Why Change Initiatives

Fail (Again and Again

and…)

Lynn A. Becker
D.P Associates, Inc
STC 50th Annual Conference
Introduction
 Industry worldwide is faced with the
ongoing struggle of keeping up with
constantly shifting technology, market
demands, “best practices”, shareholder
expectations, and more discerning
customers. To keep up with the change,
many companies are restructuring in effort
to minimize waste, optimize resources and
maximize return on investment (ROI).

"I cannot say whether things will get better if we change; what I
can say is they must change if they are to get better."
-G. C. Lichtenberg
 Success?

 The success of these initiatives depends

largely on leadership and each leaders’ ability
to not only cope with the change but to
welcome it and facilitate it. In addition,
leaders must ensure that those who work for
them will not only accept the change but
embrace it.
Past Decade

 Nearly 50% of all U.S. companies were

restructured, reengineered, right sized or
downsized
 Over 80,000 firms were acquired or merged
 At least 700,000 organizations sought
bankruptcy protection
 Over 450,000 companies failed
Need for Change
 Change = D x M x P > C

 D = dissatisfaction with status quo

 M = new management model
 P = process for managing change
 C = cost of change
Why Do Most Change Initiatives
Fail?
 “The company-as-a-machine model fits how people think about
and operate conventional companies. And, of course, it fits how
people think about changing conventional companies. You have
a broken company, and you need to change it, to fix it. You hire
a mechanic, who trades out old parts that are broken and brings
in new parts that are going to fix the machine. That’s why we
need “change agents” and leaders who can “drive change”.
 But go back and consider all of the evidence that says most
change efforts aren’t very successful. Here is our first plausible
explanation: Companies are actually living organisms, not
machines. That might explain why it’s so difficult for us to
succeed in our efforts to produce change.….
 We keep bringing in mechanics -- when what we need are
gardeners. We keep trying to drive change -- when what we
need to do is cultivate change….”

Learning for a Change, Alan M. Webber, 1999:

Interview with Peter Senge in Fast Company (FC24, p. 178)
Reengineering

 50% of the companies that participated in the

study reported that the most difficult part of
reengineering is dealing with fear and anxiety
in their organizations;
 73% of the companies said that they were
using reengineering to eliminate, on average,
21% of the jobs; and,
 Of 99 completed reengineering initiatives,
67% were judged as producing mediocre,
marginal, or failed results.
1994 CSC Index “State of Reengineering Report
Reengineering
 “The most profound lesson of business process reengineering was
never reengineering, but business processes. Processes are how we
work. Any company that ignores its business processes or fails to
improve them risks its future. That said, companies can use many
different approaches to process improvement without ever embarking
on a high-risk reengineering project.

 For technologists, the lesson from reengineering is a reminder of an old

truth: information technology is only useful if it helps people do their
work better and differently. Companies are still throwing money at
technology - instead of working with the people in the organization to
infuse technology.

 Finally, reengineering’s enduring lesson is that the bigger the hype the
greater the chances of failure. Before reengineering became The
Reengineering Revolution, innovators were experimenting with a variety
of change practices. With the exaggerated promises and heightened
expectations came faddishness and failure. The lesson: companies
should underpromise and overdeliver. The time to trumpet change
programs is after results are safely in the can.”
Fast Company: The Fad that Forgot People,
Thomas H. Davenport (FC01, p. 70)
Some More …
 Nearly two-thirds of all major changes in
organizations fail.
 According to Hammer and Champy, only 20 to 30
percent of all reengineering projects succeed.
 Only 23 percent of all mergers and acquisitions make
back their costs.
 Just 43 percent of quality-improvement efforts make
satisfactory progress.
 9 percent of all major software development
applications in large organizations are worth the cost;
31 percent get cancelled before completion; 9
percent will result in cost overruns by 189 percent
Anthills (Complex Adaptive Systems)
 “First, they are open, dynamic systems. The Marshall ball-in-a-bowl system is
closed; no energy or mass enters or leaves, and the system can settle into an
equilibrium state. By contrast, the energy and mass that constantly flow through a
complex adaptive system keep it in dynamic disequilibrium. An anthill, for example,
is a perpetual-motion machine in which patterns of behavior are constantly shifting;
some patterns appear stable, others chaotic.

 Second, these systems are made up of interacting agents, such as ants, people,
molecules, or computer programs. What each agent does affects one or more of
the other agents at least some of the time; this creates complexity and makes
outcomes difficult to predict. The interactions of agents in a complex system are
guided by rules: laws of physics, codes of conduct, or economic imperatives such
as “cut prices if your competitor does.” If the repertoire of rules is fixed, the result is
a complex system. If the rules are evolving, as with genes encoded in DNA or the
strategies pursued by players in a game, the result is a complex adaptive system.

