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CONTINUING THE ENTERPRISE OF THE FUTURE CONVERSATION
MAKINGCHANGEWORK
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About IbM GlobAl busIness servIces strAteGy & chAnGe PrActIce
IBM Globl Bsiness Seices offes one of he lges Seg & Chnge
pcices in he wol, wih oe 3,250 seg pofessionls. O Seg &
Chnge pcice fses bsiness seg wih echnolog insigh o help
ognizions eelop, lign n implemen hei bsiness ision coss fo
segic imensions bsiness seg, opeing seg, ognizion
chnge seg n echnolog seg o ie innoion n gowh.
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closing the change gap
ExECutIvE SuMMary
the IBM Globl Ming Chnge Wo S emines how ogniz-
ions cn mnge chnge n ienifies segies fo impoing
pojec ocomes. this epo conines he conesion h begn
in he IBM Globl CEO S 2008 eging fow-hining com-
pnies h e Hng fo Chnge.1 Fo is e sil, he
Enepise of he Fe ms bee pepe iself s he pce, i-e n pesieness of chnge conine o incese.
Oe wo-e peio, he pecenge of CEOs epecing sb-
snil chnge climbe fom 65 pecen in 2006 o 83 pecen in
2008 b hose epoing he h sccessfll mnge chnge in
he ps ose js 4 pecenge poins, p fom 57 pecen in 2006
o 61 pecen in 2008.2 this ispi beween epecing chnge
n feeling ble o mnge i he Chnge Gp nel iple
beween 2006 n 2008.3
O Ming Chnge Wo S focses on how o close he Chnge
Gp. thogh ses n fce-o-fce ineiews wih moe hn
1,500 pciiones wolwie pojec lees, sponsos, pojec
mnges n chnge mnges we gine pcicl nowlege
bo how o incese he lielihoo of pojec sccess.
Mos CEOs consie hemseles n hei ognizions o be ee-
cing chnge pool, b some pciiones he begn o len
how o impoe hei ocomes. Fom he pciiones hemseles,
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making change work2
we fon h, on ege, 41 pecen of pojecs wee consiee
sccessfl in meeing pojec objecies wihin plnne ime, b-
ge n qli consins, compe o he emining 59 pecen
of pojecs which misse les one objecie o file eniel.
Een hogh js 41 pecen of pojecs wee escibe s sccess-
fl, hose wih he highes pojec sccess e (he op 20 pecen
of o smple) we cll hem Change Masters epoe n 80
pecen pojec sccess e, nel oble h ege. In shp
cons, he boom 20 pecen of o smple he gop we
escibe s Change Noices epoe isppoining pojec sc-
cess e of 8 pecen.
Wh ccons fo hese sl iffeen es of pojec sccess?
We fon in o eile nlsis of s esls h chieing
pojec sccess oes no hinge pimil on technology inse,
sccess epens lgel on people. B wh is moe illmining ishe iscoe h fo common fcos helpe hese pciiones
ess hei gees pojec chllenges. When used in combina-
tion, these factors proided a synergistic benefit h ws een
gee hn he sm of hei iniil impcs, esling in highe
es of pojec sccess:
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closing the change gap
reAl InsIGhts, reAl ActIons
Sie fo fll, elisic weness n nesning of he pcom-
ing chllenges n compleiies, hen follow wih cions o ess
hem.
solId Methods, solId benefIts
use ssemic ppoch o chnge h is focse on ocomes
n closel ligne wih foml pojec mngemen mehoolog.
better skIlls, better chAnGe
Leege esoces ppopiel o emonse op mngemen
sponsoship, ssign eice chnge mnges n empowe
emploees o enc chnge.
rIGht InvestMent, rIGht IMPAct
alloce he igh mon fo chnge mngemen b nesn-
ing which pes of inesmens cn offe he bes ens, in ems ofgee pojec sccess.
these fo chnge-ele focs es e epesene gphicll
s fo fces of wh we cll he Change Diamond. Neglecing een
one e cn inhibi chnge ecellence. Pcicl insighs fom he
epeience of Chnge Mses show h he mos powefl
ppoch is o e cions h ess ech of he imons fo
fces n help gie he Enepise of he Fe in is qes o
me chnge wo.
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making change work4
HOW Our rESEarCH WaS CONduCtEd
the IBM Globl Ming Chnge Wo S eploe iffeences in
how chnge ws implemene b oe 1,500 pciiones wol-
wie, sing wih he weness h e few ognizions o i
well. IBM conce ses n fce-o-fce ineiews wih poj-
ec lees, sponsos, pojec mnges n chnge mnges fom
mn of he wols leing ognizions.
We inesige he el-wol epeiences of hese pojec lees
esponsible fo wie nge of pojecs, incling smll- n lge-
scle effos inene o eece segic, ognizionl, ope-
ionl n echnolog bse chnge. this iese nge of pojecs
h objecies h incle: csome sisfcion impoemen,
sles n eene gowh, cos ecion, pocess innoion, ech-
nolog implemenion, new me en n ognizionl
chnge. the Cene fo Elion n Mehos (ZEM) he
uniesi of Bonn, Gemn, ggege he n poie
sisicl sppo fo nlsis of he esls.
