Despite all the rhetoric, books, effort, and money thrown into change efforts, most organizational change efforts fail. Arthur D. Little and McKinsey & Co, have studied hundreds of organizations that entered into change initiatives and have found that about two-thirds fail to produce the results expected.
In recent surveys, CEOs report that up to 75% of their organizational change efforts do not yield the promised results. These change efforts fail to produce what had been hoped for and yet always produce a stream of unintended and unhelpful consequences.
These leaders develop clear strategies around re-design, restructuring, new efficiencies, and so on, hoping to get everyone to share their vision and create change programs around these strategies. However, more often then not, they end up fighting fires and crises. People don’t want to change. They don’t believe in the change. They often feel demoralized by change initiatives.
Author and lecturer, Dr. Peter M. Senge, in his book, “The Fifth Discipline: the Art and Practice of the Learning Organization,“ says that, “This failure to sustain significant change recurs again and again, despite substantial resources committed to the change effort; many of which are bankrolled by top management, talented and committed people driving the change, and high stakes. Executives feeling an urgent need for change are right; however, organizations that fail to sustain significant change end up facing crises. By then, their options are greatly reduced and even after heroic efforts they often decline.”
Harvard Business School Professor, John Kotter, who is widely regarded as the world’s foremost authority on leadership and change has said, “The most general lesson to be learned from the more successful cases is that the change process goes through a series of phases that, in total, usually require a considerable length of time. Skipping steps creates only the illusion of speed and never produces satisfactory results.” As well, he says, “Making critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating hard-won gains.”
What Drives Change?
Some of the drivers of change:
- Mergers & acquisitions
- Declining sales and/or market share
- Globalization, expansion and growth
- Sense of urgency
- When 75% of the leadership is honestly convinced that business as usual is no longer an acceptable plan.
Why Do Change Initiatives Fail?
Leaders buy and sell companies. There are mergers and acquisitions. They expand globally. In the traditional Change Model, we know that employees move through the phases of denial, resistance, exploration and commitment when a change occurs. However, too often, management fails to recognize that adjustment to change takes time. They very quickly expect employees to move from the denial phase to the commitment phase and fail to recognize that each individual will go through all of the phases at different paces. It is never uniform.
Consequently, management may end up dealing with employees that may be burned out, scared or frustrated and who don’t work well together. These are the employees who may long for “the past” and who don’t like the merger. They hate the new company and a crisis emerges. In these situations, leaders often look for blame. There is no control…only a crisis. They have moved into acceptance and left their employees behind. I once heard one healthcare company executive say to me, “We’re under so much stress that all we do is look around the organization to find somebody we can shoot.”
There are so many things that we, as management do, that create a crisis in the management of change. We may not do these things intentionally, however, the result of these actions is generally the opposite of what we’d hoped for.
Things we do that create a crisis in the management of change:
- Not engaging all employees
- Managing change only at the executive level
- Telling people they have to change, we’re in a crisis
- Sending staff on a change program and expecting change to occur
- Not honoring the past
- Not giving time for staff to vent first and then change
We’ve spoken about some of the reasons for change. We must understand and accept the fact that no two change processes look the same. It is unlikely for change management techniques to manifest themselves in the same way twice. Each change is different, each organization is different and each department is different. Furthermore, we are not the same today as we were even 5 years ago because the circumstances right now are different. The customers are different. The structures are different. The drivers of change are different. If change were this easy, we wouldn’t be struggling with the issue of strategic change management. It would be apparent. We will have seen it work and know we could duplicate it.
So how do we move from crisis to control?
1. Accept that change is a process
First, recognize that change is a process and to move from crisis to control, we must follow the process. We must engage everyone in the change. It is not complex but it is a journey.There were a number of sub-committees identified:
2. Move forward step by step
When companies strive to restructure or gain greater efficiency, experts warn that moving too quickly or failing to carefully implement changes can be detrimental to the process and ultimate result. But in the words of John Kotter, “Skipping steps creates only the illusion of speed and never produces satisfactory results” and “Making critical mistakes in any of the phases can have a devastating impact, slowing momentum and negating hard-won gains.
3. Assess potential risks and generate motivation
First, executives or other players in the organization need to assess potential risks and stir up a sense of urgency among workers and stakeholders in order to generate the motivation to spur change within the firm. However, this sense of urgency has to be strong enough and perpetuated by outside analysts, consumers, and other voices in order to propel change forward.
4. Form a powerful guiding coalition
Once change is identified as the best solution to market share, profit losses, or other catalysts, leaders throughout the organization have to band together to guide the transformation process, and these leaders can include board members, consumers, union leaders, executives, chairmen, and others.
5. Create a shared vision for corporate change
The group then coalesces to create a shared vision for corporate change, and this vision should go beyond the normal five-year forward looking plan generated at most firms annually and be easily communicated and clear. A clear vision should also include transformation steps that are coordinated and propel the organization toward the overall goal, and these visions should be communicated in not only words and speeches, but also actions of managers, supervisors, and executives. The transformation of a company should also include short-term goals that can be tracked to show executives and workers that progress is being made toward the ultimate vision and that the long journey will be worth it, even in spite of short-term job cuts for instance. Experts warn, however, that transformations can take between five and 10 years to complete, and should not be declared as complete until the company culture has transformed to meet the vision. Leaders will know to tackle other processes and structures reflecting the old culture of the firm and to engrain the new behaviors and procedures into workers in order to make the change complete.
6. Communicate that vision
Leadership should estimate how much of the vision is needed, and then multiply that effort by a factor of ten. A transformation effort will fail unless most of the organization understand, appreciate, commit and try to make the effort happen. The guiding principle is simple: use every existing communication channel and opportunity.
7. Empower others to act on the vision
Remove obstacles there may be to getting on with change. This entails several actions. Allocate budget money to the new initiative and free up key people from existing responsibilities so they can concentrate on the new effort. Allow people to start living the new ways and make changes in their areas of involvement. Nothing is more frustrating than believing in the change but then not having the time, money, help or support needed to effect it.
8. Plan for and create short-term wins
Real transformation takes time therefore; the loss of momentum and the onset of disappointment are real factors. Actively plan to achieve short-term gains which people will be able to see and celebrate. This will provide proof that efforts are working and adds to the motivation to keep going.Once change is identified as the best solution to market share, profit losses, or other catalysts, leaders throughout the organization have to band together to guide the transformation process, and these leaders can include board members, consumers, union leaders, executives, chairmen, and others.
9. Consolidate improvement and keep the momentum for change moving
A premature declaration of victory can kill momentum, allowing the powerful forces of tradition to regain ground. Keep in mind that new approaches are fragile and subject to regression. Use the feeling of victory as the motivation to delve more deeply into the organization: to explore changes in the basic culture, expose the systems relationships of the organization that need tuning, and to move people committed to the new ways into key roles.
10. Institutionalize the new approaches
At the end of the day, change sticks when it seeps into the bloodstream of the corporate body and becomes “the way we do things around here.” This requires a conscious attempt to: show people how the new approaches, behaviours and attitudes have helped improve the organization and when the next generation of leaders believe in and embody the new ways.
In too many situations the carnage of change has resulted in a significant amount of waste and anguish in organizations. Useful change tends to be associated with a multi-step process that creates power and motivation that is sufficient to overwhelm all the sources of apathy. It requires dedication and must be driven by high quality leadership who demonstrate their commitment to its success. The rewards for those organizations that manage their change efforts well have improved their competitive standing and positioned themselves for a far better future.