Why CEOs Are Partly to Blame for Companies Failing to Change

Between 50% and 70% of organizational change initiatives fail—and that’s just criminal, says Bill Pasmore, author of Leading Continuous Change: Navigating Churn in the Real World.

Bill-Pasmore-photo-large-compressorBill Pasmore 2“If change were something we had laws about, most leaders of organizations would be in jail, prosecuted for the amount of time and money they’re wasting,” he points out. “We throw people in jail for stealing $100 from a store, but you can waste a billion on a failed merger or other change effort and everyone shrugs and says, ‘That’s just business.’”

Undertaking a complex transformation effort is no easy feat. Leaders steering such an effort must simultaneously manage transitioning to a new business model and cultivating the talent pool for that business, as well as the relationships, knowledge base and a host of other facets of the challenge. Meanwhile, a single, significant misstep—from poor communication to failure to engage employees—can scuttle the whole initiative.

At the same time, continual evolution is critical for a business—virtually any business—to survive. Companies that stubbornly stick to their knitting risk sharing the fates of change-shunners like Blockbuster, Borders Group and Kodak. “Those companies waited too long,” says Pasmore. “If you look historically at what happens, the point at which most businesses are best prepared to move into a new line of business is at the peak earning point of the old model. But, boy, it takes courage to say, ‘I see the future; we need to go there.’”

The good news? Understanding the four facets of a business transformation can help leaders boost their chances of successfully steering change, says Pasmore.

1. Know what you need to change. “You need to understand where you need to go and what it will take to get there,” explains Pasmore, who urges CEOs to take a step back and thoroughly consider the possibilities ahead of them. “It’s a discovery process and not something one person can do on his or her own.” Plan to call upon experts—internal and external—with a range of expertise to create an integrated picture of what you need to do.

“Changes fail not because they’re bad ideas, but because they’re poorly executed.”

2. Decide on your priorities. The possibilities are endless—but since resources tend to be finite, you’ll need to home in on what’s most important and makes the most sense for your business.

3. Do it well. “Changes fail not because they’re bad ideas, but because they’re poorly executed,” says Pasmore, who says lack of communication often hinders execution. “People don’t communicate adequately, and they create resistance—instead of buy-in—by failing to engage employees.” Because change is a team effort, clear and continuous communication is essential to success.

4. Learn along the way. “It can be really hard for people who are [passionate about accomplishing] something to learn what’s working and what’s not on the journey,” explains Pasmore, who points out that commitment to change can act as a barrier to learning if a CEO isn’t careful. “If you don’t build a process for learning and recognizing early warning signs, your own commitment to success will block information from coming to you and [prevent] you from listening when it does.” Decide on metrics and measurements to assess the progress being made toward your vision and develop a plan for addressing any issues you identify along the way.


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