70% is the number often used when citing the percentage of organizational change initiatives that fail.
- Hammer and Champy (1993)
- Beer and Nohria (2000)
- Kotter (2008)
- Senturia et al (2008)
Hammer and Champy said, ‘many companies that begin reengineering don’t succeed at it…Our unscientific estimate is that as many as 50 percent to 70 percent of the organizations that undertake a reengineering effort do not achieve the dramatic results they intended.’
Beer and Nohria proclaimed, ‘The brutal fact is that about 70% of all change initiatives fail,’
Kotter stated, ‘From years of study, I estimate today more than 70 per cent of needed change either fails to be launched, even though some people clearly see the need, fails to be completed even though some people exhaust themselves trying, or finishes over budget, late and with initial aspirations unmet.’
Senturia et al concluded, ’70 per cent of change initiatives still fail.’
Dr. Mark Hughes of Brighton Business School disagrees. His presentation slides from 2010 suggest differently. He does not believe that 70% of organizational change initiatives fail. He concludes: “The belief that any inherent failure or success rate can be attributed collectively to all forms of organisational change is neither valid nor reliable.”
Hughes gives 5 reasons why accurately measuring an organization’s change initiative success rate is not possible.
- Ambiguities. There is a lot of variety within what constitutes a change initiative. Stated vs underlying reasons for making a change. Unanticipated outcomes. Impossible to isolate a change initiative and accurately measure outcomes. Minimizes effect of different corporate cultures.
- Context. Failure to include the unique context of each change initiative – all are different. Notes that the studies were all US based and results can not be assumed valid worldwide and across different cultures.
- Outcome Perception. The studies fail to account for the variety of perceptions within an organization about it’s success or failure. Doesn’t include human nature nor human knowledge.
- Time and Outcomes. Starts with the assumption that utilizing the correct change model will improve results. Does not include results from prior change initiatives within a given organization. Assumes change initiatives occur in a static environment and not a dynamic environment. Does not include arguments about the sustainability of change initiatives.
- Qualitative Measurements. The studies downplay the qualitative measurement of organizational change.
Hughes offers no opinion on the number of change initiatives that fail. Nor does he offer a methodology to more accurately measure success rates of changes initiatives.
I believe his primary goal is to simply debunk the notion that 70% of all change initiatives fail. His rational? It’s impossible to measure with all of the variables involved.
Even several of the research authors open the door to skepticism:
- ‘Our unscientific estimate is that as many as 50 percent to 70 percent…’ – Hammer and Champy
- ‘I estimate today more than 70 per cent of needed change…fails to be launched … fails to be completed … or finishes…with initial aspirations unmet.’ – Kotter
Both of those statements contain a healthy portion of wiggle room, variance, and variables.
Hughes does us a service by pointing out the folly that all change initiatives can be lumped together, scientifically measured, and then accurately concluded that 70% of them fail.
Summary and Opinion
Here are my observations:
- Change initiatives are a leadership issue and not a management issue.
- Change initiatives come in all shapes and sizes. They all occur in unique environments amongst varying cultures and ambiguities. One size does not fit all.
- Change management theories can help leaders understand the difficulty in leading change and formulate strategies to implement their future vision.
- Change management is primarily an academic pursuit. Change leadership is what’s done in the real world after a leader has left school.
- A large number of change initiatives do indeed fail. Does it matter if that number is 40%? 55%? Or 70%? Not really.
Since organizations operate in a dynamic environment. A change initiative launched today that is 40-60% successful might yield a 1-2% improvement. This results in an improved organization starting anew from the higher base line – with the opportunity to implement another 1 or 2% improvement going forward. That is how leadership makes change occur. Leaders help organizations take small, incremental steps forward. Continuously. In this scenario described, the survey takers would have deemed this change initiative a failure.
But if an organization attempts to make a significant change using a formulaic approach – while ignoring the dynamic nature, differing cultures, and hundreds of ambiguities that exist expecting to then measure success or failure from the original goal – it wouldn’t surprise me if the percentage for organizational change failures was more like 90-95%.
Steve Weber is the Change Ambassador. He works with leaders of organizations that need an important change to occur quickly, with a minimal amount of pain, and with a maximum amount of employee buy-in. Steve helps leaders design change initiative campaigns and serves as the campaign manager for corporate change initiative campaigns.