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70% of Change Management Initiatives Fail–REALLY?

Editor's Note: Take a look at our featured best practice, Change Management Strategy (24-slide PowerPoint presentation). Seventy percent of change programs fail, according to the April 2001 Harvard Business Review article, "Cracking the Code of Change". According to Bain & Company, businesses that implement fast, focused, and simultaneous change programs can create enormous and long-lasting shareholder [read more]

Also, if you are interested in becoming an expert on Change Management, take a look at Flevy's Change Management Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

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So now to tackle another much debated change subject–that so-called 70% failure rate.

How many times have we seen LinkedIn posts and discussions talking about this subject?  As many as Change Management MethodologiesProject Management vs Change Management, and Change Management Certification!!!

Before we start in earnest on the subject, let just have a look at some of the headline statements on this subject from some of the most influential sources of business information:

  • McKinsey and Company — “A recent survey of business executives indicates that the percent of change programs that are a success today is… still 30%.”
  • IBM — “Nearly 60 percent of projects aimed at achieving business change do not fully meet their objectives.”
  • Harvard Business Review — “The brutal fact is that about 70% of all change initiatives fail.”
  • Forbes/Towers Watson —  “A new study by Towers Watson has found that only 25% of change management initiatives are successful over the long term.”
  • Connor Partners — “Change practitioners have some culpability for the atrocious 70% failure rate of change initiatives.”

So there we have it … proof … it must be true! Between 60% and 70% of Change initiatives fail? Wow!!!

But where did this much vaunted 70% figure come from? Is it a myth? Is it supported by hard facts/real evidence? The following two articles explain its origin and provide some compelling evidence that the figure is a myth:

But this figure actually provokes a more interesting debate–the one about how we measure success/failure in the context of change initiatives.

There is of course the traditional way. That is you measure success/failure against your original Business Plan in which there should be clear and detailed Business Benefits. The problem with this is that change initiatives have a habit of not going to plan and veering off in all kinds of different directions dependent on various factors that cause them to do this. So the problem is measuring against an initial set of Business benefits that no longer relate to the way a change initiative has developed.

The Business Benefits profile should be managed and controlled as rigorously as costs and there will need to be a process of refining the Business Benefits profile in your original Business Plan. It will need to be reassessed and adjusted as necessary during the programme. Regular reviews should be conducted of the main Business Benefits led by Key Stakeholders from the Business and/or Operational Areas and facilitated by the Change Manager. Adjustments may be identified from a range of events or circumstances such as:

  • Business operations may be unstable.
  • Forward plans are no longer realistic.
  • External circumstances changing.

So in effect your change initiatives/objectives will need to be re-focused along with identified Business Benefits on a regular basis based on the changing circumstances which will facilitate a much better focus on eventual measurement of success against these.

Then there are other ways.

In a paper called “The Change Trifecta Measuring ROI to maximize change effectiveness” by PwC suggests a four point formula to prove return on investment for change:

  • Measuring the relative contribution that change management provides to a project’s overall ROI.
  • Conducting an in-depth retrospective analysis of similar cases with like objectives to identify common investment criteria and parameters.
  • Maintaining a portfolio of change programs and measurement systems that is customized to the organization.
  • Measuring organizational readiness or agility for change.
The author, Ron Leeman, has published A Comprehensive Guide to Change Management on Flevy, a 199-slide PowerPoint detailing just about everything there is to know about Change Management.  It is currently the best selling document on Change Management available on Flevy.

Additionally in an article called “How Do You Measure Transformational Change Success?” by Implementations Management Associates they suggest the following criteria:

  • On time.
  • On budget.
  • All technical objectives met.
  • All business objectives met.
  • All human objectives met.

But how do you try and ensure your change initiative will be a success? Maybe a good starting is looking at some of the reasons for failure of change initiatives:

In an article by Huffington Post called “Change Management Fails for Three Reasons” they cite the following:

  • Change consultants are insufficiently equipped on a personal level.
  • Most change models are incomplete.
  • Capacity is widely overlooked, on all levels.

