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Why Change Initiatives Fail

The business world today is facing a new reality, one of economic unpredictability, disruptive technology, globalization, and unprecedentedly fierce competition. In such an environment, the traditional ways of achieving a competitive advantage, such as scale and proprietary assets, are no longer enough. The ability of a company to address these new realities, adapt to the changing conditions, and deliver bold change is increasingly critical to gain competitive advantage. That means more comprehensive—and more frequent—change programs. Many boards have appointed CEOs and senior executives with that explicit mandate, and almost all leaders recognize the need to take even successful enterprises to new levels of performance.

Yet, despite all the investments, organizational change initiatives have a spotty record (evidence indicates that 50% of change programs fail to achieve their objectives; the failure rate increases to 75% for more complex programs). Indeed, the traditional approach to change management is itself in need of change.

Executives need to understand the stumbling blocks that cause transformation efforts to fail. In global surveys, two factors have increasingly become recognized as the leading causes of failed change initiatives:

  • A lack of clearly defined milestones and objectives to gauge progress
  • A lack of commitment, or insufficient commitment, by senior management

Success requires overcoming these challenges head-on, through a comprehensive and structured change effort that includes the right mix of processes, governance, metrics, and behaviors. 

Moreover, building superior and lasting change capabilities has become a competitive advantage. Companies that are ready, willing, and able to face the challenges of change initiatives are better equipped to manage new changes over time.

Four Imperatives for Change Management

The time-tested fundamentals of change management—practices focusing on leadership, employee engagement, governance, and executional rigor—remain as essential and powerful as ever. But they are no longer sufficient.

BCG has identified four new imperatives for change management in the digital era: 

  • Leaders must personally lead and commit to the change
  • Change must happen faster
  • Employees must be included (as active agents)
  • New behaviors should be ingrained in the workforce (see the exhibit.) 

To address the four digital-era imperatives, companies can exploit some of the very same technologies that are triggering the transformation. Digital tools, with their reach and scalability, unlock opportunities to create powerful, new, and inviting ways for change to take root.

BCG has developed a suite of change management methods and tools that can be overlaid on the foundational, integrated change management program to augment its impact. Conceived as a systemic approach, this suite of solutions positions people at the core of the change process.

Our Battle-Tested Approach: Change Delta

See how the Change Delta enables successful change management.

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Change Management