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4 Autopsies of Big Change Management Failures

Autopsies of Big Change Management Failures Can Provide Great Insights

If you resist learning and change, your career and your company are probably not set up for success. Here are a few examples from decades of change management consulting projects of now-defunct organizations whose big change management failures show they did not adequately foresee the necessity for change soon enough or adapt fast enough in a way that made good business sense.

Yes, the “old fashioned” bookstores all struggle to compete with online book sales, but Borders had additional challenges they failed to meet.

What Do These Big Change Management Failures Have in Common? All different industries – all eventual failures. Do they have anything in common?  One could say that they were ineffective at foreseeing and adapting to major changes.  They were, like many participants in our change management simulation , caught off guard.

The Bottom Line Maybe not all of these big change management failures could have been averted. But had they been better at foreseeing and adapting to change, we might have enjoyed a Borders website for specialty books; or a smaller, more fuel-efficient version of the Hummer;  or a more user-friendly source for videos; or the kind of quality camera Kodak was famous for now in digital format.

To learn more about avoiding big change management failures, download How to Become a More Change Agile Organization

FILES UNDER: Change Management , Organizational Change

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What Everyone Gets Wrong About Change Management

Poor execution is only part of the problem. by N. Anand and Jean-Louis Barsoux

Summary .   

Corporate transformations still have a miserable success rate: About three-quarters of change efforts either fail to deliver the anticipated benefits or are abandoned entirely. And because flawed implementation is most often blamed for such failures, organizations have focused on improving execution. But poor execution is only part of the problem; the authors’ four-year study of 62 corporate transformations suggests that misdiagnosis is equally to blame. Before worrying about how to change, they write, executive teams need to figure out what to change—in particular, what to change first. They can do this by fully understanding three things: the catalyst for transformation, the organization’s underlying quest (is it global presence, customer focus, nimbleness, innovation, or sustainability?), and the leadership capabilities needed to see it through.

J.C. Penney, Norske Skog, Acer, and other classic cases illustrate the authors’ points, and the article includes a “quest audit” to help companies identify their transformation priorities.

Corporate transformations still have a miserable success rate, even though scholars and consultants have significantly improved our understanding of how they work. Studies consistently report that about three-quarters of change efforts flop—either they fail to deliver the anticipated benefits or they are abandoned entirely.

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8 Change Management Failures to Learn From (2024)

• Published: August 28, 2020
• Updated: September 9, 2024

It’s easy to look back at a failed change management project and see why it happened. The hard part is identifying failure before it happens and understanding how to use those lessons to improve future change implementations.

What Is the Failure Rate for Change Projects?

An often-quoted statistic is 70% of all change projects fail .

However, this is a 30-year-old statistic from a 1993 book called Reengineering the Corporation. It states, “Our unscientific estimate is that as many as 50% to 70% of the organizations that undertake a reengineering effort do not achieve the dramatic results they intended.”

A 2009 McKinsey research paper provided a more detailed breakdown of change success and failure rates, finding:

• 4.88% are extremely successful.
• 30.51% are very successful.
• 48.96% are somewhat successful.
• 5.87% are not successful at all.

This provides a more nuanced take on change failure rates, with McKinsey evidence suggesting that total change failures occur less than 6% of the time .

20 Best Change Management Tools & Software (2024)

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8 Infamous Change Management Failures to Learn From

Let’s examine a few infamous examples of change management failures to learn from. Challenge yourself to examine these strategic failures and use the lessons to avoid similar setbacks.

1. Mission Produce’s failed ERP transformation

In late 2021, Mission Produce launched a new internal ERP system to manage its purchasing, inventory, and financial operations. The ERP transformation’s goal was to support its international growth plan through better operational visibility, automated financial reporting, and integrating data sources.

At launch, Mission Produce quickly realized its ERP change project had gone sideways. The company no longer had visibility into core operation metrics, like the number of avocados in its inventory, their level of quality (i.e., whether they were ripe or had gone bad), whether orders had been shipped, and whether invoices had been paid. 

Why It Failed

While Mission Produce’s CEO told investors that they had spent hundreds of hours planning and preparing for the ERP migration and implementation, he admitted that “the extent and magnitude [of the ERP change] was greater than we anticipated.”

Mission Product’s change initiative failed because it was naïve to how foundational its ERP is to its business operations. The company failed to properly prepare for the ERP implementation from multiple perspectives, including a failure to adequately set up and configure, not beta test it in a sandbox environment or with a beta launch, and a lack of ERP end-user training to enable employees to use the ERP correctly.

The ERP change failure forced the company to revert to manual processes on the fly to keep up with its distribution and operations and fulfill all customer orders. Eventually, Mission Produce hired a third-party ERP consulting group to help get its ERP transformation back on track, but only after it cost the company nearly $4M in over-budget costs and delayed the ERP launch by 9 months.  

2. Revlon’s failed attempt at ERP consolidation post-acquisition

In 2016, cosmetics enterprise Revlon acquired competitor Elizabeth Arden. This presented challenges for Revlon as it merged business units and integrated processes across the two entities. At the time, both companies had successfully implemented an ERP (Elizabeth Arden with Oracle Fusion, Revlon with Microsoft Dynamics AX), but realized they needed to consolidate their ERP systems going forward and implemented an entirely new ERP system, SAP S4/HANA.

Revlon soon realized the ERP consolidation change project was doomed to fail. Revlon leadership cited poor ERP design, process mapping, integration, and IT maintenance as core reasons the implementation failed. 

The change failure was so disruptive that it shut down a core Revlon manufacturing facility in North Carolina, resulting in millions of dollars in lost sales. This had a downstream impact, causing the company to incur shipping fees and damaging its customer service reputation. It also resulted in its stockholders sueing the company due to the negative impact the failure had on Revlon’s stock price.

3. OpenAI’s board attempts to remove CEO Sam Altman

In 2023, OpenAI explored the tech scene with the launch of ChatGPT. Quickly becoming the fastest adopted application in history, its board members began to feel pressure from those in the tech community who feared AI. Its board members discussed these fears with its CEO, Sam Altman, who defied the board’s wishes and continued to push AI innovation and development, which many outside the company viewed as dangerous. 

In November 2023, OpenAI’s board of directors removed Altman effective immediately. At a public event, Altman was informed via Google Meet just 10 minutes before the board voted to remove him.

The company was pressured from outside to make swift decisions without consulting its workforce or leaders. It allowed outsiders to influence their decisions without knowing the nuance or opinions of those who worked alongside Altman.

OpenAI’s key developers, employees, and investors revolted. Its chairman, research director, and key AI researchers resigned within hours of the announcement. In the following days, 745 of the 770 OpenAI employees signed a letter threatening to resign if Altman wasn’t reinstated.

Within weeks, Altman was re-instated.

The removal left OpenAI in chaos in these few weeks. Investors threatened to leave and Microsoft offered to hire any OpenAI employee who resigned. It also led to delays in OpenAI releasing new product updates and features, like its plug-in marketplace, caused a 3% drop in Microsoft’s stock price, and resulted in legal action from Microsoft. 

Ultimately, those on the board of directors who pushed for the sudden removal of Altman were removed from the board, being replaced with AI leaders who didn’t have the same views on AI safety as them. Time will tell if the holistic impact this change failure will have on society.

