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Why Corporate Change Programs Fail

Written by: George Smart

Article Overview: Theories X, Y, and Z. MBO. Grid Management. Situational Leadership. T-groups. Excellence. TQM. Team building. Re-engineering. Empowerment. Diversity. The Seven Habits. You have probably heard of at least one of these programs for business and corporate change. Like insatiable lovers, corporations can journey from one program to another, sometimes not even pausing to take an organizational breath. It is more important to help people grow sanely than quickly. The belief that there's no such thing as too much growth has killed hundreds of companies, careers, marriages, and dreams.

Why Corporate Change Programs Fail

by George Smart

"In corporate change, unfortunately, consultants sometimes conspire with their clients to chase symptoms instead of underlying problems."

Theories X, Y, and Z. MBO. Grid Management. Situational Leadership. T-groups. Excellence. TQM. Team building. Re-engineering. Empowerment. Diversity. The Seven Habits. You have probably heard of at least one of these programs for business and corporate change. Like insatiable lovers, corporations can journey from one program to another, sometimes not even pausing to take an organizational breath.

An outsider might expect that the decision to start such programs is based on considerable research, contemplation, or at the very least familiarity. But here's an example of how it can--and often does--happen. A CEO, on the way to Boston, reads an airline magazine article on a new program to raise morale. Let's call it Program X. Disney and Microsoft and a boardroom full of technology execs rave about it. He (and it's usually a he that makes this mistake) goes back to his company, calls a staff meeting, and says, "We all want better morale (this is a nice way saying morale now stinks). I've been reading on the plane about Program X that Disney and Microsoft do. I just bought the book (passes out copies to everyone) and I think Program X would work here." VP heads nod, hoping that this too will pass quickly and not linger, as one of the characters in Dilbert says, "like the stench of a dead woodchuck under the porch."

All is quiet for a while, but the CEO is still in lust, and two months later, consultants knowledgeable in Program X show up ready to work everyone up into an frenzy. This can feel wonderfully torrid at first, with high expectations and lots of fanfare. But as energy decreases, productivity goes up in some places but down overall, and people get discouraged, the CEO's interest wanders and the program loses steam.

Then the company sees the CEO: closing down the program, part by part, all for "good" reasons-which, ironically, rationalize the enormous amount of time and money spent on the program; blaming, to deflect responsibility for picking the damn thing to begin with; deflecting corporate attention away from internal problems by acquiring a company or being acquired; and having selective amnesia, to deflect anything that's left.

The affair is over. A few months pass of blissful quiet, and then a new sexy program winks at the CEO on the plane from Las Vegas, and the cycle repeats. Oh, and by the way, company morale is even lower than before.

Most all change methods are effective. For the most part, each one is theoretically sound, well-researched, and clearly articulated. There are well-regarded authors, speakers, trainers, and consultants who bring extraordinary credibility to each program, and their success stories cite dramatic increases in profits through recipes for workplace satisfaction and productivity. But when they're put in organizations, they fail-at least 70 to 80% of the time.

Why? Many CEO's like to decide fast and in a big way, and as a group they routinely choose programs without a clear understanding of the root causes within their organizations. Programs should not be undertaken without a solid understanding of "what's true now." No CEO would go into a doctor and say "Doc, I've heard that triple-bypass heart surgery is a really cool procedure. Lots of my friends have had it done-can you do it tomorrow?" They would want the doctor to make sure the procedure was called for, to test, to ask the right questions. Otherwise, there is enormous and needless worry, time, and money (not to mention damage to a perfectly good heart) when the real problem is heartburn from last night's pizza.

In corporate change, unfortunately, consultants sometimes conspire with their clients to chase symptoms instead of underlying problems. I can recall with great shame years ago when I agreed to do the equivalent of triple-bypass for a client. I didn't ask many questions. I chose to grab the large fee and run, and although the client was pleased, we both knew the work was not really useful. Now I insist that we diagnose together before choosing any program. Over the years, this saves hours of needless consulting. Sometimes we discover they don't need a program at all, just a little fine-tuning.

When I work with a company, I believe 80-90% of the wisdom and expertise needed already exists within. I bring considerable experience and expertise to the table, but a large part of my role is to draw that out and have people feel it is "theirs"-then do it. Many organizations spend endless hours and money putting together the "best" plan only to have that plan put on the bookshelf or the trash can. Too often clients (and their consultants, to be honest) expand too quickly and consider the downsides of such expansion too late. The best plan is the plan an organization will actually do-one in which they build the necessary capacity and where the changes are sustainable. It is more important to help people grow sanely than quickly. The belief that there's no such thing as too much growth has killed hundreds of companies, careers, marriages, and dreams.

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Article Tags: airline magazine, boardroom, contemplation, dead woodchuck, dilbert, energy decreases, execs, familiarity, fanfare, frenzy, high expectations, magazine article, mbo, outsider, seven habits, situational leadership, staff meeting, stench, team building, woodchuck



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