In a Coaching for Change article called “Effective change management is all down to the right skill-set” they state:

  • Poor leadership when it comes to leading through example.
  • Employees were not involved enough.
  • Lack of effective communication.

An article by Goals and Achievements called “6 Reasons Why Change Programs Fail” they suggest the following:

  • Communication.
  • Top Down.
  • Lack of space and support.
  • Unclear objectives.
  • Lack of performance measures.
  • Underestimating emotions.

An article by Project Smart called “Change Management in Practice: Why Does Change Fail?” they say”

  • Not clear about the reasons for the change and the overall objectives.
  • Failure to move from talking to action quickly enough.
  • Leaders had not been prepared for the change of management style required.
  • A change methodology or approach that did not suit the business.
  • The organisation had not been prepared.
  • The business had ‘ram raided’ certain functions with little regard to the overall business.
  • Strategic direction for the change was set but the leaders had remained remote.

And finally in a Change Designs article called “Why Change Fails” the following reasons are given:

  • Ineffective communication.
  • People simply don’t want the new strategy or change to be successful.
  • The change is implemented in isolation.
  • Mixed messages and confusion.
  • Lack of a single integrated change strategy.
  • A focus on knowing rather than doing.
  • Being put off by resistance to change.
  • Expectations of instant success.
  • Change Management has a negative image.

Looking at all of these reasons it is arguable that the two consistent factors across all of them is that of Communication plus Stakeholder Management (both factors that underpin my Practical Framework Approach to Change) as if we didn’t know that already!!! Good grief haven’t there been enough studies by renowned organisations that have told us that over the years. So please tell me why is it that individuals that purport to be Change Manager’s so often do not give these critical factors the importance they deserve? Perhaps they become too engrossed in trying to deliver something within the constraints of an ill thought through plan and the pressures that go with that scenario.

So please let’s stop talking about this mythical 70% failure rate because it has no substance and no facts that support it. The longer we in the change community continue to talk about and write articles on the subject (like this one … LOL) it will continue to damage the reputation of Change Management and the people that practice the profession.

I rest my case, m’lud!

50-slide PowerPoint presentation
Change Readiness Assessments are crucial tools used during the planning stage of a Change Management initiative. They help in gauging an organization's preparedness to embrace, implement, and sustain Change effectively. These assessments can be utilized before major transitions or [read more]

Want to Achieve Excellence in Change Management?

Gain the knowledge and develop the expertise to become an expert in Change Management. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

"The only constant in life is change." – Heraclitus

Such is true for life, as it is for business. The entire ecosystem our organization operates in—our customers, competitors, suppliers, partners, the company itself, etc.—is constantly changing and evolving. Change can be driven by emerging technology, regulation, leadership change, crisis, changing consumer behavior, new business entrants, M&A activity, organizational restructuring, and so forth.

Thus, the understanding of, dealing with, and mastery of the Change Management process is one of the most critical capabilities for our organization to develop. Excellence in Change Management should be viewed as a source of Competitive Advantage.

Learn about our Change Management Best Practice Frameworks here.

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About Ron Leeman

Ron Leeman has been involved in “change and process” work for more years than he cares to remember. He has worked extensively across the UK, Europe, and globally--and has an enviable track-record of delivering organisational change and process initiatives across a wide cross section of industry sectors. In 2012, Ron was bestowed with a “Change Leader of Tomorrow” award by the World HRD Congress “in recognition of my remarkable progress in initiating changes enough for others in the same industry to follow my example”. Ron is firm believer in knowledge transfer and now wants to share his vast knowledge with those who are considering getting into or at various stages of “change” and/or “process” work or those working on specific Projects wanting to gain practical insights into “how to” type situations. You can connect with Ron Leeman on LinkedIn here, where you can view his 85+ Recommendations and in excess of 800 Endorsements from clients and co-workers alike to give you an indication of the quality of service that he has provided and can offer. Ron is also a document author on Flevy. Browse his frameworks on Change Management, Process Analysis, and Program Management here: http://flevy.com/seller/highwayofchange.

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