While on a scrum call, one of our sales people posed this question: Does the 50-70% failure rate of change programs reported by McKinsey apply to change efforts in response to the pandemic?
Although it may be too early to tell if the failure rate will be similar, we did a little deductive reasoning to determine if the elements associated with the pandemic align with the common reasons for initiating change efforts.
Our Experience with Reasons for Change
In our last eight engagements that included change management, we were given the following reasons for the need to change:
- A change had occurred in the economic environment
- Financial performance was below expectations
- There was a mismatch between organizational values, personality, and culture with the organizational behavior
- A need to pivot the culture and structure to better align with the organization’s purpose was identified
- A major crisis occurred internally (CEO scandal)
- Growth caused a qualitative change in the organization and they could no longer operate under the current structure
- There was a disruptive innovation from a competitor
- A change occurred in executive leadership configuration (e.g. one executive retired and two changed roles)
Our experience has shown that these eight situations or conditions are representative of most change catalysts. In our conversations with clients since last March, the Covid-19 pandemic, social unrest, and political changes have led to a repeat of these themes. I think it can be accurately assumed that every organization in the world is experiencing one or more of these catalysts. As a result, every organization is undergoing some sort of change management.
Imagining the Zoom War Room
Imagine yourself in this scenario painted for me by a client who wanted me to “feel her pain”. You are sitting in your home office chair staring at 8 other floating heads on your Zoom conference. The time you gain by working at home is eaten away by endless video conferences discussing proper responses to the pandemic. It seems like every day a new piece of information comes out that makes previous decisions irrelevant or lacking. By mid April, the group finally generates a set of responses and is cautiously optimistic that they have identified the right solutions. Some are small changes like office configuration to promote social distancing; others involve significant staff reductions once payroll protection loans expire. They assure each other that although they had never been through something like this before, the ideas and plans represented the best possible solutions.
Soon, they begin the process of executing on the ideas. However, by mid July the outcome is not what they had expected. The team gathers again, confused by the failure and blaming each other.
After reviewing their plan, it was clear to me that their solutions could have been effective had the execution not been flawed. Consequently, their hundreds of hours of work and brilliant solutions became another statistic among the hundreds of thousands of other failed change management efforts.
What Went Wrong?
They generated a solution using a top down process that worked well post WWII but is no longer efficacious in the age of the internet, where trends, ideas, and change spread virally and rarely in response to a top-down dictation.
What Would Have Improved Their Chances?
In 2002, Malcolm Gladwell explained to the world how change spreads virally in response to influencers. By 2012 the entertainment industry changed their strategy to focus more on social influencers who were often kids or young people saying and doing interesting things online. They had a way of relating to others such that their thousands and sometimes millions of followers felt connected to them. As a result, when these influencers wear something, eat something or say something, others want to wear it, eat it or say it. When these people are on TV or in a movie, they bring with them an instant audience.
These influencers also exist in our organizations. Some are known by the executive leadership but many are not. These influencers have a strong impact on determining the culture, personality, and values of their teams, divisions and ultimately the entire organization. They are also the ones who intentionally or unintentionally adapt new ideas — or sabotage them.
To improve your odds from the dismal success rate of many change initiatives, these influencers must be involved in the responses to 2020. This starts by knowing who these people are. We have been using the Psynet Connections Indicator (PCI) for the past 10 years to identify them. (McKinsey and others have similar tools). Our tool allows us to understand how information flows throughout the organization; how people are connected and those that have powerful network connections. By involving the influencers, we have not seen a change management effort fail yet.
Consider using our tool or another social network analysis instrument to enlist those influencers in all of the changes related to your pandemic response.
Note: At Psynet Group, we are aware when companies need us the most, they tend to have the least amount of budget. One of our more senior consultants who has survived 5 recessions indicated that typically the first year following the recession caused the consulting business to drop by 40% as organizations freeze spending. However, it increases by 250% on average the following year as the need for external help becomes clear.
Sadly, most of the mistakes were already made and getting back on track became much harder. We are committed to making whatever reasonable adjustments are necessary to break this pattern. Reach out to us to see how we can meet your needs and improve the odds of success with your change management or pandemic response initiative.