While change can involve information technology management, strategic management, and/or business process, almost any change initiative fail to live up to their expectations. According to survey only 15% of the executives polled felt that their change initiatives were completely successful. 37% said programs were only moderately successful while 33% said the change program failed to deliver the economic expectations and could be deemed a complete failure.
Failure has no bias and is ubiquitous across the organization and is just as likely to compromise the effects of cultural or operational initiatives. Several studies confirm that change successes is the exception and not the norm; Only 20% of all reengineering projects succeed just 23% of all mergers and acquisitions make back their costs, about 43% of quality-improvement efforts make satisfactory progress and only 9% of all major software development applications make up their costs.
Its also worth noting that 31% of all change initiatives get cancelled before completion and more than 50% result in cost overruns by 189%. 90% of all “cultural” initiatives fail to meet expected results, including a whopping 70% of all mergers and acquisitions which failed to create the desired new business culture. This depressing record is consistently dismal in large scale efforts (enterprise wide) as it is at macro level (regional, territorial, or work group related).
Change initiative is more likely to cost money than save it
Failure is costly on all levels. The majority of change initiatives examined failed to live up the incremental economic gains projected in their original business case used to request and justify funding. Perhaps more disturbing to the firms long term economic outlook is the impact on human capital. Employees who resist not only reject or minimize the use of the tool but their overall performance also declines. In the midst of change employees may reduce their commitment to the organization, have lower job satisfaction and higher absenteeism and eventually may leave the company but not before they socialize their dissatisfaction with coworkers and customers.
Studies including the findings of Jim Clemmer are largely representative of the prevailing research. Clemmer suggests that companies have too many priorities and that change initiative is hampered by uncoordinated execution, poor infrastructure and process, a lack of true leadership buy-in, and “fuzzy” employee communications. He goes on to suggest that the lack of success has qualitative ramifications. Underperforming initiatives can compromise employee morale, negatively impact productivity, fuel employee turnover and jeopardize customer satisfaction. It is this list of ancillary unintended consequences that may prove to be the most damaging for an organization looking to gain an advantage in the marketplace.
So why is the track record so disappointing? It is the inability of most firms to use recognition as a strategic driver.
What’s your opinion on change initiative? Do you agree that managers have to do more to make the transition on smoothly and more productive? Let us know your thoughts in the comments bellow.