Why 88% of Change Initiatives Fail & What CFOs can do Instead

By Campbell Macpherson

Change is inevitable. Successful change is not.

A staggering 88% of change initiatives fail to deliver what they set out to achieve. The same is true for busines strategies, when it comes to mergers and acquisitions: 7 out of 8 fail to live up to expectations. And the over-riding reason is leadership.

Finance leadership today is all about leading change. If you are not leading change, you are not leading anything. You are just managing the status quo – and if 2020 has taught us anything, it is that the status quo no longer exists.

But too many CFOs forget that change is not about systems or processes or business models or even logic. Successful change is about people – and people can be unpredictable and emotional beings.

Therefore, the essential ingredients to successful change are all about people. The following Top 5 tips have been taken directly from the ‘Leading Change’ workshops and webinars I run for Henley Business School, and the ‘Embracing Change’ workshops, webinars and online programme for organisations worldwide, approved by The Institute of Leadership & Management.

1. Clarity of what you are trying to achieve – and why. If you wish your people to succeed, they must completely understand what you wish them to achieve (both the numbers and the narrative) and, just as importantly, why – both the logical reasons and the emotional reasons why they should embrace and deliver the change you desire.

2. Remember that when it comes to change, emotions trump logic every time. In fact, a comprehensive survey of 50,000 employees conducted by the Corporate Leadership Council found that emotion was four times more powerful than logic. Logic is important but it must be backed up by strong emotional reasons for changing.

3. Engage your people to understand the implications of the change. Every decision, every change, has consequences. The moment a change leader announces the change to their people, everyone’s heads will be swarming with concerns, challenges, potential obstacles, and implications. Genuine communication involves listening. The best thing a leader can do is to get all the concerns out in the open – and then work with their people to collectively address and overcome them.

4. Develop ‘leading change’ skills throughout the organisation. At every level, you need empathetic leaders and managers with an understanding that change is inevitable, personal, emotional and omni-present. Leaders with the skills they need to set clear direction, engage their people and, most importantly, help their people to want to change.

5. Build a change-ready culture. Create a culture that embraces, encourages and rewards change – where people are eager to look for improvements in the way things are done, encouraged to question the status quo and learn from failure and are open to new ways of working. Enhance the ability of your people to see change as inevitable and a constant part of life – to harness their emotions, overcome their fears, build their resilience and thrive in a world of change.

The ability to embrace change is the key life skill that everyone in your organisation needs. It is the best skill for combating anxiety and coping with uncertainty. And of course, no-one works well when they are anxious or worried about the future. We humans are like that.

About the author:

Campbell Macpherson is a sought-after speaker and international business adviser on leadership, strategy and change who splits his time between Australia and the UK. He is a keynote speaker, Executive Fellow of Henley Business School and author. His first book, The Change Catalyst (Wiley 2017), won 2018 Business Book of the Year in London. His latest book, The Power to Change (Kogan Page 2020) has just been shortlisted for the 2021 Business Book Awards and is available from Booktopia. More information about Campbell, his workshops and webinars can be found at: www.changeandstrategy.com