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Personnel Today

£25bn is wasted each year on change management errors

by Personnel Today 6 Aug 2002
by Personnel Today 6 Aug 2002

High-profile
change management blunders cost the UK economy more than £25bn a year.

A
new report, Challenge of Change 2002 finds that while UK businesses undertake
at least three major change projects a year – costing companies £52bn in
management charges alone – around half are a waste of time and money.

The
survey of more than 100 directors reveals that UK company boards devote 35 per
cent of their time to managing change but only half of this is well spent.

Many
mergers, restructures, acquisitions and downsizing operations are ill-conceived
and poorly managed, finds the Change Management Online study.

Respondents
cite BP Amoco most frequently as an organisation that has handled major change
well.  

The
company is praised for the way it dealt with four different change scenarios –
the merger between BP and Amoco, structural reorganisation, the management of
environmental issues and outsourcing the HR function.

General
Electric is  another company seen as
having successfully reinvented itself, acquiring new assets and effectively
restructuring.

Respondents
found it much easier to name companies that have failed to manage change,
however, with Railtrack coming top of the list of offenders.

The
national rail operator was criticised for the way the move from public to
private sector was managed and it was deemed to be trying to do too much too
quickly, with poor performance targets in place and not enough buy-in from all
involved.

British
Airways is also perceived to have poorly managed some aspects of change.

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"Shining
through this study is the realisation that real organisational transformation
is a people issue," said Ron Brender, chairman of Change Management
Online’s parent company Executives Online.

www.ChangeManagementOnline.co.uk

Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

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