Corporate transformations fail much more often than they succeed. The failure rate is around 70% — and that number hasn’t improved in decades. Since the 1980s, humans have digitized the global economy, mapped the human genome, and built self-driving cars. But over that same period, we haven’t gotten significantly better at helping groups of people do things differently.
We all suffer the consequences. Shareholders lose capital. Customers are stuck with services that could be better and cheaper. And employees bear a high cost in wasted time, energy and trust. Each change program that fails leaves scars within an organization, reducing its willingness and ability to adapt in the future.
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So why do change programs fail so often?
We spend our careers studying this question. We lead large-scale transformations across different sectors and continents. Most recently, we interviewed and surveyed six thousand executives and employees in fifteen countries, spoke with more than fifty executives and behavioral scientists, and analyzed fifty years of behavioral science evidence.
What we discovered was this: changes don’t fail because people resist. They fail because leaders misunderstand how people really change. When organizations struggle to change, it’s usually not because leaders have a bad strategy or few opportunities to win new business, but because they don’t pay enough attention to how people are likely to act, feel, and think throughout the process.
Consider this real-life scenario. Executives do not deliberately withhold information about a change from affected employees, but they communicate late in the planning process because they believe those employees will naturally be supportive of the idea. Or they only stop talking when the plan is “ready”, to avoid distractions.
Now another scenario. After years of complaints about a poor work process, executives design a new process. But they don’t invest enough time or resources in retraining employees because they overestimate the teams’ natural knowledge and motivation for the new process and underestimate what it really takes to change human habits.
In each of these scenarios, leaders are affected by a cognitive bias known as the false consensus effect: the tendency to overestimate the extent to which our own beliefs are shared by those around us.
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Executives often feel excitement, urgency, and motivation in the face of change—in fact, in our own research, nearly 70% of executives reported feeling positive about a change they knew virtually nothing about.
They assume that this positive disposition is universal. But employees often feel anxious, overwhelmed or frustrated. Therefore, they need much more attention, information and support than executives normally realize.
For leaders, the good news is that making change more successful can start with a simple shift in mindset. In our experience, leaders who drive successful transformations treat employees as customers of that change.
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They care intensely about people’s experience during the process, just as they care about customers’ experience with their products. They are present every day trying to understand how they can support those who make the change.
They are proactive, understand the details and constantly look for ways to make the transformation work faster and easier. With this, they combat the effect of false consensus.
In the most successful transformations, leaders put this winning mindset into practice by applying principles from behavioral sciences. For example, scientists have discovered that people place more value on things when they put their own effort into creating them — a phenomenon known as the Ikea effect.
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In transformation processes, we observe that employees who have real opportunities to contribute to the design of the change feel greater commitment to its execution.
Or consider the perceived progress effect, which describes the human tendency to try harder to achieve goals when we feel that some progress has already occurred.
In transformations, leaders who consistently communicate small early wins throughout the organization give employees a sense of movement and advancement, significantly increasing the chance that they themselves will generate new results.
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The root cause of most change failures is not strategic, financial, or operational—it is behavioral. For change to be more successful in the future, leaders will need to think deeply about the people around them and their natural patterns of behavior.
This work is never simple. The good news is that there is a science of change today — and leaders who engage with it are in a much better position to beat the odds.
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