 Third, complex adaptive systems exhibit emergence and self-organization. As

individuals, ants don’t do much. But put them in a group where they can interact,
and an anthill emerges. Because the anthill rises out of the bottom-up dynamic
interactions of the ants and not from a top-down master plan, it is said to be self-
organized. The emergent structure is independent of specific agents; while
individual ants may come and go, the pattern of the anthill persists.”

Eric Beinhocker, Strategy at the Edge of Chaos, The

McKinsey Quarterly, 1997 Number 1.
Project Outcomes
 Research on change reveals that many
business process engineering (BPR)
initiatives failed because focus was on
process and technology but not on people.
 The application of contingency and situational
leadership models addresses people issues
within the environment so should be more
effective in change initiatives

"Progress, far from consisting in change, depends on retentiveness.

Those who cannot remember the past are condemned to repeat it."
-George Santayana
Biggest Management Mistakes

 Delegation of sponsorship
 Not being directly involved with the project
 Not engaging all management levels in the
change
 Sending inconsistent signals or not
communicating enough
 Shifting focus or changing priorities too soon
 Not providing adequate resources

“Change is good. You go first.”

- Scott Adams
Risk Taxonomy:
Inadequate design completeness and correctness
 Inadequate understanding of requirements for
redesign
 Inadequate basis (data/information) for design
 Failure to adequately address the root causes
 Failure to address correct root causes
 Inadequate attention to implications
 Inadequate design detail to implement
 Internal inconsistencies in design
 Theoretically unsound or impractical to implement
 Inadequate understanding of design prerequisites
and dependencies
 Design inadequate to achieve objectives
 Inflexible design (lacks robustness in the face of
variation and change)
 Design unacceptable to organization
Art Gemmer, Rockwell Collins
Risk Taxonomy:
Inadequate design completeness and correctness

 Inadequate integration
 Inadequate integration with other processes
 Inadequate integration with other change initiatives
 Design encourages suboptimization
 Dependence of other change initiatives (design
represents risks to their implementation)
 Inadequate process ownership buy-in
 Inadequate Galbraith fit (processes, structure,
information systems, rewards, renewal, leadership)
 Excessive focus on processes
 Inadequate alignment of measures and rewards
 Inability to align structures
Art Gemmer, Rockwell Collins
Risk Taxonomy:
Inadequate change management

 Inadequate time and attention paid to change management

 Underestimation of time require to change behavior
 Inadequate measurement of change progress
 Inadequate case for change
 Inadequate quantification of benefits
 Inadequate consideration of case for change for the individual
 Inadequate communication
 Inadequate leadership participation and buy-in
 Unclear process ownership
 Inadequate senior leadership participation and buy-in
 Inadequate middle management participation and buy-in
 Inadequate line management participation and buy-in
 Ineffective identification and management of specific blockers
(resistance)
 Excessive compromise and dilution of design to gain consensus
and buy-in
 Unnecessary divergence of implementation (e.g., by business area)

Art Gemmer, Rockwell Collins

Risk Taxonomy:
Inadequate change management
 Improper sequencing of changes
 Inadequate understanding of implementation dependencies
 Resource conflicts
 Inadequate training
 Underestimation of training development and delivery effort
 Inadequate understanding of learning objectives
 Failure to address organizational and investment level
training
 Inadequate coverage those requiring training
 Poor training materials
 Inadequate instructor quality and credibility
 Inadequate instructor bandwidth
 Inadequate follow-on support
 Inappropriate timing of training to first use
 Inadequate reinforcement of training
Art Gemmer, Rockwell Collins
Risk Taxonomy:
Inadequate planning and management of initiative
 Inadequate process rigor for team size and
complexity of initiative
 Inadequate scope management
 Inadequate schedule management
 Inadequate risk management
 Inadequate quality control (standards,
completeness/correctness checks)
 Inadequate configuration control of deliverables
 Inadequate chartering of design teams
 Poor estimates
 Unprecedented activities
 Underestimation of schedule tasks

Art Gemmer, Rockwell Collins

Risk Taxonomy:
Inadequate planning and management of initiative
 Inadequate resources applied
 Part-time assignment along with “day job”
 Inadequate knowledge or experience on the part of the
resources
 Inadequate discipline
 Failure to recognize importance of rigor and discipline
 Inadequate program/project management skills
 Unclear roles and responsibilities
 Failure to update plans
 Inadequate review of status
 Inadequate measurement of effectiveness
 Inadequate coordination with other initiatives

Art Gemmer, Rockwell Collins

Resistance to Change
 Level 1 – facts, ideas, figures
 Tendency is to address with more and better
information
 Level 1 may come from
 Lack of information
 Disagreement with the idea itself
 Lack of exposure
 Confusion

