Organisational Change Management practitioners and leaders are often heard affirming that 70% of change initiatives fail due to the lack of organisational change management (OCM).
This largely quoted statistic is based on decades of so-called ‘research’ by the likes of the following:
- McKinsey (2009)
- Blanchard / Kotter (2008)
- Miller (2002)
- Beer and Nohria (2000)
- Kotter (1995)
- Hammer and Champy (1993)
Is It True?
The esteemed change practitioner Jen Frahm – founder of Conversations of Change – wrote about this back in 2013. Her blog was entitled ‘70% of change projects fail: Bollocks!’ I think that says it all!
When you look more closely at the claims made by those listed above, Hammer and Champy say ‘Our unscientific estimate is….’; Kotter says ‘From years of study, I estimate….’.
That doesn’t sound like reliable research.
In 2010, Mark Hughes from Brighton Business School asked ‘Do 70% of organisational change initiatives really fail?’ in which his conclusion was that they don’t.
Both Frahm and Hughes highlight the absence of valid and reliable empirical evidence in support of the espoused 70% failure rate.
I have often been heard quoting this statistic accompanied by the caveat that it is one that is challenged.
If we took the claim on its face value – that 70% of all change initiatives or projects in organisations fail – then those organisations would be out of business! The CxOs would definitely be out of work!
So it can’t be true – can it? I believe that the issue is in defining project or change success.
One of the arguments both Frahm and Hughes make is that it is difficult to define what success look like.
However, I am not too sure. Maybe I’m naïve?
What Does Success Look Like?
I would like to take a less scientific view of the claim and actually support its intent. I await the backlash!!
If we think that success of a change initiative or project is defined as on schedule, within budget and delivered functionality, then the claim is absolutely false. They don’t fail.
However, I think success – real success – is much more than that. It is about implementation rather than installation. Projects install changes whilst OCM implement changes.
The following diagram illustrates what I believe constitutes ‘real ‘success.
If most of your change initiatives or projects can tick all of those success factors, then declare them a resounding success.
Your projects DO NOT fall into the 70% category.
However, if you can’t tick most or all of those success factors, then I believe that 70% of your change initiatives or projects truly are a failure.
They may deliver functionality, be within budget and deliver on time, but if they are not meeting business requirements or require extensive ongoing support, then they are failing.
Many of the success criteria I have defined are dependent on good project management techniques such as iterative requirements validation to ensure that what is delivered at the end of the project delivers on business requirements, which are likely to have changed since project inception.
This also ensures that minimum rework post-implementation is required to meet changed requirements.
Many of the success criteria are also reliant on effective and extensive OCM.
OCM and Success Criteria
Let’s explore some of the success criteria that OCM can contribute to. They are in no particular order of magnitude or priority.
I will use the words project and change interchangeably but they incorporate both projects and change initiatives within the organisation.
OCM can assist projects delivering on schedule by ensuring that everyone is on-board and ready for the change. This involves stakeholder management, sponsor management, resistance management, communication plans, training plans and reinforcement plans.
These techniques are required whether your project is waterfall or agile. If it is the latter OCM is applied in an agile manner in cadence with the project.
If these things are not done, it is likely that there will be delays. The project could be delayed as training needs were not properly analysed and appropriate education and training put in place to ensure that the change could be supported in the ‘live’ environment. Implementation gets delayed as training gets a last-minute focus and implementation cannot take place until it has taken place.
This can also contribute to the project being delivered within budget if training is given due consideration early on in the project and budget allocated accordingly.
OCM is critical to ensuring widespread adoption of a change.
If stakeholder management is not undertaken and resistance to a change surfaced so that tactics can be put in place to overcome it, there is likely to be limited uptake of the change.
Stakeholder management will perform stakeholder analysis to determine the impact of the change on each stakeholder and the impact each stakeholder can have on the change. Stakeholders will be prioritised, their influence and interest determined which will drive the approach to influencing and engaging them as well as the creation of an effective communication and engagement plan.
Active and visible sponsorship will be needed for adoption. People look to their leaders to be visible sponsors of a change and to demonstrate why the change is necessary.
When asked to identify the key contributors to the success of their change initiatives, participants in the Prosci® Best Practices in Change Management – 2016 Edition identified active and visible executive sponsorship as at the top of the list.
OCM will work to ensure that identified sponsors are advocates for the change and have the capability to be effective sponsors. OCM will create a sponsorship roadmap which will outline the actions required of sponsors and when.
