Experience and research at Buck Consultants tells us successful organisations lead change, as opposed to just manage it.
Businesses are always changing; it is a necessity to competing in any market. But identifying the need for change is not enough - a business must be able to implement change effectively.
Companies are making significant changes to cope with challenges now and in the future. Of those we surveyed in 2009, two thirds had implemented a significant organisational change in the past 12 months and almost all planned further changes over the next year. We find that the most common types of organisational change in today's world are:
- Restructuring the workforce
- Aligning to a new company direction
- Streamlining technology and processes
Unfortunately, organisations are changing with mixed levels of success. Just over half (54%) of those we surveyed said the changes over the past 12 months were perceived by respondents to be successful. That means that nearly half of all changes initiated by companies failed to realise the intended results.
There are a variety of similarities and differences in the way organisations implement change. From assessing different change programmes, and the results of our survey, we have found several common activities that appear to influence success. The top three are:
Better preparation for change
Greater involvement of staff
Internal collaboration and teamwork
Leaders often express views that are consistently misaligned with views expressed by those in more junior roles. To reinforce this, our survey found that 64% of respondents at director level perceived changes over the past 12 months to be a success, compared with just 45% of those at staff level. Leaders will benefit from a more realistic view by investing time upfront to understand the implications of the change they are driving and clearly define what success will look like.
Preparation is the key - 70% of those that said they were successful in change undertook in-depth preparation. This result was almost inverted among those that were not successful - 69% of them did not undertake in-depth preparation.
Organisations that actively involve staff - stakeholder management, education and training, embedding change, monitoring feedback and understanding metrics - have a better chance of success.
Communication as a stand-alone activity has a limited impact on the rate of success. Our survey found that of those that did communicate, 59% were successful, against 43% of those that did not communicate. It is revealing that 96% of successful changes involved communication and employee feedback.
Organisations that fail to change tend to focus only on internal communications and ‘telling' staff about change. Feedback indicates that executives find it challenging to keep staff engaged and that in-depth consultation with those further down the chain of command would have overcome this. Our experiences show that organisations face such difficult business conditions that leaders want to ‘fast track' change, beyond what most organisations are capable.
Isolating a change project will reduce the chances of its success. Our survey found that when a function acts on its own to drive a change, there is only a 45% chance of success - over half of the survey respondents said change was driven in this way.
We found that working across different internal functions always increases the chances of success, if anything because it spreads responsibility for success across a wider set of stakeholders. In our survey, where two functions were involved to initiate a change, the success rate jumped from 45% to 62%, and when three functions were involved, it increased further to 70%.
Senior leaders are most likely to initiate change in isolation without input from other teams. Yet with their overarching roles, they are in the best position to engage change across functions.
The potential impact of change on organisations will continue to be significant. If leaders and change managers can be pragmatic in implementing the changes they have planned, they have every chance of delivering the desired results and moving the organisation forward.
Indications are that some may need to learn lessons from the past. Even though 46% of respondents we surveyed could not say changes over the past 12 months were successful, as many as 77% still said they were confident that the company would successfully adjust to changes in the coming 12 months. We wonder if this confidence is a little unfounded.
When we ask leaders what activity they plan to implement up-and-coming changes, there appears to be little difference from the unsuccessful approaches of the past. Many are planning the usual corporate communication activities, such as broadcast messages and leadership endorsement. Still too few are brave enough to truly lead change and involve staff - only 23% we surveyed said they will consult over up-and-coming changes. It is clear from change programmes over recent months that these types of activities are important if an organisation is to improve its chances of success.
What is clear from our survey and common experience is that organisations lack fundamental change capability, starting with senior leadership. Although the current climate may put pressure on leaders to effect a change quickly, they will benefit from a more thoughtful consideration of the scope of change, the involvement of their staff and the cross-functional nature of change.
Ben Wells is a senior consultant at Buck Consultants