For management, few challenges are more daunting than implementing wholesale change. Yet, in today’s fast-changing world, few management teams can evade such challenges.
What compounds the difficulty of effective change management is that it involves so many variables. And the more sweeping the change, the more variables with which managers must contend.
We are not speaking here, may I add, of incremental change, such as those aimed at improving existing processes and procedures. We’re talking about change which sets aside a host of established practices, markets, or working relationships to put something altogether new in place.
Failure Rates in Managing Change
Even though managers devote an immense amount of time to developing strategies and plans for change, fewer than three out of every five large-scale change initiatives actually succeed. This is not a statistic which I’ve pulled out of thin air. It comes from an extensive survey of global executives, conducted in 2013. They put the success rate of major change efforts in their organizations at only 54%.
Why such an alarming failure rate? Their responses place much of the blame on one commonly overlooked factor in change management. That factor is culture.
Of the executives surveyed, 64% ranked cultural considerations as more important than strategy and operational models in determining whether change will succeed. Yet any of us who consult with companies which are making sweeping change know that for most of them, the cultural aspects of change are low on their priority list.
Culture Is Everything
Astute managers of change never make that mistake. One of the business legends in the field of change management is Lou Gerstner. As CEO of IBM, he transformed the company completely.Asked about the most important lesson which he had learned on that journey, he answered unequivocally: "Culture is everything."
Organization culture is fundamentally the combined impact of the values, beliefs, attitudes, and behaviors of those within the organization. Of these contributors to culture, behavior is the easiest to change. That’s why incremental change in processes and procedures is more likely to garner support than are changes which demand altogether new attitudes and beliefs. Procedure and process improvements usually ask people only for behavioral change.
Culture typically digs in its heels, however, when changes in values, beliefs, and attitudes are at stake, especially values and beliefs. Quite frankly, managers are usually more skilled and confident at changing behaviors than in transforming organizational values and beliefs. Thus, when overseeing change, they are constantly tempted to put their energy into the behavioral aspects of it, not the cultural aspects.
But so long as broader cultural issues go unchanged, behavioral change will have a short shelf life. The overall change initiative is left poised for failure. And in all likelihood, the organization will soon be back to business as usual.