4. LeasePlan’s SAP “Core Leasing System” failure

In 2016, Australian-based vehicle management company Leaseplan partnered with HCL Technologies to develop a new core leasing system (CLS) built using SAP ERP modules. The new system was to transform its operations and was a core transformation change and IT project. By 2018, it was expected to start rolling out across its workforce.

In early 2018, auditors began sounding alarms to LeasePlan about its user access and change management, recommending the company improve its IT governance , user role controls, and IT user training as the new system was set to roll out to even more countries and users.

LeasePlan eventually abandoned its new CLS platform, wasting $100M in overall project costs, lost productivity, consultant fees, and IT fees. LeasePlan admitted that its new CLS was not fit for the new digital world it was expected to operate in and that the SAP system it was built on was already outdated.

5. Borders parnters with Amazon to enter the e-commerce market

Once the second-largest bookstore chain in the United States, Borders Group Inc. (Borders) made a strategic error that led to the company’s eventual bankruptcy—partnering with Amazon to compete with online retailers.

In 2001, Borders outsourced all online book, music, DVD, and video sales to its competitor, Amazon. While the partnership was meant to bring in additional sales, purchases in the physical stores suffered. 

Regarding a crucial aspect of your business model, “keep your friends close and your enemies closer” is not a strong strategy. Borders made the mistake of taking a shortcut, contributing to the company’s eventual bankruptcy.

Significant changes like Borders’ partnership with Amazon require detailed planning and risk assessment. It’s crucial to form a strategic initiative for change.  If Borders had considered the long-term effects of this strategy, they may have predicted this outcome.

Customers used Borders stores to window shop and then made their purchases through Amazon . By 2006, Borders no longer turned a profit. Five years later, Borders declared bankruptcy and liquidated their assets.

6. ConvertKit's rebrand campaign

Although this email marketing software company spent  two years  planning its rebrand, a flaw in its research cost ConvertKit over $500,000.

ConvertKit announces a rebrand to the name “ Seva .”

ConvertKit chose Seva as its new name, based on the Sanskrit word for “selfless service.” While the company believed it represented how much it cares about customers, business leaders failed to dig into the nuances of the word’s association with the Sikh religion.

ConvertKit later learned that Seva is a holy concept — a  way to worship through giving  without the expectation of anything in return. To use Seva as the name of a for-profit business would be hurtful and contrary to the true meaning of the word. In the end, ConvertKit canceled the name change.

Always consider the  people side of change . ConvertKit made the mistake of focusing solely on the business side of a rebrand. By ignoring the cultural impact of using a religious word as a business name, the company failed its customers and spent half a million dollars on a rebrand, but it ended up reversing.

Always consider who will be most affected by a change. Often, those people are within your company, but not always. Look at the change from multiple angles before committing.

7. Kodak's push for print

Film and camera company Kodak dominated the industry for decades but slipped out of relevance by failing to transform its business.

The Strategy

Ignoring the need for change.

Kodak made billions  selling analog cameras and film cartridges but did not take the rise of digital photography seriously. Although the company created a digital camera in the 1990s, Kodak still focused on printing photos as the company’s main revenue driver.

As smartphones transformed how people share photos — through social media versus physical prints — Kodak stubbornly stuck to the outdated strategy of pushing for print. As a result, a company that reached $10 billion in sales in 1981 filed for bankruptcy in 2012.

When you recognize a disruption of your business, choose to change, or risk the consequences. Remedial changes — addressing an unexpected issue — are reactionary.

Choosing  not  to react is a losing strategy. Kodak refused to adapt to the  digital transformation  happening in the photography business. When you recognize a shift in your industry, use a  change proposal template  to analyze your options and intended outcome and determine how external factors might affect your transformation.

✓ Thank you, the template will be sent to your email

8. Tarsus Distribution

South African IT distributor Tarsus Distribution, attempted to minimize manual data entry with robotic process automation (RPA). Unfortunately, their communication strategy led to internal resistance.

Implementing software robots to take over manual data entry tasks.

Tarsus Distribution leveraged RPA to deploy  software robots to handle manual data entry work . Although the goal was to lessen employee workload and not replace staff members, the communication strategy came across as robots taking over.

When Tarsus Distribution implemented software robots before gaining internal support, employees expressed fear about and resistance to the move. Without employee buy-in, the RPA solution could not reach its full potential.

The way you communicate your change is as important as the change itself. As the change initiator, you know why it has to happen; it’s your responsibility to convey the reasoning to the people affected.

Before announcing a change, make sure you’re following  change management communication best practices . In this case, Tarsus Distribution failed to address the “What’s in it for me?” and “What does it mean to me?” questions, which led to unnecessary confusion. Focus on explaining the  why  behind your change. Gain internal support from key leaders, such as supervisors and department heads. And give your employees the details they need to support the change.

Many change initiatives are driven by technology changes, from consolidation projects, migrations, or new implementations entirely. These applications enable companies to automate processes, improve efficiency, and drive business outcomes.

However, without user adoption of these technologies, organizations will fail to find transformation change success and will not reach their full ROI potential.

With Whatfix, enable your end-users with role-based in-app guidance and support in the flow of work to drive skill acquisition, knowledge retention, and maximizing productivity by fully utilizing software to its potential. With Whatfix, IT teams can:

• Provide hands-on user training with replicate IT sandbox environments for any web application with Whatfix Mirror.
• Create in-app guided onboarding experiences with Tours and Task Lists.
• Enable users in the flow of work with Flows and Smart Tips on complex workflows, infrequently done tasks, and areas of user friction.
• Provide users with on-demand support via Self Help, enabling them to find answers to technical questions without leaving applications.
• Monitor in-app content consumption and engagement with Guidance Analytics.
• Track any custom user event with Whatfix Product Analytics.
• Collect feedback from users with in-app Surveys.

Ready to get started?  Request a Whatfix demo today!

Navigating through organizational change is a multi-step process. Whatfix helps you scale enterprise-wide changes, improve user engagement, and drive user adoption.

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7 Reasons Why Change Management Strategies Fail and How to Avoid Them

How are you influencing change in your organization? Learn to minimize disruption—and improve your chances of success—by avoiding these common missteps.

Mary Sharp Emerson

To stay competitive in today’s rapidly-changing business environment, organizations must be willing — and able — to constantly adapt and evolve their business strategy.

It sounds easy enough. After all, the COVID-19 pandemic is a perfect example of how quickly the world can change and how quickly businesses need to — and can — respond. 

The reality of change management is much less clear-cut. 

Organizations, like people, are often highly resistant to change, even when we know it’s necessary. As a result, successfully adopting a new strategy with a change initiative, regardless of how incremental or radical, is usually difficult and often messy. And the consequences of a poorly-managed organizational transformation can be devastating.

Today more than ever, organizations need leaders with the knowledge and skills to plan and manage change successfully. According to David A. Shore , instructor of two Harvard DCE Professional & Executive Development programs focused on strategies for leading change , leadership is often the key to a successful change initiative.

“When change initiatives fail (and they do so more often than not) they rarely fail on technical skills (hard skills), they fail on the people skills. I have identified what I have come to call ‘The Great Enablers.’  While they are not the goal of any change initiative, they are the engine and as such they represent a cornerstone of the programs I teach,” Shore notes.

Understanding some of the most common reasons why strategies for change fail — and ways to avoid those pitfalls — can help you prevent an organizational disaster and lead a successful change initiative.

What is Change Management and Why Do We Need It?

