Some Reasons for failure of the change-:
1. Clear performance focus
Success comes from a tight, clear connection between change expectations and business results. Failures come when an organization is overly focused on activities, skills and culture, or structural changes without creating a tight linkage to business results.
2. A winning strategy
Projects & organizations succeed when the strategies play to strengths. Failure happens when there is an overestimation of strength(s) and/or no ability to document concrete ‘wins.’
3. A compelling and urgent case for change
Success happens because there is a widely accepted ‘felt’ need for change. Failure occurs when there is no demonstrated commitment to the need for change. There is no clear ‘pain’ for remaining in the status quo.
4. Specific change criteria
In successful efforts, the underlying performance criteria and change requirements are clear, documented and not negotiable. If the ‘rules’ shift or evolve or can be negotiated, failure follows.
5. The distinction between decision-driven and behavior-dependent change
Some changes can be ‘decided’ – restructuring, purchases, hires/fires, etc. Another change is ‘behavior-dependent’ – skills development, new processes, implementing new accountabilities, etc. Organizations that over ‘decide’ and underinvest in ‘behavior’ changes fail.
6. Structure and systems requirements
Structure and systems (particularly IT) changes may be required for change but are almost always overused as either the answer or the excuse. Overdependence on structure and systems results in confusion and sapped energy, and is a great technique for stalling progress.
7. Appropriate skills and resources
Successful change often demands new skills that are being created; requiring some level of transition resources until new skills are fully functional. Lack of the right talent (skills) and resources against an opportunity is a certain failure, yet organizations consistently repeat this shortcoming.
8. Mobilized and engaged pivotal groups
Organizations that succeed tap critical internal influencers to champion the change and actively engage staff in driving the change. Getting beyond basic change rhetoric requires a compelling employee value proposition (“what’s in this for me,”) achievable goals, tools and shared information.
9. Tight integration and alignment of all initiatives
Major change inevitably requires dozens of initiatives (strategy projects, re-engineering efforts, training, leadership development, communications, technical redesign, new measurements, etc.). The result is a massive integration challenge. Failure results from locally and globally isolated projects, cross-project conflicts, resource competition, and confusion as to how projects do or don’t relate.
10. Leader ability and willingness to change
The ceiling on any attempt to change at the project, department or organization level is set at the leaders’ willingness to embrace and embody the change. Whatever behaviors individual project or leadership team members cannot adopt, become effectively impossible for the organization.
Examples of corporations that failed to innovate
1. Kodak
Kodak, a technology company that dominated the photographic film market during most of the 20th century. The company blew its chance to lead the digital photography revolution as they were in denial for too long.
Steve Sasson, the Kodak engineer, actually invented the first digital camera back in 1975. “But it was filmless photography, so management’s reaction was, ‘that’s cute—but don’t tell anyone about it,” says Sasson. The leaders of Kodak failed to see digital photography as a disruptive technology.
A former vice-president of Kodak Don Strickland says: “We developed the world’s first consumer digital camera but we could not get approval to launch or sell it because of fear of the effects on the film market.” The management was so focused on the film success that they missed the digital revolution after starting it. Kodak filed for bankruptcy in 2012. The Kodak failure surprised many.
2. Nokia
Nokia, a company founded in Finland was the first to create a cellular network in the world. In the late 1990s and early 2000s, Nokia was the global leader in mobile phones.
With the arrival of the Internet, other mobile companies started understanding how data, not voice, was the future of communication. Nokia didn’t grasp the concept of software and kept focusing on hardware because the management feared to alienate current users if they changed too much.
Nokia’s mistake was the fact that they didn’t want to lead the drastic change in user experience. This caused Nokia to develop a mess of an operating system with a bad user experience that just wasn’t a fit on the market.
The company overestimated the strength of its brand and believed they could arrive late in the smartphone game and succeed. In 2007 Steve Jobs launched the iPhone, a phone without a keyboard, which was revolutionary at the time. Really, watch the video and listen to people losing their minds the first time the watch someone using a touchscreen. In 2008 Nokia finally made the decision to compete with Android, but it was too late. Their products weren’t competitive enough.
3. Xerox
Another one of those big business examples of failure is Xerox. Xerox was actually first to invent the PC and their product was way ahead of its time. Unfortunately, the management thought going digital would be too expensive and they never bothered to exploit the opportunities they had.
CEO David Kearns was convinced that the future of Xerox was in copy machines. The digital communication products invented weren’t seen as something that could replace black marks on white paper. Xerox failed to understand that you can’t keep perpetually making money on the same technology. Sometimes technology fails too.
4. Blockbuster
The video-rental company was at its peak in 2004. They survived the change from VHS to DVD but failed to innovate into a market that allowed for delivery (much less streaming).
While Netflix was shipping out DVD’s to their consumer’s homes, Blockbuster figured their physical stores were enough to please their customers. Because they had been the leader of the movie rental market for years, management didn’t see why they should change their strategy.
Back in 2000, the founder of Netflix Reed Hastings proposed a partnership to the former CEO of Blockbuster John Antioco. Netflix wanted Blockbuster to advertise their brand in the stores while Netflix would run Blockbuster online. The idea got turned down by Antioco because he thought it was ridiculous and that Netflix’s business model was “niche business.” Little did he know that Hasting’s idea would have saved Blockbuster. In 2010 Blockbuster filed for bankruptcy and Netflix is now a $28 billion dollar company.
