, through regular engagement with employees and stirring calls to action, is essential.

Change management is a discipline with a history dotted with failures, however it’s also a discipline that will become increasingly important for all businesses to master.

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