United Airlines is so famous for its PR disasters that there is a special word for them: Snafuniteds. In its latest public relations crisis, reported by the Daily Mirror on Sunday, the airline messed up a booking and separated three children aged 2, 4, and 6 from their parents, scattering them all over the cabin in seating arrangements.
It isn't, so it's logical to wonder: Why not? Original research carried out by McKinsey & Company reveals that the failure rate for organizational change projects has ranged at a staggering 60 to 70 percent since the 1970s.
Given the amount of money companies spend annually for change management, the failure cannot be attributed simply to a lack of trying. Something more fundamental is at work.
Change Is Costly
At its most formal, change is a redirection of mental, physical, and psychological resources to do some things differently. At an organizational level, this means that processes that are in place and already working have to be modified, assessed, and refined. In a worst-case scenario, they have to be abandoned, redrawn, and implemented from scratch.
Change never comes free of charge. A Gartner survey of 169 SAP implementations in North America, for instance, found that, on average, only 5 percent of the overall system implementation budget of a project was allocated to the change management effort. Gartner recommends that companies allocate an average of 15 percent at minimum.
Organizational change requires communication, training, systems development and implementation, and the tweaking and assessment of processes across the board. It is a sizable investment that eats into the bottom line.
The cost becomes even higher when we begin to consider what it takes to successfully change hearts and minds--attitudes and ways of thinking--across your entire organization. You need a clear understanding of the rules and regulations, operating procedures, mission statement, values, and vision.
More than that, you need to be able to identify and affect the way people feel when they are at work. Change, in order to stick, requires a detailed, top-down approach backed by a sustainable plan with clear checks and rewards.
A New York Times timeline of United's position following the widely publicized, forced eviction of passenger David Dao Duy Anh from a flight reveals that the company changed its views in accordance with public pressure and damage done to its share value. This means that top-down guidance and vision for true change is currently partial at best and nonexistent at worst.
The Plan for Lasting Change
Some management gurus believe that lasting change requires accountability, transparency, and assessment.
United's very public failure to change its culture provides us with a four-step process that addresses the issues of extrinsic and intrinsic cost, transparency, and accountability. It is designed to successfully overcome organizational inertia and deliver lasting results in a sustainable manner:
- Make it manageable. To work, change has to be the solution to very real, very visible problems, and it must be incremental. To be successfully managed, change needs to work with processes that are already in place that everyone is using. Above all, it has to identify and acknowledge existing strengths, skills, and abilities within the organization and build on them, not negate them.
- Reinforce feedback. To encourage transparency and accountability, create a culture of celebration of the successful management of change. Set small improvement targets and celebrate their achievement. Create a culture of iteration in which analysis becomes part of the learning process. By all means, be ambitious in your long-term goals, but set realistic short-term ones, achieve them, rejoice, and make sure everyone within your organization understands their value.
- Formalize each success. Make each success in the change you are affecting a building block of your organization's identity. Avoid a culture that cannot wait to forget failures and fails to adequately learn from successes. Draw principles from each moment of success and every point of failure. Apply them to your organization's operational processes to improve them. Clearly communicate the value of this to everyone within the organization to help them feel a part of the achievement.
- Apply it. Managing change requires constant practice and reinforcement. To do so successfully, you need to make it part of your DNA. This means you apply it in pretty much every operational area of your organization, adjusting for need and context.
Through these four steps, your own organization's brand and reputation will not suffer from every stumble the way United's does.