Wednesday, August 11, 2010

Forget Change Management

We are living in asynchronous times. There are still a lot of potential clients who haven’t even accepted that their complex projects don’t follow linear patterns. Some have just started to implement change management programmes. On the other side, many, in particular large international companies have gone through myriads of change projects and have experienced that even the smartest change management strategies can’t prevent that 60-80% of those projects fail.

It’s time to change change – forget change management.

Here is my analysis of the crisis of change management:


1. Everything is change

After 30 years after the first concepts of change management emerged, there is still no common understanding of what change actually means. Just look at the following list of change projects:
  • A company wants to implement an enterprise resource management (ERP) solution. It takes twice the time and much more resources than originally planned.
  • Two companies merge but after a couple of years people still stick to their original corporate identities. Value is destroyed.
  • The largest economy of the world tries to reform their health system but fails to do so for a period 20 years.
  • Somebody needs to move to a different country for his job. His family is upset because they feel uprooted.
  • The government of an OECD country supports the capacity building of the administration in an Asian country to fight corruption and to introduce good governance.
  • People of a country overthrow their government.
We are surrounded by change. But what is the essence? When should we talk about a change project, and when not? Do the models of change management apply equally to all kind of major and minor transitions from state A to state B? Do we need change management approaches in every corner of our private lives, societies and organizations?

Can change be defined as a planned or unplanned transformation of any social system? Where are the boundaries of our discipline?


2. The terminology is a problem - "change" is a war term

“Change” has been devaluated and in many organizations, people freak out when their bosses or some hired hands just mumble the word change (or any of those fancy project names, like “Horizon 2010”, “One Blablabla”, “Fit for the Future”, etc.). It seemed for a moment in history that President Obama was able to give a positive twist to the word change. Yes, this is history as well…

It is not that people don’t like change at all – it is more that they are tired of their leaders’ big but shallow promises. People are tired of simultaneous change programmes imposed on them. At Harley Davidson, they used to say “Bend over, here it comes again” when a new change programme was introduced. I don’t think that we will be able to give change a general positive connotation. As a consequence, any given change programme has a close to 100% risk of resistance.


3. Change cannot be managed

The idea of change management suggests that given the appropriate resources, a change project can be implemented according to Gantt charts. What a weird idea! Change in social systems is complex because social systems are complex and their behavior is largely unpredictable. How could anybody believe that change management plans have anything to do with organizational life? Let us face reality: soft sciences like sociology, psychology, economics still seem to suffer from an inferior complex vis-á-vis “exact sciences” (like physics etc. – mind you: the predictability of physical effects has been questioned ever since Heisenberg formulated his uncertainty principle). They make us believe that more research will eventually explain how the world works. In don’t buy into that.

Let’s assume that all things in the universe follow a finite set of rules and that every single cause-action relationship could be theoretically determined (including all human reasoning – an issue which is still heavily debated). N. N. Talib, in his groundbreaking book “The Black Swan” explains that when you want to compute the way of a billiard ball, you might be all right for the first two, three, four contacts with another ball or the wall of the table. I am always stunned by the capacity of the world billiard elite to estimate up to eight movements of their game. However, Talib says that to make an exact physical prediction, starting from the ninth move you have to include the gravitation effect from the person standing next to the table. Let’s say that it would be possible to let a ball have 56 touches with the other balls or the wall of the table – in that case you would have to take into your calculation every single particle of the universe. That’s physics, let’s move on to social science.

Organizations and societies are complex social systems because:

  • Each person in this system has their own set of believes, attitudes, concerns, needs and purposes which determine their behavior. You have 500 people – you have 500 variables to consider.
  • People are related to each other in many different ways. We know that an organizational chart doesn’t tell us much about the real relationships people have at work, or out of work. There are pretty good network analysis tools out there, but what they provide is only a model of reality.
  • There are unlimited small and large external influence factors interacting with any give system. Stock brokers are usually great to compute these effects but have recently experienced that their models aren’t worth the paper they are written on.
When I did my PhD, I learned the sentence “What can’t be measured, can’t be managed.” So, how can we believe that change in social systems can be actually managed?


