Organizational Change: The Culprits That Make It Fail

by Dora Wang on Dec 15, 2014 8:00:00 AM

The Culprits That Make Organizational Change FailOrganizational change: It’s the bogeyman of the business world. And who’s surprised? About 70 percent of attempts at change fail, and those failures can be public and downright spectacular. Bank of America’s acquisition of Countrywide in 2008—which has since cost the bank over $40 billion—has been called “the worst deal in the history of American finance.”

Success is possible, but it’s a slippery beast. Take Mike Jeffries, the outspoken and often eyebrow-raising CEO of Abercrombie & Fitch. Over 20 years ago, he took the helm and drove the company’s rebranding from a struggling sporting goods brand into a trendy icon of upscale collegiate apparel.

But on December 9, he abruptly resigned with no successor named. What went wrong?

A Charismatic Leader Is Not Enough

The restructuring of Abercrombie’s brand was a success, but the Jeffries-driven face-lift came with frequent controversy. The CEO became notorious for making statements that drew fire (and boycotts) from multiple sources. Shareholders were unhappy with his hefty compensation, which he dropped in response to their pressure.

The nail in the coffin was several consecutive quarters of declining sales. Now the company needs to find a new leader—and a new identity. “He actually was the brand,” said Terre Simpson, president of executive-search firm Simpson Associates.

Jeffries had the vision to redefine the Abercrombie & Fitch brand, plus the drive to make the change happen. But the success didn’t outlive his tenure.

What’s The Problem? Jeffries was great, but what about everybody else in the organization? When a strong personality leads the charge and leaves others in his wake, there is no one left to bolster the team. Organizational change is not a one-man show.

Get ‘Em All On Board

Want another reason change fails? Check out these stats by Eagle Hill Consulting:

  • 82% of executives said they were committed to change—but only 66% of employees agreed that was true!
  • 63% of executives said change was communicated well by the company ... but 65% of employees felt differently.

There is a massive misalignment between those at the top and those left to institute the change at lower levels.

What’s The Problem? Executives think they’re headed in the right direction, but most of their employees are on a different track.

Success requires that organizational change is embraced at all levels, and everyone in the company is on board. This means communicating—and listening. Speak the language your employees want to hear: most prefer team and one-on-one meetings to impersonal emails for communicating about change. Fail to communicate to your team and you will fail to truly implement change.

Change happens. With a team-first mentality that puts communication at the top, you can lead your organization through it and find success on the other side.



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This post was written by Dora Wang

Dora is an employee engagement researcher for TINYpulse and managing editor of TINYinstitute. Having grown up in Texas, she is now firmly settled in Seattle, where she spends her free time reading comic books, wrangling her three cats, and (of course) rooting for the Seahawks.

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