Wednesday, March 13, 2013

Change Management: Why 70% failure is SUCCESS

What you see depends on where you sit.

I was recently sitting with some of the top leaders of a client.  It seemed like the 100th time I've looked at a Big 4 accounting firm "study" that identified $200 Million dollars worth of savings.  Even in 2013, those numbers are still very tempting for senior executives.  Here is why a 50% or 70% failure rate is SUCCESS.

It is a success from the senior
performance perspective.

Senior managers are regular people.  They have worries, fears, hopes and dreams.  They also have a performance plan and the dreaded performance review.  However, their performance plan differs from most employees in that the senior leader plan is more about the numbers.


Let's say you are one of the top 20 executives of the organization that received the Big 4 study with $200 Million in savings.  If I do a little math, that's $10 million dollars per executive.  Here is what the savings looks like per senior executive, factoring in the change management failure rates:

If a senior executive performance review contains a $3 Million dollar cost savings, that is going to be one happy senior executive!

Like I said, senior executives are real people and have hopes and dreams.  Going over and above their performance financial savings goals means money for a vacation, a summer cottage, a new car, etc. (or whatever it is you dream about if you had more money).

If I were in their shoes and you called the initiative
that bought me a summer house a failure, then
"failure" sounds a lot better to me than it used to.

In one of my next few posts, I'll share with you the "cost cutting" secret the consulting industry does not want there clients to know:  
90% of "cost savings" evaporate 
within 3 years


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