UK boards cannot cope with change

2002

UK businesses undertake at least three major change projects per annum,

costing companies £52 billion in terms of management time alone, however half are unsuccessful, according to a new report.

The survey – The Challenge of Change 2002 - was conducted on behalf of ChangeManagementOnline.com among 100 directors and senior managers in some of the UK’s biggest businesses. The study reveals that UK boards are devoting 35% of their time to managing change yet only half of this time is well spent, as many change scenarios – be they mergers, restructures, acquisitions, downsizing - are not being effectively managed.

BP Amoco was cited most frequently, by the directors interviewed, as an organisation which has handled major change well. The company was praised for its handling of four different change scenarios - the merger between BP and Amoco, structural re-organisation, management of environmental issues, and outsourcing of the HR function. General Electric was chosen as another company which has re-invented itself, acquired new assets and consequently restructured the business successfully.

The directors questioned found it more clear-cut to name those who have failed to manage change. Railtrack/British Rail topped this list. It was criticised for the way it has managed the move from public to private sector. It was deemed to be trying to do too much too quickly, with poor performance targets in place and not enough buy-in from all those involved.

Another poor change performer was British Airways. Despite being recognised by some for its change successes, it was more frequently criticised along with Royal Mail/Consignia, for the way it has managed its re-branding. Far from disliking the new identities, the interviewees didn’t like the lack of decisiveness both companies have shown. (Both organisations have reversed identity decisions – Consignia has returned to Royal Mail and British Airways reverted to using the Union Flag on its tailfins.)

According to the study these ‘identity about turns’ reflect one of the major factors that create most change failures - leadership. Over 80% say boards need to better master the art of leading during times of upheaval. A further issue is people management - almost 80% report that companies fail to keep the workforce ‘on side’ during the process and can’t handle resistance to change. However, the biggest problem with managing change is forecasting the size and scope of the task. For 86% of those studied, boards struggle to gauge how much change is good for an organisation and misjudge the timescales and business impact.

According to Change Management Online, a new site dedicated to the supply of change managers and change management teams, serving all sectors of UK business, there is a growing trend to outsource a lot of change management. Almost a third of those questioned bring in interim managers or change specialists to help them progress a major change initiative. Outsiders are particularly valued for their fresh approach (80%) and specialist experience (78%) at managing change. Their ability to challenge board thinking and see through tough/unpleasant tasks is also a major benefit. Indeed 75% of the senior managers and directors interviewed view change management as a specialist skill in its own right.

"Shining through this study is the realisation that real organisational transformation is a people issue. Companies are changing so quickly today that few directors or managers have the opportunity to master the necessary skills before they face their first major change challenge, says Ron Brender, chairman of Change Management Online's parent company Executives Online. "This is why so many companies are buying in change management experts – to deliver the board’s vision and change strategy.”

To develop The Challenge of Change Report, interviews were conducted in Q2 2002 with Directors and senior managers operating in 100 UK companies employing a minimum of 500 people, 11 interim management and change management supply agencies, 189 interim managers and 5 management consultancies.

For more information about the issue of change management, or for a copy of The Challenge of Change 2002 Report visit: www.ChangeManagementOnline.co.uk or call:01962 829765