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Friday, May 30, 2008

Change Management - Why Is It So Hard?

A new Economist Intelligence Unit study investigates the state of organizational change programs, and asserts that an unstable economy won't dampen spending on change programs.

In Managing change successfully (March-April 2008), sponsored by Celerant Consulting, the researchers found that business leaders are responding to the economic slowdown by launching more change programs and spending more money on them.

Although change programs in the last year have had cost reduction as their primary goal, the survey found that, over the next year, the goal will be organizational flexibility for operational efficiency -- 57% of companies surveyed put this at the top of their agenda.

The problem?

  • In spite of this enthusiasm for change, few companies are consistently successful at it. Although change management, as a business discipline, has been around since the 1940s, most companies still struggle to put theory into practice.
  • Of the 607 senior executives polled for this survey, 58% say that, over the past five years, half or fewer of their change initiatives have been successful. The U.S. fares a lot worse, with 75% of respondents stating that half or fewer of their change initiatives have been successful.

Why is change so hard?

  • The element of change management that companies have the most difficulty with is "winning hearts and minds" (51%). This was followed, in second place, by "lack of management buy-in" (31%).
  • When change management initiatives fail, companies' blame "lack of clearly defined or achievable milestones" (24%). Next on the blame-list is "lack of commitment by senior management" and "poor communication" (both with 19%). In other words, the ingredients that are required to convince people of the case for change.
BOTTOMLINE: Human nature is one of the key barriers to effective change management, (along with economics and expertise) all of which are directly related to executing strategy.

Read Chapter 3, What Is It So Hard? - from the new book by Gary Harpst, Six Disciplines® Execution Revolution, for insights into why change is so hard, and a breakthrough way to overcome this ongoing challenge.

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