5. Yahoo
In 2005 Yahoo was one of the main players in the online advertising market. But because Yahoo undervalued the importance of search, the company decided to focus more on becoming a media giant.
The decision to focus more on media meant they neglected consumer trends and a need to improve the user experience. Yahoo managed to gain a massive number of viewers to view content but failed to make enough of a profit in order to scale.
Yahoo also missed out on a lot of opportunities that could have saved them. For example, in 2002 they almost had a deal to buy Google, but the CEO of Yahoo refused to go through with the deal. And in 2006 Yahoo had a deal to buy Facebook, but when Yahoo lowered their offer, Mark Zuckerberg backed out. If the company had taken a few additional risks, maybe we would all be yahooing right now instead of googling.
6. IBM
International Business Machines (IBM), nicknamed “Big Blue”, is an American multinational technology company that had its breakthrough in the 1960s with the IBM System/360– a family of computers designed to cover the complete range of applications.
In the early 1990s, IBM failed to adjust to the personal computer revolution and thus began their downfall. The company adjusted their focus back on hardware instead of software solutions. Today, after going through several transitions, IBM is one of the most powerful names in enterprise software. They turned their luck around with new management. An ending that most companies don’t see.
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7. Blackberry Motion
BlackBerry, a line of smartphones and tablets, was a smashing success in 1998. They changed the game in the mobile industry by offering a device with an arched keyboard. Their encryption even into the early 2000s was second to none but they weren’t thinking of user experience.
Just a few years later the entire mobile industry started focusing on bigger touchscreen displays, while BlackBerry was more concerned about protecting what it already had. Failing to adapt to changes, in 2017 the CEO John Chen announced that BlackBerry was out the smartphone manufacturing business and that the company has built a new strategy. “Under this strategy, we are focusing on software development, including security and applications.”The company plans to end all internal hardware development and will outsource that function to partners. .
8. Hitachi
Japanese brand Hitachi used to be an electronic giant together with Sony, Panasonic, and Sharp. It was one of those brands that you’d spot in almost every household. Now the company is losing billions of dollars a year. The reason? The digital revolution.
The electronics industry has changed, where consumers don’t have as high of a desire for their high price products. The digital revolution not only changed the way electronic gadgets work, but they also changed the way they are manufactured.
Gerhard Fasolt, an economist, thinks: “Look at Apple, they make iPods and iPhones. Apple makes at least 50% profit margins on those. People say iPhones are made in China, but maybe only 3% of the value of an iPhone stays in China. So it’s hard to become rich today on the scale of just by manufacturing – you have to do a lot more.” In 2012 Hitachi announced that they will stoop manufacturing TVs, but the factory used for it will instead start producing projectors and chips.
9. Polaroid
Founded in 1937, Polaroid was one of America’s early high-tech success stories. The company became a hit 1972 when they introduced the SX-70, the camera that superseded the old peel-back Polaroids with a picture that developed as you watched. In the late ’90s, Polaroid was at its peak.
In 2001, due to the boom of digital photography, the company filed for bankruptcy. The leaders of the company continued to believe paper print was what customers wanted. They were great people who failed.
Gary DiCamillo, CEO of Polaroid from 1995-2001, said in an interview: “People were betting on hard copy and media that was going to be pick-up-able, visible, seeable, touchable, as a photograph would be. It’s amazing, but kids today don’t want hard copy anymore. This was the major mistake we all made: Mac Booth, Gary DiCamillo, people after me…. That was a major hypothesis that I believed in my marrow that was wrong.”
There might still be hope for the type of photos and nostalgia that only comes with a Polaroid camera. In recent years the demand for instant cameras has grown significantly. Polaroid’s President and CEO Scott W.Hardy states: “There’s a nostalgia to instant photography for generations of consumers who grew up with it, and there’s a novelty to it for generations of consumers who grew up in the digital age and have never held an actual photo in their hands until recently.”
10. Toshiba
Another Japanese company that used to be a tech giant is now struggling to stay alive. Back in the mid-1980s, Toshiba was one of the world’s most innovative companies.
During that time they launched the T1100, its first mass-market laptop. John Rehfeld, a former employee of Toshiba who helped sell the laptop overseas said: “There were a few laptops out before then but they all had compromised. That’s why Toshiba got off to a fast start. We had a laptop that performed like a desktop.”
The Internet killed Toshiba’s growth, people were buying their competitors’ computers for lower prices online. In 2016 Toshiba announced that they would stop making PCs for European consumers, but will continue to sell computers to businesses in Europe and the US. In 2017 Toshiba announced that they are considering selling its prized memory chip business to pay down debt. Later that year the world’s second-largest producer of NAND memory chips Bain-Led Group stated that they bought the chip business for $18 billion.
11. Motorola
Motorola demonstrated the first handheld phone in 1973. The brand’s vice-president Marty Cooper said: “Battery lifetime was 20 minutes, but that wasn’t really a big problem because you couldn’t hold that phone up for that long.” Even though Motorola kept producing various versions of its cellphone, they failed to see that customers wanted innovation in software rather than hardware.
Clearly lacking market knowledge, Motorola’s new products in the early 2000s weren’t enough to grow the business. The products weren’t user-friendly and Motorola completely missed the movement to 3G. Essentially, Motorola didn’t implement 21st-century communication with its products, making it hard to compete with smartphones on the market. In August 2011 Motorola was acquired by Google.
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