Organizations of all types initiate change for good reasons. From the C-suite to the front lines, people and teams figure out new ways to solve customer problems, improve products, create new revenue streams, and reduce costs.
In nonprofits and government agencies, they conceive new ways to attract donors, expand the scope of their services, and become better at fulfilling their mission. Other change advocates envision whole new ventures or organizations.
Every change starts with an idea—a vision of what could happen to create a tangible benefit for an organization. But ideas are not enough. Change—or, to call it by another name, innovation—is the process of transforming a vision into a new reality that delivers the promised benefits.
Why So Many Change Initiatives Fail
Given that innovation and change are so essential for today’s businesses, the fact that a huge percent of change initiatives fail to achieve their objectives is noteworthy. A seminal study by Harvard Business School professor emeritus John P. Kotter revealed that 70 percent of transformational change initiatives fail (Harvard Business Review, 1995). Later studies have produced similar results. A 2014 Deloitte study of more than 5,000 innovations over the past 15 years calculated an aggregate success rate of only 4.5 percent.
One reason for high failure rates is that most leaders focus on the processes—the hard skills and tools needed to create the desired result—and they underestimate the challenges related to the people. In my work, I’ve identified five factors that have the biggest impact on prospects for success in a change initiative.
HOW TO HELP ENSURE THE SUCCESS OF CHANGE INITIATIVES
- Allocate resources effectively. Change happens because people make it happen. Virtually every person working on a change initiative still has his or her regular job to do, so carving out time on a regular basis and maintaining that effort over weeks and months can be a huge challenge. Leaders must make sure that the right supports and incentives are in place to facilitate and reward that extra effort.
- Make appropriate adjustments for scope creep. Every project begins with certain parameters and specifications that define its scope. But as the project gets under way, that scope invariably changes. If resources remain allocated based on the initial scope of work, the project will be at risk. Leaders need to re-examine the resources and adjust in ways that take that new scope into account.
- Engage stakeholders. Stakeholders are all the people who affect or are affected by the change initiative. Project participants can’t make the change happen by themselves. They need champions and supporters. It’s important to align stakeholders around the overall vision and then actively engage them throughout the process.
- Keep your eye on the real goal. Leaders can be too quick to declare success. They must be willing to use success metrics that are meaningful to the company and admit when success has not been achieved. Traditional metrics (e.g., bringing a project in on time, on budget, and on spec) are usually not sufficient because they can be achieved without meeting the only really important goal: delivering the promised benefits for which the project was initially approved.
- Prepare people to sustain the innovation. For the change to deliver sustainable benefits, people have to be ready, willing, and able. Many change initiatives are like New Year’s resolutions—people start out with the best of intentions, but the change doesn’t stick. With resolutions, people know the change is in their best interest, but still find the effort hard to sustain. How much more so with an externally imposed change from a boss, the board, or some third party? Leaders need to recognize that resisting change is human nature—and then understand and act to overcome that resistance.
BUILDING YOUR CAPACITY TO DRIVE CHANGE
Given the rapid pace of change in companies today, demand for people who can lead successful change initiatives far outstrips the supply. In fact, 91 percent of HR directors say that by 2018, people will be hired on their ability to lead change.
Whether you are implementing a small change to a localized process or department or are transforming a large organization, you should think of change not as a destination, but as a carefully designed process. Driving that process is a professional capability made up of important knowledge and skills that can and must be learned. By developing a deeper understanding of why change is difficult, how change initiatives go off track, and how to mitigate the risks, you can become a successful change agent—someone who can transform promising ideas into concrete, positive results.
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