The Truth about that 70% Fail Rate

August 27, 2019
August 27, 2019 Joe Britto

Reading time: about 3.5 minutes

Before I get into this week’s blog a confession.

This week we’re talking about the often-quoted assertion that 70% of change projects fail. Here’s the confession: I’m guilty of repeating it too. In my defence, when I did repeat it, I’d say I couldn’t find any references—that it was more anecdotal that fact. But I still repeated it: to clients, in talks, and in writing.

With that out of the way, you won’t be surprised to hear that the 70% stat isn’t true. I won’t bore you with my road to Damascus moment. I’ll just say it made me think about how often I’d cited a number that’s only very rarely referenced. Truth is, it’s a mix of opinion, and very questionable research. Really, it’s just made up.

So this week, I’d like to focus a little on why that number is meaningless; and what we can learn about businesses because of it.

70% Fail Rate: The Reality

Dr Mark Hughes, of Brighton Business School, takes us through the history of the 70% myth in his paper “Do 70% of All Organizational Change Initiatives Really Fail?” [1] The statistic begins in the page’s of John Kotter’s A Sense of Urgency where we get the phrase “From years of study, I estimate today more than 70% of needed change either fails to be launched, even though some people clearly see the need, fails to be completed even though some people exhaust themselves trying, or finishes over budget, late and with initial aspirations unmet.”

It continues in 2009 when McKinsey pointed to their own survey of “1,546 business executives from around the world, asking them if they consider their change programs ‘completely/mostly’ successful: only 30 percent agreed.” [2]

And from there opinions are circulated as fact. A corporate urban legend if you like. Or a real life example of comedian Vic Reeves’ joke that 88.2% of statistics are made up on the spot.

The Problem with the 70% Fail Rate Myth

Deloitte [3], Forbes [4], Mckinsey [5], and many management consultants quote the 70% number.

Maybe that makes sense. After all, a management consultancy is in the game of helping businesses. What better way to convince a business they need your help then to tell them there’s research that shows 70% of change projects fail?

And if it helps businesses see the need for more robust change processes; then what’s the problem? Well for me, what raising the spectre of a 70% fail rate does is create fear and then offer a simple solution in the form of a new change model, or change process, to address the fear.

And there’s the rub because if that change model or process did work, then it’s a case of no harm, no foul. But is there any proof that one change model works any better than another? And again the answer is “No, not really.”

Simple Solutions to Complex Challenges

What’s really happening is too often consultants use the 70% fail rate myth as a way to offer simple solutions to complex problems. Simple solutions that stand no better chance of working then if we left the business alone to start with.

That’s because it’s hard to know what causes a change project to fail. It could be a lack of resourcing the change; or a thing often referred to as “executive resistance”—senior people in a business failing to get behind a change. It could be behavioural or organizational challenges—people don’t work toward the goal together, or the business isn’t set up to effectively support the change.

Except for perhaps resourcing, even the best model in the world can’t address those challenges.

Before you think I’m giving my profession a bad name, let’s remember applying simple solutions to complex challenges isn’t just the domain of consultants. After all if a business wasn’t looking for a simple solution, it wouldn’t hire the consultant touting one to start with.

The biggest problem is that in a fast-paced business environment, businesses and consultants alike are looking for the shortest, fastest process to success. And that encourages a climate where consultants say something like, “Well if you just follow these steps, your change project will succeed.”

Certainty in the face of complexity has a powerful draw.

Complex Solutions to Complex Challenges

The real challenge of change isn’t the model we use. It’s getting people to use the model, support the change, or follow the process.

Those aren’t simple things to solve because if they were, we wouldn’t be dealing with people, we’d be dealing with robots. And what people do is disagree with an approach, pay lip service to it, adjust the process, or don’t follow it all. And the reason they do that is because their agenda and the goals of the business don’t align.

The complexity I’m talking about in the sub-title to this section is the complexity of helping people see where their objective and the company’s objective fit. Do that and the foundation of your change project changes. And it changes because people are now working for the change not because they have to, but because they want to. And that means resources are allocated, and resistance fades.

The Foundation of Change

For me, that foundation has its roots in mindset. Unlike a change model, helping people see the alignment between their goals and a company’s goal isn’t easy. It takes time. And it takes effort.

But create a foundation like that and now you can use any model or no model because people want the change to succeed.

They flex in their thinking. They’re curious about what’s possible. And because they believe in what they’re doing they have the resilience to stay the course. Those represent shifts in thinking. and though it’s harder to achieve, it’s also sustainable. After all, once we shift our thinking, there is no going back.

 

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[1] Hughes, Mark. “Do 70% of All Organizational Change Initiatives Really Fail?” Journal of Change Management, Vol 11(4) p. 451-464. December 2011. [2] https://www.mckinsey.com/featured-insights/leadership/changing-change-management [3] Deloitte brochure. Demystifying Change Management https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/public-sector/lu-demystifying-change-management.pdf p.35 [4] Reason Why Most Change Management Efforts Fail  https://www.forbes.com/sites/brentgleeson/2017/07/25/1-reason-why-most-change-management-efforts-fail/#22bd9dc2546b [5] Isern, Joseph and Pung, Caroline, “Organizing for successful change management: A McKinsey global survey”, The McKinsey Quarterly, June 2006.

 

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