You must be the change you wish to see in the world.—****Mahatma Gandhi

As a result of the trends mentioned in this blog series, organizations must adapt, evolve, and reinvent themselves to be positioned competitively. Indeed, there is little doubt that organizations must continually deal with increasingly rapid pace of change. 

More importantly, leaders must be aware of the impact change has on day-to-day productivity. For instance, some researchers estimate that during normal business environment, worker productivity stabilizes at approximately 60 percent. However, during times of change, productivity can potentially drop to a mere 15 percent.     

Another way to look at this is that during a typical eight-hour workday, an employee is productive about five hours, with the other time focused social and personal issues and interactions. When organizational change occurs, productivity can decrease dramatically, with employees “working” less than two hours, with the rest of the day absorbed by speculation and gossip, concern for themselves, and attempts to figure out how the organization will successfully implement change. 

How organizations manage change is not always something they can brag about, though. Indeed, a well-known statistic (from some 30 years ago) is that 90 percent of all companies fail to execute strategy successfully. (Do a Google search and you will find this state referred to multiple times by business experts.) Other stats often touted by business leaders: 

• 60 to 70 percent of technology insertions are ineffective

• $75 billion spent annually on failed IT projects, with poor management as the culprit

• 8 of the 10 largest mergers over the last 10 years failed, destroying $789 billion in shareholder wealth. 

Clearly, organizations must learn how to adapt and change or face an “Extinction Event,” such as those described in Code Halos. To highlight this point, keep in mind that 70 of the Fortune 500 that appeared in 1955 still exist; nearly 2000 companies have come and gone since then. It seem that corporate life expectancy, which was once 75 years, is now less than 15 years. 

To be sure, much has been written about the need to instill a winning culture that successfully navigates change. But what will it really take? 

First, leaders need to remember that for organizational change to succeed, there needs to be effective leadership that is committed to guiding and supporting change with a clear and shared vision of the future. In fact, some employees resist change simply because they do not understand it. In this instance, it is the role of the leader to ensure that individuals understand the rationale for the change. 

In addition, some individuals may resist because they simply do not like the proposed changes. Here, workers need a clear incentive for change. In other words, they need to know “what’s in it for me” (WIIFM). They also may not like change because they are not prepared to tackle it. Therefore, organizations need to equip the workforce with the appropriate skills and resources to be successful, with a clear action plan as to how they will achieve the organizational changes. 

Finally, some employees may not like who is driving the change. Here, we’re really talking about trust.  A manager who establishes a culture of “my way or the highway” minimizes genuine buy-in to change. In turn, the organization gains passive-aggressive behavior or overt resistance to change. 

This reminds me of an article I recently read of an interview with the CEO of Starbucks. When asked what he attributes his organizational success to, he stated: “The secret sauce to our success is the culture and values of our company.” A similar sentiment was mentioned by former Southwest CEO, Herb Kelleher, who stated: “Everything (in our strategy) our competitors could copy tomorrow. But they can’t copy the culture—they know it.” 

What’s the key takeaway? Organizational change makes leadership development even that much more imperative—so that leaders are equipped to guide organizations through potentially difficult and evolving times. The good news: Although change presents many challenges to organizational leaders, it also provides plenty of opportunities for growth and improvement.  

Are you attending ATD 2015? If so, hear Edwin speak at his session, The Perfect Storm: Human Capital Challenges and Opportunities in the 21st Century, on Wednesday, May 20, from 1:30 to 2:30 ET.