15
21
14
22
%
%
nAtIonsfroM Aroundthe world
dIfferentIndustrIes
Are coMPAnIeseMPloyInG More thAn100,000 eMPloyees
hAve less thAn 1,000eMPloyees
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closing the change gap
fIGure 1 deMoGrAPhIcs: GlobAl MAkInG chAnGe work study
The Global Making Change Work 2008 Study covered organizations o all sizes, balanced aroundthe globe and across industries.N = 1,532
ProJect teAMMeMber
7%
chAnGeMAnAGer
17%
ProJectMAnAGer
38%
InItIAtor/ProJectsPonsor
25%
Job roles Organizational size
Geographic region Breakdown by industry
others
6%subJect MAttereXPert/revIewer
7%
1,000-10,000
32%
uP to 100
7%
100-1,000
15%
10,000-100,000
32%
More thAn100,000
14%
IndustrIAl
18%
fInAncIAlservIces
16%
coMMunIcAtIons
17%
dIstrIbutIon
13%
others
7%
ProfessIonAlservIces
8%
PublIc
21%euroPe
34%
AMerIcAs
29%
AsIA PAcIfIc
37%
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making change work6
Maig ag
CHaNGE IS tHE NEW NOrMaL
tos nmic wo enionmen is csing ognizions o e-
fme he iionl iew of wh noml is. We e winessing he
effecs of globlizion, echnolog nces, comple mlinionl
ognizions, moe feqen pneing coss nionl boes n
compn bonies js o menion few of he enbles n c-
celeos of chnge.
No longe will compnies he he l of epecing -o-
opeions o fll ino sic o peicble pen h is ine-
pe onl occsionll b sho bss of chnge. to pospe, le-
es will nee o bnon sch oe noions of chnge. In eli,
he new noml is coninos chnge no he bsence of chnge.
HOW tHE ENtErPrISE OF tHE FuturE FaCESCHaNGE
the IBM CEO S 2008 ienifie fie coe is of he Enepise
of he Fe n fon h opefoming compnies e hng
fo chnge.4
GLOBALLY
INTEGRATED
HUNGRY
FORCHANGE
INNOvATIvE
BEYONDCUSTOMERIMAGINATION
GENUINE,
NOT JUSTGENEROUS
DISRUPTIvE
BYNATURE
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closing the change gap
these ognizions e cpble of chnging qicl n sccess-
fll. Inse of meel esponing o ens, he shpe n le
hem. Howee, we lso lene fom he CEO S h hee is
chnge gp n i is gowing.
the bili o mnge chnge ms be coe compeence n
e, s he leel of epece chnge conines o ise, mn e
sggling o eep p. Eigh o of en CEOs nicipe substantial
o ery substantial chnge oe he ne hee es, e he e
hei bili o mnge chnge 22 pecen lowe hn hei epece
nee fo i a change gap that has nearly tripled since 2006.5
the gowing chnge gp sems fom chnge h is moe comple
n moe ncein, n hppening n ccelee pce. CEOs
e wesling wih boe se of chllenges hn in he ps, which
inoces een gee is n ncein.
fIGure 2 the chAnGe GAP
The gap between the expectation o change and an organizations history o managing it is growing.
2006
2008
65%
57%
eXPect substAntIAl chAnGe
chAnGed successfully In the PAst 8%chAnGeGAP83%
61%
eXPect substAntIAl chAnGe
chAnGed successfully In the PAst
22
%chAnGeGAP
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making change work8
Inbili o close he chnge gp hs he boom line. toble
pojecs picll cee cos oens while flling sho of esie
objecies ele o ime, bge n/o qli, n filing o
elie bsiness le. the e cos of oble pojecs is ifficl
o mese, b Eopen esech s fon h he low-en
of sch esimes cies n ege cos moning o 134 pecen of
he oiginl pln ohe esimes of he ege cos of oble
pojecs wee mch highe.6
Bombe b chnge on ill ll fons, finncill opefom-
ing compnies h mch smlle chnge gp hn hei pees in
finncill nepefoming compnies.7 Nobl, he opefomes
i no fce fewe chllenges hn ohes; he simpl nicipe
moe chnge n wee moe effecie mnging he chnge.
fIGure 3 GAP Is sMAller for outPerforMers
Because outperormers manage change well, they can get ahead o and even
be the drivers o change.
19%chAnGeGAP
29%chAnGeGAP
outPerforMers
underPerforMers
eXPect substAntIAlchAnGe
chAnGed success-fully In the PAst
85%
83%
66%
54%
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HOW PraCtItIONErS dEaL WItH CHaNGE
Mos CEOs consie hemseles n hei ognizions o be ee-
cing chnge pool, e few opefomes o ecel elieing
n benefiing fom meningfl chnge. B how is his cll
ccomplishe? Wh e he ciicl chllenges n which e fc-
os cn le o chnge h cll wos?
O Ming Chnge Wo S conines he conesion fom he
CEO S, escibing bse on new se he pcicl seps
ognizions ms e o bee pepe fo he nelening b-
ge of chnge h seems o be eewhee. this epo loos moe
closel he enepise i, Hng fo Chnge. We engge
1,532 e pciiones i ses n fce-o-fce ineiews,
eeling mn sefl insighs bse on hei el-wol epeiences
wih wie nge of pojecs.
this secion of o epo highlighs some of he mos compelling
s finings, incling eepe ie ino he impc of chnge on
ognizions n he es o sccessfl chnge. Le, we will
eploe specific, pcicl cions h helpe pciiones o in
eoin esls in chnge effos.
