Why 70% of transformation initiatives fail

and how we reverse the odds

Wherever we look, we need urgent, wholesale transformational change towards a future where all can thrive in harmony with our planet.  There are countless motivated people in positions of power with accurate problem definitions and promising solutions.  So why does transformation remain stuck at an abysmal 70% failure rate?

Image credit: AI generated by Gerd Altmann

“Transformation efforts remain stuck.  The 30 percent success rate hasn’t budged after many years of research, and we now know that even successful transformations still leave value on the table.”

— McKinsey & Company (2021).  Losing From Day One: Why Even Successful Transformations Fall Short.

What do we get wrong about transformation?

I have often been asked to do for change initiatives what Dr. Gregory House (played on the series House by Hugh Laurie) does for obscure medical conditions:  diagnose.  Drawing on two+ decades in research and practice of transformation across 6 continents, here are the most common reasons transformation fails much more frequently than it succeeds:

1. We don’t distinguish it from incremental change

2. We overlook process change

3. We don’t design transformation

4. We don’t think we can

5. We don’t put the right people at the helm

To reverse the odds, let’s examine each of these in detail.

1.   We don’t distinguish transformation from incremental change

The difference between incremental and transformational change is like that between efficiency and effectiveness.  If efficiency is about getting to the intended result with the least waste of time, effort, and resources, then effectiveness is about the outcome.  If efficiency is about doing it right, effectiveness is about doing the right thing. 

If incremental change addresses animal cruelty by switching to organic hamburgers, transformation considers a vegan diet.  If incremental change looks for water efficient irrigation technologies, transformation eliminates irrigation altogether.  If continual improvement looks to improve staff productivity by 5%, transformation rethinks the business model.  And so forth.

Incremental change fine-tunes the system while transformation recasts it, fundamentally changing the rules, structures, skills, and processes. 

Both are bedrocks of innovation, and both are essential for progress.  However, we have done ourselves an immense disservice by failing to differentiate the two. 

Before being cleared for major surgery, you may be required to bring your sugar levels down or let a recent tooth extraction heal.  Imagine if going in for a medical procedure, you did not know if it were minor (you’d be home for lunch) or major (requiring 2-3 nights in hospital).  Anybody would find that disorienting if not altogether unacceptable, which is why we must acknowledge transformation as a major change to be planned and executed accordingly.

2.    We overlook process change

Complex systems — which are the ones usually catching changemakers’ fancy — are more like spider webs than like a spice cabinet or a Jenga tower.  Pulling on any one element affects the entire web;  a web that likes being exactly how it is whether we agree with it or not.

Image credit: Elena Bondareva

It was on multi-billion-dollar project for a government agency that I first suspected that process change is the Achilles’ heel of transformation.