4. Models don’t work


Change management specialists have come up with models that help us to understand how systems react, and what needs to be done to transform them. I know around hundred of them, and new models pop up like crocuses in spring. The problem of models is what they do is reducing complexity to an extent that they have nothing in common with reality. The fact that 60-80% of change projects fail is in my view largely attributable to the blind application of change models. Let’s trash them all – they make things worse!


5. We are not living in an ideal world


Why I got into change management was because I liked the human touch that most text books have. Change management is about the people in organizations, and it is about creating conditions in which people are motivated, engaged, and passionate about what matters for them. So, shouldn’t we just create conditions for people to collaborate and we’ll be fine (like my teacher Robert Dilts once said “Creating a World to Which People Want to Belong”)? This assumes that the ultimate motivation of all people is actually to live in a world that is just. It assumes that money and power does not corrupt people. The capitalist system is built on greed (and the socialist system discourages people to stick out be exceptional). We haven’t found the right rewarding systems that would motivate anybody in an organization or a society to work for the benefit of all (including their own). How can we develop organizations if people have their hidden (or not so hidden agendas)?

Frankly speaking, I don’t think we can get out of this misery if we just try to improve our models and tools. We might still find clients who buy in to our approaches, and some change projects will actually work out well.

So, what's the next step if we want to change how we think about change?




Meet us at Berlin Change Days 2010!

17 comments:

  1. Great post Holger,
    I'd like to think that we may be moving towards a wider application of the old saying "if it can't be measured, it can't be managed", to one where the complexities of life and the intangible benefits are also considered....
    So, we might add "but if we only pay attention to what can be seen as being measurable, we may not be able to leverage what has been left out"
    Your post goes a long way to explain the sorts of things that get left out of traditional change processes.
    In 2008 I wrote an article on measuring intangibles that might be of interest:
    Davis, H. (2008) Golden Capital, Living Asset Stewardship and other kindred intangibles: Can we measure up? International Journal of Knowledge, Culture and Change Management,Vol 8, No 1, pp. 137-146. http://ijm.cgpublisher.com/product/pub.28/prod.775

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  2. Your article came exactly at the time when I am trying to explain why a change project cannot be specifically broken down into distinct tasks and stick to a Gantt chart so that outcomes may be measured. We are dealing with people here, i.e., we are all different and react differently one moment to another even to the same subject.

    Models, frameworks, etc. are guidelines or checklists to help us in the change journey. Execution is the key and the art. There are times when you are so sure that a certain intervention may work but fail miserably. When you think back on previous projects or situations, there will always be things that you could have done better or in another way. We all have different experiences, perspectives and backgrounds. This is what makes CM interesting and, at times, frustrating.

    Thanks for your article.

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  3. While I agree with the basic idea presented here I still believe that the models add value when explaining the complex topic of change. What we know is that all models are wrong. What is important is to what degree and how can I use them to teach, learn, or demonstrate. If I am lost in a foreign land without a map then a globe can have some value. When it comes to change many are in a foreign land and even the simple change models can help the traveler find their way through the risks that all projects face.

    Thanks Holger for making us think. Without that we can not learn.

    Shon Isenhour
    www.reliabilitynow.net

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  4. Thank you for a challenging post.

    Arguably it isn't the models, concept and body of work on change management and change leadership that is at fault - maybe the problem is twofold - (1) the knowledge isn't applied, and that is because (2) senior people are not accountable for their failures.

    Can you imagine the world of civil engineering living with a 70% failure rate? Or many other comparable disciplines, where the cost of failure (by every definition of corporate failure) is so massive that senior execs cannot afford to allow it to happen - so they up their game.

    Take the world of M&A which has comparable failure rates (to change management) in terms of shareholder no-value added + straight forward destruction of shareholder value, and where (as with change management) the failure reasons - virtually all cultural and people related - are well researched and documented - but does it make any difference?

