Despite all efforts various surveys still support Kotter’s claim that around 70% of all change efforts fails. Several articles backed this up, with larger projects more likely to not completely meeting the objectives as planned.[*] Recently I was presented one of these surveys which showed that, – according to CIO’s-, “resistance by employees” was the number one reason for change efforts to fail during implementation.[†]
I was shocked to see that 82% of the CIO’s in the survey indicated this as the main reason. In my experience people are open and willing to change. Lean Management, Agile and/or Scrum have been incorporated by many companies as method for continuous change or developing new solutions and tools. Customer centricity and value creation are at the core of these methods (see Rule 1 of the Agile manifesto). Despite this, the success rate appears to be relatively stable for several decades. So why are employees resisting to “buy” new solutions if customer satisfaction and valuable products or the center of the deliver?
Resistance to Change, is it?
Marketing theory and economics teaches us that customers will want to buy a product in case benefits outweigh the costs (customer value). Employees are not customers of course, but I do see, most of them, as rational human beings capable to adopt those things which bring more value to them or the organization than they cost. I oversimplify by assuming the high-level objectives of the company and employee are aligned. Not taking fear of change or any of the other reasons into account is not correct. Of course, this is not true in real life as well. Assuming good intentions, I strongly belief employees are willing to change if it is in their best interest or makes (their) company life better this will hold true in many cases.
Therefor I argue that for those cases where employees’ resistance is pointed out as a/the reason for projects to fail, the value the project/ solution brought is not sufficiently outweighing the effort and costs.
Treacy and Wiersma introduced the concept of value disciplines many years ago to explain why market leaders are successful.[‡] They provided a strategic framework which links product value, operational excellence and customer focus to explain why companies are successfully leading in their market.
An organization needs to make sure they are good at all three value disciplines, but must excel in one of them. The choice of a value discipline in which they excel gives color to the organization by shaping its operating model, processes, organization structure, culture and (external) reputation. The examples of successful companies in the picture shows this concept still holds true in today’s world. Let’s plot some typical examples in these value disciplines during the realization and implementation of new/improved/changed business process with a new IT solution.[§]
A lack of Operational Excellence
Release dates have been changed multiple times and business requirements/ product features have not been delivered completely. Interfaces with feeding systems have not been realized yet and will be planned for subsequent releases. Close to the release date training and instruction materials are delayed/too late and the training environment is not “available/live” yet, making it more difficult to learn the new tool.
A lack of Product leadership
When selecting the new solution, a proven technology by a well-established company were important criteria. The chosen new IT platform, which is very capable, has been around for over 10 years. The supplier is moving into cloud based solutions and actively promotes these solutions as add-on to its core offering which are currently not integrated yet in the “new” solution.
A lack of Customer Intimacy
The new solution promised ease of use, less “steps/clicks” than before to enter data and automated performance and operational reports. Unfortunately, the step-up in efficiency is not that big and the automated report generation requires user configuration first. Having pushed for data export possibilities early on, the data is available but needs additional conversion/cleansing/steps to create meaningful information. Due to time constraints, the users turn to Excel to provide the KPI reporting instead of setting it up in the new tool.
Change Management as the magic wand
If we view employees as customers there’s also a lot to learn from marketing theory and practice. Successful introductions of new products like smartphones, video-&music streaming and online booking services show people are very willing to change; at a surprising pace, sometimes. High scores on each of the value disciplines will not be enough. Another factor comes in to play as well.
These success stories need also be explained by the way they have been marketed; even up to an extend where just having or using the product or service becomes part of the perceived value. In selling products and services companies go through some lengths to effectively educate their customers on the problem/need they have and the value their product can bring. Being credible, trustworthy is yet another important factor to “buy” the products being offered.
Kotter’s or Burke-Litwin’s model on change from the 1990’s or Lewin’s model from the 1940’ takes these factors into account in their methods to manage change. Over the years research has proven that active change management is more successful in realizing change than not using a structured approach.[**] These models have been nicely summarized in the four quadrants shown in the picture.[††] I think we all can relate to what happens if one of the quadrants is not sufficiently covered.
Most people find it hard to motivate change or even do something when they do not see or have the need for it; or understand the organization’s need. And don’t we recognize the situation where we have very capable people, who are very busy to put the fire out on their “burning platform”, only to find out later that the neighbors invested their time in building a shiny, more efficient and better facility replacing the old platform (lack of vision). Not knowing where the start, which direction to go first will most likely not bring you from A to B despite your new car and road network (lack of actionable first steps).
Having change management in place can create a false sense of security to overcome the “resistance by employees”. Especially if the capability of the organization is not adequate in putting the pre-requisites for change in place (lack of capability).
Over the years I have learned that the success of transformational projects lies in:
1) the value of the change itself, and
2) the capability of the organization to deliver solutions on time in full.
I hope you never have experienced the anxiety and frustration when something where you were counting on didn’t meet your needs or was delivered (too) late. I do remember in one of my projects a young farmer who ordered a new spraying machine well in advance. He wanted to turn around the family business and start treating the crops differently. He indeed was very frustrated, to say the least, when the machine was not ready in time for the new season. He didn’t accept the alternative machine which did meet a lot of the specs, but was just slightly better than the one he had already and lacking the one thing he needed it for. Will you label this as resistance to change?
WE need to make sure we CAN change!
I think the key for successful transformation lies in the choices you have made and the performance in the different value disciplines; Ensuring processes and systems capable of delivery will make the difference. Hassle-free delivery of state of the art solutions which provide a (competitive) advantage which surprises your customers/users will
So, in any transformational project the delivery capabilities of the organization need to be understood to secure that it will not be a roadblock later one during the program. This is where project and change management go hand in hand, not only to focus on communication, training, stakeholder management and change readiness assessment, but also to understand and manage the potential roadblocks in the project from a very early stage. Delivery capability should be a part of the change readiness assessment and needs to be managed according to the outcomes.
Steven de Cocq van Delwijnen is managing consultant Business Transformation Management at RGP. He can be reached at email@example.com
[*] “Leading Change: Why Transformation Efforts Fail”, Kotler, 1995. The percentages vary in the different studies from over 60 to over 70% depending on the type of study and scope of the research according to Forbes magazine from a few years ago. A McKinsey survey from 2017 indicated a succes rate of 37%.
[†] Deloitte on implementation challenges, page 10.
The top reasons for projects to fail are (bottom to top): Silos/No Horizontal Process View, No Organizational Change Plan, Scope Expansion / Uncertainty, Business Case Not Compelling, Inadequate Sponsorship, Unrealistic Expectations, Poor Project Management, Resistance by Employees
[‡] “The Discipline of Market Leaders”, Treacy and Wiersma, 1995
[§] Examples are based on multiple real live examples, for reasons of confidentiality these examples are not named, but I trust these things happen more often.
[**] There are many good resources to find on change management, so I gladly refer to these if you want more information on the topic. Typing “filetype: .ppt Change Management Training” and “filetype: xls Change Management Assessment” in Google results in thousands of files.
[††] All credits to the person who has created this. I have been able to find it on the internet, but was not able to find the source.