Why 4 out of 5 transformation projects fail

Only approximately every 5th change project is successful. Why? According to transformation experts, Axel Kellermann and Alexander Mauer, this is because many companies disregard the typical phases of organisational transformation.

Alex, Axel, a recent study from the consultancy Mutaree has shown that only every 5th change project ends successfully. How do you evaluate this statistic?

Alexander Mauer: This number coincides with our past experiences. Change is always challenging for a company and its individuals. Foresight and courage at  leadership level are necessary for the successful implementation of change. We often receive calls from customers who want to change something, without necessarily knowing exactly what. Even the objectives are sometimes unclear. At this point it is important to ask questions such as: How should my company look after change has occurred? What needs to change, and what should stay the same? The first steps of analysis and planning are critical to building a strong foundation from which a change initiative can successfully launch.

Axel Kellermann: We have been leading and controlling transformation programs for years, and have intensively dealt with the topic of change management. Transformations often fail for two main reasons. Firstly, there is a lack of commitment from the highest management level and secondly, because not enough value is attributed to adequate employee involvement. Change measures must also be reflected in the respective corporate culture. Project and change management necessarily go hand in hand because every implementation, initiation or change process is realized by the individuals in a company. If that does not work the change initiative itself fails and the company will return to its previous pattern of action.

Can you specify the difficulty of implementing change?

Axel Kellermann: Typical transformations deal with the change of work processes, company mergers and integrations, digitalization or restructuring. If company leadership understands such projects simply as rational measures, the timely inclusion of employees and co-determining bodies recedes into the background. Approaching change management methodically and with clear structure, is usually the right route to  success. Kotter’s ‘8 steps model’ for example, is very relevant.

Alexander Mauer: The model is based on the various stages a change initiative must undergo. Successful change starts with a conscious understanding of its need and is supported through strong internal arguments. The second stage is about creating a vision and communicating this in a clear manner to the relevant parties. To make change possible in practice as well as to ensure its longevity and sustainability, it is necessary to overcome hurdles set by work and company procedures. Many transformations fail due to companies not understanding these distinct phases and their according communication. A further pitfall is attempting to make change happen immediately, without investing sufficient time and resources into the preparatory phases.

 What advice to you have for companies?

Axel Kellermann: The willingness to approach change methodically and with the necessary patience during preparation, is a prerequisite to success. Slow down to move faster. This notion may seem counterintuitive to agile project methods, it is however, well compatible in practice.

Alexander Mauer: In concrete terms this means: Always keep the entire project cycle in mind. From the first abstract suspicion that something needs to change, to the scope analysis, to a fixed or agile project plan and finally to practical application. All steps are important. The more structured the preparatory work is, the easier it is for a project manager to approach the implementation in an efficient and goal-oriented manner. The correct staffing remains critical, as well as the milestone at which external help needs to be  integrated into the cycle. That is the timepoint when a project has been clearly defined and is ready to be realized.

Foto: Anja Micke