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Planned Changes

Planned Changes Don’t Always Produce the Intended Results To this point, it is clear that change—from simple fine-tuning to radical reconstruction—is a necessary prerequisite to organizational survival. However, successful change is extremely difficult to execute as the scope and complexity increases. Many types of change initiatives have failed: reengineering, total quality management, activity-based costing, joint optimization, strategic planning, and network structures.101 If change leaders were to fully consider the failure rates when designing interventions or acquisitions, fear would trump action. As one manager put it, “The opportunity has turned out to be 10 times what I thought it would be. The challenges have turned out to be 20 times what I thought they were!”

Fortunately or unfortunately, inaction and avoidance are no solution. Maintaining the status quo typically does not sustain competitive advantage, particularly in troubled organizations. Delays and half-hearted efforts that begin only after the problems have become critical increase costs and decrease the likelihood of a successful transformation. As Hamel and Prahalad put it, “No company can escape the need to re-skill its people, reshape its product portfolio, redesign its process, and redirect resources.”

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Organizations that consistently demonstrate their capacity to innovate, manage change, and adapt over the years are the ones with staying power.104

Hamel and Prahalad believe that restructuring and reengineering, on their own, do little to increase the capabilities of the firm. These two Rs increase profitability and can enhance competitiveness but “in many companies . . . re-engineering (and restructuring) . . . are more about catching up than getting out in front.”105 Hamel and Prahalad argue that companies need to regenerate their strategy and reinvent their industry by building their capacity to compete. These transformations and realignments that result are sustained marathons, not quick fixes. Skilled change leaders provide a coherent vision of the change and do all that they can to help people adapt and embrace the changes with realistic expectations. When change recipients understand that things will often get worse before they get better, but also believe that the benefits are well worth the effort, change initiatives are more likely to be sustained.106 For example, as costs rise in China, the environment is shifting manufacturing elsewhere, including a rebirth of manufacturing in the United States. This trend demands a continuing evolution of strategy as well as reshaping of supply chains to alter ingrained overseas production practices that have evolved over the past 15 years—changes that manufacturing and supply chain managers may have difficulty adjusting to.

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