Organisational Change Management Volume 1

Section 2 Why Organisational Transition Efforts May Fail

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"Change programs often seem like they're being shot out of cannons. They start with a bang, then quickly fall flat"

Harvard Business Review, 2000

Remember: success or failure is relative to what you want to achieve. Furthermore, there are degrees of failure and success. We need to understand why things went wrong!!!!


International statistics

Most change initiatives fail. In the early 1990s it was found that around 2/3 of organisations involved in total quality management projects failed to produce the hoped-for-results. Similarly, for organisations instigating re-engineering programs, around 70% failed.

Between 1980 and 1995 each Fortune 100 company invested, on average, more than $US 1 billion in change programs:

- of these only 30% produced any improvement in the bottom line results that exceeded the company's investment in that change process;

- only 50% improved their share prices.

A Gallup poll (late 1990s) reported that 75% of American business leaders are not well prepared to manage change

(sources: Harvard Business Review 1998 a, b & c; Peter Senge et al 1999; Robert Kriegel et al 1996)

Australian and New Zealand Statistics

An Australian survey (1998)found that only 22% of major change initiatives achieved all the desired benefits. If budget constraints and time deadlines were removed, it was 50%.

A study of around 250 organisations undergoing change in Australia and New Zealand showed:

- 67% of organisations experienced at least one major setback;

- 47% were hit by at least two major setbacks;

- 29% by at least three major setbacks;

- 88% of executives felt that the intended changes and new direction for their organisations were correct;

- 92% felt that the changes were not beyond the organisation's capacity to achieve, yet reality showed otherwise.

Other research indicates that 50% to 80% of large systems' implementation, organisational re-engineering and change efforts fail to deliver the promised benefits

In summary, the above statistics highlight the large gap between expectations and achievements in organisational transition

(sources: Michael Crawford et al, 1996; Dennis Turner, 1998)

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