    Of course not. Why not? Because of the fee structure of the "advisors" and the short-term related remuneration of the senior execs.

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  5. Awesome post! Your sentence "Change management is about the people in organizations, and it is about creating conditions in which people are motivated, engaged, and passionate about what matters for them. So, shouldn’t we just create conditions for people to collaborate and we’ll be fine?" especially resonated with me. Its about the people!

    Thank you for sharing your thoughts...

    Juanita Carrington
    www.thetransitioncompanion.com

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  6. I thought it was interesting and ironic to find a "change management blog" that claims "change cannot be managed."

    You said at the end "Frankly speaking, I don’t think we can get out of this misery if we just try to improve our models and tools. "

    I'm curious what you think will "get us out of this misery."

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  7. carlosedocabrera@gmail.com
    Hello Everybody:
    I've read quite interesting posts related Holger's post. I'm an MBA student in Australia, and although i agree with the concept that you cannot manage change and that no model is the right one, I still have the experience in my previous work that the knowledge aqcuired based on the different approaches or models of CM such as the Political, Cultural and Systems perspectives which are far to be exact sciences, they present a frame and starting point of how can you organize your thoughts when you are incharge of a change project (small or big) in organizations.
    Furthermore, at least 50% of the details which in appereance are not academic, they already are. There are many drivers of change that can impact strngly in the process, having those tools in hand may give the heads up and anticipate some issues rather than forgetting and throwing to the bin all the theories and models.
    As Kurt Lewin's stated in his Classical Model, change can be framed specially with his freeze, unfreezing and refrizing approach. It is important to note that I agree that managing people, businesses and behavior are not exact sciences and that many complex factors influece desicions everyday, but academy has offered us tools that can be used in real life with possitive outcomes throughout diverse disciplines.

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  8. I could not disagree with you more with respect to the models comment. Now if you said that "unproven" models don't work, then I'm with you. Along with you, I see unproven models popping up all the time. This is a result of the McKinsey way ... it is the way the consulting firms teach the their consultants to operate.

    Proven change models, on the other hand, should not perish because of their ignorant brothers and sisters from the corporate world. Lewin said "there is nothing as practical as a good theory." Note he did not say any theory, he said a good theory.

    In principle, I agree with what you are saying. I also have 1 or 2 models that work just about every time. The difference with me is that I give the client the freedom of choice, rather than ramming some untested, unproven theory down their throats.

    Thanks for the post.

    Regards,

    rjk

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  9. Holger,

    I'm slightly disappointed by your post, because it betrays a lack of hope.

    Do people need help to understand the changes that they are going through?

    Do they need techniques to help them work together to resolve them?

    Are there good people trying to build a better "world" which balances altruism and the self?

    With the levels of organisational dis-function that we see everyday in our lives should we roll over and accept it?

    Should organisations be looking for management approaches that echo community over dictatorship?

    If any of these questions are yes, then actually, we need good people with good skills to make those good things happen.

    What you call it - personally I don't care... but there needs to be resources to help builder brighter (sunnier) people, teams and organisations, or we are all doomed to darkness.

    There may be a crisis of identity, but the needs remain.

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  10. Thanks Holger for your insightful, thought-provoking ideas.

    Totally agree change cannot be managed through Gantt Charts alone - particularly when the activities in the Gantt Charts do not lead to effectively helping participants overcome their resistance to change. For me, this is about facilitating a process and (to make it sustainable) "creating the environment" where people can feel motivated, passionate and engaged (they can see "what's in it for them") about the change.

    Whilst I agree social systems are difficult to measure, I have personally found surveys like "staff engagement" and "organisational culture" surveys (like the ones proposed by the Hay Group) to be effective enough for organisations to leverage if this is the area that requires measurement. One can also measure the "results" or benefits intended by the change as a parameter to gauge how effective change has been.

