One research paper by McKinsey concluded ‘that 70 percent of change programs fail to achieve their goals, largely due to employee resistance and lack of management support’. It also noted that ‘when people are truly invested in change it is 30 percent more likely to stick’.
I find both of these numbers shocking. The former because the failure rate is so high. The latter because even with fully invested people the change success rate seems so low. I do not doubt McKinsey’s research, yet there must be a way to improve the odds of change surviving and taking hold in a corporate setting.
I do not need a crystal ball to tell that many companies that we know (and perhaps even love) today will not be with us tomorrow because of their failure to change. As I write this article I am thinking about my vintage Mercier racing bicycle which was assembled in the 1980s in France using branded components almost exclusively produced by a plethora of other French manufacturers. Most of these once famous component makers, including the Mercier company itself, have since ceased to exist because they were slow to adapt to change in their market environment, or to drive technical innovation, or to negate threat of their Asian competitors. Most likely all three. I also keep thinking that had Mercier developed a strategically architectured operating model – market responsive and agile – 35 years ago when they were at the peak of their fame and performance, they might well still be delighting us with their beautifully engineered bikes – and who knows, perhaps even finally win the Tour de France race.
One INSEAD article notes that ’emotionally illiterate leadership gives rise to a change-averse corporate culture’. This resonates with the view presented in the HBR that the ‘failure is usually an inability to truly embrace the new business models the disruptive change opens up’. Importantly, the INSEAD article proceeds to identify five main emotion-based barriers to strategy execution within organisations, where each one presents a major danger to transformational efforts by preventing the necessary sense of urgency and commitment to a common task from taking hold throughout the organisation (below is an edited quote for your convenience, read the original article in its entirety at INSEAD Knowledge Five Reasons Most Companies Fail at Strategy Execution):
Mistrust and low sharing of useful and timely information – A “politics first” mentality that prizes appearance management above action. This causes a situation where no one wants to be the bearer of bad news. Strategic alignment is further hindered by information-hoarding among players who see their colleagues as competitors.
Low receptivity to effortful change – Effortful change (even when it’s obviously beneficial, e.g. quitting smoking or staying on a diet) is easy to profess, difficult to do. Leaders must demonstrate their own willingness and ability to change before asking it of others.
More talk than action, then misaligned action – Communication for intellectual understanding does not elicit emotional engagement to implement the new strategy. When leaders fail to inspire the collective toward a common goal, each team will tend to veer off in its own direction. It becomes impossible to integrate all the silos.
Mechanistic action – When under high time and performance pressure, employees become creatures of habit rather than taking risks to become innovative.
Complacency – Confronted with the potential effort and risk of strategic change, the organisation as a whole believes the status quo is good enough, so why do the hard work to change it?
I believe that approaching these challenges from the Strategic Business Architecture perspective of efficient Target Operating Model design could significantly alleviate, if not solve, at least some of the barriers to change. For example, strategic alignment in an architected organisation is preserved through a unified view of strategic objectives and independent assessment of their operational execution by the Strategic Business Architect; s/he would also identify and recommend appropriate change management actions to combat mistrust. Similarly, it is difficult to hoard or misrepresent information once the single master data management approach is implemented.
Of course, a way can always be found if there is a will to resist change. Yet I find that the going gets much smoother once the urgency and right operational environment for change are created. Else all that is left is pondering on what Mercier could have been, but never became.
P.S. Here is the Mercier bike I am talking about if you would like to have a look.
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