If effective and targeted communication is not carried out it there will be limited understanding of the need to change and what the impact will be on each individual. Therefore adoption will be limited. OCM will develop a communication plan that identifies target audiences, objectives, key messages, frequency, channels and senders.
Clearly adoption will be limited without provision of comprehensive training and supporting materials. OCM will drive conduct of a training needs analysis and provision of an appropriate training plan.
Without reinforcement of the need to change, people can slip back into their comfort zone and the old ways of working, so adoption can decline. OCM will collect and analyse feedback, diagnose gaps and manage resistance through the implementation of corrective actions and the celebration of success.
Customer / Client Satisfaction
In order to ensure customer and/or client satisfaction, a project has to involve them throughout the project lifecycle. OCM can be key in determining their readiness to adopt the change at any point in time.
Human Centric Design (HCD) is a new buzzword but not a new thing. It is a design and management framework that develops solutions to problems by involving the human perspective in all steps of the problem-solving process. Human involvement typically takes place in observing the problem within context, brainstorming, conceptualizing, developing, and implementing the solution.
Really? Have we, in the past, designed and implemented solutions without any involvement from the person or people we are delivering it for?
If you read my recent blog entitled Why My Telco Needs ITIL Practiioner, you could be led to believe that there is an element of truth in there. Two of the guiding principles in ITIL Practitioner are ‘Design for Experience’ and ’Observe Directly’. We need to consider the customer experience in everything that we do and observe what is actually taking place.
I think we have always involved people to an extent but not to the extent needed to ensure complete satisfaction.
As people are exposed to new processes, procedures, systems etc., OCM can ensure that they are truly ready for the change. You can provide people with documentation and training until the cows come home, but it does not mean that they are ‘ready’ to transition to the new way of working. This is especially the case if they have no idea why things are changing.
OCM is key in ensuring that everyone understands the need for the change. Stakeholder management and resistance management are key activities in this space. We need to understand where each stakeholder is in relation to the change, and where there is resistance, surface it and put in place tactics to overcome it. (Noting that resistance to change is not always a bad thing).
Benefits Realisation / Return on Investment / Value on Investment
Successful benefits realisation requires a focus on OCM throughout the project. OCM will support achievement of benefits realisation by minimising the disruption to the organisation, supporting transition of stakeholders to the new ways of working, ensuring people have the skills and knowledge required, managing resistance to change and reinforcing the need for change. Throughout this process, OCM will identify potential risks and issues that may impact benefits realisation.
The project return on investment (ROI) is directly linked to the employee adoption and usage of new processes, systems and or tools.
A project focussed on process optimisation is going to highly reliant on adoption and usage and therefore OCM has a large contribution to achievement of ROI.
A good read on OCM ROI calculation can be found here.
Whilst ROI focusses on the financial return from a project (i.e. tangible assets), value on investment (VOI) focusses on the intangible assets that contribute to organisational performance. VOI includes ROI.
Value on investment could include improvement in employee well-being in turn leading to increased productivity. Whilst this is harder to define, it’s important to understand that the entire value of an investment is more than just hard cash.
Take the example of a technology investment in video-conferencing. The ROI would be calculated from the elimination of travel, hotel accommodation, meals etc. minus the price of the teleconferencing facility and ongoing maintenance costs etc.
VOI would be realised through people attending work in a comfortable environment, sleeping in their own bed, spending more time with family and friends rather than travelling and being more productive in the workplace as a result of increasing well-being.
Zero or Minimum Ongoing Support Required
The assurance of people readiness for change, effective transition to new ways of working, adequate training and support, and effective communication will mean that there should be minimum requirement for ongoing support for the new systems processes or tools from a people perspective. OCM will be fundamental to this achievement via the various OCM activities already mentioned in this post.
Without OCM, there will an increased volume in calls to the Service Desk or other support services and reversion to project personnel for support and advice. This is not an effective use of resources and increases overall cost of project delivery.
Do 70% of all change initiatives fail?
I wouldn’t stake my house on it but if you define ‘success’ based on the criteria I included in the diagram above, I would not be surprised if the percentage was in the 70% region.
However, if you define success as on schedule, within budget and delivery of functionality, then the claim is completely fabricated.
I guess the question is ‘What do you want success to look like?’ If you want it to be as I have described, then OCM will be your saviour!