Why change projects often end in failure; 3 top tips for mitigating the risk

Similar statistics emerge from IBM, KPMG, Logica, etc. You can while away many sleepless hours on Google gathering similar data from around the globe.

Now, as a guy who has been involved in a lot of change in the IT industry over 35 years – been there, done it, had the failures and got the t-shirt – allow me to step back and analyse why such projects end in unfulfilled expectations, unexpected outcomes and negative consequences.

Firstly, let me define the word ‘change’ in the context of business change.  Here I mean any sort of change – not necessarily digital or technological. Anything that involves a project team driving challenges such as acquisitions; mergers; organisational change; enhanced customer service; manufacturing quality; warehouse efficiency; public accountability.  Here I include radical, transformational change but also simple improvement projects and programmes.  The list is endless – you get my drift.

Tip 1 – Where are you?  A common basis for change.

Change how you manage the view of your current state
Where do you want to go?

So many organisations I meet have failed to define their “current state”.  And, of course, if you don’t know where you are; how do you know where to head – and how?

Of course, you think you understand current state but in reality, do you?  Do you have a common basis for evaluating all potential change projects?

Mckinsey & Company, in a recent paper considering digital change, talk about an organisations ‘Digital Quotient’.  The key point Mckinsey makes is, “the starting point for success is developing a clearly defined, coherent digital strategy that’s fully integrated with the overall corporate one.”

I would say that this comment is a “no brainer” – however it needs to be coupled with a common sense of where you are today.  Yes, have a strategy, in line with corporate goals, but all set off with a clear and common understanding of your starting point for change.

Do you evaluate all change projects on the same basis?  If not, why not?  I have sat in many board meetings wading through investment cases made in Word, Powerpoint, Excel, GANT charts, and on Napkins.   Use one tool to evaluate all investments on a common basis.

A further shocking statistic is that 70% of people involved in projects apparently knew that they would fail from the start!   This brings me to the second tip:

Tip 2 – Project prioritisation, who goes first, who gets the money?

Change how you understand your priorities for transformation
How do you know what your priorities are?

I have never worked in or met an organisation that has enough money to invest in re-engineering all parts of the business.  I can’t find any useful Google statistics to quote in supporting this statement – but let me be presumptuous and call it ‘a fact of life’.

It is my experience that as part of an annual budgeting cycle and approval of the annual and multi-year strategic plan, the board is asked to consider and bless many investment initiatives.

The list of ‘to-do’s” is always greater than the P&L and Balance Sheet can support.  And so, we get into “debate mode”.  Each project or worthy investment produces a business case – often hundreds of pages of charts, diagrams and technical wizardry.  Each report written to different standards, different styles, and with different RoI calculations.

Most board members, under extreme time pressure, jump to the “executive summary” section and do their level best to make sensible prioritisation decisions.

Usually what happens is that the business draws up the “mother of all spreadsheets” with a long list of change projects. My sense is that many organisations start at the top of the list and work down the list until the money runs out.  I refer you to the failure rate quoted at the outset of this piece.

The simple answer.  Find a common basis for evaluating all change projects.

Tip 3 – Find a basis for common communication.

Chage the way you commnunicate; use a simple language so that everyone understands
Communication spaghetti?

In today’s technology-driven world so many change projects are based upon some form of technology change.  Digital transformation is probably at the top of most project manager’s investment charts.

The problem with technology is that some people ‘sort of’ understand technology – let us call them IT savvy – and most of the rest of us are less IT savvy.  Most of us are simply users of technology – we know what we want; but we don’t understand the technological underpinning.  Nor do we care. Statistics suggest that on average 13% of change projects contain people who are IT savvy.

So, here comes the final problem……the people with the business need for change, who aren’t IT savvy, often own the budget for change.  The people who understand the technology, usually don’t own the budget, and struggle to explain technology value in terms the rest of the business understand.  The result is “the project communications gap” where many projects disappear never to achieve their desired outcomes.  This is such a fundamental problem.

The resolution is easy to state.   Use a tool, a process, a piece of software, that allows technologists and non-technologists to look at potential change projects together – using a technique that both understand.  Use a ‘jargon free’ graphical tool that shows change projects described as “information flows” to achieve desired outcomes.  Make sure each outcome has a clearly defined and commonly agreed value and assign costs to achieve each outcome.  This builds a pictorial cost/benefit analysis of information flows to achieve desired outcomes.

This approach forms a solid foundation for developing and running successful change programmes.  A common basis for understanding from where you start, a common basis on how to assess the competing investment decisions, and a common basis for technical and non-technical users to communicate.

LINQ is the first tool of its kind in the world; it enables the rapid capture of your current state at the level of detail needed so that how your business works today is understood by everyone. As that current state evolves, so does LINQ, delivering a persistent current state from which you can make your change and transformation decisions. By valuing your outcomes, LINQ prioritises areas of your business which should be as efficient and effective as possible, allowing you truly focus on investing in those most valuable areas first. Communication is simplified; everyone can understand the language of the Information Supply Chain and see where their efforts add value to the organisation.

Get in touch through our website today to move to the new normal way of managing your change and transformation.