Why Change Management so often fails

Why Change Management so often fails

In 1983, McKinsey consultant Julien Phillips published a paper in the journal Human Resource Management that described an “adoption penalty” for firms that didn’t adapt to changes in the marketplace quickly enough. His ideas became McKinsey’s first change management model that it sold to clients.

So it is notable, to say the least, that in 2015, more than 35 years later, McKinsey found that only 26% of organizational transformations succeed. It’s not hard to see why. While traditional change management models offer sensible frameworks for fairly obvious changes, truly transformational efforts almost always encounter fierce resistance.

That’s an important distinction that leads to a significant difference. As I found when researching my book, Cascades, successful transformations identify resistance from the start and effectively plan to overcome opposition. Clearly, today, when change is so often a matter of survival, traditional change management models are no longer enough.

Preparing for resistance

The change management industry was developed to solve a particular and discrete problem. While there were clear and coherent models for other critical business functions, such as marketing and finance, there was a relative dearth of models to help drive change. Phillips’ model and those that came after sought to fill that gap.

Yet as the McKinsey data clearly shows, those models have not been widely successful and it’s not hard to see why. Much as any competitive strategy that doesn’t anticipate the response from competitors is doomed to failure, any transformation strategy that doesn’t take into account those who oppose change is unlikely to succeed.

In my research, however, I found that when resistance is anticipated and accounted for, transformational efforts can achieve astounding results. At Wyeth Pharmaceuticals, the team implemented lean manufacturing techniques across 17,000 employees and cut costs by 25%. At Experian, CIO Barry Libenson shifted its entire technological infrastructure to the cloud and improved profitability across the entire company.

What made the difference is that in both cases, those leading the transformation didn’t assume that the changes would be embraced. In fact, just the opposite. They expected resistance and built a plan to overcome it.

Mapping the terrain

Traditional change management models start with steps that encourage communicating the need for change and building a sense of urgency. Yet that can often backfire. While communication efforts can and often do excite many about the prospect for transformation, they also alert the opposition to step up their efforts to undermine change.

So the first step is to map the terrain upon which the battle for change will be fought (and make no mistake, any significant transformation effort is always a battle). There are two tools, borrowed from nonviolent political movements, that can help you do this: The Spectrum of Allies and the Pillars of Support. Both have been battle tested for decades.

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The Spectrum of Allies, helps you identify which people are active or passive supporters of the change you want to bring about, which are neutral and which actively or passively oppose it. Once you are able to identify these groups, you can start mobilizing the most enthusiastic supporters to start influencing the other groups to shift their opinions. You probably won’t ever convince the active opposition, but you can isolate and neutralize them.

The Pillars of Support identifies stakeholder groups that can help bring change about. Some of these may be internal stakeholders, such as business units or functional groups within an organization. However, some of the most important stakeholders are often external, such as customer groups, industry associations, regulators and so on.

At this point, you are still planning, rather than implementing change. Most of all, you are listening and remain respectful of others who don’t hold the same views you do. The information you gather in these early stages will be critical for overcoming resistance later on.

The myth of a quick win

One of the key tenets of change management is the need to achieve some quick, short term wins to help build momentum. The truth is that these types of objectives are often not meaningful to many, if not most, key stakeholders. In fact, they can often signal to those skeptical of change that the initiative is not serious.

In my research, I found that every successful transformation I studied identified a keystone change which had a clear and tangible goal, involved multiple stakeholders and paved the way for greater change down the road. Because these require the involvement of multiple stakeholders, they are never quick or easy.

For example, in the Wyeth transformation noted above, the keystone change was to reengineer factory changeovers, a difficult and complex task. In Experian’s shift to cloud technology, the keystone change was to build internal API’s. During Lou Gerstner’s historic turnaround at IBM in the 90s, he sought to shift the company from a “proprietary stack of technologies” to its “customers’ stack of business processes.”

In each case, key constituencies in the Spectrum of Allies were mobilized to influence key institutional stakeholders in the Pillars of Support. That takes time, patience and no small amount of effort. In some cases, it took a few tries to identify a keystone change that could succeed.

Every revolution inspires its own counter-revolution

Many change management efforts start with a large kickoff, complete with a vigorous communication campaign designed to create a sense of urgency and rally the troops. What’s often overlooked is that these efforts often alert those who are opposed to change that they need to begin undermining change efforts before they gain momentum.

As the change efforts gain momentum, these undermining efforts may quiet somewhat, but they very rarely disappear, even after the goals of the transformation have already been achieved. For example, at Blockbuster Video, initial efforts to address the disruptive threat posed by Netflix were successful, but that strategy was quickly reversed when a new CEO came aboard.

That’s why it’s crucial that you set out from the beginning to survive victory and you do that by rooting your efforts not in specific goals or objectives, but in common values. As Irving Wladawsky-Berger, a key player in IBM’s historic turnaround told me,

“Because the transformation was about values first and technology second, we were able to continue to embrace those values as the technology and marketplace continued to evolve.”

Perhaps most of all, you need to remember that there’s a reason that the vast majority of transformational efforts fail: Change is hard and it can’t be easily managed. Yet history has shown that it can be achieved, even under the worst conditions and against the greatest odds, if you learn to anticipate and overcome those who would seek to undermine it.

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