WHY BIG CHANGES FAIL!

Big changes often fail because organizations underestimate the complexity and risks involved. The root causes are most likely overly optimistic planning, unclear goals, and lack of stakeholder engagement. However, by simplifying change management—breaking down large projects, engaging teams early, and aligning with organizational culture, leaders and change professionals can dramatically improve the odds of success.

Leaders must recognize that successful transformations are not just about the destination but about the journey. By taking a more realistic, iterative approach, organizations can ensure their big changes deliver lasting and sustainable results.

In today’s rapidly evolving business landscape, organizations are under constant pressure to implement large-scale changes, whether to stay competitive, respond to external disruptions, or pursue growth opportunities. Yet, despite the billions invested in change initiatives, many big changes fail to deliver the intended results. According to research, up to 70% of major transformations fall short, leaving organizations with unmet goals and in some cases demoralized organizations.

This article explores why big changes fail, drawing on insights from Bent Flyvbjerg, a renowned Danish expert in project- and change management. He has studied big changes for the past 2 decades and gathered data from 16.000 big changes/projects.

I will also outline the most important steps to simplify change management helping leaders and change professionals addressing the most important root causes leading to failure.

Why big changes fail

Most leaders and change management professionals have both experience and strong opinions about why changes fail. It is for sure a big question to explore with a lot of answers, but research done by Bent Flyvbjerg gives us insight in some of the dynamics leading to failure in big changes.

Although it is well known by most, a lot of businesses keep making the same mistakes, over and over again, which is quite interesting.

Let’s look at the most common mistakes leading up to the failure of big changes.

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1. Overly Optimistic Planning

One of the primary reasons large changes fails are the “optimism bias (overconfidence bias). People tend to believe that their projects will be more successful than others, despite evidence to the contrary is well documented.

The tendency to underestimate the time, costs, and risks of a project leads to unrealistic expectations. Furthermore, change outcomes, the benefits, are in many cases too optimistic which can lead to organizational burnout due to the pressure put on the organization.

Bent Flyvbjerg’s research highlights how megaprojects, from infrastructure to organizational change, are often plagued by poor planning, leading to budget overruns and delays. Leaders often focus on best-case scenarios, neglecting to plan for setbacks and especially the complexity in large scale changes.

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2. Strategic Misrepresentation

Strategic misrepresentation happens when project leaders, owners or managers deliberately downplay costs or inflate potential benefits to win approval. This tactic is used to make projects appear more feasible and attractive to stakeholders, even though leaders know the estimates are unrealistic. In addition, research shows that many sponsors rely on overly optimistic projections to secure funding or buy-in. Once the project moves into execution, these misrepresentations come to light, often leading to budget overruns, delays, or the need for renegotiation. As a result, projects become unsustainable, erode stakeholder trust, and frequently fail to deliver on their promises.

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3. Scope creep

Scope creep occurs when a project’s goals and objectives gradually expand beyond their original scope. This often happens when stakeholders request additional features or changes during the project’s development, increasing its complexity. These modifications strain the project’s budget and timeline, making it harder to stay on track. Without strong governance and controls, scope creep can escalate, resulting in significant cost overruns and delays, ultimately making the project difficult to manage and more likely to fail.

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4. Poor front-end planning

Poor front-end planning is a key driver of project failure. When insufficient time and effort are dedicated to early-stage planning, the project often starts with vague or incomplete objectives, leaving the team without clear direction. This lack of clarity can lead to misalignment among stakeholders, who may have different expectations or priorities, resulting in conflicts and costly changes as the project progresses.

Another consequence of poor planning is inadequate risk analysis. By failing to thoroughly identify and assess potential risks, projects become more vulnerable to unexpected challenges that can derail progress. Issues such as budget overruns, delays, or operational inefficiencies frequently emerge as a result.

