The Change Equation

The Change Equation

Peter Duschinsky (Imaginist Company, UK)
Copyright: © 2012 |Pages: 12
DOI: 10.4018/978-1-4666-0200-7.ch003
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Abstract

In this article, the author investigates the nature of complexity and its role in project failure. Also, the paper proposes a model to assess complexity. It draws some conclusions about the implications for change management interventions. The author finds that projects fail when the complexity exceeds the capability of the organisation to cope. The overall aim of the article is to offer an approach to reducing this number of failed change projects.
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Definition Of Terms

First let’s define what we mean by project success - and failure.

“A successful project is one which achieves its outcome(s) on time, within budget and to the required level of quality, realising the benefits identified in the Business Case.” (Dept of Finance and Personnel, 2009)

“Failure is usually defined by the host organisation in terms of projects that are late or over budget, an inability to fully realize the expected benefits or gain the acceptance and enthusiastic support of users and management” (Cannon, 1994)

The definitive source for our understanding of the rate of project failure is the Standish Group’s annual survey. The latest survey (Figure 1) found that only 32% of projects succeeded. 44% were ‘Challenged’ and 24% failed outright.

Figure 1.

Standish Group report 2009 (as cited in Wieberneit, 2009)

In fact the definition used by the Standish Group is quite generous. Successful projects include those that come in more or less to time and budget and deliver most of the planned benefits. ‘Challenged’ projects have overrun their planned timescales and budgets (some by a substantial degree) but have delivered at least some of the expected benefits. So a failed project is one that simply has not delivered. This includes those that have been abandoned before they get to completion.

So if 32% of the projects were classed as successful in the 2009 survey, that means only 32% came in more or less to time and budget and delivered most of the planned benefits. If I was a surgeon, solicitor or construction engineer with this performance history, you wouldn’t be giving me your business, so why do we put up with it in the project management domain? And note that it was 35% in 2006! So things are actually getting WORSE.

Other surveys confirm the high failure rate: Harvard Business School also found that only 30% of change efforts among the Fortune 100 produced a positive bottom-line improvement (1997). PricewaterhouseCoopers reported that only 25% of IT projects succeed. According to them, 25% fail completely and 50% are late, over budget and deliver less than the expected benefits.

This trend seems to apply to all kinds of change projects: a survey by Martin Smith (2003) gave the picture of success and failure as presented in Figure 2.

Figure 2.

Success rates for five types of organisational change

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