10 reasons why organizational change fails 

So if your organization needs to change in fundamental ways, how can you beat the odds and be successful? The starting point is to understand why most transformation efforts fail. In our work with hundreds of senior executives seeking to change their organizations, we’ve seen the following ten factors increase the likelihood of failure. 

1. No clear and compelling case for change 

When people don’t understand why change is necessary, anxiety, cynicism and resistance inevitably build. Most major transformations are justified from a financial returns standpoint, but the rationale for large-scale change must be clear and compelling for all of the key stakeholders. If you don’t help critical groups of people understand why change is necessary and how it will affect them, you will never get to the rest of the story. Even with a solid intellectual rationale for change, people inevitably want to understand the implications for and impact on them. 

2. Lack of senior team alignment 

The leadership requirements of leading a transformation are quite different from those of leading a business or function in steady-state or even a smaller, more focused change effort. By definition, transformations are comprehensive makeovers of the way work is done. Leading such efforts involves making progress on an array of projects or workstreams that need to be managed in a traditional sense, but that also need to be pulled together in ways that require close collaboration and difficult tradeoffs. Only the senior leadership team can do this work. 

3. Abdication of leadership’s responsibility to drive the process 

While necessary, senior team alignment is not sufficient. The team needs to remain fully engaged throughout the transformation process, even as they continue to run the business. Given the significant competitive and operational pressures that senior teams face, it’s all-too-easy for leaders to abdicate their responsibility for actively directing, leading and monitoring the transformation. This often is reinforced by the organization’s reward system, which incentivizes a shorter-term, more operational focus. 

4. Insufficient focus on co-creation in design 

Given the times, organizational transformation consulting unsurprisingly is a thriving business. However, given the high failure rates, it’s clear few actually are delivering the value they promise. This is particularly true for consultants who use what we call the “doctor-patient model”; they diagnose the situation and prescribe solutions without engaging the patient in deciding what is best for them, without giving them choice. “Co-creation culturing” means building maximum alignment through the process by providing accurate and relevant data as the basis for critical discussions, always pushing for assessment of multiple options (whether different strategic directions or different organization designs) and reaching agreement by openly, collectively assessing the different options against a clear set of criteria for success. 

5. Communicating without really engaging 

It’s not enough for leadership to put substantial time and attention into articulating and communicating the business case for transformation. They have to do it in ways that truly enlist employees in the transformation process. Too often, however, they fail to get them really onboard, even when there is a burning platform providing a clear and compelling rationale for change. This is because one-way communication, even with the best of supporting materials, is not enough to win employees over to being willing change agents. To enlist employees, leadership has to be willing to let things get somewhat messy, through intensive, authentic engagement and the involvement of employees in making the transformation work. 

6. Inadequate focus on culture change 

Culture change is always an essential element of transformation. Culture is “how we do things around here” – the norms and ways of operating that underpin getting work done. If that doesn’t change in necessary ways, then all the work to change strategy, structure and systems is likely to come to naught. Culture is, however, hard to work on directly.