Projects that rush through the planning phase, without thoroughly defining objectives or addressing risks, tend to face significant problems during execution. The lack of solid front-end planning can severely impact a project’s ability to stay on time, on budget, and within scope, ultimately threatening its success.

5. Failure to Use Data and Reference Forecasting

Bent Flyvbjerg’s research emphasizes the importance of data-driven decision-making and Reference Forecasting to improve project outcomes. This involves comparing a project with similar past projects to create more accurate and realistic forecasts. However, many projects fail because they neglect to use this approach, often due to overconfidence bias.

When teams ignore historical data from comparable projects, they make decisions based on gut feelings or political pressure rather than relying on concrete evidence. This often leads to overly optimistic projections for costs and timelines, again increasing the risk of budget overruns and delays.

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Research Highlights and summary

• Overconfidence bias and strategic misrepresentation are the two most common reasons for project and changes to fail.
• 9 out of 10 projects fail to meet their timelines.
• 90% of megaprojects suffer from cost overruns.
• Large projects experience cost overruns of 20-50% on average and take 40-50% longer than planned.
• IT and software projects often suffer from the worst optimism bias. 1 in 6 IT projects have a cost overrun of 200% and a time overrun of 70%.

How to address the root causes

Understanding the root causes of why big changes fail is just the beginning. To effectively implement successful transformations, organizations must take actionable steps to simplify changes.

Bigger isn’t always better !!

Rather than launching a massive, all-encompassing transformation, break the change down into manageable steps. This allows for early wins, which can build momentum and give leaders time to adjust strategies based on real-world feedback.

Smaller, modular projects are easier to control and adjust, reducing the risk of failure.

With that as the foundation, here are five strategies to mitigate the common pitfalls in big changes/projects:

1. Adopt Realistic Planning Practices

Shift away from overconfidence bias by implementing a realistic planning approach. Engage cross-functional teams to gather diverse insights and assess potential risks comprehensively. Establish clear, achievable objectives and build in contingency plans to address setbacks. Regularly review and adjust plans based on real-time data and feedback to maintain alignment with project goals.

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2. Ensure Transparency and Honesty

Combat strategic misrepresentation by fostering a culture of transparency. Encourage project leaders, owners and managers to present data accurately, avoiding the temptation to downplay costs or overstate benefits. Regular check-ins and open discussions about project realities can help maintain stakeholder trust and allow for timely adjustments before issues escalate.

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3. Implement Strong Governance Structures

To control scope creep, establish strong governance frameworks that clearly define project scope and objectives. Engage stakeholders early in the process to align expectations and minimize changes later. Set up a change control process to assess any new requests rigorously, ensuring they are justified and manageable within the existing project framework.

4. Invest in Front-End Planning

Dedicate sufficient time and resources to front-end planning. This involves setting clear objectives, aligning stakeholders, and conducting thorough risk analyses. Consider using scenario planning to anticipate potential challenges. By investing in robust planning, organizations can reduce ambiguities and enhance their ability to adapt to changes during execution.

5. Leverage Data and Historical Insights

Utilize data-driven decision-making and Reference Forecasting to inform project planning and execution. By analyzing similar past projects or reference projects, organizations can develop more accurate projections and avoid common pitfalls. Encourage teams to rely on empirical data rather than gut feelings or political pressures, enhancing the reliability of forecasts and improving project outcomes.

Recap / Summary

In an era where organizations must continually adapt to stay competitive, understanding why big changes fail is essential for leaders and change professionals. By focusing on realistic planning, transparency, strong governance, thorough front-end planning, and data-driven decision-making, organizations can simplify implementation of big changes and significantly improve their chances of success.

Recognizing that the journey is as important as the destination allows leaders to create a culture of adaptability and change capacity, ultimately ensuring that big changes lead to sustainable results. By implementing these strategies, organizations can navigate the complexities of transformation and emerge stronger, more aligned, and better equipped to meet future challenges.

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Ref:Bent Flyvbjerg (2023), how big things get done (data from +16.000 projects)