A Forbes article describes why change management fails 75% of the time in the long term.
Startups are used to doing “Pivots” to solve needs for change. These Pivots are relatively easy when there are only two co-founders involved. They become more complex as the organization grows. This post discusses issues for established organizations so that startup CEOs can consider them when planning a Pivot.
Why Change Management Fails
- The objectives of the change and the reasons for the change were not clear to all. Thus those with vested interest tended be resistant.
- There were delays in launching implementation after communication of intent. This can lead to confusion in messaging. It gives time for resistance to jell.
- There was no plan to change the way of managing the business
- The concept of normal; then a quickie change; then a new normal does not work. There is a need for a more continual change process.
- A change methodology was selected that did not fit the context. Or, the business had too many different methodologies in place at once.
- The existing corporate culture resisted the change due to lack of preparatory work.
- A change was rammed through for a small part of the business, without thought as to integration with preceding and following activities, and/or management declared victory too soon.
- After setting the path, management was not involved in the change
Some assume that change can be managed. This assumption is based on the assumptions that:
- The external world is stable. That is now less certain.
- The management and leaders of change are objective. But, they are human and thus have prejudices and attitudes that may not be optimal.
- The implementation plan need not change. But, as the military would say, no plan survives first contact with the enemy. Thus, the implementation plan will likely require flexibility.
- Change starts from an understood starting point. That may be true. But the players will have varying vested interests and objectives and attitudes. Some of these must be changed before launch of implementation
- Some desire change itself rather than seeing change as a path to a result
Some attempts at change within organizations have faltered because no one realized that individuals needed to change their way of doing business.
Researchers Thomas and James Quick, writing in the Academy of Management Journal suggest that the reason for failure is in essence due to too much belief in shareholder value as the only meaningful metric of performance.
Emily Lawson and Colin Price suggest in an article in the McKinsey Quarterly that the success of change in larger organizations depends on convincing hundreds or thousands to change the way they do business. And that for this to work, all those involved need to alter the way that they think about what they do.
Leo Tolstoy, the Russian novelist, said “Everyone thinks of changing the world, but no one thinks of changing himself.”
Solutions to improve the probability of success
- Planning ahead and involvement with all stakeholders can reduce resistance and increase acceptance
- Victor Lipmanwrote in a Forbes article New Study Explores Why Change Management Fails – And How To (Perhaps) Succeed five concepts to improve the probability of success:
- Goals for change must be realistic and achievable by this organization
- The CEO and other senior managers must be intimately involved in the actual change process
- Senior management must “walk the talk, not talk the walk” – and prove that they each care
- Middle and lower management must “know in their bones the reasons for the change”
- The company or organization must be committed “for the long haul”. “Substantive cultural change in an organization with a deeply entrenched culture is never an easy task”
- Otherwise “skeptical and resistant employees, will just outlast you”
Conclusion For Startups
- Some resistance is a good idea. A better plan can be developed
- If the resistance is not understood; disaster will appear
- Poorly developed objectives and plans increase resistance
- A competent experienced external change executive can handle some levels of resistance
- Only a fruitful transformation will allow development of a culture that nurtures change
- Forbes New Study Explores Why Change Management Fails – And How To (Perhaps) Succeed
- Psychology Today Why Change Management Fails – Most change management programs initiated by leaders in organizations fail