Strategic Intelligence for CFOs, Finance Directors, Controllers and Treasurers in Asia  | 
2013, May 24

Change Management: How to Avoid Failure

Home > Features > Change Management: How to Avoid Failure
Features

Change Management: How to Avoid Failure

by KPMG Agenda Magazine, 16 April 2011
topics:
Management
tags:
change management communication Ford GE IBM inspiration Intel Monsanto State Bank of India

The concept of change has become so powerful that it elects politicians – and so pervasive that no business leader could impress investors by extolling the virtues of the status quo. Yet while driving change is a constant preoccupation for most CEOs, relatively few change management programs succeed. Most experts agree that around 70% of change in multinationals fails, a figure that has remained pretty constant for the past 15 years.

 
“Corporations have been asked to take on change in the past,” says Mark Spears, Global Leader in KPMG’s People and Change practice. “But now they’re taking on lots and lots of change all at the same time.” Government regulation, globalization, emerging technology, environmental responsibility, increased competition, economic uncertainty… “There are all kinds of drivers forcing organizations to react and evolve,” Spears says.
 
Major strategic shifts now come around much quicker. “Many companies are being hit with those big changes that, not too long ago, happened once in a decade, in half or a third of that time,” says John Kotter, the Konosuke Matsushita Professor of Leadership, Emeritus, at Harvard Business School and author of Buy-In: Saving Your Good Ideas from Being Shot Down. “The consequences, the stakes and the costs of change management failure are big.”
 
Change hurts. Organizations are structured to resist it. People are hard-wired to reject it. “People have a view of the world. They see it through a frame of reference,” says Spears. “If you challenge that, they fight against it.” Today, staff are being asked to take on three to four times as much change as they can naturally handle, he suggests.
 
Yet, as Edward E. Lawler III and Chris Worley argue in Built to Change, the ultimate corporate advantage in today’s business environment is the ability to transform, making change management the definitive core competence. Change is seen by many as a positive force, an opportunity to reassess the fundamentals and keep excesses in check. It can be so useful that one CEO even quipped: “In some companies, if you don’t have a crisis, you should make one up.”
 
It’s easy – if time-consuming – to list all the steps that characterize successful change management efforts. Having the discipline to stick to them is the hard part. “Even if you get all of these things right, it’s still a bloody and difficult process. And that’s just one change,” Spears warns. “But companies today have to become change-capable. It’s too costly not to get it right.”
 
1 Persuade the troops
The logical first step to major change is convincing everyone that a fundamental shift is needed – and quickly. But rather than hitting employees over the head (“A little hit on the head does wake people up, but hitting them on the head 19 times will kill them,” Kotter says), leaders must ignite the kind of fire that inspires deep-seated, durable change.
 

It is essential that change is driven and communicated by senior leaders. When Jeffrey Hiatt and Timothy Creasey, authors of Change Management: The People Side of Change, explored failed change management initiatives, they found there often wasn’t enough communication from executive sponsors and senior managers.

 

Change is easier when company culture is prepared for upheaval. In the 1980s, says former AlliedSignal CEO Lawrence Bossidy, change was “a radical, unpopularized idea” akin to “changing the tire when the car is running” at many multinationals. By the time Bossidy was implementing his own changes at the aerospace company in the 1990s, however, “the burning platform was obvious to everyone”.

 
1234next ›last »


Related articles

Comment on this article

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <a> <p> <span> <div> <h1> <h2> <h3> <h4> <h5> <h6> <img> <img /> <map> <area> <hr> <br> <br /> <ul> <ol> <li> <dl> <dt> <dd> <table> <tr> <td> <em> <b> <u> <i> <strong> <font> <del> <ins> <sub> <sup> <quote> <blockquote> <pre> <address> <code> <cite> <embed> <object> <strike> <caption>
  • Lines and paragraphs break automatically.
  • Use <!--pagebreak--> to create page breaks.

More information about formatting options

Verification Code
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

Accounting and Regulations

CFO innovation Asia Accounting and Regulation the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Accounting Regulation, IFRS, US GAAP, Tax, investor relations, corporate governance, Corporate Law, Financial Regulators, Internal Audit, Audit, Corporate Law.
Auditing, Investor Relations, Law and Compliance, Tax

Finance and Banking

CFO innovation Asia, Finance and Banking the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Corporate Finance, trade finance, treasury and risk management, capital expenditure, Banking, mergers and acquisitions
Cash and Liquidity Management, Corporate Finance, Insurance, Treasury Management

Management

CFO innovation Asia the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Management, Corporate Governance, Human Resource Management, Compensation and Benefits, Mergers and Acquisitions, Professional Development, Corporate Real Estate, Risk Management, Budgeting and Forecasting, Business Process Management, Business Process Reengineering, Outsourcing.
Budgeting and Planning, Business Expense Management, Human Capital Management, Outsourcing and Shared Services, Risk Management

Metrics

Corporates, Financial Services

Technology

CFO innovation Asia Technology the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Systems, Business Intelligence, EPR, Accounting software, CRM, Cloud Computing, Telecommunications, Business Process Outsourcing, Business Process Management Software.
Business Intelligence, Enterprise Software and Systems, Financial Systems, Security