Most ProJects fAll short of obJectIves
Pojec lees confime h pojec sccess is inee h o
come b. In o s, we lene h 41 pecen of pojecs wee
consiee sccessfl in meeing pojec objecies wihin plnne
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making change work10
ime, bge n qli consins. Conesel, nel 60 pecen
of pojecs file o fll mee hei objecies: 44 pecen misse
les one ime, bge o qli gol, while fll 15 pecen eihe
misse ll gols o wee soppe b mngemen.
the Most successful 20 Percent: chAnGe MAsters
On ege, pciiones e onl 41 pecen of pojecs s suc-
cessful, efine s meeing ime, bge n qli gols. ye, he
op 20 pecen we cll hem Change Masters epoe n 80
pecen pojec sccess e, nel double the aerage.
In shp cons, he boom 20 pecen of o smple is he gop
we escibe s Change Noices hei epoe pojec sccess
e ws isml 8 pecen. thei low sccess e eflecs he iffi-
cl of geing ll pojec fcos o wo s plnne: js one bo-
en lin in he chin cn le o pojec file.
fIGure 4 ProJect success rAtes: ProJect leAders rePorted thAt 41 Percent of ProJects were
consIdered successful
Forty-our percent o all projects ailed to meet either time, budget or quality goals, while 15 percent
eitherstop or ail to meet all objectives.
ProJects thAt dId notMeet eIther tIMe, budGetor QuAlIty GoAls
44%
ProJects thAt fullyMet theIr obJectIves
41%
ProJects thAteIther MIssed AllGoAls or werestoPPed
15%
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closing the change gap
fIGure 5 shAre of successful ProJects
The top 20 percent o organizations reported an average project success rate o 80 percent, nearlydouble the average.
95%success rAteIncreAse
Share o successul projects
8%
41%
80%
Top 20%Change Masters
AverageBottom 20%Change Novices
chAnGe chAllenGes: the soft stuff Is hArd
toble o file pojecs cee cos oens n, b efiniion,
fll sho of chieing he esie objecies. When nel 60 pe-
cen of pojecs fil o mee objecies, significn epense is
ince in ems of wse mone, los opponi n lc of
focs. Chnge Mses nesn h ecing he lielihoo of
oble pojecs, een slighl, cn he cle n pi
pbc.
O esponens ienifie seel of he e bies o chnge.
alhogh ngible ss lie change of IT systems o essing
technology barriers m be epece o pesen ifficlies, o
pciiones i no epo hem mong hei gees chllenges.
Leaders are unrealisticabout how change is goingto happen. They moveahead anyway and get intoproblems.
Change Manager, UK, Energy and
Utilities company
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making change work12
cagig mi a ai
cpa
cmpxi i ima
sag
la mmim ig maagm
la ag
la apa a miig g imai
la miai i mp
cag p
cag It m
tg ai
Sot Factors Hard Factors
fIGure 6 MAJor chAnGe chAllenGes
The most signicant challenges when implementing change projects are people-oriented topping thelist are changing mindsetsand corporate culture.
58%
49%
35%
33%
32%
20%
18%
16%
15%
12%
8%
Inse, he min obscles he ienifie wee changing mindsets
and attitudes (58 pecen), corporate culture (49 pecen) n
underestimating project complexity (35 pecen). Pojec pofes-
sionls who picll eqes moe ime, moe people n moe
mone epoe h hese sof chllenges e cll moe pob-
lemic hn shortage of resources!
Spisingl, i ns o the soft stuff is the hardest to get right.
Chnging minses, ies n cle in n ognizion picll
eqie iffeen echniqes, pplie consisenl n oe ime
someimes coss seies of sccessie pojecs n
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closing the change gap
ofen conining fe he foml pojec hs finishe. Pciiones
picll fin sch less concee chllenges oghe o mnge n
mese hn chllenges ele o bsiness pocesses o echnol-
og, which e moe ngible n possibl cpble of being chnge
pemnenl hogh single ineenion.
fActors for successful chAnGe
the lis of gees pojec chllenges ws op-he wih sof fc-
os. When se o ienif e fcos fo sccessfl chnge, pc-
iiones eiee he ifficl in eling wih less ngible specs
of pojec.
Culture isnt just one aspeco the game, it is the game
Lou Gerstner, U.S., ormer IBM
CEO 8
tp maagm pip
emp im
h a im mmiai
cpa a mia apm ag
cag ag (pi ag)
cag pp
eii aiig pgam
Ajm pma ma
eii gaiai
Ma a -ma ii
fIGure 7 whAt MAkes chAnGe successful?
Leadership, employee engagement and honest communication are prerequisites or successulchange.
92%
72%
70%
65%
55%
48%
38%
36%
33%
19%
Sot Factors Hard Factors
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making change work14
Pciiones fiml plce e esponsibili fo he fe of chnge
pojecs in he eecie sie n oewhelming 92 pecen nme
top management sponsorship s he mos impon fco fo sc-
cessfl chnge. roning o he op fo sccess fcos wee
employee inolement (72 pecen), honest and timely communica-
tion (70 pecen), n corporate culture that motiates and pro-
motes change (65 pecen).
In fc, he op si nswes ll efeence sof specs of chnge,
ning hem boe efficient organiation structure, n monetary
and non-monetary incenties. Chnge Mses he elize h
behiol n cll chnge e ccil o pojec sccess n e
consiebl oghe o ess hn he so-clle h fcos,
sch s sce, pefomnce meses n incenies.
why the chAnGe MAsters eXcel
We he seen h ognizions iffe gel in es of pojecsccess, b wh? deile nlsis of o s esls eele
highl significn coelion beween pojec sccess n fo
impon es of focs: el insighs, soli mehos, bee sills
n igh inesmen.
these fo chnge-ele focs es e epesene gphicll
s fo fces of wh we cll he Change Diamond. When combine
effeciel, ing cions o ess ech of he imons fo fc-
es cn help gie he Enepise of he Fe in is qes o mechnge wo.
