In a time long, long ago, organizational change was a once-a-season-experience. Think of IBM introducing the floppy disk, or the airline industry’s switch from paper to electronic ticketing. Major change was a major deal, of course, but not something that managers expected to be constantly tackling. Managing the organizational transformation process could be left to specific managers dedicated to the task.
Fast forward to today. In our present world of relentless disruption, market volatility, and hybrid workplaces, the ability to successfully manage change is an essential skill for leaders they must call on daily. Change management is management, making it that much more important to get right—and that much costlier to mess up.
Most leadership teams understand the importance of change management to organizational transformation strategies; it’s successfully implementing it that escapes them. It’s probably no surprise, then, that the failure rate of major organizational transformations is alarmingly high.
In a 2019 presentation, McKinsey senior partner Harry Robinson estimated the figure to be 70%. All too often—as you probably well know—changes that are announced with great fanfare quickly fall victim to competing priorities, under-resourcing, and an inability or unwillingness to sustain the effort over the long term.
“They Won’t Get It…”
What you don’t get is successful companies make communication intrinsic to their organizational transformation strategies
This explains why dozens of companies have come to us in a panic after attempting to implement some company-shaking change—only to watch it blow up in their faces.
The organizations have been in very different industries, but members of each management team had the same regrets: they underestimated the amount of work required to make a change, overestimated their organization’s capacity to make it, and/or misjudged how their organization viewed their motivation for making a change.
One of my takeaways is that so much of their pain could have been avoided or at least minimized if they had properly planned for change. With that in mind, here are four common obstacles to a successful transformation that every manager should plan for. As the saying goes (or should go): you can prepare now or pay later.
1. Underestimating the Scope of Change
Most leaders want transformational change to be easier than it is. And who can blame them? I think we’d all prefer to expend less effort and reap more rewards, whether you’re at work or at the gym. I haven’t met a manager who hasn’t said with a sigh, “This is so much harder than I expected.”
My typical response: “What did you base your expectations on?” Then, silence.
By its nature, transformational change in organizations creates discontinuity because it touches an entire organization. It touches on business strategy and company culture; on every department and individual employees. In contrast, incremental change—say, implementing a new technology platform or launching a new product—touches discrete aspects of the organization.
Not understanding that systemic change requires systemic solutions can stop the organizational transformation process cold.
Call-out/Tip
You don’t need to have the best organizational transformation strategies to be successful. A set of carefully considered strategies, consistently applied, is often good enough.
Take the financial services company we worked with a few years ago, which had recently shifted from offering consumer products to offering services, as an example of transformational change.
As part of their transition, they sprayed the organization with disconnected initiatives whose efforts weren’t coordinated, that were under-resourced for what was expected to be delivered, and whose project leaders lacked the authority to make material decisions or impose consequences on those unwilling to cooperate.
Human resources had no idea what was going on, so they were at a loss when confused employees contacted them. Instead of accelerated change, the result was obstructed change—a system clogged with an overload of disparate efforts that everyone stopped caring about.
2. Ignoring Change Fatigue
Implementing a major change is hard, time-consuming work. On top of this, those who have to deliver the change still have day jobs. Too often executives ignore the capacity limits of those impacted by a change, simply expecting that these workers can successfully implement the change while still carrying out their day-to-day responsibilities.
This is a recipe for burnout and resentment—and change failure.
No amount of inspirational videos or pep talks can overcome this reality. You can’t simply will your employees to meet impossible expectations, even if they’re well-compensated and otherwise happy.
Bolster Your Organizational Transformation Strategies:
Under these circumstances, hyping the potential benefits of the transformation will inevitably be met with cynical disbelief. Those tasked with implementing a disconnected, competing, under-resourced, and poorly led initiative will wonder how leaders could be so out of touch.
And, if things get really bad, leave . . . for a company whose strategies for organizational transformation are far more robust.
Transformational change starts with an open, honest acknowledgement of how hard the work will be, how much capacity and discipline the organization actually has, and a personal commitment to ensuring the conditions truly allow for the change to be properly implemented. Effective communication requires listening to employees twice as much as telling them about the change.
Lao Tzu
“If you do not change direction, you may end up where you are heading.”
3. Misjudging How Others See You
It’s no secret that changes are often motivated by a leader’s personal convictions and interests. There’s nothing inherently wrong with this, so long as the leader is being honest about it. Leaders get in trouble when they try to hide their grand new vision behind some lofty rhetoric about “the greater good” or downplay the grueling sacrifice required by others to make successful transformation happen.
Letting their organization know how and why a change is personal might feel counterintuitive (or scary), but employees at every level place a high premium on transparency. So long as the manager is willing to roll up their own sleeves and show that they’re doing their part to advance an arduous transformation, employees can accept most reasons, so long as they’re not nefarious.
And You Thought Implementing Organizational Transformation Strategies Was Hard
There’ll be no digital transformation, no rainbow at the end of the road if you can’t get your team to trust each other
(On that note, leaders who use a major change as a smokescreen behind which they hope to advance their career shouldn’t be foolish enough to think employees don’t see right through this.)
Sponsors of change fear that acknowledging their personal connection to a transformation might hurt employees’ commitment to it. But if leaders only want the benefits with none of the personal cost, lost commitment will indeed be the result.
4. Dismissing the Past
Most leaders begin their change efforts with some degree of organizational assessment. Knowing that past efforts failed is helpful, but knowing why they failed can strengthen your credibility. Every organization has ways it naturally undermines change, and diagnosing the saboteurs can help you avert them.
It could be an organizational culture of fear or risk aversion. It could be a heavily layered hierarchical structure that makes cascading change difficult. It could be inflexible reward structures that disincentive new behavior or high performance. It could be that the strategy of the organization is too disconnected from the change to make it seem relevant.
This scenario is not uncommon. If you are driving major change at any organization, you are likely stepping into a track record of failure. Until you can truly comprehend what went wrong, and how your employees experienced it, they won’t believe that committing to change again will be worth it.
Acknowledge the pain of the past. Nobody understands the difficulty of change efforts more than those who’ve watched them fail before. But too many leaders charge ahead, trying to inspire people as though their approach is the first or is better, without acknowledging the pain of the past. Without realizing it, they are erasing the very real frustrations of their employees.
Organizational change is one of today’s most difficult leadership challenges. But with some time spent planning for obstacles, you can build strong, resilient employees and an organization that not only accepts changes but dares it to bring it on.
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