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5 reasons why large business initiatives fail

The graveyard of business decisions and investments is littered with failed transformation initiatives. Be it in corporate, government or non-for-profit, failure is not discriminating. Failure bites hard and it can take a long time to recover. Whether it's a new software implementation, new outsourcing arrangement, new operating model, new ways of working or new market entry, failure can have big-time consequences. Often times failure leads to leadership changes, changes in strategy - even bankruptcy.

By some reports, 3 out of every 4 business change initiatives fail. Failure in this context means missed budget, timeline or outcomes not delivered. Here are the 5 most common (and most significant) reasons for failure that we see:

1. Lack of Vision

Limited clarity on where the business / initiative is going and why? What's the business imperative? Why do we need to change? It's critical that people (employees, shareholders, suppliers, etc) understand the rationale for the change and the big picture.

2. Poor Implementation Skills

To deliver on the vision, skills and experience in delivering change are required. Driving change at the necessary pace, discipline and focus require particular skill-sets. These aren't day-to-day operational skills and may not exist in the organization.

3. Lack of Management Support 

Big change needs to be led from the top. Emphasis the word *led*. Management and leadership necessary for the change and impacted by the change need to be on-board and *leading*. They need to be communicating clearly, committing funds and resources and making tough decisions. Without this, the program is doomed to fail. 

4. Failure to Manage Resistance

Resistance is inevitable. It will come from anywhere and everywhere. Understanding the resistance and its drivers is the key first step. Once you know this, you are armed to address the resistance and ensure it doesn't get in the way of success. It's critical to engage the right skills experienced in dealing with change resistance.

5. Absence of Governance

A lethal error, but surprisingly a common occurrence. What "good governance" looks like is part of the problem. Many see governance as a weekly or bi-weekly project catch-up. For large initiatives you need best-practice governance including tight issues/risk management, a clear operating rhythm, a solid decision making process and unambiguous lines of accountability,

When embarking on any major business initiative, the best disposition to take is one of "pessimistic realism". In other words, be aware that the odds are stacked against you and take every opportunity to bolster your program with additional "scaffolding" to increase its chances of success. 

You can find on Expert Toolkit useful tools in change management and managing resistance to change. You can also do a quick change readiness assessment using our proven template. If you are looking for it all, get yourself a copy of the Expert Toolkit Master Change Practitioner Bundle.

Remember, hope is not a strategy.


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