A change management strategy is a planned methodology that enables leaders to successfully guide an organization through change, while minimizing disruption and the risk of unexpected consequences. And while the goal may be to change the organization, the key to success — in most cases — lies in the ability to lead people through the change. 

Businesses seek to change — in most cases — because their current business strategy is no longer promoting the success of the organization. A new strategy is required to increase profit margins, for example, or remain competitive in a changing business landscape. 

“Change initiatives are the vehicles by which strategy is delivered,” according to Shore. “ They represent the most significant dimension in determining whether goals and objectives are achieved. They are the connective tissue that allows us to bridge the gap between strategy and execution .”

No change initiative looks the same, but will vary widely depending on the strategic goals of the organization. Your change initiative may focus on improving efficiency or performance or building better processes. It may be slow and iterative — introducing new features into an existing product, for instance — or it could be revolutionary, such as creating an entirely new product line. 

Yet regardless of the nature or scope of the change, it will likely be disruptive to your employees and to your business processes alike. Even small changes, no matter how well-meaning or necessary, can have unintended consequences. And as change becomes larger and more complex, the risks increase, as does the need for a systematic approach.

Therefore, having a systematic approach to change — and leading your teams through change — is critical.

As Shore notes, “A point of distinction between managing change and project management is that the former has as a cornerstone leading human capital (people) in a way that facilitates the intended outcome. If you can’t change your people, you can’t change anything.”

How Has Change Management Evolved?

The idea that changing business strategy must be managed is relatively new. Until the late 1940s (generally speaking), most leadership models were relatively straightforward: the boss decided to make a change and his subordinates carried it out.

Today, leaders are aware that change is extremely complex and that a heavy-handed, top-down approach is rarely successful. Thinking about how to manage change has moved from an academic exercise to the creation of actionable guidelines for business leaders.

From the 1950s to the early 1990s, the theory of change management — and it was very much a theoretical exercise at first — changed in two important ways. First, it began to identify the importance of the employee in promoting — and resisting — change. Second, it began to recognize that successful change often occurs in stages, and that these stages could be predicted, planned, and managed.

Change management as a formal, multi-phase process took its modern form in the late 1990s. Leading Change , a 1996 book by John Kotter, popularized the idea of change management, bringing it from academic theory into the practical world of business. Kotter’s eight-step change management process continues to define much of the language around change management nearly 25 years later. 

Browse all Business Strategy programs.

7 Ways that Change Management Strategies Fail

Yet, even as thought leadership on change management has become more in-depth and sophisticated, one simple fact remains: change management is still very difficult. 

Successfully implementing change — whether large or small — remains one of the greatest challenges facing leaders. 

Identifying some of the most common reasons why change management strategies fail can help leaders think more critically about how their actions may be helping — or hindering — their organizations from reaching their goals. 

#1: Starting with an Incomplete or Poorly-Defined Strategy

When thinking about an organizational transformation, leaders often focus on what the change is and why it is necessary. However, failing to give equal priority to how the change will happen can undermine any transformation effort.  

Without a comprehensive change management strategy, short term tactical decisions can delay or undermine long-term results. They can lead your organization down an unexpected — or unwanted—path and make it more difficult, or even impossible, to achieve the desired results.

In addition, the lack of a strategic change management plan can make it more difficult to build a strong guiding coalition and buy-in, hinder your communication with employees, and create misunderstandings and diminish trust in the leadership team. 

The Solution: Invest significant time and energy into creating a comprehensive change management strategy before starting any change initiative. It can be helpful to choose a model to follow: Kotter’s 8-Step Process , Lewin’s Change Management Model , or Prosci’s ADKAR Ⓡ Model — to name a few — can all offer a starting point on which to build your unique strategy. 

As you build out your strategy, identify areas of resistance and potential problems you think you may encounter. SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis can be a helpful tactical tool to help develop alternate pathways to achieve your long-term goals. While you likely can’t plan for every single contingency, developing a robust strategy will help you minimize unexpected problems.

#2: Following a Strategy that is Too Rigid and Inflexible

Having a well-defined change management strategy can be key to keeping your change initiative on track. At the same time, however, being too dogmatic and inflexible in implementing that plan can be equally detrimental to your long-term success. 

No matter how much thought and planning you put into your strategy, you are unlikely to account for every development. Change — especially large-scale change — can take a long time, and the environment and market are also changing around you. Failure to adapt your strategy to unanticipated or sudden developments can render your long-term strategy ineffective, or at worst, irrelevant.

The Solution: Revisit your strategy plan frequently, both before and after unexpected developments occur. 

Be sure that your long-term vision and goals are clear, but also that your strategy includes short- and mid-term objectives that you can revisit and realign to account for changes in the environment around you. Don’t be afraid to make adjustments throughout the process to keep your end goals on track.    

#3: Lack of Effective Communications

Leaders often spend a great deal of time communicating about the proposed change in order to gain buy-in before beginning the change initiative. However, change management strategies often fail or fizzle out when leaders don’t communicate enough after the initiative is announced.

For example, you announce your vision and strategy for change in an all-staff meeting. You then reinforce the message in an email to the organization or the team. You schedule follow up meetings with key stakeholders and 1:1s with your employees. At this point, it’s easy to believe that the message has been received and the organization is on board. 

In reality, once the initial communication drive is over, the day-to-day demands of the job take over and enthusiasm for change diminishes. Your team quickly reverts to the comfort of the status quo.

The Solution: Create a short, comprehensible explanation of your change strategy. It should be clear, consistent, and constant. Be prepared to repeat that explanation frequently, throughout the entire process and with everyone who may be impacted, no matter how remotely. 

Make sure that every action that the leadership team takes aligns with your vision of change. Every interaction with your team, from a staff meeting to a performance evaluation, is an opportunity to educate the organization about why this change is important and the positive impact you believe it will have on the organization in the long run. 

When it comes to change management, remember that even if you think you have communicated enough, you probably haven’t. 

#4: Failing to Identify and Address Resistance

Every change initiative is going to encounter resistance. This is true no matter how much you worked to build a guiding coalition before launch and no matter how well you communicate and create enthusiasm after launch.

In fact, according to Shore, resistance to change is the most common reason why many change initiatives fail. 

“People are people—carbon and water. As such, we resist change. It’s important to recognize that managing change is about upsetting people only at a rate that they can tolerate. It’s all about physics. For change there must be movement. With movement there is friction,” Shore says. 

People resist change for many reasons. They may be uncomfortable with the unknown or perceived risk. They may misunderstand or disagree with the goals and/or the strategy of the change initiative. They may fear what change means for their role or even their job security. They may lack trust in the management team or the organization.

Unless their specific concerns are addressed, resistance can easily derail or undermine the change initiative, either covertly or overtly. As Shore notes, “The job of an agent of change is to address this friction.”

The Solution: Make a strategic and thoughtful assessment of how your change initiative may impact your employees in order to identify potential resistance from the start. Tailor your communication strategy so that you can address that resistance as soon as—or even before—it arises.

And most importantly, actively listen to and engage your employees throughout your change management strategy. Active listening is the best way to avoid misunderstandings, ensure that all parties have complete and accurate information, and address fear, anxiety, and discomfort that comes with any change.

#5: Disconnect Between Strategy and Culture

Have you heard your employees say, “That’s not the way we do things around here?” If you have, then your change management strategy is probably in conflict with your organizational culture.