I you dont have leadershipsupport, youre doomed.
Project Manager, U.S., Media and
Entertainment
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Real Insights, Real Actions. Sie fo fll, elisic nesning of
he pcoming chllenges n compleiies, hen follow wih cions
o ess hem.
Solid Methods, Solid Benefits. use ssemic ppoch o chnge
h is focse on ocomes n closel ligne wih foml pojec
mngemen mehoolog.
Better Skills, Better Change. Leege esoces ppopiel o
emonse op mngemen sponsoship, ssign eice
chnge mnges n empowe emploees o enc chnge.
Right Inestment, Right Impact. alloce he igh mon fo chnge
mngemen b nesning which pes of inesmens cn
offe he bes ens, in ems of gee pojec sccess.
REAL INSIGHTS
REAL ACTIONS
SOLID METHODS
SOLID BENEFITS
RIGHT INvESTMENT
RIGHT IMPACT
BETTER SKILLS
BETTER CHANGE
fIGure 8 the chAnGe dIAMond
By ocusing on the our acets o the change diamond, practitioners achieved signicantly higherrates o project success.
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making change work16
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closing the change gap
fAcets ofthe chAnGedIAMond:
closInG thechAnGe GAPChnge Mses e clel oing mn
hings igh, s eience b hei high
leels of pojec sccess. those wih
ege sccess es, s well s he
lgging Chnge Noices, col boh
benefi b oping simil pcices.
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18
Sccessfl pojecs eqie fll, elisic nesning of he
pcoming chllenges n compleiies, followe b specific cions
o ess hem. Lc of el insigh les o high is h com-
plei will be neesime o een oelooe. In picl, he
complei of behiol n cll chnges is ofen neesi-
me in he el pojec plnning n scoping sges.
When se if hee ws sfficien weness of he chllenges
ssocie wih implemening n ssining chnge, pciiones
epling yes epoe 52 pecen pojec sccess e wihin hei
ognizions. Pojec sccess es oppe s ognizions
weness leels ecese, own o low 25 pecen sccess e
fo hose pciiones who nswee no o he qesion.
yes tendInGtowArd yes
43%
35%
25%
52%
tendInGtowArd no
no
fIGure 9 we found A stronG correlAtIon between successful ProJects And A reAlIstIcAwAreness of the chAnGe chAllenGe
Responses to the question, Within your organization, do you think there is sucientawareness o the challenges associated with implementing and sustaining change?
Percentage o successul projects
reAlInsIGhts,reAlActIons
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I believe there is a strongawareness; however, theinternal capabilities andability to execute is achallenge.
Initiator/Project sponsor, Canada,
Consumer Products
B weness of complei lone is no enogh cion is he il
ne sep. Onl 18 pecen of pojec lees in o s epoe
h hei ognizions h sfficien weness of he chllenges
ssocie wih implemening n ssining chnge. B of h
smll gop, 85 pecen si h hei weness le o he ino-
cion of specific meses o sppo chnge.
fIGure 10 beInG Merely AwAre of chAnGe coMPleXIty Is InsuffIcIent
Action as a result o awareness is critical to more successul change eorts.
tendInGtowArd yes
33%
no
13%
tendInG towArd no
26%
30%
yes
18%
55% 13% 2%
Does this awareness o the challenges o
implementing change normally lead to theintroduction o specifc measures to supportthe change?
Within your organization, do you think there issufcient awareness o the challenges associated withimplementing change?
Yes
Tending toward yes
Tending toward no
No
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making change work20
GaINING rEaL INSIGHtS aNd turNING tHEMINtO aCtIONS
El weness n cions e ciicl o ess he op ogniz-
ionl chllenges inheen in chnge pojecs shown elie: min-
ses, ies, cle n complei. Sch chnges o no hppen
omicll Chnge Mses ess hem el, pln cefll
n eece igoosl.
Chnging n ognizion eqies comple chnge simlneosl
mn leels n ognizions en o bil in of immne
ssem o fen off ispie inflences. El weness n con-
seqen cion help o ess he nl esponse of n ogniz-
ion o esis emps o chnge i. Some pcicl seps incle:
hook Into the hIstory
Poie chnge lees wih ccess o hisoicl , people s-
es, cle ssessmens n w soies, s well s he people
inole in peios pojecs, if possible. Len fom boh goo n
b epeiences n be especill igiln in seeing insighs ino
he sof specs of he ognizion negoing chnge.
oPen your eyeswIde!
Emine he pojecs scope, liel impcs n epece ocomes
cefll. assess he imensions of he chnge people, cle,
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closing the change gap
behio n ognizionl specs, s well s pocess n echnol-
og impcs. Be elisic in efining he necess chnge n com-
mnice h infomion wiel wihin he ognizion.
PlAn And AdJust
Wih hoogh nesning of pojec compleiies, bil
chnge pln o ess hem. as he pln is commnice, ese
n eece, be pepe o p i feqenl s neee o hn-
le he nepece.
tAke A lonG vIew
Be pepe o bil n eece plns o ess he sof sff
well beon he foml en e of he pojec o elie bsiness
le. Chnging hese specs es ime, pience, n consisen
n coninos cii. Be pepe o conine hese ciiies
beon pojec bonies eepe ino he ognizion.
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making change work22 solIdMethods,solIdbenefIts
Fo mos ognizions, clssic pojec mngemen, wih is foml
n sce elemens, hs been se fo eces. B foml
chnge mngemen mehos he no e pemee bsiness o
pojec opeions o significn egee. tos chnge mnge-
men, if eplicil pefome ll, ofen occs in he fom of impo-ise solions.