Rick Maurer, Why Resistance Matters, beyondresistance.com

Resistance to Change
 Level 2 - emotional and physiological reaction to
change. Level 2 can be triggered without conscious
awareness. Based on fear or loss.
 Tendency to treat as Level 1
 Level 2 may come from fear over a perceived . .
 Loss of power or control
 Loss of status
 Loss of face or respect
 Feeling of incompetence
 Feeling of isolation or abandonment
 Sense that they can't take on anything else (too much
change

Rick Maurer, Why Resistance Matters, beyondresistance.com

Resistance to Change
 Level 3 is also the domain of cultural, religious, and
racial differences. People may resist whom you
represent.
 Difficult to see that our ability to see others’ points of
view is limited by these factors
 Level 3 may come from . . .
 Personal history of mistrust
 Cultural, ethnic, racial, gender differences
 Significant disagreement over values
 Transference. The person being resisted represents
someone else such as a mother or father.

Rick Maurer, Why Resistance Matters, beyondresistance.com

One Change Process Model
 Preconditions
 Top-management commitment
 Assemble change team
 Allocate resources and authority
 Analysis
 Operation and organization at multiple levels
 Benchmark
 Determine SWOTs
 Design
 Idealized model of operations
 Align organization with operational flows
 Redesign relationships

Kai Simon, Redwood Research ©1995

The Rest of the Story
 Implementation
 Modify existing activities
 Integrate into processes
 Establish new management style
 Fine tuning
 Benchmark new operations
 Institute improvement program
 Align with new management style
 Reconsideration
 Evaluate change process and results
 Institute organizational learning
 Make change permanent

Kai Simon, Redwood Research ©1995

Another Change Process Model
 Leading change
 Creating a shared need
 Case for Change
 Threat vs. Opportunity Matrix
 Force Field Analysis
 Communicating desired outcome(s)
 Elevator speech
 Mobilizing commitment
 Stakeholder Analysis
 Commitment Plan
 VSM Prep Worksheet
 RPI Contract
Another Change Process Model (2)
 Developing/Selecting a Change Strategy
 VSM
 RPI
 Burst
 5S Processes
 Social Analysis
 Implementing Change
 Activity Plan
 Communication Plan
 Measurement Plan
Another Change Process Model (3)

 Sustainment/Monitoring Progress/Renewal
 Event Follow-ups
 Cadence Reviews
 Measurement Plan
 Alternative Rewards
Change Agents & Leaders

 What makes a change agent and/or leader

effective?

 What makes a follower more apt to participate

in certain change initiatives?

"None of us knows what the next change is going to be, what

unexpected opportunity is just around the corner, waiting a few
months or a few years to change all the tenor of our lives."
-Kathleen Norris, Hands Full of Living
 Kurt Lewin
Field Theory and Group Dynamics

 Why are groups so ineffective in getting things

done?
 How is influence spread?
 How is a group affected by their perceptions of
events?
 How do groups relate with each other?
 How do individuals adjust to these conditions?
 How can training leaders improve the functioning of
groups (t-groups)?

“Continuous improvement requires a commitment to learning.”

David Garvin, Harvard University
Cycles of Change

"It is not necessary to change. Survival is not mandatory."

-W. Edwards Deming
Phases of Change
 Loss
 Doubt
 Discomfort
 <<<Danger Zone>>>>
 Discovery
 Understanding
 Integration

"We live in a moment of history where change is so speeded up that

we begin to see the present only when it is already disappearing."
-R. D. Laing, The Politics of Experience
Elements of Change
 Vision
 Direction
 Teamwork
 Process
 People
 Technology
 Sustainment

“If you want to make enemies, try to change something.”

- Woodrow Wilson
Initiating Change
 Levels, goals and strategies

 Metrics

 Sequence of steps

 Implementation and organizational change

“Change before you have to.”

- Jack Welch
Levels of Change
 The Tale of Three Villages: The chiefs of three
villages each set out to build a bridge across a wide
chasm. If they could build this bridge, the trade that
came would enrich the lives of villagers for
generations to come.
 The first chief told his workers, "Go forth and work. Do
whatever is necessary to build that bridge." The villagers
established a frenzied pace, for this chief abused those
workers who did not follow his commands. The first chief
boasted to the other two leaders about the speed of his
construction. Unfortunately, because no one coordinated
these worker's efforts, the bridge was a haphazard
collection of nails and boards. It soon collapsed.
Second and Third Villages
 The second chief was watching this mess and decided to learn
from the first chief's mistakes. She organized her workers into
teams, and gave them a plan to build a bridge. At first, these
workers had success, and built the bridge straight as an arrow
far over the chasm. She boasted to the two other chiefs about
the accomplishments of her workers. Unfortunately, the the next
major storm destroyed the bridge for the chief did not know how
to build structural supports. Her workers became discouraged
and abandoned their efforts.

