Failure rates of large and small change programmes are high. Too high. Organisations sometimes try to improve their chances of success by focusing on governance and reporting. This includes tightening up responsibilities of steering committees and change boards, and the roles of individuals within these structures, or by throwing more resources at the challenge.
We believe that this is not enough – and not the right focus. And we use our ground-breaking research into the key indicators of success and failure in financial services programmes, to advise clients what their priorities should be.
Davies’s unique research into 300+ financial services change initiatives
We have conducted research into more than 300 change initiatives to understand what helps, or hinders, success. Of those we studied, 52% were deemed a success by the organisations which undertook them, while 48% were seen to have failed – or were even abandoned.
Looking more closely, our analysis showed that when three specific factors were all present, success rates increased to 94%. But when they were all absent, failure rates increased to 80%. These three essential conditions are:
- A relentless focus on business outcomes.
- A high degree of collaboration between the programme team and key stakeholders.
- The presence of a clear and practical operating vision.
Furthermore, the degree of focus on the business outcomes was the single most important factor differentiating between successful and unsuccessful programmes. Our analysis showed that the chances of succeeding when this is present are four times greater than when it is absent.
A high degree of collaboration within the delivery team/s and with key stakeholders means the various silos and stakeholders work constructively together to clarify priorities, make sensible trade-offs and agree feasible plans. They have a shared commitment to an outcome and a vision.
A clear and practical operating vision unites people behind a common understanding and shared sense of intent. Achieving this clarity requires more than references to the business outcomes. It requires clear descriptions of the future business and operating models; the interrelatedness of systems, processes, people and organisational structures.
Factors that predict failure
In parallel with our critical conditions for success, we also looked at the primary drivers of failure. Those we identified were
- An inadequate focus on business outcomes even at the sponsorship level
- An absence of commitment from the delivery team and key stakeholders towards the programme goals
- An unfeasible plan
Without commitment, the chances of failure increased to almost 80%. This emphasises the importance of building not only collaboration across all stakeholders, but also a sense of commitment towards the programme outcomes – and following that through with specific behaviours. For example, allocating sufficient time and resources to the right priorities in the programme, or communicating effectively with other members of the team.
The importance of leadership
What this research ultimately confirms is the importance of leadership. It is the leader who defines the business outcomes of the programme and ensures people focus on that outcome. It is the job of the leader to build alliances and collaboration, securing the commitment of various stakeholders behind the business outcomes and the operating vision. Leaders are also responsible for ensuring that programme plans are adapted and changed when necessary avoiding a ‘stick to the plan’ or ‘back to the plan’ type mindset.
We help clients worldwide to create successful, high performing individuals, teams and organisations. To find out more, please contact us.