B consisen n sce chnge mngemen ppoch
iele ngible benefis fo compnies in o s. Pciiones
who always follow specific and formal change management proce-
dures h 52 pecen pojec sccess e, compe o 36 pe-
cen sccess e fo pciiones who improise according to the
situation. I is ineesing o noe h een hose who h foml
meho b i no se i consisenl fe slighl bee hn
hose who impoise (39 pecen, ess 38 n 36 pecen).
t a pii a ma ag maagmp i a aa
Ag a pii a ma agmaagm p, a
I m I a a
Ai a impi aig iai
fIGure 11 forMAl chAnGe MAnAGeMent Methods cAn only IMProve ProJect success If
they Are APPlIed
Project success rates were best or organizations that consistently used structured changemanagement methods a variety o less ormal approaches all resulted in success ratesbelow average (41 percent).
52%
39%
38%
36%
Inormal change management approach Formal change management approach
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Onl 24 pecen of pciiones in o s consisenl se fo-
ml chnge mngemen mehos. Seen-si pecen si hei
ppoch o chnge mngemen ws sll infoml (25 pecen),
hoc (8 pecen) o impoise (43 pecen). In cons, js oe
hlf of o esponens pplie foml pojec mngemen poce-
es consisenl.
fIGure 12 chAnGe MAnAGeMent Methods Are usuAlly InforMAl, Ad hoc or IMProvIsed
Seventy-six percent o organizations use a change management approach that is typically inormal,ad hoc or improvised; by contrast, 49 percent o organizations ailed to use ormal projectmanagement methods consistently.
24%
ProjectManagement
ChangeManagement
51%
Formal methods are used consistently Formal methods exist but not used on a consistent basis, ad-hoc or improvised
76%
49%
Oewhelmingl, he chnge mngemen ppoches of pojec
lees e qie imme. as ognizions fce inceses in boh
he bsole olme of chnge n is leel of complei, wie-
spe impoision ms iel o pofessionl, foml chnge mn-
gemen mehos pioi mos e beginning o ecognize.
When se whehe sn chnge mngemen ppoches
e necess, 87 pecen of pciiones nswee eihe yes o
tending toward yes. this cons beween hose seeing he le
of sn mehos n hose cll sing hem inices h
he nee fo chnge is opcing ognizions cen cpbili
o mnge i ssemicll: in essence, i is Mehos Gp.
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making change work24
MakING GOOd uSE OF MEtHOdS
Gowing pojec complei n incese sensiii eging he
sofe o hien imensions of chnge is cceleing he esb-
lishmen of foml chnge mngemen in he pojec minsem
n is inegion ino pojec mngemen. Chnge mngemen
is nsfoming gll fom n o pofession, simil o he
eolion of he pojec mngemen iscipline, which hs ne-
gone fomlizion h se bo fo eces go.
Ping soli mehos ino pcice begins wih llocing esoces
o enc chnge meho h is ligne wih he ognizions
pojec mngemen ppoch. then i ms be se consisenl
hogho he ognizion. deeloping sn chnge meh-
oolog shol incle hese pcicl seps:
INTEGRATE, INTEGRATE, INTEGRATE
Mnge chnge s foml wosem wihin ech n ee poj-
ec, inege closel wih pojec mngemen n mnge wih
he sme igo.
Following a good solidmethodology that integrateswith the project really helpsto make a quicker start onthe change journey
Change Manager, Australia, Govern-
ment
fIGure 13 the Methods GAP
Despite the overwhelming majority o project leaders who recognize the value in standardizing changemanagement practices, very ew consistently use a systematic approach.
Need FormalMethods
87%
24%
Use FormalMethods
63%MethodsGAP
Percent answering "yes"
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KEEP ALL EYES ON THE PRIzE
Conol he scope of he chnge effo o emin focse on cii-
ies h ie he elizion of benefis efine b he oiginl bsi-
ness cse.
DRIvE CONSISTENCY
deelop n pomoe sn chnge meho h cn be
pplie consisenl fom pojec o pojec wihin o ognizion.
Commnice his wiel n monio is opion.
EMBED IN THE CULTURE
Incle he chnge meho n ssocie compeencies s p of
he eelopmen pogm fo fe lees.
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making change work26
using moe epeience n sille chnge mnges n pojec
sponsos cn men ece is of oble pojecs. Effecie
chnge leeship in he fom of eice chnge mnges n
ceible n epeience sponsos is ciicl. I is eqll impon
o csce leeship esponsibili o ll leels of he ognizion,ceing empowee emploees who sppo n enc chnge.
tHE IMPaCt OF dEdICatEd CHaNGE MaNaGErS
Pciiones fon h eicing chnge mnge o pojec
incese he lielihoo of pojec sccess. ye 20 pecen of chnge
pojecs i no inole chnge mnge ll. Pojecs wih po-
fessionl chnge mnge h 43 pecen sccess e, compe
o 36 pecen sccess e fo pojecs wiho one.
fIGure 14 shAre of successful ProJects, InvolveMent of chAnGe MAnAGers
Success rates rose when a change manager was used on a project.
No ProfessionalChange Managers
36%
43%
ProfessionalChange Managers
19%success rAteIncreAse
Share o successul projects
betterskIlls,betterchAnGe
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tOP MaNaGEMENt SPONSOrSHIP
O finings showe h pciiones consie op mngemen
sponsoship o be he mos ciicl fco fo ming chnge sc-
cessfl. to impoe seg eecion, lees nee o engge,
enble n empowe emploees ll leels of he ognizion.9
top sponsoship is eqll il in ohe es lie seing copoe
cle n llocing esoces, incling he chnge mngeshemseles.
