Why Most Change Crash-Lands

Why Most Change Crash Lands

Stephen Carver FAPM FIRM Senior Lecturer School of Management Cranfield University

Types of Change Want to do

Don’t want to do

Serendipity

Strategic Projects

Crisis

Compliance Projects

Unplanned

Planned

Cobbs Paradox

We know why change projects fail.

We know how to prevent their failure‌ so the paradox is‌ why do so many fail?

Planning “People don’t like to plan - Planning is unnatural - It is much more fun just to do.

And the nice thing about just doing is that failure comes as a complete surprise.

Whereas if you have planned, the failure is preceded by a long period of despair and worry” Sir John Harvey Jones

Are we rational?

Ambiguity effect Anchoring Attentional bias Availability heuristic Availability cascade Backfire Bandwagon effect Groupthink Herd behaviour Base rate fallacy Belief bias Bias blind spot Choice-supportive bias Clustering Confirmation Congruence bias Conjunction Conservatism - Bayesian Contrast Curse of knowledge Decoy effect Denomination effect Distinction bias Duration neglect Empathy gap Endowment effect Essentialism Exaggerated Experimenter's Expectation bias False-consensus Functional fixedness

Focusing effect Forer effect Barnum Framing effect Recency illusion Gambler's law of large numbers Hard-easy effect Hindsight bias Hostile media effect Hot-hand fallacy Hyperbolic discounting Dynamic inconsistency.

Identifiable victim effect Illusion of control Illusion of validity Illusory correlation Impact bias Information bias Insensitivity to sample size Irrational Just-world Less-is-better effect Loss aversion Sunk cost effects Ludic fallacy Mere exposure effect Mirror-imaging Money illusion Moral credential effect Negativity bias Neglect of probability Normalcy bias

Observation selection Observer-expectancy effect Subject-expectancy effect Omission bias Optimism bias Wishful thinking, Valence effect Positive outcome bias Ostrich effect Overconfidence Pareidolia Pessimism bias.

Planning fallacy Post-purchase rationalization Pro-innovation bias Pseudocertainty Reactive devaluation Recency bias Survivorship bias Recency illusion Texas sharpshooter fallacy Restraint bias Time-saving bias Rhyme as reason effect Unit bias Risk compensation Well travelled road effect Peltzman effect Zero-risk bias‌ Selective perception Semmelweis reflex Selection Social comparison Social desirability bias Memory Bias Status quo bias Stereotyping Subadditivity effect Subjective validation Survivorship

Chaos Complex or Complicated?

Maturity Levels

5

4 3 2 1

World Class Continuous process improvement , success is normal Competitive Controlled and measured processes, results more in line with plans

Compliant Standardised, more predictable Minimal Some process, inconsistent success

Ad Hoc Disorganised, accidental success

PPM – Strategic Advantage Strategic Contribution

Limit of process based approach

5

4 3 2 1

World-class: redefines delivery in the industry, automatically improving, very hard to imitate by competitors, drives business strategy.

Competitive: provides source of competitive advantage, focused, metrics determine areas for improvement, supports business strategy.

Compliant: follows industry-accepted norms, improvements sporadic, process-focused, cost of failure significant, little strategic contribution Minimal: tasked with ‘not messing up’, some use of standards, reactive, high cost of failure, negative strategic contribution.

Ad hoc: unreliable delivery, very high cost of failure, strongly negative strategic contribution

What is Complexity?

• ‘Complicated’ e.g. a Swiss watch. Linear & predictable • ‘Complex’: from the Latin ‘complexus’ (braided together). Nonlinear & unpredictable.

• Like quality – it is hard to quantify • is something that is experienced.

Complexities • Structural Complexity: BITS – Number, size, financial scale, interdependencies, variety, pace, technology, breadth of scope, number of specialities, multiple locations/time-zones. IQ

Complexities • Emergent Complexity: CHANGE – Technological and commercial maturity & change, novelty, clarity of vision / goals, clear success criteria / benefits, previous experience, availability of information, unidentified stakeholders, “missing” plan, unforeseen, unknowables.

Two Dimensions of Complexity

High Structural Dimension

Programme

Complex Dynamic

Project

Agile

Low

Low

Emergent Dimension

High

Socio Political Complexity Communication Intuition Politics Stakeholders Culture Personality Social Systems EQ

The 3 Complexities We asked a group of 246 Change Managers: “In your work, which of the 3 complexities is the most difficult to manage?”

“In your own formal training and development, which of the 3 complexities has received the most attention?”

Structural

Structural

Sociopolitical

Sociopolitical

Emergent

Emergent

Choice of Change Leader? § Structural § Socio-political § Emergent

Managerial response Leadership response Entrepreneurial response

‘Manager’

S

E ‘Entrepreneur’

S-P ‘Leader’ © Cranfield University 2013

18

Dodos & Fish

Stephen Carver FAPM FIRM Senior Lecturer School of Management Cranfield University

On Reputation

It takes 20 years to build a reputation and five minutes to ruin it.

If you think about that, you’ll do things differently.

On Reputation Charlie Munger

Lose money for the firm and I will be understanding.

Lose a shred of brand reputation and I will be ruthless.

Key Weaknesses 1. Board & NED Abilities 2. Board Risk Blindness 3. Poor Cultural Leadership 4. Defective Communication 5. Excessive Complexity 6. Inappropriate Incentives 7. Glass Ceilings

The Research • 100’s hours identifying resilient organisations • • • • •

8 World Class Organisations selected 80 semi structured interviews 70 individuals – UK, Europe and USA Across functions and “glass ceiling” 1000+ page evidence based research

The 4 Enablers • • • •

Good Good Good Good

people and culture leadership and governance business structure strategy, tactics and operations

The 5 Principles • • • • •

Good risk radar Build & value strong relationships Leaders are respected & respectful Rapidly respond Diversified resources

Resilience The ability to recover quickly from illness, change, or misfortune; buoyancy.

The property of an entity that enables it to resume its original shape or position after being bent, stretched, or compressed.

Rebound, give, adaptability

High

Alert

Resilient

Empowerment

Low

Vulnerable

Low

Defensive

High

Risk Management Maturity

High

Alert

Resilient

Vulnerable

Defensive

Empowerment

Low

Low

High

Risk Management Maturity

High

Alert

Resilient

Empowerment

Low

Vulnerable

Low

Defensive

High

Risk Management Maturity

High

Alert

Resilient

Vulnerable

Defensive

Empowerment

Low

Low

High

Risk Management Maturity