Home > Articles > Business & Management

The Challenge of Leading Strategic Change

Organizations change only as much or as fast as individuals change. And, to change individual behavior, you must first change the mental maps guiding that behavior.
This chapter is from the book

I was recently talking with a CEO (I will call her Maria) about a major transformation that she was leading in her company. After several minutes of explaining her change plan, she asked me if I could recommend a good book or article for her to read on leading strategic change. I mentioned that, in fact, I had a book coming out on the topic. Graciously Maria congratulated me and then asked, “So what’s new and different in your book?”

“That’s simple,” I said. “Most other books on change have it backwards. They take an ‘organization-in’ approach wherein they outline all the organizational levers, such as reward systems, organization structures, performance management processes, and so on, that you should pull to lead change based on the premise that if you change the organization, individual change will follow.”

Because the change plan Maria had outlined earlier to me was an “organization-in” approach, she seemed a bit taken aback by my implying that her change plan was wrongheaded. Gathering a bit of courage, I continued, “My research and experience demonstrate that an ‘individual-out’ approach is what works. Lasting success comes from changing individuals first and then using organizational levers to sustain the change. This is because organizations change only as far or as fast as their collective individuals change.” I concluded, “Without individual change, there can be no meaningful organizational change.” Despite having impugned her strategic change plan, my last sentence about organizational change not being possible without individual change seemed to ring true to Maria.

Seeing that she was a bit intrigued, I decided to reinforce my point with an example. I described a large industrial firm that had recently implemented, at no small expense, a new CRM (Customer Relationship Management) system. The system was implemented because much of the knowledge regarding key customers resided in the heads of sales people who had been with the company for a long time and were due to retire in the near future. As a consequence, capturing and systematizing this knowledge made absolute sense. The new CRM system was introduced at a big company conference and sales people were subsequently trained in the new system. However, three months after the celebrated launch, virtually none of the sales people were using the system. Simply changing the system did not change their behavior.

At this point, Maria was nodding her head in agreement, so I pushed ahead with the second example. The second case I described to her was that of a large specialty chemical company in Europe. At the hands of a new CEO and with great fanfare, the company introduced a new organizational structure. One of the key features of the new structure was the consolidation of support services, such as technology, legal, HR, and supply chain, from the business units into global shared service centers. This move was designed both to raise the professionalism of the services and to save money. However, a year after the structure’s celebrated introduction, behavior had not really changed. In fact, most of the business leaders still had their “own people” in their units doing the functional activities (technology, legal, HR, and so on) that were supposed to have been consolidated into the global shared service centers. However, the business leaders were clever enough to hide their noncompliance by giving people new titles. For example, one business leader had changed the title of his HR director to “Head of Intangible Assets.”

Maria laughed at this example, saying that she had seen such incidences more than once in her career. Consequently, I reiterated my key point by stating, “Instead of an ‘organization-in’ approach, effective change needs to take an ‘individual-out’ approach. That is, in order to change your organization, you must first change individuals.” Because Maria seemed basically onboard with all of this, I closed with what some would call a brave statement and others might label as a foolish comment. I closed by saying, “And sometimes, changing individuals means changing yourself as the starting point.”

Maria mused on this final statement for a second or two but then commented, “It’s funny you should say that. As I’ve been thinking about the changes required of my team and other key leaders in order to transform this company, I’ve started to realize that I would need to make some changes in myself and how I lead as well.” At that point our conversation took a bit more personal turn relative to the changes she thought she might have to make.

But let me shift gears and bring this back to you, the reader. Let’s assume for a moment that, like Maria, you agree with my first premise that simply changing some organizational features, such as organizational structures or information systems, will not necessarily cause people to change their behaviors. Let’s further assume that you believe that in order to change your organization, you have to first change the mindset and behaviors of individuals. Even accepting these two key points, you might still ask yourself, “Okay, but do I really need to read a book on this? After all, how tough can leading change really be?”

Failure Rate

Unfortunately the answer is that leading successful change is very tough. In my research and experience with more than 10,000 executives, approximately 80 percent of organizational change initiatives fail to meet their objectives. When I present this figure, people often react somewhat along the lines of the following: “Eighty percent? That seems high.” However, if you put this in an everyday context, it is not so surprising. For example, every year millions of people make New Year’s resolutions. Most of those resolutions focus on eating better or exercising more or both. The key question is, “What percentage of people who make these resolutions and say they really want to change their lives are still following through just three weeks after making them?” Sadly it is only about 10–15 percent. If people cannot easily and successfully change their own behavior when they say they want to, why would we be surprised that people have about the same level of difficulty and failure rate when trying to change others’ behaviors, who may not even want to change?

But let’s not quibble about numbers. Other studies suggest that the percentage of organizational change failure is only 50 percent. But whether it is 50 or 80 percent, it is not 30 percent. This is important, because if the failure rate were 30 percent, we might attribute it to the failings of less motivated and skilled managers. But at 50–80 percent, this means that there are many motivated, skilled, and otherwise successful leaders who are nonetheless falling short of their organizational change objectives.

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020