EMPLOyEE INvOLvEMENt MakES SuCCESSMOrE LIkELy
O finings sgges he nee fo boe inclsion of people if-
feen leels in he ognizion. Besies he fmili op-own hie-
ch h fomll csces ni-specific infomion, Chnge Mses
see he le in n me se of infoml, moe self-ognize com-
mnicions sces, sch s socil newos, he gpeine, ninfoml commniies of inees h eis in ll ognizions.
Engging emploees hogh inolemen n wo-w commni-
cion is powefl combinion: 72 pecen of pciiones beliee
emploee inolemen is ccil n 70 pecen beliee hones n
imel commnicion is impon. Bee commnicions n
emploee inolemen enble n empowe people, hen chnge
hppens through hem no js to hem.
Facilitate involvement oemployees and allow themto exercise infuence overthe change process.
Project Sponsor, Canada, Lie Sciencand Pharmaceuticals
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making change work28
PARTICIPATIvE LEADERSHIP
Chnge lees wih picipie leeship sles wee moe liel
o he sccessfl pojecs. a song cle of empowemen n
elegion of ecision-ming powe isibes esponsibili fo
chnge hogho he ognizion. Lees who elege he
ecision pocess o hei sboines h 46 pecen pojec sc-
cess e, compe o 39 pecen sccess e fo hose who con-
sl wih sboines, hen me ecisions on hei own.
fIGure 15 shAre of successful ProJects, A coMPArIson of leAdershIP styles
Leadership styles had an important impact on project outcomes..
Share o successul projects
LEvEraGING SkILLS FOr BEttEr CHaNGE
Fo ems inole in chnge, enbling sills n enggemen
coss he ognizion shol be e pioi o help bil he
cpbiliies o sppo coninos chnge. Some pcicl sgges-
ions incle:
LEAD FROM THE TOP
Se ision n iecion clel, llocing esoces n esblish-
ing copoe cle fom he op. a chnge sponso shol be
ciel n isibl inole in seing oell iecion, pblicl
commnicing ll leels n sing iffeen echniqes n
mei, n eicing he igh sille esoces o he chnge
effo.
After consulting theirsubordinates, managers
decide on their own
39%
46%
Managers delegate theirdecision process to their
subordinates18%success rAteIncreAse
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INvOLvE THE PEOPLE
Emphsize emploee inolemen o ese esisnce o chnge,
boh iniil n gop leels, n se in plce mechnisms o
encoge his inolemen.
COMMUNICATE OR FAIL
Enble hones n imel wo-w commnicion o bil s n
commimen o chnge pogms n lees, n ece esis-
nce. use mliple chnnels n iffeen mei. te ime o
nesn he ience n how he lie o commnice.
GET THE RIGHT SKILLS EvERYWHERE
Enble pi eelopmen of inenl sills o eep pce wih
chnges in he eenl enionmen. Consie he esblishmen of
ssinble chnge mngemen cpbili wihin he
ognizion.
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making change work30 rIGhtInvestMent,rIGhtIMPAct
the igh bge fo chnge mngemen, spen effeciel on he
igh hings nsle ino significnl highe lielihoo of pojec
sccess. Howee, epening pon he objecies of picl
pojec, he igh leel of inesmen in chnge mngemen will
. reinfocing he nicipe le fom sch inesmens, mssie 72 pecen of pojec lees wol lie o ines moe in
chnge mngemen fo fe pojecs.
fIGure 16 the MAJorIty of ProJect leAders would lIke to Invest More to close the chAnGe GAP
Comparing current investments to plans or uture projects.
Invest Aboutthe sAMe
26%
Invest less
2%
Compared to current investment in changemanagement, on uture projects would you...
Invest More
72%
In fc, op ognizions inese onl 18 pecen moe in chnge
hn ohes, b wee ewe wih significnl highe pojec sc-
cess. this incemenl mon ws picll se o focs on eel-
oping insighs, mehos n he igh sills o be l effecie.
Pojec sccess es wee 23 pecen highe when he moninese in chnge ws gee hn 11 pecen of he pojec
bge.
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Ming moe effecie inesmens in chnge is no bo blinlieing nlimie sms of mone ino pojecs. rhe, i is bo
cing he imon pecisel, hogh focse inesmens in he
igh hings fo ech specific siion.
INvEStING WISELy IN CHaNGE MaNaGEMENt
Ognizions nee he igh bge o bil segic cpbiliies
n inege hem ino ognizionl pocesses n sces
inesing js lile moe hn ege pe pojec cn gel
impoe esls. Chnge Mses consie mone spen on chngemngemen s n inesmen, he hn n epenie. Some
pcicl ies incle:
tAckle coMPleXIty before It tAckles you
Ines p fon in gining n cing pon insighs h cn help o
oi n oecome boh epece n nepece hles ing
he cose of pojec.
fIGure 17 InvestMent levels
Organizations that invested less than 11 percent in change had a 35 percent success rate; those thatinvested more than 11 percent had a 43 percent success rate.
Investment 11%
23%success rAteIncreAseShare o successul projects
The ability to demonstratethe benets o a changeprogram was key in the shi
in thinking.
Project Manager, Canada, Lie Sci-
ences and Pharmaceuticals
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making change work32
REMEMBER TO EMPHASIzE THE HUMAN TOUCH
Ines in sills b sing well-ine chnge mnges moe consis-
enl n enble wiespe commnicions h engge emplo-
ees coss ll ognizionl leels.
