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Lessons Learned

6 Myths About Change In Business

Effective change is seldom top-down. It usually radiates out from an organization's center.

6 Myths About Change In Business
[Photo: Flickr user Ben Hirsch]

In many cases, it's hard to tell what the next big changes for your industry will be until they've arrived. And it's hardly any easier knowing precisely how successful any company-wide changes you put in place will be until the overhaul is complete.

That's where data can help. Here at Accenture Strategy, we've combed through 15 years of research on hundreds of change initiatives—from mergers and restructurings to cost reductions and tech rollouts—across some 150 companies around the world. Looking at the findings, it's clear there are some stubborn myths about change that just don't hold up to empirical scrutiny. Here are six.

Myth No. 1: Too Much Change Too Fast Is Dangerous

The most successful companies actually thrive on change. Rather than get tripped up by dramatic transformations, those companies do better as a result of making them regularly. The top-performing companies see more change internally—at rates of up to 30% to 50%—and at faster paces than their lower-performing counterparts.

Why? Because the most successful organizations don't experience business changes as deviations from the norm. Instead, they've grown used to change as an ongoing process, which helps each new adjustment see more successful outcomes. Slow, incremental tweaks may help keep things steady, but they simply aren't a part of the most cutting-edge companies' playbooks.

Myth No. 2: Change Is Destabilizing

Change initiatives rarely fail because of the change itself. Typically, it's other pre-existing problems that cause things to swerve off course. In fact, we found that 85% of organizations that run into trouble while making big changes have major underlying issues that need addressing beforehand.

Myth No. 3: Change Is Usually Top-Down And Meets Resistance From Managers

Effective change is seldom top-down. Instead, it usually radiates out from an organization's center. According to our research, it's the unit leaders who sit beneath the corporate level that play the biggest part in implementing major changes successfully.

That's not to say that CEOs and other C-suite leaders can't or don't make sweeping, visionary changes. They can and do. But when it comes to most of the changes that companies make effectively, those top-down efforts are more the exception than the rule.

Myth No. 4: Performance Dips In The Early Stages Of Big Changes

Don’t believe it. We’ve found that for high-performing organizations, performance—when it comes to cost management and the effectiveness of customer service—doesn't level off when things shift gears. Instead, change is actually healthy for the most successful companies. Our research finds that performance rises continuously from the start of a change initiative through to the end.

Myth No. 5: Everyone Needs To Understand The Changes Before Committing To Them

While this is true for the lowest-performing groups, it isn't for the companies that change most successfully. There, trust in leadership is so high that most team members are willing to get on the bus even before they know where it’s headed.

How come? Because that trust is more emotionally rooted. Employees are more willing to buy into an effort on faith then find out the details as they move along. But in organizations where that level of trust and commitment doesn't already exist among teams, that can't happen. Companies with leaders who inspire genuine loyalty can start moving ahead with new initiatives without having to spell out specific details in order to gain employees' buy-in.

Myth No. 6: Emotions Don't Matter

Both negative and positive feelings can have a huge impact on how well a company adapts to change. Our research found that high levels of fear and frustration can reduce business outcomes by some 20%. On the other hand, high levels of passion and drive can boost them by up to 50%.

Whether an organization is undergoing a major, onetime transformation, making a series of targeted adjustments, or building ongoing change into its basic culture, it's worth paying heed to these myths. The longer they stick around in business circles, the harder it will be to make changes that actually succeed for the long haul.

Warren Parry is managing director of talent and organization at Accenture Strategy and the author of Big Change, Best Path.

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