Change initiatives that work against existing corporate culture will likely be more difficult and less likely to succeed. Demands to change workplace habits and behaviors will be met with distrust and resistance if employees lack trust that the organization will support and reward those changes in the long term. 

Conversely, if the proposed changes are already in line with a shared vision of the organization’s purpose and goals, employees are more likely to trust that their efforts in supporting change will be rewarded. 

The Solution: Ensure that your change management strategy is grounded in a realistic assessment of your organization’s culture and vision. 

Even before you begin a change, make certain that senior management and front line employees alike are aligned on organizational priorities and goals, as well as on reward structures and tolerance for risk. An effective communications plan should include a focus on how your change supports the shared vision for your organization.

#6: Setting Unrealistic Expectations

One of the major pitfalls when starting a change initiative is to push too hard, for too much, and too quickly. Rushing through a change increases the risk of mistakes and removes the opportunity to respond appropriately to changing events. And moving too fast can quickly burn out both your team and your organization. Change fatigue can quickly undermine even the most enthusiastic team.

The pressure to do too much too quickly comes in several different forms:

• The marketplace : Rapid change may be required to stay competitive. Waiting too long to launch a new product, for example, could leave an opening for your competitors.
• Top management : Executives often underestimate how long change takes and how much it will cost, and they overestimate the end results. Enthusiasm for change can quickly fizzle when it takes too long or gains aren’t perceived as “big enough.”
• The need for momentum : People and organizations alike have short attention spans. It can be challenging to sustain enthusiasm for change over the long term. 

The Solution: Managing expectations — both positive and negative — during a change initiative is just as important as managing the change itself. Remind yourself and your key stakeholders — frequently — that true change takes time. A well-paced solution is much more likely to be effective and successful. 

Be sure that your strategic plan is realistic in its goals and intended outcomes. Outline a clear timeline, with both short- and long-term objectives. Short- and mid-range goals will help your team stay on target without moving too quickly. 

#7: Not Creating—and Celebrating—Short Term Wins

Pushing for change too quickly can lead to burnout. Yet not showing positive progress in a timely manner can be equally detrimental. Employees and teams can easily lose momentum and enthusiasm for a change if they feel they aren’t making progress. 

And the more difficult the change is — the more it requires changing behaviors or making sacrifices — the more quickly your teams will lose interest.

The Solution: Don’t wait for wins to emerge naturally from the change management process. Build them into your strategic plan from the start. As you define your short- and mid-range goals, include achievable outcomes that will yield visible results. 

And when your team achieves those outcomes, be sure to publicize them as wins, and celebrate them — as soon as they happen. Building on the enthusiasm for a short term win will help sustain momentum for a longer duration. 

How Can I Learn to Avoid These Change Management Mistakes? 

Leading a change management strategy is challenging and takes effort and dedication. And even the most successful change leader is likely to make a few mistakes and missteps along the way.

However, the skills you need to improve your ability to manage change successfully can be learned at any point in your career. 

Professional development programs focused on business strategy generally — and change management strategy specifically — can give you the frameworks and tools to lead your organization’s change initiative to completion. These key leadership skills can help you advance your career and help your organization stay competitive in today’s crowded and chaotic marketplace.

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Learning from Failed Change Management: Case Studies

Understanding Change Management

Change management involves guiding teams through transitions, such as new technology or organizational restructuring.

However, without proper planning and execution, change management initiatives can fail, leading to resistance, decreased productivity, and high turnover rates.

Learn about the key stages of change management to increase the chances of success in your organization.

Case Study: Inadequate Communication

A company implemented a new CRM system without informing or training employees, resulting in resistance and decreased productivity.

Clear communication and training are crucial throughout the change management process to ensure employee buy-in and a smooth transition.

This case study highlights the importance of involving employees in the decision-making process to increase engagement and success.

Case Study: Lack of Employee Involvement

Another company attempted to restructure departments without employee input, leading to low morale and high turnover rates.

Involving employees in the decision-making process can increase engagement and ensure a smoother transition.

Explore the relationship between employee engagement and successful change management .

Case Study: Insufficient Resources

A third company underestimated resources required for their change management project, causing delays and frustration.

Thorough planning and resource allocation, including time, budget, and personnel, are crucial for a successful change management initiative.

Understand the key stages of change management to ensure sufficient resources and a smooth transition.

Strategies for Small and Medium Enterprises

Change management strategies for small and medium enterprises (SMEs) should be tailored to the unique needs and resources of the organization.

Effective strategies for SMEs include clear communication, employee engagement, and thorough planning.

Discover change management strategies for SMEs to ensure successful transitions.

Learning from Failed Change Management

By examining failed change management efforts, organizations can identify common pitfalls and develop strategies to avoid them.

Focusing on clear communication, employee engagement, and thorough planning can increase the chances of a smooth transition.

Learning from failed change management efforts is crucial for future success.

Kodak Change Management Failure

Kodak was once the undisputed leader in the photography industry, with a market share of over 90%.

However, the company’s failure to adapt to the shift from film to digital photography led to its decline and eventual bankruptcy in 2012. 

Kodak’s change management failure is a classic example of how companies can fall from the top due to a lack of adaptability and failure to embrace innovation. 

In this blog post, we will examine the reasons behind Kodak’s failure to adapt to digital photography, including its organizational structure, culture, and missed opportunities. 

We will also explore the lessons that can be learned from Kodak’s experience and provide suggestions for companies to avoid similar failures in the future

Brief History of Kodak and its dominance in the photography industry 

Kodak was founded in 1888 and quickly became the dominant player in the photography industry, thanks to its introduction of the first flexible roll film. 

This innovation made photography more accessible to the masses, as it eliminated the need for bulky and expensive glass plates. 

In the early 20th century, Kodak further solidified its position in the industry by introducing the Brownie camera, which was affordable and easy to use. 

This led to a surge in demand for Kodak’s products and services, and the company’s market share in the photography industry reached over 90%.  

In 1962, Kodak sales surpassed 1billion $.

Kodak also developed a strong brand image and was known for its high-quality film and cameras. 

However, as the photography industry shifted from film to digital in the late 20th century, Kodak failed to adapt and eventually lost its dominance in the market.

Why did Kodak’s fail to adapt to digital technology?

There are three reasons that explain Kodak failure to adapt to digital technology.

A Explanation of the shift from film to digital photography 

The shift from film to digital photography began in the 1980s with the introduction of the first digital cameras. Digital cameras offered several advantages over film cameras, such as instant feedback, the ability to delete and edit images, and the ability to store images electronically. As digital cameras became more advanced and affordable, the demand for film-based photography declined, and the market for digital photography grew.

B. Kodak’s initial investment in digital technology  

Kodak was an early investor in digital photography and developed some of the first digital cameras in the 1970s and 1980s. However, the company’s initial focus was on using digital technology to enhance its traditional film-based products, rather than fully embracing digital photography as a standalone product. This approach limited Kodak’s ability to innovate in the digital photography market and compete with companies that were fully focused on digital technology.

C. Kodak’s hesitancy to fully embrace digital technology  

Despite being an early investor in digital photography, Kodak was slow to fully embrace the technology. The company’s primary revenue stream was still from film-based products, and Kodak was hesitant to disrupt its existing business model. Kodak also had a culture of risk aversion and was reluctant to invest in new technologies that might not generate an immediate return on investment. This hesitancy and lack of focus on digital technology ultimately led to Kodak’s failure to adapt to the shift in the industry

Kodak’s organizational structure and culture also contributed to failure 

It is not all about technology but organizational structure and culture are also behind this failure.