 The third chief was watching their efforts and decided to learn
from the other chiefs' mistakes. He sent his workers to the other
villages to learn what they had done, and what they hadn't done.
His workers then developed a plan. In their first step, they did
not build the bridge at all, but focused on creating the support
columns they would need. When they completed this task, they
rapidly finished the bridge.
Level 1
 Shaping and anticipating the future:

 Few assumptions about the business itself

 Generate alternate scenarios
 Defines opportunities
 Assesses strengths and weaknesses of
scenarios
Level 2
 Defining what business to be in:
 Many start here because
 assumption that future will be like the past
 CEO’s vision for the future set
 don’t know where else to start
 afraid to start at Level 1because changes needed
to future requirements
 only charge is to refine the mission that already
exists
Level 3
 Reengineering processes:
 focus on fundamentally changing how work is
accomplished
 major structural changes
 may be aftermath or consequence of level 1 or
2 or may be done as independent action
Level 4
 Incrementally changing processes
 focus on making small changes to existing
work processes
 assumes that existing processes only need
minor refinement; may end up ignoring or
failing to address structural, system-wide
problems
 Where to Start?

 Level 1 through 3 - high need for change, risk-

tolerant management, relatively few constraints,
and has good consensus among management
on direction; environment requires rapid
adaptation to fast-moving events
 Level 4 - perception that there is only modest
need for change, relatively risk-avoidant, has
many constraints, and little consensus on
direction; slow moving industries
10 Challenges of Change
Management/Sustainment
 Initiating Change
 Time
 Support & resources
 Case for change
 Value vs actual beahvior
 Sustaining Momentum
 Fear & anxiety
 Metrics
 Cult
“Change is not without its inconveniences, even from worse to better.” -
Richard Hooker
10 Challenges of Change
Management/Sustainment
 System-wide Redesign and Rethinking
 Control issues
 Not building on previous successes
 Strategy and purpose not sustained

Peter Senge, The Dance of Change: The Challenges to Sustaining Momentum in

Learning Organizations. Doubleday/Currency, March 1999
Change Tactics
 Education = resistance due to lack of info
 Participation = others have info or power
 Facilitation = fear
 Negotiation = power differences
 Co-optation = politics & power
 Manipulation = politics or expense
 Coercion = speed and you have the power
Strategies to Minimize Resistance

 Tell the truth

 Involve people as much as possible
 Communicate
 Educate/Train
 Provide a forum for feedback
 Keep the transition period short
 Be the change
Sustaining Change
 Transitional change will not be effective if old
behaviors are allowed to continue
 Resistance must be addressed adequately
 Must have support structures in place
 Must remove the ability and/or the desire to
return to the old ways
 Leadership and employees must live up to
the commitments of the change
Resistance from Above

 Resistance from leadership is unique

 Lack of support
 Lack of resources
 Unwillingness to change

 Resistance may arrive by surprise

 “Nice work, but no.”
 “You don’t understand.”
 “I didn’t know you were doing THAT.”
 “You want how many people/how much money?”
 “You don’t see the Big Picture.”
How to Handle

 Early involvement in the change

 Help with definition
 Understanding of boundary conditions
 Renew case for change frequently
 Show bottom line benefits
 Explain transition characteristics
 Describe future state in WIIFM terms
If There is …
 If there is perceived resistance from above on
a project, DON’T START UNTIL:
 Boundary conditions are identified
 Buy-in on the project is reached
 All parties agree on the project scope,
including stakeholders
 Following these steps does not ensure that
resistance will be satisfied
 Relationship with leadership may need to be
revisited
 Communication – Prior to Change
Negative Positive
 Talk badly about the change  Learn about the change
 Talk badly about the  Ask how you can help
organization  Find out how to prepare for the
 Talk one way in public, but change
another in private  Be positive
conversations
 Be open and honest with your
 Stop performing your current
feedback
responsibilities, or perform
 Encourage constructive
them carelessly
conversations about the
 Have secret meetings where
change
the change is not taken
seriously
 Communication –During Change
Negative
 Block progress or sabotage the
change
 Talk negatively about the
change in private
conversations
 Ignore the change – pretend
it’s not happening
 Prevent others from
participating in the design or
implementation of the change
Positive
 Ask questions about the future
 Ask how the change will impact
day-to-day operations
 Provide input to the solution
 Find out what new skills will be
needed and seek training
 Take advantage of the change
to develop new skills and grow
professionally
 Communication –After Change
Negative
 Avoid using the new tools or
processes
 Tell peers or subordinates that
using the new tools or
processes is no big deal and
shouldn’t be taken too seriously
 Revert to the old way of doing
work when problems or issues
arise
 Take advantage of problems
during implementation of the
change to demonstrate why the
change won’t work
Positive
 Reinforce the change with
peers and subordinates
 Help the business achieve the
objectives of the change
 Avoid reverting back to the old
ways of doing work when
problems arise
 Help solve problems that arise
during implementation