Anyone who’s worked in a large organisation for any length of time is likely to have experienced transformational change in one form or another. By (bad?) luck rather than judgment, I have been at the pointy end of some fairly significant change programmes during my last two consultancy assignments and it’s fair to say that I have seen wildly varying degrees of success. It was with great interest, therefore, that I read an article last week that posed some fascinating arguments as to why the success rate in delivering step change is often so poor.
The article suggested that every organisation has a default future that is influenced by a number of powerful forces that act almost as invisible ‘rail tracks’ that dictate the course towards this default state. It is only by having a clear understanding of these forces and putting in place the necessary conditions for change, that leaders will be able to influence and alter the trajectory of the organisation.
Some of these forces are easy to observe, like technology and regulation, while others, like mind-set, values and culture, are often embedded deep within the organisation and not immediately apparent. Equally, some of these forces are generated externally, such as economic conditions, while others are a result of past internal choices and actions, examples being legacy technology and product strategy.
The classic approach to creating an improved future might be something like this: firstly, devise a strategy – ideally one that has a compelling vision with audacious goals – then, secondly, implement the strategy through a change programme. Sounds easy, doesn’t it?!
Unfortunately, the reality is more likely to be very different. Most organisations don’t really have a meaningful strategy. They may well have ambition and stretch targets, but there is often more bad strategy than good strategy. ‘Bad’ doesn’t necessarily mean that a strategy is wrong, just that the strategic thinking is not complete and goes no further than a set of aspirational statements. According to one Professor at Harvard Business School, only about 5% of large-scale change programmes are successful – and there is evidence spanning the last 25 years which indicates that the ability to deliver successful change has not improved. And it may, in fact, be getting worse…
So, the purpose of any change initiative is to deliver a vision of the future, where the vision is part of a wider strategy. It is generally accepted that the change initiative must be justified by a business case that defines tangible financial benefits that exceed projected costs. But the fundamental flaw with this approach – one that I have experienced first-hand – is that it assumes that the organisation can easily change, that it is agile, and therefore able to adapt without constraint. While this may be true in small companies, the reality is that most established organisations are not agile: their decision-making is slow, resources are difficult to mobilise, established mind-sets stifle innovation, and legacy technology makes any change complex and expensive.
Most organisations therefore need to accept that they are not agile and that successful change requires a significant level of insight and effort to change the trajectory away from its default future.