A. Description of Kodak’s traditional hierarchical structure  

Kodak had a traditional hierarchical structure with a highly centralized decision-making process. This structure was effective in Kodak’s early years when the company dominated the photography industry, but it became a hindrance as the industry evolved. The centralized decision-making process made it difficult for Kodak to quickly adapt to changes in the industry, and decisions were often made by a small group of executives rather than being informed by input from employees throughout the organization.

B. Discussion of Kodak’s culture of risk aversion and reluctance to change  

Kodak had a culture of risk aversion and was reluctant to invest in new technologies that might not generate an immediate return on investment. This culture was reinforced by the company’s historical success in the film-based photography market, which made it difficult for employees to imagine a world without film. Kodak’s culture of risk aversion and reluctance to change contributed to its failure to fully embrace digital technology and adapt to the shift in the industry.

C. Analysis of how Kodak’s structure and culture contributed to its failure to adapt  

Kodak’s organizational structure and culture contributed to its failure to adapt to the shift in the industry. The centralized decision-making process made it difficult for the company to quickly make decisions and respond to changes in the market. Additionally, the culture of risk aversion and reluctance to change made it difficult for Kodak to fully embrace digital technology and invest in new products and services. The combination of Kodak’s structure and culture created a situation where the company was slow to adapt to changes in the industry, ultimately leading to its decline.

Kodak’s Missed Opportunities 

A. Explanation of Kodak’s missed opportunities in digital photography  

Kodak had several opportunities to innovate and establish itself as a leader in the digital photography market, but it failed to capitalize on them. For example, Kodak had the opportunity to develop and market the first consumer digital camera but ultimately decided not to pursue the idea. Additionally, Kodak failed to fully embrace the potential of online photo-sharing and social media, which became popular in the 2000s.

B. Discussion of Kodak’s missed opportunities in other markets  

Kodak also had opportunities to diversify its business and expand into other markets but failed to do so. For example, Kodak had early success in the inkjet printing market but was slow to fully invest in the technology, allowing competitors such as Hewlett-Packard and Canon to gain market share.

C. Analysis of the impact of Kodak’s missed opportunities  

Kodak’s missed opportunities had a significant impact on the company’s decline. By failing to fully embrace digital technology and capitalize on new markets, Kodak lost its dominance in the photography industry and was unable to establish itself as a leader in other markets. This failure to innovate and adapt ultimately led to Kodak’s decline and bankruptcy

Lessons Learned from Kodak Change Management Failure  

A Importance of innovation and adaptation

One of the key lessons learned from Kodak’s change management failure is the importance of innovation and adaptation. Kodak’s failure to fully embrace digital technology and invest in new markets ultimately led to its decline. Companies must be willing to take risks, embrace new technologies and adapt to changes in the market to remain competitive.

B. Need for a culture of continuous learning and improvement  

Another lesson learned from Kodak’s change management failure is the need for a culture of continuous learning and improvement. Kodak’s culture of risk aversion and reluctance to change made it difficult for the company to adapt to the shift in the industry. Companies must create a culture that encourages learning, experimentation, and continuous improvement to remain competitive and adapt to changes in the market.

C. Importance of organizational structure and decision-making processes  

Finally, Kodak’s change management failure highlights the importance of organizational structure and decision-making processes. Kodak’s highly centralized decision-making process made it difficult for the company to quickly adapt to changes in the market, while its hierarchical structure made it difficult for employees to provide input and ideas. Companies must have a flexible and adaptable organizational structure and decision-making process that allows for input from employees at all levels and enables the company to quickly respond to changes in the market.

Final Words 

Kodak’s change management failure serves as a cautionary tale for companies that fail to innovate and adapt to changes in the market. The company’s reluctance to fully embrace digital technology, missed opportunities in new markets, and rigid organizational structure and culture contributed to its decline and eventual bankruptcy. Kodak’s downfall illustrates the importance of innovation, a culture of continuous learning and improvement, and an adaptable organizational structure and decision-making process. Companies that can embrace these lessons and remain agile in the face of change are more likely to succeed in today’s rapidly evolving business environment

About The Author

Tahir Abbas

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10 Reasons the Change Management Process Fails (and How You Can Succeed)

Check out our on-demand webinar: “ How to Overcome Resistance to Change and Improve Productivity “

Over 70% of organizational change management process initiatives fail , but change itself isn’t the stumbling block. Change is common and natural, even inevitable. Seasons change, people change, mountain ranges change — yet successful change management remains a lofty, even insurmountable challenge for many organizations.

Why is that?

Organizational change happens every day as a matter of course. The challenge lies in instituting and managing manufactured change in a deliberate and focused direction, and within a specified timeframe.

Altering a river’s course over many years in a specific direction requires significant effort. If you build a crude dam with little thought to its impact downstream, the results can be devastating.

The work you’re doing when instituting a process change or organizational principles is like changing the course of a river. Without the necessary effort, consideration, and tools in place, results will be unpredictable at best, and harmful at worst.

Although each team faces a unique change management challenge, we found ten barriers in common across nearly every industry.

Let’s address each barrier and outline research-backed strategies for overcoming them.

Top 10 Reasons the Change Management Process Fails

• Strategic Shortcomings
• Underestimating Scale and Scope
• Neglected Stakeholders
• Poor Communication
• Lack of Buy-in
• Lack of Vision
• Active Resistance
• Lack of Tooling
• Lack of Endurance

1. Strategic Shortcomings

If you fail to plan, you plan to fail.

Successful change management starts with a sound strategy. You need to know why you want change, expected outcome(s), whom it will impact, and how you plan to change. Many change management processes fail because simple logistical or tactical details were overlooked, or the team wasn’t properly equipped.

How do you fix strategic shortcomings?

The Strengths, Weaknesses, Obstacles, Threats (SWOT) analysis framework can be a great place to start formulating your strategy.

• What are your team’s unique strengths and weaknesses, and how might you leverage those in your change management plan?
• Are there opportunities available to you in the here and now?
• What threats or obstacles stand in the way of your ability to implement change?

You can’t plan for every contingency, but assessing issues early can save massive future headaches. Or worse, a failed change initiative.

2. Underestimating Scale and Scope

What is it going to take to accomplish the organizational change you’re hoping to achieve?

As with most significant undertakings, there are often a greater amount of resources and time necessary to achieve success than initially expected. Many process change initiatives failed because of an underestimated scope, a lack of resources, or the clock running out.

How do you address understanding scale and scope?

Before taking a single step toward implementing change, think of the process from beginning to end.

• Plan your resources ahead of time. Outline the resources you’ll need when you’ll need them, and for how long you’ll need them.
• Don’t try to keep it all in your head; use a project management system to track and manage those requirements.

By scoping the work that lies ahead, you’ll have an easier time executing and earning buy-in from your colleagues.

3. Neglected Stakeholders

It’s easy to assume who your main stakeholders will be in the change management process. It’s even easier to forget others. They have an equally substantial stake in the outcome.

As Bruce Harpham explains in his CIO article, “ 8 Ways You’re Failing at Change Management ”

“Successful change management requires strong input from stakeholders, but if you fail to properly map out who the true stakeholders really are and what they will need to get out of the project, your change management efforts are sunk.”

How do you include stakeholders from the start?

In the earliest stages of your plans for change, you must consider everyone the program will affect.

