In short, transformation projects fail because of inertia.
Case Study: General Electric
General Electric recently fell out of the Dow Jones industrial index for the biggest industrial companies in America, after having been in the top echelons for many decades. GE has suffered enormously at the hands of new technologies and business models, to the point now where the share price of the company can no longer keep pace with more relevant rivals.
GE is a highly diversified multinational conglomerate that provides a range of services in many industries, including power generation, home appliances, security systems, railway engines, and oil and gas extraction equipment. Over the years, it has become bloated and resistant to change, with each department in the company trying to outcompete the others for management and financial resources. Within GE there is a problem of unifying the company mission: it simply has too many arms of business. And this is leading to all kinds of problems with direction and implementing real change.
Inertia Versus Action
All companies face a dilemma between inertia versus action. As https://certus3.com/ point out, the forces of inertia can be intense. Well-established companies do not like change because change usually means that some people lose out in the short-term, whether financially or otherwise. Companies develop an internal resistance to change which leads to the avoidance of risk-taking, and the development of innovation. Special interests fight to preserve the status quo, sometimes even when it becomes clear that the business will fail.
What To Do About It
The good news is that inertia isn’t a problem that cannot be overcome. It just requires the right tactics. For starters, companies should avoid relying on their internal systems to self-correct when things begin to go wrong. Instead, they should look outside the organization to external consultants who can help guide them on how to implement transformational projects.
Secondly, they need to negotiate with various stakeholders, pointing out what will happen if change does not arrive. GE didn’t realize that it was necessary to do this until it was too late. Company executives only began negotiating with managers, employees, and shareholders about the direction of the businesses once it had become eminently clear that the company was going to fail without a radical overhaul.
Finally, companies need to recognize that merely sending people off on training exercises isn’t enough to facilitate real change in their organizations. Companies must provide a context in which that training can be carried out once people return. All too often companies purchase training programmes believing that they will, by themselves, force up productivity and change working environments. They miss the obvious fact that many people simply backslide into their old habits without ongoing support in the office.