70%. A recent reader of an article on blog challenged me re the source
of that often quoted statistic. Here is a brief summary of a cross
section of sources that I sent her and that reveal the horror of it all…
A global survey conducted in 2008 by McKinsey & Company offered the
insight that organisations could only hope to survive by constantly
changing - but approximately two thirds of all change initiatives fail
and will fail when top leadership have low understanding and
appreciation of the business, paradox here they will remain in
business the way they were forty years ago, but not change their
mindset.
Why keep Profit as sole measure of change, why not customer
satisfaction, quality, safety as prime factor for measuring change? A
Question to big time philospher of change initiatives. Why noy change
the mind of stakeholders......towards these perspectives rather than
keeping money as motivator.
In a recent "Call for Papers" for the "Journal of Change Management"
[for a special issue entitled "Why Does Change Fail and What Can We Do
About It?"] Professor Bernard Burnes of Manchester Business School
makes the following observations:
"Whilst this seems to be a staggeringly high rate of failure, it is
not out of line with the rest of the change literature which regularly
quotes failure rates of between 60% and 90% [Burnes, 2009]. For
example, Bain and Co claim the general failure rate is 70% [Senturia
et al, 2008] but that it rises to 90% for culture change initiatives
[Rogers et al, 2006)]. In the 1990s, Hammer and Champy [1993] claimed
that 70% of all BPR initiatives failed."
According to "Research Findings on Program Failure and Success" by
Patrick Morley, Ph.D. Chairman and CEO, "Man in the Mirror":
"Two-thirds of Total Quality Management (TQM) programs fail, and
reengineering initiatives fail 70% of the time [Senge, 1999]. Change
initiatives crucial to organizational success fail 70% of the time
[Miller, 2002]"
A "Computer Weekly" study [2003] on 421 IT projects revealed the following:
16% of all projects successfully completed [that is they were
delivered in scope on time and on budget]
75% of all projects were "challenged" in the following ways:
35% behind schedule
59% over budget
54% under-delivered on planned scope
A survey conducted by the Standish Group [2003] showed that 66% of IT
projects are either totally abandoned or fail against a measure of
budget, scope, time or quality (i.e. 'challenged'). It has been
estimated that the cost to US business of failing or abandoned IT
projects runs into hundreds of billions of dollars.
Closer to home, the UK Labour government have wasted 26 billions of
pounds on failed projects. An investigation by "The Independent"
newspaper has found that the total cost of Labour's 10 most notorious
IT failures is equivalent to more than half of the budget for
Britain's schools in 2009.
The world of mergers and acquisitions fares little better. The "value
enhancement trend for 10 years of KPMG International's M&A survey"
shows that on average only 28% of mergers have resulted in enhanced
shareholder value, whilst an average of 36% have led to a reduction in
shareholder value. This value assessment is based on company share
price movements relative to average industry sector movement during a
two-year period.
In the film "Apocalypse Now", the anti-hero Colonel Kurtz mumbles
through the closing sequences:
"…the horror…horror has a face…and you must make a friend of horror…"
Any impartial assessment of all of the main types of significant
change initiatives reveals the sheer horror of the colossal human and
financial wastage perpetrated by organisational and political leaders.
The knowledge of how to successfully lead and manage change is out
there in the domain in a growing body of easily accessible work.
So it must be an appalling combination of ignorance and arrogance that
causes the organisational and political leaders who preside over this
litany of costly failures to be so desperately under-prepared as they
embark on further change initiatives.
To avoid the 70% failure rate of all change initiatives. So why do 70%
of ALL organisational change management initiatives fail to deliver
the promised benefits? Why such a high failure rate? And how can you
avoid it?
The only certainty is that there is no certainty. This means change.
Forced change. Reactive change. Planned change. Now - getting it right
is business critical.
The overwhelming issue...
The single biggest reason for the astonishingly high 70% failure rate
of ALL business change management initiatives has been the
over-emphasis on process rather than people - the failure to take full
account of the impact of change on those people who are most impacted by it.
Consider what Michael Hammer, co-author of "Re-engineering the
Corporation", has said about the people issues:
"I don't regret saying anything [in the book]; it's more what I left
out. In particular, the human side is much harder than the technology
side and harder than the process side. It's the overwhelming issue."
Closely allied to that reason is the lack of leadership and the lack
of process to directly address the human aspects of change.
It's all about people... and processes that work for people
Change management is about how you take an organisation from Position
A to Position B, in the fulfillment or implementation of a vision and
a strategy and the whole art is to how to carry your people with you,
so that the envisaged benefits of the vision and strategy are actually
realised.
At root, change management is about process and people. But even
process is just about people doing stuff... so ultimately it's all
about people - and processes that work for people.
My intention with this Blog is to give you the broad perspective for
managing change, and a specific in leading your people through change,
putting it all together and managing the whole messy business.
All this to ensure that you DO succeed and DON'T become part of the
70% of failures.
In the current economic climate, all organisations are experiencing
the impacts of change and many could now benefit from the practical
knowledge of how to manage change.
The universal relevance to organisations of all sizes and can be
"scaled up or down" as you feel is appropriate to your organisation.
" Leading your people through change, putting it all together and
managing the whole messy business, is hyper-critical now"
Lip Service is just not enough, it will lead to dead duck in times to
comes and business to bankruptcy.
There has to be rules for TQM, Change Managers and all those involved
in change. Get to the ground and listen to the sound of wind, keep
your ears to the ground.
Change initiators need to drive change, just do not sit in ivory tower
and make a suggestion. Get your hands dirty and put your foot in the
muddle pool just dont expect others to initiate.
TQM/BPR/PI sits in the corner and looks at the door, as consultants.
Nothing will happen this way, roll your sleeves and work with the
group. Change will happen.
What say Thou?
--
Rajesh Diwan
------------------------------------
Shabbar Suterwala's Leaders Worksop "Key to Your Success"
visit us at www.shabbarsuterwala.com
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