• Solicit feedback EARLY from all stakeholders involved
• Build a change management team or coalition to lead the change management process
• Provide roadmaps or timelines with plenty of communication

These efforts will give stakeholders ownership of the plan’s success and enhanced visibility into the process.

4. Poor Communication

The way you communicate change is just as important as your implementation plan. Miscommunications are the root of many process change failures.

A Willis Towers Watson study found that “only two-thirds (68%) of senior managers say they are getting the message about the reasons behind major organizational decisions. Below the senior management level, the message dwindles further. Only half (53%) of middle managers and 40% of first-line supervisors say their management does a good job of explaining the reasons behind major decisions.”

As you might imagine, with communication so poor among management, even fewer individual employees “got the message.”

How do you fix poor communication?

Managers at every level need to be closely aligned. As Victor Lipman explains in his Forbes article, managers should “know in their bones the reason for the change”. That takes thoughtful training, consideration, and empathy. Help managers understand how they’re expected to implement this initiative, what role they play, where it’s going, and why it’s essential.

To avoid ambiguity, document the process, the critical milestones, and the steps needed to get there.

Looking for a project management software vendor that understands change management? Schedule a Workzone demo to see how Workzone walks with you the entire way to project management success.

5. Lack of Buy-in

Once you’ve identified who your stakeholders are, you’ll need to earn their buy-in.

Successful change management process initiatives require buy-in from entry-level employees to senior leadership and everyone in between.

Buy-in from both senior leadership and entry-level are important for different reasons. Senior leadership buy-in adds legitimacy to your initiative. Middle management and entry-level leadership is needed for day-to-day implementation. The difference in engagement between taking part in a process “because you’ve been told to” vs. “because you believe in it” is night-and-day.

It’s also important to think horizontally and earn buy-in from your peers in other departments. They could be a helpful resource in execution or just a sounding board.

How do you fix a lack of buy-in?

There are many things you can do to earn buy-in from your colleagues. It’s often true that you’ll need a different strategy for each functional area. Ultimately, buy-in needs an empathetic change management process. Establish a plan everyone can get behind.

• Senior leadership will want to know high-level stuff like objectives, measurements and reports, and overall goals. Make sure to address those concerns preemptively, and show how your change initiative will positively impact the organization’s bottom line.
• Team leads will want to know how well those plans fit into their team’s day-to-day work. Show consideration for their concerns and solicit their feedback.
• Individual contributors need to understand how the extra resources invested will pay off down the road. Communicate the value of their participation and the payoff you expect it to bring.
• Colleagues across departments need to know how this effort will impact their work before giving it their support. Earn their buy-in by showing them the universal benefits of your change initiative. Make sure they’ll be be able to count on you for assistance in any challenges along the way.

6. Lack of Vision

Lack of vision can de-rail the change management process from buy-in to execution. If the vision is unclear to you, it’s unclear to the ones implementing the plans.

In his Harvard Business Review article, “ Leading Change: Why Transformation Efforts Fail ,” John P. Kotter explains the irreplaceable role of vision.

“In every successful transformation effort that I have seen, the guiding coalition develops a picture of the future that is relatively easy to communicate and appeals to customers, stockholders, and employees.”

Without a unified vision, it’s easy for a change initiative to get lost in murky aspirations.

How do you fix a lack of vision?

To develop the crucial “picture of the future” Kotter describes, it’s important to crystalize your vision into a simple, coherent, and compelling narrative of where all the work is heading.

What will it be like once you’ve implemented the changes, and how will it be better than the current state? How do we expect to get there?

The fewer words you can use to share this vision, the more likely it will be to gain acceptance among your team. If you’re not able to address these questions effectively early on, it may be a sign that your plan for change needs more work before taking it to the team.

Lean on the change leaders you’ve selected to help you develop that vision and use their perspective to ensure it persuasively speaks to your broader audience.

7. Active Resistance

Unfortunately, many change management programs fall victim to “active resistance”. This reason is often a mashup of the reasons above, but can also indicate a deeper cultural issue.

How do you fix active resistance?

Twenty years in project management has led us to some conclusions about process change resistance. It’s not easy to overcome process change resistance. Not one bit. However, we developed a three-step formula to address and overcome the most common sources of resistance.

Overcoming Resistance to Process Change

Here’s a peek at the process:

Discuss your process change solution with an open mind.

Most employees want to do the best job they can for their employers. Listen mindfully as you hear feedback about how this change will affect your team and the organization. You’ll likely gain some valuable perspective on the impact your plan will have.

Identify why team members are resisting and address it

Although each team and each situation are different, there are three common reasons for resisting change:

• Mistrust – In order to earn their trust, it’s crucial to be consistent , fair , transparent , and protective . Once they know they can trust you, your team will be much more willing to engage in a change initiative.
• Pessimism – Past failed change efforts can leave employees feeling as though new change efforts are just as likely to fail. Help them overcome this by realizing things can change.
• Comfort – A team that is competent in their current work will have a difficult time transferring that success to new challenges. For the team to accept change, they need to remember how long it took them to see the success they have today. They need to set realistic expectations, not based on their current success. And they need room to be able to fail.

Make sure you’re prioritizing actions that increase trust, help overcome past failures, and set expectations.

Turn resistance into an action plan

Turn specific objections into objectives to earn buy-in for change. Here’s a formula you can follow:

• “So what I hear you saying is ________. Is that right?”
• “For this to succeed, we need to ________.”
• “If we can ________, are you on board with this change?”

8. Lack of Tooling

What do tools have to do with a change management process?

More than you might think. Without a documented change process, a single source of truth, or system of record, it’s easy for essential elements of your plan to get misinterpreted or lost. A program that began on the right foot can quickly go awry without the tools to support it.

How do you fix a lack of proper tools?

As Boris Ewenstein, Wesley Smith, and Ashvin Sologar explain in their McKinsey & Company paper, “…applying new digital tools can make change more meaningful—and durable—both for the individuals who are experiencing it and for those who are implementing it.”

Many tools exist today that can make navigating change easier. Basic to-do lists to project management software come to mind. Even a share Google Doc helps keep everyone’s thoughts together. Just make sure you find a common tool that you know your team will adopt and use .

Inertia : The resistance of the object to any change in its motion, including a change in direction.-Wikipedia

Apply that to an organization. The longer a process has been in place…the more people are invested…the more comfortable they are. That is a lot of inertia to deal with.

It’s common for people to become comfortable doing things a certain way because “that’s the way we’ve always done it.” At some point, a process was developed, and it worked well enough for people to become comfortable following it.

How do you fix (organizational) inertia?

While it may seem like your current process is an immovable object, you need to start small. Little wins will add up. Every conversation is a chance to win over someone else. The more momentum you can build, the more unstoppable a force you will become.

Use your new enthusiastic change coalition to keep that momentum going.

10. Lack of Endurance

While a well-developed and supported change management program may be able to achieve a significant transformation in a small amount of time, it’s rarely (if ever) going to happen overnight. As Brent Gleeson explains in his article for Inc. , even change management experts and consultants find their one-year change management plans taking two or more years.

How do you fix a lack of endurance?

Most change initiatives take place over a protracted timeline, and part of developing a successful change management plan is understanding that timeline and communicating it effectively. If you’ve done a good job of outlining the scope of the change you’re hoping to accomplish, you’ll have a more accurate picture of how long it’s going to take to implement it.

