It is even said that 70% of the attempted changes fail in an organization and interestingly the failure rate has been consistent for decades (Maurer, 2010). In general the metamorphism lost its way due to various exogenous and endogenous factors, as a matter of fact, it could be inferred that the factors that are within the organization are diversifiable, and could be managed whereas those beyond the organization periphery brings systematic or un-diversifiable risks. The failure steams internally from the inefficiency of management, employees, culture or any other immediate stakeholders like the trade unions whereas externally it sediments from various actors like government, competitors, suppliers, media et cetera.
Once the leader of the telecommunication market, Nokia, ended up its decade back history in a horrible way, as referred by (Sull, 1999), the arrogance of past success created an acceleration trap which hermit the company from buying in new operating software in their mobile devices. Had the company been able to incorporate Android in place of Symbian, it would have fitted itself in the new ecosystem of the Android world. Further, every positive learning might not provide expected yield, Boeing Inc. after imitating the manufacturing process of Toyota. Inc. planned to off source 70% production of its 787 Dreamliner to other third countries which initially was majorly executed by the Boeing itself. In fact, the diversion in working process, allocation of the technical staff for training and resource to other countries, increased its lead time in manufacturing the planes ending up in paying hefty penalties to its customers. Similarly, Sears; the classic grocery stores of United States of America due to its distorted vision in focusing on stores or online business has not only rappelled its stakeholders but is also in the brink of closure.
Is the task of failing to change only limited to big companies like, Nokia, Boeing, and Sears who are deemed to be too big to fail? Indeed no, a perfect apotheosis could be my friend's organization, a government-owned banking institution which is in the industry since eight decades, having an employee of around twenty-eight hundred. The board of directors unanimously decided to privatize the organization in the guidance of government and initiated a legal tendering and bidding in search for joint-venturing or strategic partners. But in the course of time, due to the lack of prior communication about the issue with employees and trade unions, distrust had developed building up resistance to change.
Late but not least, to figure out factors like motivation, honesty, teamwork, appealing leadership and favorable policies and procedures also plays a crucial role in favoring the change. Had Marissa Mayer, CEO of Yahoo.com been able to effectively lead the change against the hyper-competitive strategy from its competitors like Google.com; the scenario could have been different for yahoo.com. Moreover, ossified management process (Birkinshaw, 2013) also hampers the change momentum; basically, the company with rigid organization structure characterized by multiple hierarchies and guided by Max Weber principle of management falls under this category. My friend's government own multi-level organization could be the case to share, where procurement of an accounting software deemed for process restructuring took more than two years, rhetorically the de-motived baby boomers in their retirement age were not interested in amalgamating new way of doing business as learning computers was a painstaking task for them. Indeed the procrastinating working culture affected overall change process.
To compare and contrast, Vijay Mallya, CEO of debt-ridden Kingfisher Airlines was a billionaire at a time. He had a strong investment in projects related to liquor and was an introducer of formula one racing in India , Similarly, Richard Branson, CEO of Virgin groups is a listed Forbes dignitaries, Ineffective vision, superiority of owns interest in comparison to that of organization, unclear strategy and inefficient allocation of resource lead to closure of Kingfisher Airlines and Mr. Mallya is presenting facing multiple banking charges whereas his employee envisions Mr. Branson as a charismatic leader, the company has become the first of a kind to introduce the space marking under the name of Virgin Galatica.
Being known with the facts, as mentioned above 70% of changes fails, it’s for sure, no one ones like to lag behind but indeed it often happens, the impact of the failure are generally more profound than what we had thought of, a closure of Sears in Canada, not only damaged the corporate image of the company but it also negatively affected the earnings of hundreds of employees that it had laid off. Whenever a change fails it bring cascading effect in an economy, bigger the company higher the destruction in it its ancillary industries; probably it could be the reason for Federal approving a bailout to secure the General Electric (GE) during the recession of 2008. Similarly, psychological impacts are also seen in the employees as it creates social, economic discomfort. Further, the failure of change not only defames the management but also arouses cognitive dissonance in employees; they may breach the confidentiality of organization and may disclose its competitive factors to its competitors.
A conflict of principle and sovereignty had happened between, Apple and government of United States, where the government requested Apple to unlock the iPhone of suspected person but the company didn’t, the complexity was here the company maintains its customer privacy as a concern and it failed to change even after the government request (Khamooshi, 2016)
To conclude, the failure to change breeds cynicism, the diversifiable issues which hold with the company could be managed by providing adequate training, making transparency in communication, incorporating effective appreciative inquiry and sense-making. Similarly, the management should always scan the external environment so that it can prepare its employee to accept any change that may happen in the future brought about by the systematic risk. The company corporate culture that enjoys the change has the positive learning curve.
Bibliography
Birkinshaw, J. (2013, May 8). Why corporate giants fail to change . Retrieved August 15, 2017, from fortune.com: http://fortune.com/2013/05/08/why-corporate-giants-fail-to-change/
Maurer, R. (2010, September 19). Why 70% Changes Fail. Retrieved August 15, 2017, from reply-mc.com: http://www.reply-mc.com/2010/09/19/why-70-of-changes-fail-by-rick-maurer/
Sull, D. N. (1999). Why do companies go bad. Harvard Business Review, 42-52.
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