IBM’s Making Change Work Study Gives Stark Warning

This is a guest blog, authored by Leslie Allan which I thought very interesting:-

Managing change in today’s organizations is not getting any easier. However, doing it well is the new imperative. How are organizations faring with moving their people and systems in new directions? IBM Global Business Services researched change management practices across the globe. Their extensive Making Change Work Study quizzed over 1,500 project leaders, sponsors, project managers and change managers from many of the world’s leading organizations, ranging from small to very large in size.

The IBM study reveals that the percentage of CEOs expecting substantial change has risen from 65% in 2006 to 83% in 2008. However, CEOs reporting that they had managed change well in past projects climbed from 57% in 2006 to only 61% in 2008. This constitutes a more than tripling in the size of the gap between actual change capability and needed capability. The costs to organizations are real and sizeable. Failed change initiatives bring in their wake budget overruns, disgruntled customers and demoralized employees.

How successful are organizations at implementing change? The IBM study reports most CEOs considering themselves and their organizations largely ineffective at bringing about change. The change practitioners themselves reported the following change program success rates:

• 41% fully met objectives
• 44% missed at least one objective
• 15% missed all objectives or aborted

In all, 59% of change initiatives failed to meet their objectives. This is quite a sobering result as we set about entering the second decade of the 21st century. Another sobering thought is the stark contrast between those organizations getting change management right and those that are struggling. The top 20% of organizations, the study reveals, are successful 80% of the time. Conversely, the bottom 20% of organizations only manage to achieve their change objectives 8% of the time. The top 20% of companies are ten times more likely to lead a successful change initiative than the bottom 20%.

Clearly, underachieving organizations can draw important lessons from the top achievers. What are the barriers to successful change and what are the key success factors that poor performers can leverage to their competitive advantage? The IBM study provides valuable insights into what poorly performing organizations can do to emulate the success of their better performing competitors. What are these lessons?

Through their research study, IBM revealed these key barriers to successful change:

• 58% Changing mindsets and attitudes
• 49% Corporate culture
• 35% Complexity is underestimated
• 33% Shortage of resources
• 32% Lack of commitment of higher management
• 20% Lack of change know how
• 18% Lack of transparency because of missing or wrong information
• 16% Lack of motivation of involved employees
• 15% Change of process
• 12% Change of IT systems
• 8% Technology barriers

Note how people factors account for the top three challenges and for four out of the top five. Getting the “soft” stuff right turns out harder to do than getting the traditional “hard” stuff, such as resources and technology, correctly aligned. What was once considered the unimportant “soft and fuzzy” aspect of organizational life turns out to be what makes or breaks change projects.

How can we get the executive and managers at all levels to better appreciate the importance of these “soft” aspects of change? What can we do in our own organizations to help embed more effective change management practices? What have you done so far? Please share your experiences?

Leslie Allan – http://www.businessperform.com/

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