Transparency is key. If you project that your process change will take a few weeks, but it takes seven months, you’ll have a hard time keeping everyone on board. It’s also important to remember that change doesn’t happen overnight. If you’re not in it for the long haul, don’t expect the change to stick.

In conclusion

Mastering the change management process is one of the most challenging issues for any organization, and the statistics reflect that; however, careful planning, modern tools, and frequent, thoughtful communication will help stack the deck in your favor.

Partner with a project management software company that understands how hard it is to change. Schedule a demo today and see how Workzone walks with you through your project management journey.

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Case study: Examining failure in change management

• VU SBE Executive Education
• Management and Organisation

Research output : Contribution to Journal › Article › Academic › peer-review

• change management
• cultural psychology
• health care management
• medical practices
• operating theatre

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• 10.1108/JOCM-06-2019-0204 Licence: CC BY

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• Change Management Social Sciences 100%
• Psychology Social Sciences 100%
• Case Study Social Sciences 100%
• Suture Material Medicine and Dentistry 100%
• Suture Nursing and Health Professions 100%
• Tendering Social Sciences 50%
• Discourse Analysis Social Sciences 50%
• Social Arrangement Social Sciences 50%

T1 - Case study: Examining failure in change management

AU - Graamans, Ernst Patrick

AU - Aij, Kjeld

AU - Vonk, Alexander

AU - ten Have, Wouter

N2 - PurposeThis case study aims to shed light on what went wrong with the introduction of new surgical suture in a Dutch hospital operating theatre following a tender. Transition to working with new surgical suture was organized in accordance with legal and contractual provisions, and basic principles of change management were applied, but resistance from surgeons led to cancellation of supplies of the new suture.Design/methodology/approachResearchers had access to all documents relevant to the tendering procedure and crucial correspondence between stakeholders. Seventeen in-depth, 1 h interviews were conducted with key informants who were targeted through maximum variation sampling. Patients were not interviewed. The interviews were recorded, transcribed and analysed by discourse analysis. A trial session and workshop were participatively observed. A cultural psychological perspective was adopted to gain an understanding of why certain practices appear to be resistant to change.FindingsFor the cardiothoracic surgeons, suture was more than just stitching material. Suture as a tactile element in their day-to-day work environment is embedded within a social arrangement that ties elements of professional accountability, risk avoidance and direct patient care together in a way that makes sense and feels secure. This arrangement is not to be fumbled with by outsiders.Practical implicationsBy understanding the practical and emotional stakes that medical professionals have in their work, lessons can be learned to prevent failure of future change initiatives.Originality/valueThe cultural psychological perspective adopted in this study has never been applied to understanding failed change in a hospital setting.

AB - PurposeThis case study aims to shed light on what went wrong with the introduction of new surgical suture in a Dutch hospital operating theatre following a tender. Transition to working with new surgical suture was organized in accordance with legal and contractual provisions, and basic principles of change management were applied, but resistance from surgeons led to cancellation of supplies of the new suture.Design/methodology/approachResearchers had access to all documents relevant to the tendering procedure and crucial correspondence between stakeholders. Seventeen in-depth, 1 h interviews were conducted with key informants who were targeted through maximum variation sampling. Patients were not interviewed. The interviews were recorded, transcribed and analysed by discourse analysis. A trial session and workshop were participatively observed. A cultural psychological perspective was adopted to gain an understanding of why certain practices appear to be resistant to change.FindingsFor the cardiothoracic surgeons, suture was more than just stitching material. Suture as a tactile element in their day-to-day work environment is embedded within a social arrangement that ties elements of professional accountability, risk avoidance and direct patient care together in a way that makes sense and feels secure. This arrangement is not to be fumbled with by outsiders.Practical implicationsBy understanding the practical and emotional stakes that medical professionals have in their work, lessons can be learned to prevent failure of future change initiatives.Originality/valueThe cultural psychological perspective adopted in this study has never been applied to understanding failed change in a hospital setting.

KW - change management

KW - cultural psychology

KW - discourse

KW - emotion

KW - health care management

KW - medical practices

KW - operating theatre

UR - http://www.scopus.com/inward/record.url?scp=85079782946&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85079782946&partnerID=8YFLogxK

U2 - 10.1108/JOCM-06-2019-0204

DO - 10.1108/JOCM-06-2019-0204

M3 - Article

SN - 0953-4814

JO - Journal of Organizational Change Management

JF - Journal of Organizational Change Management

A Case Study in Continuing Failure of Change Projects

Most failing change projects do so because of the lack of attention paid to the basic  principles of change management .

When organizations need to change, leaders cannot simply click their fingers and expect that change to take place.

The reasons and benefits of change may be obvious to project sponsors, change leaders , and the board of directors – hence the decision to make change – but that doesn’t mean they will be clear to all.

Why do strategic change projects fail?

Change is unsettling, with people required to alter the way they have done things for years. There may be job losses, revision of working practices, new processes, procedures, and systems, and even new managers for team members to get used to.

It is that phrase which, perhaps, sums up the problem that most change leaders face: People need to ‘become used to’ change.

Taxing times of change

With the need to cut budget deficits, and reduce the national debt, the government has made public spending and raising taxes priorities.

What better place to see both workings than at the tax-collecting agency, the HMRC.

Back in 2012, the HMRC published its first Digital Strategy. The aim was to change the way it does things internally, and also to change the way that its ‘customers’ interact with it.

The idea is that taxpayers will conduct much more tax related issues online rather than on paper. This cuts waste, reduces processing times, makes for more accurate calculations, and, of course, will reduce job numbers at HMRC.

Evidence of failing change management

The HMRC’s change projects have always met with resistance. The department came about through the merger of the Inland Revenue and Customs and Excise in 2005.

Since that time organizational change has been constantly on the agenda. For nearly a decade, change after change has been forced upon the staff. Employee numbers have reduced by nearly 35% from 96,000 to 60,000.

The HMRC’s change leaders understand the need for employee engagement in the process, yet they have felt left out in the cold, unloved and unwanted. Change management’s idea of employee engagement at HMRC was to issue an annual staff survey. In 2010, the response rate was 69%. Only a year later, this rate had fallen to 52%: a clear indication that employees don’t care, and have a total distrust of management.

Does a ‘no-reply’ mean employees are happy?

Employees’ distrust of senior management at HMRC ran so hot that most believe that the lack of response would be taken as a sign of staff happiness at work. This distrust was heightened when the staff survey gave no room for comment and was simply a list of questions with multiple choice answers.

Employee feelings, all of which heightened resistance to change, included:

• Employees saw managers as being people inexperienced and uneducated in the business
• Further, they saw the survey as simply paying lip service, a waste of time that was completely ignored
• They believed management to be making mistakes at almost every turn
• Concerns and suggestions for improvement given to lower level managers would be ignored by senior managers

Simply put, there were so many surveys that employees stopped responding.

Management’s response to the 2011 survey was exactly as most employees expected: another large change initiative, this time the 2012 Digital Strategy.

Failing change management

At the heart of the 2012 Digital Strategy was the desire to move customers to a more automated system. Employees were expected to help this process but given no say in the process of doing so.

Imagine a bar which had been a Maroons stronghold for decades suddenly being bought out and painted in Blues colors. That’s the sort of resistance the forced change at HMRC came up against.

The digital strategy did have some success:

• 200,000 small businesses signed up for digital tax accounts
• 400,000 tax credit customers began renewing claims online
• But these results, from tens of millions of taxpayers, took two years to realize.

