Compact Risk: Controlling the Perils of Change

In the best of times, new products, new technologies, and new initiatives bring exciting opportunities. In challenging economies and uncertain political landscapes, organizations are often faced with cutting back on services or product offerings, reorganizing their workforce, or adapting their business models.

In either situation, effectively navigating through change is essential to surviving it, but successfully managing organizational change is not easy. Roughly 70 percent of change efforts fail or are derailed, and the consequences are significant in both the short- and long-term.   

The cost of failure to an organization can be seen in lower productivity and morale, missed objectives, wasted time and money, and higher employee turnover. The more far-reaching effects of a failed change effort are the unflattering opinions from an organization’s customers and investors. Once-successful companies have collapsed because an
attempt to change did not succeed.

John Kotter, a Harvard Business School professor of leadership and the author of several books on change, cautions organizations that today’s economic, sociological, and political environments require that they learn to adapt rapidly or cease to be competitive.

“The rate of change is exponential,” says Kotter. “Not only do we have political uncertainties, but technology keeps spiraling, and globalization creates interesting ties between countries. That means that something that affects one, is felt by others a long ways away.”