Changes in organisational change programs and why so many fails

– In stillness death, in movement life

Surveys from McKinsey and Harvard suggest that +60% of change programs fail.

The pattern is clear, and diligent leaders often devote countless resources to planning out the perfect change management initiative… however, my experience suggests the place that leaders need to begin their transformation efforts is not their organisations: It’s themselves. (HBR 2016)

Lately, I have witnessed a couple of failed change processes, where the pitfalls were on the prioritisation of either strategy or culture:

  • On the one hand, I experienced a merger of two organisations where all the analytics and business plans were in place, but a lack of understanding of cultural differences made the changing drag on and they never really realised the synergies of the merger.
  • On the other hand, I have followed a company in a branch threatened by disruption who wanted to move from a traditional hierarchical structure to a more dynamic and agile structure with innovation raising bottom-up. They started the change process with a well-defined cultural change process but without having the business plans in place (as they wanted ideas to arise bottom-up). They ended up with a confused group of employees and a set of values/culture that did not live in the daily operations – innovation did not arise bottom-up.

People, culture and performance, goes hand in hand

The connections between people, culture and performance, become apparent to me when I started working with the leadership framework ‘Competing Values’ (by Jeff deGreaff), presented to me at a Henley MBA workshop with Learning Designer Lars Hoffmann.

Competing Values

(Competing Values Leadership)

The Competing Values Framework have many similarities to both the “Big Five” personality traits and “four psychological types” discovered by Jung, which are the foundation of more or less all personality test.

A simple resolution would, therefore, be to say that culture is the sum of an organisation´s employee’s. Knowing how hard it is to change personality the importance of prioritising culture in a change program becomes apparent.

Jeff deGreaff works with three layers of the model, people, practices and purpose, whereas culture is in the second layer practices

While we are at it, this is not to say that working with personality test is the answer to a successful change program. In my work with recruitment and change, I rarely include personality test in assessments as they tend to look at personality as a static thing and does not take context into consideration.

In other words, they tend to give a clear and non-complex answer to something that is nuanced and complex. You can come a long way with a proper interview and knowledge of the “Big Five” or the “four personality types”.

The change journey of tech start-ups

An observation from working with tech start-ups is that they tend to follow the change process from the Competitive Values circle from yellow to red:

  1. Collaborate: let’s work together on creating something great
  2. Create: hitting the ground running, feeling the market needs and adjusting the solution
  3. Compete: capitalisation, we have a great solution, and it is now time to win market share
  4. Control: we have realised our potential, and it is now time to consolidate and lean the organisation

Continuous change management, the ability to respond to a rapidly changing context

What seems to be the issue on this journey is that companies often do not have proper awareness of the impact it has on their business when they are changing from area to area. Especially culture can be painfull when you do not have proper awareness of the changes and therefore have to change bigger parts of the organisation instead of preparing and training the employees to follow the development.

Often companies simply expect culture and people to follow along, but the fact is that in successful change management processes, culture and strategy go hand in hand.

So why do we tend to struggle with the cultural change?

I lately had the pleasure of working with Kotter’s 8 steps and playing the “Change Game” at a CBL workshop held by organisational psychologist Julie Grenaa at Henley, which made me think.

(CBL workshop interview 2016 (Danish))

Working with John Kotter, the grandfather of Change who developed the 8-step change model. A model that has been modified in many ways but still is the principal method to drive organisational change

Kotter's 8 steps

(Kotter’s 8 steps)

Going through the steps you will notice culture in step 8, which could mislead you one to think that culture is something to be handled at the last phase of a change process.

This is also the phase of a change process where you often see management lose focus as they are on to what is next up (often a new change process). This is another common pain point in change processes, as this is the phase where you should cash in on the change.

As a modification of the 8 steps would be that they more or less should be driven parallel, not linear. The model above basically is a waterfall process (Waterfall is in IT the opposite to agile development), but shifting contexts require more agile approaches.

Kotter has also developed his perspective on this in his 2014 book Accelerate, one of the elements that he has updated is the need to shift from strictly linear approach to enabling change to happen on multiple fronts and continuously.

Recommendations, when dealing with change management:

  1. First of all, clarify what is constant and what Is flexible, hereby ensuring a clear understanding of the organisational purpose and DNA, and what is flexible and will be formed by/to the ecosystem (customers, employees, partners and suppliers).
  2. Ensure organisational agility and a clear visionthat is understood at all levels, which requires constant iterations and adaption. It is important with clear communication of the desire the organization are to move towards as well as what it is to move away from
  3. Strong leadership that removes barriers and blockers in order for employees to be able to succeed and with this change to actually happen
  4. Internal and external involvement: Include the full ecosystem (customers, employees, partners and suppliers) in the change process. There have been many examples of organisations that tend to be too inward facing, focusing on internal structures – The Nokia case (did not see the iPhone coming) would be typical example of this
  5. Empowerment, active change agents at all organisational levels, is a very effective way to succeed in change management
  6. Acknowledge that culture and strategy goes hand in hand, and you can’t work with one without the other

Please don’t hesitate to get in touch, share or comment on my personal stories.

Stay tuned for my next blog post which will come in 3-4 weeks. I expect it to be a post on people management as that is the next course of my MBA study.

Further readings: