Over and over again I have seen major change initiatives fail. In fact, studies show that over 70% of most internal initiatives fail to meet stakeholder expectations. Whether it is implementing a new system, a merger or acquisition, business process improvement, opening a new office or pursuing a new direction, these major internal projects meant to help the company grow, improve, and thrive are derailed due to issues that could have been planned for, but weren’t.
The cost of these failed initiatives, beyond the obvious inability of the business to grow and flourish, is hard dollars and time invested and lost. Hard costs include outright purchases of software, products, travel and outside services. There is also investment of time of employees and leadership wasted or misused. But there are also many “soft” costs such as lost confidence in leadership, missed opportunities or loss of competitive advantage. These costs can ultimately far exceed the tangible measurable expenses.
In working with clients through the six steps to increase profitability outlined in my blog and detailed in my book, Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering and Environmental Firms, I realized that many firms get stuck at Step Five – Implement Changes. This is where the rubber meets the road – where many firms find it too difficult to get past their cultures of not holding people accountable.
Getting through the first four steps are fairly straightforward. Step 1 – Calculating metrics and establishing a baseline for 1% to 3% improvement is easy, and important for getting leaders and staff motivated. Steps 2 and 3 – Identifying and analyzing what is really going on in the business involves asking employees for feedback, and can be streamlined using our Business Management Assessment tool. Step 4, developing a plan to make improvements, involves applying what we learned in the Assessment to prioritize which initiatives will have the biggest financial impact. But Step 5, Implementation of these initiatives, is where many firms get derailed and fail to get traction. Without execution the whole process is a waste of time, effort and money.
The following are 10 reasons change initiatives fail
These are the challenges with implementing effective change initiatives that I have seen consistently when working with clients to grow and improve their business:
10. Lack of Defined Outcomes – failure to determine specific measurable goals and objectives for the project.
9. Resistance – this is a normal reaction to change and should be anticipated. Having a plan for resistance is an effective way to prepare for its inevitable consequences.
8. Missing Feedback – employees and other stakeholders can provide valuable feedback and clues as to what obstacles you might face. Failure to ask for feedback often leads to lack of buy-in and unexpected problems.
7. Disjointed Team – without the right team your initiative is doomed to fail. Ensure that all team members are committed, have the right skills and time available, and are passionate about the mission of the project.
6. Failure to Measure – without specific measurable metrics established to analyze results, it will be very difficult to determine if the initiative is a success or failure. Everyone should know how the results will be measured and there should be a regular process for reviewing progress against expected milestones.
5. Poor Planning – every internal initiative should be treated as a project with a scope, budget and timeline, and given the same attention as you would a billable project.
4. Inadequate Resources – every internal improvement project needs adequate resources of time, money and people to be successful. Many firms underestimate what it will take to get change management initiatives implemented, and are surprised to see what it costs or how long it takes in the end.
3. Failure to Communicate – communication is critical to getting employee buy-in and eventual user adoption. The core of the communication should center on why the project is critical to your firm’s success, and the value it will bring in the short and long term. Don’t forget – WIIFM – “What’s in it for me” – make sure you let employees know how it will impact them directly or resistance will be higher.
2. Lack of Accountability – along with measuring progress comes holding employees accountable for the success of the project. This includes well-communicated rewards and consequences for meeting expected milestones and outcomes. Ensure that all team members know that excuses will not be tolerated and specific consequences, such as being removed from the team, will accompany failure to follow through with assigned tasks.
1. Absence of Leadership Consensus – the primary reason that change initiatives fail is lack of consensus and support from the firm’s leaders. Firm leaders must be at the forefront of communicating the importance of the change, and show visible support for its results. If leaders don’t care enough to stay involved then it will be difficult to expect employees to get behind an important project.
By ensuring these 10 challenges are anticipated and prepared for in advance, you can give your firm the highest chance of success in implementing critical business improvements. Make sure you take the time to understand where your firm is at before starting any new projects, and have realistic goals that everyone can get behind.
Join the conversation below. What other best practices have you seen for ensuring that change is implemented effectively at your firm?
DID YOU MISS THIS YEAR'S PROFITABILITY SUMMIT?
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Find the Lost Dollars: 9 Areas Your A&E Firm is Losing Profit
Thursday, October 10th - 1:30pm ET
Many A&E firms are leaking profits due to ineffective processes, non-integrated systems, and a culture focused on technical excellence and not business success.
In this session you will learn how to improve 3 Key metrics – your win rate, utilization and project profit margin by improving business management and operational practices that will lead your firm to find the lost dollars in your company. You will gain useful best practices that can lead to increased financial success including sales & proposal success, estimating, project management, time management and client relationships. Learn how to identify problem areas by doing a company-wide assessment and getting valuable insight from your employees. This web training will focus on how to assess people, processes, and systems including what questions to ask and how to ask them.