Talking Point: The Disney Institute Blog

A Question For All Leaders: Why Does Most Organizational Change Fail?

August 05, 2014 by Jeff James, Vice President & General Manager, Disney Institute

Here is a striking statistic: according to research by McKinsey & Company, about 70 percent of all organizational change fails.  

These failures, of course, have consequences for all organizations. In addition to wasted costs, resources and lost opportunities, other less obvious consequences such as cynicism and fear will continue to plague future attempts at change.

Why does this happen? Does it point to a lack of employee engagement, or is it a sign of leadership weakness? According to Rick Maurer, author of Beyond the Wall of Resistance, there are four reasons for unsuccessful organizational change:

  1. Lack of Knowledge: Authors Jeff Pfeffer and Robert Sutton coined the phrase “the knowing-doing gap” in their book by the same title. They found that there is a large gap between the knowledge that people possess and the amount of knowledge that is applied. According to Pfeffer and Sutton: “Piling up more knowledge” isn’t necessarily the answer, it’s figuring out its application.
  2. Lack of Leadership Skills and Practice: You’ve likely heard the phrase “Practice makes perfect,” and the subsequent response, “Practice makes permanent. Only perfect practice make perfect.” Like any athlete, musician or work professional, you must practice to improve your craft. Focused and deliberate practice is what Maurer says is often missing from management education.
  3. Hidden Conflicts Working Against Change: According to a the National Institute of Health, “Only one out of seven people with life-threatening heart problems actually does anything to change their lifestyle.” That same unwillingness to change exists in organizations. Leaders report that it would “take too long to involve others” or that they see delegating as “a sign of weakness.” These beliefs lead to conflicts between what a leader should do and what they will actually do, sometimes unknowingly undermining their own goals and at the cost of successful change.
  4. Organizational Culture Working Against Change: There are the rules governing employee behavior that come straight from the manual—the ones that say your organizational culture “respects individuals, teamwork, diversity [and] innovative thinking.” Then there are the “real” rules that govern your environment, the ones that sometimes slip off the tip of a tongue during a meeting. An organization must decide if the “real” rules are supporting or preventing change.

So, how can your organization overcome these challenges? Here is a hint: it starts with leadership skills.

Check back on Thursday for part two of this series, as we will explore what your organization can do now to increase the odds of change success, and the critical role leaders play in creating and communicating the vision to motivate employees to commit to the proposed change.

Tell us – How do you overcome change obstacles in your organizational culture?

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Posted in Leadership Excellence | Tagged Leadership, Organizational Change, Employee Engagement, Culture, Leadership Skills, Jeff James | 0 Comments

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