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Change Management – 3 Key Reasons For the catastrophic 70% failure rate

Failure reasons in change management are many and varied. But one thing is painfully clear. Any organizational initiative that creates change – or has a significant change element to it – has a 70% chance of not achieving what was originally envisaged.

There are 3 main reasons for failure:

  1. The gap between the strategic vision and successful program implementation and the lack of a practical change management model and tools to bridge that gap.
  2. The “hidden and built-in resistance to change” of organizational cultures, and the lack of processes and change management methodologies to address this.
  3. Failure to take full account of the impact of the changes on those people who are most affected by them i.e. the absence of good strategies for managing change.

It may occur at the project level [at the execution “getting it all together” level] so that the initiative doesn’t get off the ground – or doesn’t get completed. This is where most people focus – on the “getting it done” bit. But the bigger and more critical issue here is that even when the projects – the new capabilities – are completed on time and on budget, a failure can still occur at the program level – and from a statistical perspective it probably will!

A Program Level [more accurately a “no program” level!] Failure occurs when the envisaged benefits [the whole raison d’etre] of the initiative are not achieved.

The root cause of failure

The root cause of this failure is a lack of clarity and lack of communication – and even more fundamentally – the lack of a language and contextual framework to articulate and manage the necessary processes of change.

This is what a Program Management based approach to change is all about and why it is so important. As with most specialist areas of knowledge, there is within this discipline a universal or generic set of “truths” that transcend the boundaries of the formalized models and tools of program management, apply to all organizations experiencing step change and can be expressed in simpler language.

Just as an aside, I feel that whilst it is absolutely necessary for there to be experts and centres of technical excellence – the very processes by which they function separate them and the knowledge from the far wider audience who could benefit most from that knowledge.

Time for some definitions:

Program Management

  • Is the holistic perspective – takes in the bigger picture.
  • Is the coordinated management of a Portfolio of Projects that change organizations to achieve benefits that are of strategic importance.
  • Is the understanding and management of Benefits, Risks and Issues and the provision of an Organization Structure and Process Definition.
  • Does not replace Project Management – it is a supplementary framework

Differences Between Programs and Projects

  • A Program is all about delivering the overall business benefits in line with the strategic vision and over a longer period of time than a project.
  • Whereas a project has a definite start and finish point, with the aim of the delivery of an output that may be a product, service or specific outcome.
  • Program management focuses on the management of all key stakeholder relationships and the delivery of defined business benefits and in addition to managing the project portfolio will also include the management of any other activities that are necessary to ensure complete delivery.
  • Whereas Project management has narrower terms of reference with clear, specific and (relative to the overall Program) limited scope of its deliverables.

And yet despite the fact that program management as a discipline has been around for over 10 years – the failures still keep mounting.

Men always dislike enterprises where the snags are evident … “[Machiavelli” The Prince “]

The whole of my approach to change management and dealing with the “snags” such as fear of change and resistance to change is based on this model of a program approach.

My preference for this is that it forces senior management (and their advisors) to take a holistic and structured look at the wider factors that need to be addressed – and that is often “mission-critical”.

80% of companies [or rather 80% of directors] – haven’t got a clue about program management

In my experience, the size of a company is no indicator as to whether or not it employs a program management approach. I have sat across the table in meetings with directors of UK-based £1bn + turnover corporates – household names in some cases – who didn’t have a clue about program management.

I would go further and say that the vast majority of companies know little to nothing about program management.

A useful indicator is the number of online searches on Google AdWords for project management and program (or program) management, for the month of March 2009, there were 450,000 searches for project management and 39,200 searches for program (or program) management.

One reason why program management has not yet permeated the business “mainstream” is that – in my opinion – it appears to be complex and to address dimensions that don’t resonate or connect with mid-range corporates and larger SMEs.

This is partly because corporates are more complex – but also because the talented and experienced professionals who compile these things think that way!

However, it is my belief and experience that the broad principles of program management can be set out in a simple model and using simple language that can be applied in any organization of any size.