Change management is broken. These 4 numbers explain why

Change is often presented as an enigma. Unlike a traditional management task, you can’t just devise a plan and execute it. To be an effective change leader, you need to embrace a certain amount of uncertainty because change, by definition, involves doing new things, and that always involves some measure of unpredictability. 

Still, that doesn’t mean change is mysterious. We actually know a lot about it. In Diffusion of Innovations, researcher Everett Rogers compiled hundreds of studies performed over many decades. Around the same time, Gene Sharp led a parallel effort to understand how large-scale political movements drive social and institutional change.

So while any change effort involves no small amount of uncertainty, there is also quite a bit of consistency. Much as Tolstoy remarked about families, all successful transformations end up looking very much alike, while all unsuccessful transformations end up failing in their own way. Here are four numbers to keep in mind as you embark on your change journey. 

1. Three Quarters Of Transformational Initiatives Fail

In 1983, McKinsey consultant Julien Phillips published a paper in the journal Human Resource Management that described an “adoption penalty” for firms that didn’t adapt to changes in the marketplace quickly enough. His ideas became McKinsey’s first change management model that it sold to clients.

Yet it was Harvard’s John Kotter, in his seminal 1996 book Leading Change, who really popularized the idea of change management, bringing it from academic theory into the practical world of business. His eight-step change management process continues to define the field for many even today. Later, Prosci’s ADKAR model gained prominence.

Yet for all of the prestige surrounding these ideas, there’s no evidence that any of these change management methods actually work. In fact, in a 2021 study McKinsey found that 69% of transformation efforts fail. A more recent study by Bain found that only 12% succeeded and 75% had mediocre results. That’s abysmal. 

There are many theories about why change fails. The McKinsey’s report points out that the source of failure can come at any stage, from target setting to planning, implementation, and after. Bain found that nearly all failed transformations were underfunded. In truth, however, these are symptoms, not causes. 

In my research  I’ve found something simpler and more fundamental: change fails because people resist it. If you can overcome resistance, change is possible. If not, it isn’t. That is why we developed a simple tool called the Resistance Inventory, so that our clients can anticipate resistance from Day 1 and build strategies to mitigate it. 

2. Two-Thirds Of Employees Experience Change Fatigue

Managers launching a new initiative often seek to start with a bang. They work to gain approval for a sizable budget as a sign of institutional commitment. They recruit high-profile executives, arrange a big “kick-off” meeting, and look to move fast, gain scale, and generate some quick wins. All of this is designed to create a sense of urgency and inevitability.

Yet trying to manufacture urgency often backfires. In Cultures of Growth, Stanford social psychologist Mary C. Murphy points out that disruption undermines the growth mindset that is essential for building an innovative culture. In particular, she cites research indicating that fear inhibits learning. There is also evidence to suggest that this effect is especially pronounced among top performers, who tend to be more prone to anxiety.

Now consider a 2014 report by PwC. In a survey of more than 2,200 executives, managers, and employees located across the globe, it found that 65% of respondents cited change fatigue, and only about half felt their organization had the capabilities to deliver change successfully.

It gets worse: 44% of employees say they don’t understand the change they’re being asked to make and 38% say they don’t agree with it. Perhaps not surprisingly, employees view new transformation initiatives suspiciously, taking a “wait-and-see” attitude, undermining the momentum and leading to a ”boomerang effect” in which early progress is reversed when leadership moves on to other priorities.

The impact on mental health is substantial. Stress disengages the parts of the brain related to cognitive and executive functions and activates the emotional parts of the brain instead. A recent study by the American Psychological Association found that 71% of American workers report feeling stressed at work and three in five say it negatively impacts their performance. 

3. Only 10%–20% Participation Is Needed To Hit An Inflection Point

The biggest misconception about change is that, to get people to adopt it, you need to sell the value of an alternative future. The real problem with change is that the status quo has inertia on its side, and never yields its power gracefully. It has had years—or even decades—to build support among internal and external stakeholders. 

That’s why most transformational efforts fail and why two-thirds experience change fatigue. The status quo, despite its drawbacks, is what people know. To adopt something new, we need to overcome the synaptic patterns built up in our brains, the cultural forces to which we have conformed and to overcome switching costs. 

That’s never easy. So how do you break the cycle?

The good news is that you don’t have to convince everyone at once. We know from the earliest diffusion studies on things like hybrid corn and tetracycline that it takes only 10%–20% to adopt an innovation for rapid acceptance by the majority to follow. Everett Rogers, in his seminal Diffusion of Innovations, found that this pattern was consistent over hundreds of studies spanning many decades. 

The key is to understand that change doesn’t spread through communication campaigns, but through peer networks. If you can empower 10%–20% of your organization to be successful with a new idea, they will spread it to their friends, who will spread it to others still. People adopt what they see working around them. So instead of trying to shape opinions, work to shape networks. 

4. 84% of U.S. Corporate Assets Are Now Intangible Assets

In the early 1980’s, Intel’s President, Andy Grove, realized he had a problem. The company had built its business on DRAM memory chips. But competition from the Japanese was killing its profits. As he described in his book, Only The Paranoid Survive, things came to head in the middle of 1985.

He turned to Intel’s Chairman and CEO Gordon Moore and asked him what a hypothetical new CEO would do if they were both fired. Moore replied without hesitation that the new CEO “would get us out of memories.” It was right then and there that a decision was made to focus on the microprocessors that would lead Intel to industry dominance. 

It’s a great story and, for many, it has come to epitomize effective change leadership. Leaders make a strategic decision, communicate it effectively, and see that it is implemented at every level of the organization. Questions and concerns are listened to and addressed, but at the same time, the message is clear: Change is coming and you need to get on board. 

But consider that research shows in 1975, during roughly the same period that Gove and Moore transformed Intel, 83% of the average US corporation’s assets were tangible assets, such as factories, machinery, and buildings. When your assets are tangible, change is largely about communicating strategic decisions made from above. There’s little anybody can do to resist them anyway.

However, the very same research finds that by 2015, 84% of corporate assets became intangible, such as licenses, patents, and research. Change is no longer about making decisions about strategic assets, but about influencing what people think and do everyday. You can’t try to force or overpower that kind of change, you need to attract and empower.

And that is probably the most important thing to know about how transformations happen today: change itself has changed. We can no longer just tell people to do what we want; we need to attract people who want what we want, who share our sense of mission. It is no longer enough to simply plan and direct action; we must inspire and empower belief.