Corporate transformations fail much more often than they succeed. The failure rate is around 70% and this figure has not improved in decades. Since the 1980s, human beings digitized the global economy, mapped the human genome, and built cars that can drive themselves. But over the same period, we did not become meaningfully better at helping groups of people do things differently.
We all suffer the consequences. Shareholders lose capital. Customers are stuck with services that could be better and cheaper. And employees bear a heavy cost of wasted time, energy, and belief. Every failed change program leaves scar tissue in an organization, reducing its appetite and capacity for future adaptation.
So why are failed change programs so common?
We have spent our careers studying this question. We have led large-scale transformations across industries and continents. More recently, we have surveyed six thousand executives and employees across fifteen countries, interviewed more than fifty executives and behavioral scientists, and sifted through fifty years of evidence from the behavioral sciences.
What we’ve found is this: change doesn’t fail because people resist. It fails because leaders misunderstand how people really change. When organizations struggle with change, they usually do so not because leaders have a poor strategy or insufficient opportunities to win new business, but because they don’t focus enough on how people are likely to behave, feel, and think throughout the process.
Consider this real-world scenario. Executives don’t intentionally withhold information about a change from affected employees, but they tell them late in the planning process because they believe those employees to be well-disposed toward it. Or they defer saying anything at all until the plan is “finished,” so as not to distract employees.
Here’s another scenario. After years of complaints about a bad business process, executives design a new one. But they don’t invest meaningful time and resources in retraining employees because they overestimate employees’ inherent knowledge and motivation about the new process, and underestimate what it takes to change human habits.
In each of these scenarios, leaders are affected by a cognitive bias known as the false consensus effect: the tendency to overestimate the prevalence of our own beliefs in the world around us. Executives often feel excitement, urgency and motivation around change — in fact, in our own research, around 70% of executives report feeling positive about a change they know nothing about. They assume their positive disposition is universally shared. But employees more commonly feel anxious, overwhelmed, or frustrated. Consequently, employees need much more attention, information, and support than executives typically expect.
For leaders, the good news is that making change more successful can start with a simple mindset shift. In our experience, leaders of a successful change treat employees as the customers of that change. They obsess about their people’s experience of change, just like as they obsess about their customers’ experience of their product. They show up every day seeking to understand how they can serve the people executing the change. They are proactive, they understand the details, and they are always looking for ways to make the work of change faster and easier. In doing so, they fight back against the false consensus effect.
In the most successful changes, leaders put a winning mindset to work by applying practices from the behavioral sciences. For example, scientists have found that people value things more when they put their own effort into creating them — they call this the IKEA effect. In transformation, we’ve found that employees who have genuine opportunities to contribute to the design of the change feel more committed to its successful execution.
Or, consider the endowed progress effect, which describes human beings’ tendency to work harder toward goals when they feel that some progress has already been made. In transformation, leaders who consistently describe early wins across their organizations give employees a feeling of momentum, making them significantly more likely to generate wins of their own.
The root cause of most change failures isn’t strategic, financial, or operational — it’s behavioral. For change to succeed more often in the future, leaders will need to think deeply about the human beings around them and their natural patterns of behavior. This work is never easy. The good news is that a science of change now exists — and the leaders who engage with it are in the best position to beat the odds.
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