PUT SOME METHOD INTO YOUR MADNESS
Ines in esblishing snize mehos o bil moe effecie
n long-em cpbiliies h sppo chnge effos, n emin
igiln bo pojec spening oell.
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CHaNGE MaStErS: tHEIr SECrEtS FOrSuCCESS
O sech fo he e o gee pojec sccess bings s bc o
he Chnge Mses, who chiee sccess es nel oble he
ege. We iscoee h Chnge Mses i no limi hei focs
o js one fce of he Chnge dimon.
Inse, his gop oo cions ele o ech of he fo fces of
he Chnge dimon n pojec sccess impoe sbsnill
s esl. Conesel, Chnge Noices neilize ee fce
n h f infeio esls, een when compe o js he
ege.
fIGure 18 how chAnGe MAsters And chAnGe novIces utIlIzed or underutIlIzed eAch fAcet
High concentration on all acets o the Change Diamond correlated to signicantly higherproject success rates.
8%
41% 95%success rAteIncreAse
80%
Top 20%Change Masters
AverageBottom 20%Change Novices
46% 61% 79%
12% 24% 37%
73% 79% 84%
10% 11% 13%
Real Insights - Pecenge of ognizions hing cle nesning of he chnge chllenge
Solid Methods - Pecenge of ognizions singfoml mehos consisenl
Better Skills - Pecenge of ognizions singchnge mnges fo chnge pojecs
Right Investment - Pecenge of pojec bgeinese in chnge mngemen
shInInG thedIAMond foreXtrAordInAryresults
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making change work34
tHE WHOLE CHaNGE dIaMONd: GrEatEr tHaNtHE SuM OF ItS PartS
While ech Chnge dimon fce h isinc benefi inii-
ll, when compnies combine ll fo fces hei oell pojec
sccess incese micll f moe hn he sm of he ps
wol inice. Neglecing een one e cn inhibi chnge
ecellence.fIGure 19 IndIvIduAl versus AGGreGAte effect of vArIous ActIons
Combining all our Change Diamond acets resulted in an outstanding increase in project success.
52%
Real Insights:aweness of
Chnge Chllenge
43%
Better Skills:Pofessionl
Chnge Mnges
ChangeChampions:
Combining allFo Fces
43%
Right Investment:>11% Chnge
Bge
52%
Solid Methods:Consisen se ofFoml Mehos
Project success rate o individual acets
41%aegepojecsccesse
Increase in project success due tosynergy eect o all our acets together
19%80%
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to l shine in encing chnge, ognizions nee o polish ll
fo fces of hei Chnge dimon.
B combining ll fo fces, Chnge Mses ine n 80 pecen
sccess e n incese f beon he sm of he iniil
effecs. togehe, Figes 18 n 19 emonse he poenil
ews of eoing enion o:
reAl InsIGhts, reAl ActIons
better skIlls, better chAnGe
solId Methods, solId benefIts
rIGht InvestMent, rIGht IMPAct.
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making change work36
arE yOu rEady?
as oself he lis of qesions below, eneing checm in he
pplicble colmn. yo checms cn help o ienif o c-
en senghs n wenesses eging ech of he fo fces of
he Chnge dimon. the esling pen cn help o ogniz-
ion pinpoin whee o e cions now o len how o bee el
wih chnge n ep he benefis of hnling i well.
YES
fIGure 20 how do you rAnk on the chAnGe dIAMond fAcets
Look or patterns in your answers to see where your organization most needs to improve.
TENDINGTOWARD YES
TENDINGTOWARD NO NO
GAINING REAL INSIGHTS AND TURNING THEM INTO ACTIONS
does o ognizion he goo common nesning of wh pojecshe file o scceee in he ps?
ae he people n cll specs of he chnge pln gien emphsis eql oh plce on pocess n echnologicl chnges?
Is chnge iewe s long-em nsfomion hs p of seg, soppose being seen s sccession of iniil sepe pojecs?
MAKING GOOD USE OF METHODS
does o ognizion he consisen, ie n ccepe meho fo chngemngemen h is pplie o ee pojec?
do ll pojecs he n ppoe bsiness cse, n meho fo ienifing ncing benefis gins h cse?
Is chnge mnge s foml wosem in ll significn pojecs?
LEVERAGING SKILLS FOR BETTER CHANGE
does o ognizion ines in biling chnge mngemen sills which cnbe leege coss pojecs?
Is he ole of pojec sponso well-efine, n is h ole hel cconble fospecific commnicion n iecion seing ss?
ae hee pocesses n echnologies in plce o llow people o become
inole in he chnge, ge cce infomion n poie feebc?
INVESTING WISELY IN CHANGE MANAGEMENT
does o ognizion incle chnge s line iem when bgeing pojecs?
Is o chnge mngemen bge se elie o pojec complei n is, soppose o sigh pecenge?
Is he chnge bge focse lgel on nesning n ecing ocomplei, eeloping consisen mehos n cqiing he bes chnge sills?
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CONCLuSION
While he Enepise of he Fe is inee hng fo chnge, o
Ming Chnge Wo s shows h eecing chnge well
emins he ecepion, hogh ceinl n chieble gol. O
esech wih pciiones eele pcicl insighs bo closing
he chnge gp incling he insigh h sof, people-ele
fcos picll pesen gee chllenges hn h, echnolog-ele fcos h e picll esie o ienif n mese.
