According to research by McKinsey & Company, about 70% of all organizational changes fail. Often, such failures are blamed on staff or on external constraints, such as cost, workload and legislation. Some say that it’s the fault of executives and middle managers who resist change to protect their areas of influence. Others cite the lack of clarity and misalignment of goals, objectives and commitment to change objectives.
One thing is for sure; it’s not the employees on the floor who cause change to fail. Front-line employees and those without management functions are not the ones who have a responsibility to manage change. That job rests squarely on the shoulders of the leadership team.
The underlying reasons for failed organizational change all relate to the lack of clarity and consensus particularly around fundamental corporate definitions. When you ask the questions, “What’s the corporate strategy? What does our brand stand for? What’s our mission?” you undoubtedly will get different answers from what is written on paper with the explanation from employees that what’s on paper is not what is experienced on a daily basis.
What can we do about this?
The lack of clarity and consensus is often the result of corporate silos—teams of people working on different priorities and having differing understandings of the corporate mission, vision, strategy and brand. They work separately, siloed in their areas of expertise, which doesn’t lend itself to a unified push in the same direction towards the desired organizational change and transformation. Consider the following:
A company wants to introduce new products that target an expanded clientele including customer segments that differ from its current customer base. To deliver the new products and serve the new customer segment, the company needs to recruit new employees skills that differ from the current employee base.
This scenario will impact the corporate culture, the corporate brand and the employer brand, and effort will need to be expended to ensure that current employees navigate the organizational changes, remain engaged and are retained.
The responsibilities and accountabilities for the development and management of the corporate culture, employer brand and corporate brand reside in different departments. HR is responsible for recruitment. Brand and company reputation are key factors in attracting and retaining talent, but HR does not control company reputation, external perceptions and image or the value of the corporate brand. People are the key factor in delivering the brand’s promise to customers, but marketing doesn’t control employees’ understanding of the brand, living brand values and delivering on the brand promise. Line managers are responsible for managing employees and steering them through change, and also for making recommendations for budgets and other resource requirements to effect change. But it’s the CFO who approves the budget and is responsible for assessing the impact of costs on the bottom line.
What’s the solution?
What really ought to happen is that HR, marketing and all other departments—sales, customer service, finance—should be working together to develop a fully integrated and aligned employee and customer experience that reflects the change that the organization is trying to implement. This can be achieved in the following ways:
- Build consensus and executive buy-in. Agree on the objectives of the desired change and related impacts on the definitions of the corporate mission, vision, strategy and brand. This requires a cross-functional, multi-disciplinary approach. All executives must be involved.
- Involve people in the change process. A good example is Meals on Wheels in the USA. Budget was approved for the purchase of special software to manage an expanded volunteer base, meal distribution and accounting. It was staff that helped bring each other up to speed on the new software that made the change effective.
- Sponsorship in the form of an executive leader who will champion change and send a clear message that management is serious and supportive of change.
- Transparent communication first – Make a compelling case for change at all levels of the organization. Clearly define what change and success will look like and the benefits to all stakeholders.
- A well-planned and organized approach – Organization and planning always contribute to success. The plan should include actions to anticipate and address resistance to change.
This blog was written for YourWorkplace and published on 30 January 2013.