    Personally, I have used the Kotter 8 steps of change to great effect in facilitating significant change in organisations. There is an "art" to the implementation of this model, though and a significant application of applied psychology helps.

    Keep up the great work!

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  11. Change management is very crucial part of project management that should not be eliminated.It will be much better to take the changes under control.

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  12. Change management is the toughest thing in the process of informational change and incremental change. I think certain techniques must be adopted to manage change effectively.

    Foe example:

    -Communicate the reason for change to all the stakeholders.
    -Assure them there will be no threat to their current position as this is the main source od resistance.
    -Invite them to participate n the change process. The more they participate, the higher their will be the acceptance ratio.
    -You may also want to hire change agents to manage change.

    There are lots of strategies...

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  13. In some ways i agree, but in others way there is a lot that can be done for change management. If you have the right management in place, and they have been trained in how to manage crisis situations etc, then they will be in a better position to handle change

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  14. Change is inevitable and is labeled as among the toughest task a man can do for himself. But, learning to manage change can help oneself to become successful even in their own little ways. You just need to strive hard and stay determined in every step of the way.

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  15. Hello,
    I enjoyed your post. I believe you are correct in identifying people’s agendas, hidden or otherwise, as a factor in the reason to Forget Change Management. I believe it could be the most important factor. In your list of change projects the causes for failure all seem to all boil down to agendas.

    • A company wants to implement an enterprise resource management (ERP) solution. It takes twice the time and much more resources than originally planned. (Probable lack of Internal/External compromise/cooperation. Agendas)
    • Two companies merge but after a couple of years people still stick to their original corporate identities. Value is destroyed. (Divisional turf war. Agendas)
    • The largest economy of the world tries to reform their health system but fails to do so for a period 20 years. (Political posturing. Agendas)
    • Somebody needs to move to a different country for his job. His family is upset because they feel uprooted. (Fear & resentment. Agendas)
    • The government of an OECD country supports the capacity building of the administration in an Asian country to fight corruption and to introduce good governance. (Good vs. Evil. Agendas)
    • People of a country overthrow their government. (Refusal to give up power. Agendas)

    The agendas of the Change Agent, Upper Management, Mid Management and Employees all play a role in the failure of change to happen.

    I think of Change Management more of an art than a science. The statistics you quoted state that as a science it is pretty dismal, more along the lines of herding cats. But as an art it can be beautiful. If the Change Agent defines clear goals with cooperation, input and compromise (buy-in) from ALL facets of the operation then change can begin to happen.

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  16. Great post! I never really looked at the issue of change management in this way.. Thank you so much for opening my eyes to the fact that change is going to happen inevitably, and that it is just how we adapt to these changes that we can be judged on our individual and company success. The quote "what can't be measured, can't be managed" is a very good one for this situation, and change definitely fits that mold, because there is no way to manage it.

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  17. The Change Management focuses on critical priorities for an organization’s change effort.
    Every employee looks at the organizational change from the stand point of how he or she will personally be affected. Self-preservation becomes a major concern.
    Until personal career issues like these have been resolved satisfactorily, employees are too preoccupied with their own situations to focus effectively on their work. Company interests take a back seat to personal interest. Worry, gossip and rumors take over. The change management team answers these questions in a hurry, so the business can move forward.
    The change management team knows the main key to managing resistance effectively is to get it out in the open. Sometimes resistance can be reduced by giving subordinates a good understanding of the rationale for the changes. If employees understand what the alternatives were and the tradeoffs that were involved, the better they can buy into the situation. The change management team realizes that resistance is “diagnostic” – that is, when employee resistance becomes extreme, something is not being done right. On the other hand, if resistance is virtually nonexistent, it may mean the organization is overstabilized and too complacent.
    The change management team initiates change with the idea that, more than likely, it will stir up resistance somewhere. They anticipate this, and the organization is better positioned to handle it.

    http://www.pritchettnet.com/Change-Management-Team-Critical-Priorities

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