Compnies cn no longe jsif o ffo n ad hocppoch o
chnge mngemen. We iscoee h chnge mngemen is
ning poin fom n o pofessionl iscssion, fom
impoision o iche, moe ssemic ppoch, bse on cle
empiicl pespecies on wh wos n wh oes no.
Impoing pojec ocomes eqies enion o combinion of
cing on el insighs, emploing bee sills, esblishing soli
mehos n llocing he igh inesmens. B focsing on ll fo
fces of he Chnge dimon, ognizions cn gin snegies
h me chnge wo in hei fo: elieing moe sccessfl
pojecs n biling chnge mngemen cpbili h is il
o becoming n Enepise of he Fe.
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making change work38
tHE IBM INStItutE FOr BuSINESS vaLuE
IBM Globl Bsiness Seices, hogh he IBM Insie fo Bsiness
vle, eelops fc-bse segic insighs fo senio bsiness
eecies on ciicl ins-specific n coss-ins
isses. this eecie bief is bse on n in-eph s b he
Seg & Chnge em. I is p of n ongoing commimen b IBM
Globl Bsiness Seices o poie nlsis n iewpoins hhelp compnies elize bsiness le. yo m conc he hos
o sen n e-mil o [email protected] fo moe infomion. Fo he
IBM 2008 Globl CEO S efeence in his s, go o: ibm.com/
enepiseofhefe. Fo ohe elen sies, o m lso
bowse o Web sie ibm.com/iib.
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aBOut tHE autHOrS
Hns Heni Jgensen is n associe Pne in IBM Globl Bsiness
Seices n Globl Le of he Chnge Mngemen Commni. He
hs le nmeos pojecs in he e of mngemen n seg
consling in Eope, ameics n asi oe he ps 15 es. Hns
Heni cn be eche [email protected].
Lwence Owen is he Globl Lee of he Ognizion n
Chnge Seg Pcice, wihin IBM Globl Bsiness Seices. He is
esponsible fo leing he eelopmen of ognizionl n
chnge segies fo cliens o ie hei nsfomion gens,
n mnges one of he lges ognizion n chnge consling
ems globll. Lwence cn be eche [email protected].
anes Nes is Senio Mnging Consln wih he Seg n
Chnge pcice of IBM Globl Bsiness Seices n les he se-
ice innoion esech he klshe Seice resech Insie
(kSrI), fone joinl b klshe uniesi n IBM. anes cn
be eche [email protected].
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making change work40
CONtrIButOrS
Sl Bemn, Globl n ameics Seg n Chnge Lee, IBM
Globl Seices
Pee kosen, Globl Lee of he IBM Insie fo Bsiness vle,
IBM Globl Seices
M Bcinghm, Senio Mnging Consln, Seg n
Chnge, IBM Globl Bsiness Seices
Mie ash, Senio Mnging Consln, Seg n Chnge, IBM
Globl Bsiness Seices
Json Seng, Senio Consln, Seg n Chnge, IBM Globl
Bsiness Seices
Jcqi Wen, Pne, Ognizion Chnge Seg, uk n
Ieln, IBM Globl Bsiness Seices
Pofesso d. Geog ringe, dieco, Cene fo Elion n
Mehos (Zenm f Elion n Mehoen ZEM), uniesiof Bonn
Sn Piengeli, Pojec Mnge, Cene fo Elion n
Mehos (Zenm f Elion n Mehoen ZEM), uniesi
of Bonn
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aCkNOWLEdGMENtS
te collboie innoion ws ehibie b moe hn 1,500 cliens
n mn ohe colleges hogho IBM who conibe o his
ppe. In picl, his ppe benefie fom iionl inp n
esech fom Jg albech, ann Bisch, Coln Bgemeise, Ewin
e Goo, rosne Giois, Ls Goschling-knsen, dniel Hmpe,
Chisoph kfn, to kneo, Pic kme, Enice kwon, JnNemnn, Si yong P, Gelle Pjo, aoele Sebille, Nhlie
Sie, Gce to, r Wng n Shi rong Zhng.
FOr FurtHEr INFOrMatION
to fin o moe bo his s, plese conc one of he Seg
& Chnge lees below:
Global and Americas Saul Berman [email protected]
Asia Pacific Steen Daidson [email protected]
Japan Ryuichi Kanemaki [email protected]
Northeast Europe Sara Longworth [email protected]
Southwest Europe John Papatheohari [email protected]
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making change work42
rEFErENCES1 the Enepise of he Fe: IBM Globl CEO S 2008. IBM
Copoion. M 2008. www.ibm.com/enepiseofhefe
2 Ibi.
3 Ibi.
4 the Enepise of he Fe: IBM Globl CEO S 2008. IBM
Copoion. M 2008. www.ibm.com/enepiseofhefe
5 Ibi.
6 Jgensen, M. n k.J. Molen-sol. How Lge ae
Sofwe Cos Oens? Ciicl Commens on he Snish
Gops CHaOS repos. Information and Software Technology
48(4). 2006. hp://siml.no/esech/engineeing/pblic-
ions/Jogensen.2006.4
7 Bse on eene CaGr 2003 o 2006. the Enepise of he
Fe: IBM Globl CEO S 2008. IBM Copoion. M 2008.www.ibm.com/enepiseofhefe
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8 Gesne, Lo. Who Says Elephants Cant Dance? Leading a Great
Enterprise Through Dramatic Change. HpeBsiness. New yo.
2003.
9 the finings fom his s lign wih he cemic liee.
See fo emple: koe, John. Leing Chnge: Wh
tnsfomion Effos Fil. Harvard Business Review. Mch-apil
1995.
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