Why big change fails

03 Oct
October 3, 2013

Despite all our efforts almost 70% of all change initiatives fail.  In a previous post I wrote about change and the speed of change that’s all around us.  In this post I want to look at why so many change initiatives fail.

According to Harvard Business Review almost 70% of all change initiatives fail.  That’s right – 70%!

If you don’t believe HBR then perhaps thirty years of research by change guru Dr. John Kotter may help.  In addition to HBR, Kotter also found that about 70% of change initiatives fail.  Ken Blanchard – author of the One Minute Manager books – also found the same shameful 70% failure rate

In addition, McKinsey also found that over 50% of large IT projects blow their budget.

Whichever way you look at it – it isn’t pleasant reading.

But what IS success?

Now let’s be honest.  ‘Success’ is a difficult thing to measure when undertaking a change programme; indeed we could easily argue that it’s almost impossible for all change programmes to succeed 100% and so there must be some element of failure, surely?  But it’s also easy to say that a project has ‘failed’ whenever it falls short of its intended outcome when in reality it may have been a massive success – just not the massive success in every area that an organisation wanted.

Although the reasons for major failure on all projects will never be known – especially for private projects, where failure can be hidden – public projects, by their very nature, are open to scrutiny – and therefore analysis.

McKinsey has analysed a number of public failures related to IT projects and their results are shown in the graph below:

McKinsey

McKinsey found that 45% of all major IT projects overrun their budget and that 13% of them have either unclear objectives or a lack of business focus – that’s a lack of the most basic elements for running a large project.  Shocking!

But the incredulity doesn’t end there.  Take a look at the information that’s to be found in government IT gone wrong.  OK, it’s a little out of date and NOT all projects are IT based but yet again that magic 70% failure rate is with us again – or rather, because its government projects, 30% success 😉

And if you wonder which of the government projects were failing to deliver then here’s the list:

  • NHS IT programme
  • Police computer system, Impact
  • Magistrates Courts system, Libra;
  • National Insurance Recording System (NIRS2)
  • PAYE end-of-year filing system (ERIC)
  • Inland Revenue Tax Credits System
  • Benefits Payment Card project
  • Crown Prosecution Service’s case tracking computer system
  • Criminal Records Bureau disclosure service
  • Home Office’s Immigration and Nationality Directorate Casework programme
  • Air Traffic Control system
  • Probation Service system
  • Ministry of Defence’s Project Trawlerman
  • “Flagship” elearning project UKeU
  • Northern Ireland Vehicle System Replacement Project
  • National Firearms Licensing Management System
  • FiReControl, the IT contract for nine regional Fire Service centres
  • Treasury’s Child Trust Fund
  • Treasury’s Pensions Schemes project
  • A project in the Treasury’s Actuary Department
  • Rural Payments Agency’s IT
  • DWP’s online retirement planner; and
  • Births, deaths, and marriages register

Computer Weekly also provides some insights in their article Why do big IT projects fail? 

What are the common causes of government IT project failure?

In addition to the McKinsey research, here are the top reasons why IT projects fail.

  • Lack of clear link between the project and the organisation’s key strategic priorities, including agreed measures of success
  • Lack of clear senior management and ministerial ownership and leadership
  • Lack of effective engagement with stakeholders
  • Lack of skills and proven approach to project management and risk management
  • Lack of understanding of and contact with the supply industry at senior levels in the organisation
  • Evaluation of proposals driven by initial price rather than long term value for money (especially securing delivery of business benefits)
  • Too little attention to breaking development and implementation into manageable steps
  • Inadequate resources and skills to deliver the total portfolio

Source: Office of Government Commerce

Spooky, eh?  Both McKinsey and the Office of Government Commerce come back with an almost identical list – perhaps there’s some serious learning here.

In a future post I’ll look at what can be done to remedy this high failure rate and why we’re doomed to a continued 70%+ failure rate unless we make some simple yet massive changes.

Call to action

Look back at all your recent change programmes.  Were they the success they were meant to be, and if not, why not?

Tags: , , ,
2 replies
  1. Costas (@LearnKotch) says:

    Great blog Jonathan – but tell me this how many leaders of these failed change initiatives are actually fired / demoted or moved on? With over 70% failure rate there is either quite a few execs on the streets or organisations turn a blind eye. Like one former manager of mine said – “we all fail some where along the way Con but it is how you manage the expectation of failure that will see you through to your next project” Think I need some of these “spin doctor” skills others I will be one of those few on the streets! Regards Costas

    Reply
  2. Jonathan Kettleborough says:

    Hi Costas – great question! In my experience the cost of failure is not always reflected in the repercussions to those leading the change. In fact, often the leaders will gain an advantage because they claim to know the reasons for the failure and claim they can fix it ‘the next time round’.

    Cynical perhaps – but for may large change programmes – the organisation does NOT really own the change – rather it farms this out to major consultancies who will often promise the impossible to secure fee income.

    Although a UK centric example, the failure of the NHS IT programme is legendary as you can read here http://www.dailymail.co.uk/news/article-2040259/NHS-IT-project-failure-Labours-12bn-scheme-scrapped.html A more recent update via the BBC is here: http://www.bbc.co.uk/news/health-24140967

    Not great reading!

    I’m preparing a future post on the cures for major change failure so watch this space! Rather than ‘spin doctor’ I’ll be suggesting a whole pile of reality . . . should be a great ride 😉

    Thanks as always for your comments. Jonathan.

    Reply

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *