Three Common Pitfalls of Organizational Change

When company leaders want to make big changes, they often stick to familiar methods that don’t quite hit the mark. That’s why 70% of company-wide transformations end up failing. There are three common mistakes that leaders make when trying to bring about change. First, they underestimate how hard it is to make meaningful changes. Second, they have unrealistic expectations about the company’s ability to handle those changes. And third, they need to make sure that the employees understand why the transformation is important. If your big change is not going well, looking into these three areas can help you get back on track.

A financial services company tried to switch from selling products to providing services, but after two years, things were a mess. The leader of the change said, “We did everything we could to keep this transformation on track. We communicated a lot, had meetings to get everyone involved, and tried more than 30 activities to promote our vision. But it feels like we’re going in circles. There’s no noticeable improvement, employees are overwhelmed with projects that seem unimportant, and we’ve lost sight of why we started this in the first place.”

Underestimating the Challenge

Many skilled leaders think making big changes will be easy. It’s like when LeBron James joined the Miami Heat basketball team and confidently said they would easily win seven championships (spoiler: they didn’t). Many leaders have the same expectation.

Big changes affect the entire company. For the financial services company, switching from products to services meant changing everything. The leaders thought that doing a lot of different things would bring about the transformation. But because there were so many strategies, they weren’t coordinated, the people in charge couldn’t make decisions, and they didn’t have enough resources. This created a bunch of different activities that hurt the morale of the workers.

Then, the company had fancy meetings with one-way communication. This made the gap between management and employees even bigger because it showed that the leaders didn’t understand the problems with the poorly-led initiatives. Workers thought the leaders were all talk and no action. To make real change, the company needed to coordinate the strategies and make sure they matched the goals.

Overestimating the Company’s Abilities

People in charge of change still have their regular jobs. Leaders often don’t realize how much the employees’ roles are affected by the changes while they’re still doing their everyday tasks. Many leaders start making changes but then get distracted by the next exciting thing.

Instead of working on the necessary leadership changes, they make videos and write articles saying how important the changes are. They claim early success with exercises that don’t really change anything. This turns the planned transformation into just a campaign.

The financial services company had 20 well-made videos with many leaders, dozens of articles talking about early successes, and hundreds of emails about different exercises. But less than 20% of the employees opened them.

Real transformational change starts with admitting that it’s going to be tough. Leaders need to understand the company’s abilities and be ready to listen more than they talk. They also need to be the first ones to change.

For the financial services company, leaders had to stop strategies that the company couldn’t handle. They started listening to employees in groups where leaders could only ask questions. They identified parts of employees’ roles that could be paused to focus on the transformation. They put leaders on plans to improve their skills. In company-wide meetings, leaders admitted they misjudged the abilities and talked about how they were fixing it. This made the employees see that the leaders were committed to making real changes.

Misjudging How Others See You

Leaders who explain why and how the change is personal to them are more successful. This answers the unspoken questions that employees have about the changes. If employees don’t hear those answers, they might think the changes are just to help the leader’s career. And if the changes mean sacrifices for the employees, they become skeptical. If leaders only want personal gains without personal costs, employees won’t commit to the project.

For the financial services company, the change was started by an executive who came in as the head of strategy. She came from another company that didn’t make the same switch from products to services. She knew the industry was changing and that not keeping up would hurt the business. She also knew that if she could succeed in making the change, she would be in a good position to become the CEO. But she was worried that employees would think she was only there for a short-term gain. So she tried to make the change seem less personal. But this made employees think she was only there for a quick profit.

When she shared her story and why she wanted to stay at the company for the long term, it changed how people saw her. It showed her strong personal beliefs. She talked passionately about the change in company meetings and explained why she thought the company could succeed. She admitted feeling insecure about being new and wanting to be accepted. By being open about her vulnerabilities, she changed how people perceived her. She encouraged others to see that the change was good for everyone.


If you’re in the middle of or about to start a big change, you probably know it’s going to be tough. There will be unexpected challenges that test your persistence and confidence. Do the important work to prepare your company and yourself for the journey. The biggest obstacle you can stop from ruining the change is yourself.

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