A new approach to change management at HMRC

HMRC is promising a new approach from its change leaders toward its change projects. It says that it now has a change management strategy that is fuelled by disengaged staff.

At the Employee Benefits Live 2014 conference, Judy Greevy, deputy director engagement and diversity HMRC, said, ‘A real challenge we have, like a lot of organizations, is really making it possible for people to feel that they actually have a voice in the organization and that people are listening to them.

“We’re going through this whole big change and we’re going to need a lot more skills and different ways of operating, so what we need to do to help people get through this is to make them feel more empowered in terms of what they do in their job, and to enable them to identify ways that things can be done better.”

Change management at HMRC believes that supporting staff and helping them build new skillsets was key. Consequently, staff will:

• Have a minimum of five days of training each year
• A new rewards offering aligned to staff expectations and needs

A new digital change management strategy

Change leaders at HMRC have updated the Digital Strategy. It’s new 2014 version sets out the ‘digital vision’ to all customers (individuals, business, and agents) to give all their own online tax account. The service wants customers to deal with it online.

HMRC’s Chief Digital and Information Officer, Mark Dearnley, has said it will ‘go on listening to what customers are telling us.’ In the strategy document, there is little mention of the staff.

Further, Dearnley said, “So there’s no big fanfare today. It’s business as usual for my teams in our two Digital Centres and elsewhere across HMRC working hard to make our digital vision a reality. This is one more small but important step and I’m really excited about what the future holds.”

Set up for continuing change failure

The HMRC seems to have learned little about its employees or how to manage change over the last decade. Employees, shunning the staff survey, feel they have no voice and no input. The response of change leaders is to provide more training and tinker with its reward system. This new program will be aligned with the new digital strategy.

Meanwhile, the new digital strategy document is unveiled and concentrates 99% on the customer.

Employees, feeling disengaged and underutilized will hear only one sentence of the whole announcement by Dearnley:

“It’s business as usual for my teams in our 2 Digital Centres and elsewhere across HMRC working hard to make our digital vision a reality.”

How taxing are change projects?

In the modern world, employees want to be heard. They want to know that management takes their views seriously.

People at all levels have different views, different fears, and concerns. They also have a wealth of talent and experience, not only of internal workings but also of customers. Ignore them at your peril.

Having read about how the HMRC has tackled change over the last decade, is there anything you would do differently?

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Why ditching your old change management plan might be the key to managing change more effectively.

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Managing change isn't about intricate plans and processes

If I were to ask you, as business leaders, what keeps you up at night, chances are high that managing change would be at the top of your list. According to a study published in Harvard Business Review , 50% of CEOs report that their company has undertaken two or more major change efforts within the past five years, with nearly 20% reporting three or more.

The fact is, we live in a world of permanent transformation where new technologies, market dynamics and customer expectations constantly shift the ground beneath our feet.

This reality challenges the traditional change management models that were designed for specific, finite projects—think implementing a new software system or restructuring a department. These plans often follow a linear process: define the change; develop a strategy; implement the change; monitor and adjust. While this approach has its merits, it presumes that change is a temporary state—a disruption that will eventually settle into a new, stable normal.

But what if that stable normal never arrives? What if managing change is not about returning to a steady state but about thriving in constant flux? It's time to rethink how we approach organizational change.

From Creating a Sense of Urgency to Seizing the Moment

Traditional change management emphasizes creating a sense of urgency to propel action. While urgency can be a powerful motivator, research often shows that employees may feel overwhelmed and become resistant if they perceive the urgency as undue pressure. In fact, this often leads to short-term wins that lack long-term sustainability.

Instead, seize the moment by recognizing that the window for change is always open. Focus on ongoing opportunities rather than temporary crises.

Look around—businesses that excel in managing change don't wait for a crisis to act. They continuously scan the environment for opportunities and align their change initiatives with their long-term vision. By fostering a culture that is always ready to adapt, you move beyond the reactive approach and become a proactive force.

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Your change management strategy should be about seizing the moment, not creating a burning platform

From Leadership-Driven to Empowered Expert Teams

The old models of change management rely heavily on direction from senior leadership. While executive leaders play a critical role, this top-down approach can stifle innovation and slow down the change process.

Empower your teams (and change managers) to take the lead on various aspects of the change initiative. According to a McKinsey study , organizations that successfully empower their teams during transformations capture, on average, 67% of the maximum financial benefits, compared to only 37% for those that do not.

Imagine a scenario where your frontline employees, who are most familiar with the nitty-gritty of your business processes, are also the ones driving change. These key stakeholders bring specialized knowledge and firsthand experience of your internal processes, making them invaluable change agents. With the appropriate support, they can act swiftly and make more informed decisions.

From Top-Down Information Cascade to Social Channels and Organic Networks

One of the biggest challenges in managing change is effective communication. The traditional top-down information cascade often results in slow, diluted messages and disengaged employees.

Instead, leverage social channels and organic networks within your organization to disseminate information quickly and effectively. In fact, according to a study published in the Journal of Complex Networks, information spreads 10 times faster through social networks than through traditional top-down methods.

Think of it as a grassroots movement within your company. When information flows freely and organically, it fosters transparency, trust and momentum. Employees feel more involved and committed to the change initiative because they are not just passive recipients of information but active participants in the conversation.

Your key stakeholders are your organic network and your change management institute

From Governance and Hierarchy to Self-Organizing Teams

Traditional change management relies heavily on governance structures and hierarchy to monitor progress and make adjustments. While oversight is necessary, excessive bureaucracy can hinder agility.

Instead, consider empowering self-organizing teams that can make decisions and implement changes swiftly.

These teams need to be empowered to experiment with new approaches and adapt quickly to emerging challenges. This approach requires a shift in mindset from control to trust. As business leaders, your role is to provide the necessary resources and support, while granting these teams the autonomy to manage change within defined parameters.

From Planning and Predicting to Experimenting and Adapting

Traditional change management models rely heavily on detailed planning and predicting outcomes. However, the unpredictable nature of today's business environment makes it difficult to plan for every eventuality.

Adopt a mindset of experimenting and adapting, where you test new ideas, learn from the outcomes and iterate accordingly.

This approach aligns well with the agile methodology, which emphasizes short sprints, frequent feedback and continuous improvement. Instead of sticking rigidly to a plan, be prepared to pivot and make adjustments based on real-world feedback. This not only increases the likelihood of success but also fosters a culture of innovation and resilience.

Your change management process should build in experimentation and adaptation

From Change Management Process Focused to People-Focused

Finally, traditional change management is often overly focused on the change management process, change management tools, key performance indicators and implementing change - neglecting the human dynamics that drive successful change.

Shift your change management strategy to focus on people—understand their fears, motivations, and aspirations. Research suggests that the emotional experience of workplace change can even resemble the turmoil of grief. Building a culture that supports individual change is crucial for the success of any organizational change.

Invest in developing change management skills and provide the necessary support to help your employees adapt. By prioritizing people over processes, you create a more resilient workforce that is better equipped to handle the challenges of continuous transformation.

In a world of permanent transformation, clinging to outdated change management models is a recipe for stagnation. The future belongs to organizations that can adapt quickly, empower their teams, and foster a culture of continuous improvement. By shifting from a focus on temporary change to building belief and conviction, you can guide your organization through the complexities of modern business with confidence.

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