Looking back to an HBR article from 2000, researchers claim that the brutal fact is that about 70% of all change initiatives fail. “In our experience, the reason for most of those failures is that in their rush to change their organizations, managers end up immersing themselves in an alphabet soup of initiatives.” They suggest that leaders used to approach change from two different perspectives:
- Theory E is change based on economic value. A CEO whose goal is to increase profitability by reducing the workforce by 71,0000 people through divestiture, layoffs, attrition.
- Theory O is change based on organizational capability. Companies that enact this strategy have a strong, long-held, commitment-based psychological contract with their employees. Anybody know any of those companies?
Clearly we need both approaches, but theories E and O are so different that it’s hard to manage them simultaneously—employees distrust leaders who alternate between nurturing and cutthroat corporate behavior. All the good old change management stuff applies: leaders need to listen, set the direction, get aligned with senior management, look for opportunities for reinforcement and bright spots in the organization. To read more: