Failure in numbers
One thing is obvious: we must learn to transform both better and faster!
70% aller Veränderungsprogramme erreichen nicht das gewünschte Ziel – immer noch! Egal ob wir Deloitte, Bain & Company, KPMG, BCG oder Capgemini fragen, diese Zahl erscheint seit Jahren immer wieder in den Umfragen. Doch was sind die Ursachen für den Misserfolg von Transformationen? Allein im Jahr 2022 gingen dadurch in der digitalen Transformation 900 Billionen US-Dollar verloren (Forbes Technology Council). Werden wir denn gar nicht besser? Nein, es scheint, wir werden schlechter! Porsche Consulting shows in its latest study that only 20% of German companies achieve their strategic transformation goals. In the areas of transport, mobility & logistics, in the public sector & infrastructure and in the technology & telecommunications industry, the success rate is a maximum of 15%. In the case of digital transformations, as many as 94% fail to achieve their goal! Why is that?
In the public sector, the set of rules to be observed is enormously demanding, and comprehensive and holistic reforms take years. In addition, there is hardly any other sector with so little scope within established framework conditions. Legal consequences must always be expected. Where is the source of energy for engagement, the scope for empowerment and agile ways of working?
In the technology and telecommunications industry, it is due to the incredible speed with which new things are developed and old things become obsolete. The adaptation cycles take too long. If we bet on a horse that is modern today, it is already old hat by the time it is implemented. The bigger the company, the more comprehensive the adaptation programmes. But time is now the decisive factor! Start-ups are conquering the market with new ideas, are small, light and agile and have designed their business model to adapt from the very beginning. The market is in enormous flux. It is no longer about implementing THE transformation programme. It is about living a whole new culture of perpetual adaptation. So we need to get to the bottom of why transformations fail!
6 Reasons for the failure of transformations
No matter what industry you are in, there are a few factors that can shake up any transformation, no matter how well-intentioned it may be. You should pay attention to these 6 causes in order to recognise and remedy weak points in time:
- Lack of vision clarity
If companies cannot explain exactly why a change is necessary and what they want to achieve with the transformation, it is almost impossible to successfully shape the transformation process or even to activate others for it. What is needed here is not a short-term profit motive, but a vision that people want to follow, even if it means effort. Those who do not know the intended impact through transformation cannot engage effectively. Those who cannot judge whether the desired goal is worthwhile will hold back themselves and their commitment.
- Insufficient leadership support
One of the main causes of failure in transformation programmes is a lack of commitment and support from leadership. If leaders do not actively model change, set clear goals and demonstrate unity, direction is lacking and the initiative stalls. Competing goals and priorities are poison for any transformation process and a slowdown that most companies cannot afford. In addition, competing goals lead to a lack of resources allocated to the transformation. A tight budget, insufficient staff or an unrealistic timetable will cost credibility and slow down the transformation and probably not bring it to the desired goal.
- Lack of adaptability
Digital transformation requires agility and the ability to adapt quickly to changing circumstances. If companies are too rigid, have inflexible processes or find it difficult to respond to new demands, this can affect the success of the transformation. Every company is well advised to review the balance between regulations and freedom. What absolutely has to be regulated? What can be decided situationally and depending on the use case by the operational level? When it comes to transforming faster, control clearly loses out to trust in the problem-solving competence of the workforce! Adaptability needs competent complicity!
- Lack of competencies
Transformation is about strategically realigning together, checking the business model for resilience and acquiring new skills as a company! Which skills are needed in the long term and therefore also valued? How can these skills be acquired? Will the skills training happen within the company or "are they kicking me out to hire someone who already has those skills?" Does the planning for transformation take into account time to learn or do employees find themselves being overwhelmed? Depending on how companies deal with this question, they will release hope in the future or strengthen the old.
- Cultural resistance
Transformations, whether digital or not, often require a profound cultural change within the company. It is not just about accepting new technologies or adapting ways of working. That is too short-sighted and too operational! Transformations essentially change HOW the company's purpose is fulfilled. What will we stand for in the future? What behaviour will promote success and bring us to the goal? How do we deal with old routines? The "reflexes" of employees and managers are still completely old school. Developing a new corporate culture through new behaviour is a marathon, not a sprint. It takes a general awareness of the desired behaviours and why they are beneficial for each individual. AND it takes consistent, social reactions to undesirable behaviour. Especially under pressure, we react unconsciously, and usually based on old patterns of success. Culture change is therefore an intensive and exhausting process, with many constructive feedback and correction loops for all involved.
- Insufficient integration
Employee involvement is a crucial success factor for transformations. If employees are not actively involved in the transformation process, if their perspectives are not heard, this can lead to frustration and lack of acceptance. Why should it be any other way? People are not lemmings! And people do not like to be the victim of other people's decisions. We cannot shortcut the process of dealing with innovations, forming an opinion and seeking our own way in it. We only lose time if we only involve the staff at the implementation stage. By losing time like this, we risk the failure of our transformation!
Bad transformation programmes harm the company
Over the last few years, we have seen one change programme take over from the next before the first could even produce results. And what have we achieved as a result? That's right - frustration among the staff. The daily work was burdened with additional work - without any real, consequent relief and without the promised results, because we never reached the end, the proposed future scenario. What remains is disillusionment, a tarnished trust in the management team and a declining commitment to the company's goals in general. “All I want is to just do my job and bring home my salary - anything else I’ll do in my free-time!" This is exactly what a failure in transformation feels and sounds like.
Companies urgently need more change competence
Aus den Ursachen des Misserfolg von Transformationen zu lernen, ist ein erster Schritt. Doch das wird nicht reichen, um in Zukunft besser und schneller zu werden. Was wir in allen Branchen brauchen, ist eine neue Einstellung zur Veränderung!
Every successful transformation requires a change management strategy that ensures acceptance of the desired changes through communication, participation and implementation support. And this strategy is needed at the company level from the first hour of the transformation. It needs change enthusiasts who are curious, ask questions, explore possibilities - without diminishing the value of what has been achieved so far. We need people who can create a spirit of optimism, exude confidence and encourage others to “new thinking". And we need significantly increased change competence at all management levels to support precisely these stimulators of change and direct them towards an aligned goal. Companies of the future that can adapt quickly are learning-oriented. They create a culture of development where employees expand their knowledge, learn from mistakes, develop new skills and share best practices. This, together with empowerment and permission to make their own decisions, makes companies faster and more adaptable.
So that you can find out how high the chances of success for the transformation in your company are, I have put together this short questionnaire. You can use it to check whether there are any weaknesses in your company that make a failure of the transformation likely!