600 business leaders in large organizations in the US and Europe were interviewed. Key findings:

With the economic slowdown, more change management programs are being launched
Organizations are launching more change programs to alleviate the impact of the economic slowdown. These initiatives are driven primarily by the quest for operational efficiency and the need to reduce costs.

Successful change management eludes most companies
58% of respondents in Europe and 75% in the US say that less than 50% of their change initiatives are successful. Failure comes mostly from struggling with people issues. The most frequently cited issues: winning over the heart and mind of employees at all levels (54%), gaining local management buy-in (31%), and cultural issues (27%).

Employee resistance is seen as the leading cause of failure
If employees cannot see what is in it for them, and if their untold fears are not alleviated, they will not accept the project.

27% of respondents identified culture as a leading difficulty
Winning over the mind and heart of employees involves understanding not just individuals, but the cultures in which they operate, in order to select the right style of leadership, planning and communication that works best for them.

24% identified the lack of clearly defined change goals and milestones as a key reason for failure
They saw their company as unclear about where they are starting from and about their expectations for change. The programs have more chances of success when change objectives are linked to business objectives. There has to be a detailed map, measureable milestones, and forward momentum.

19% identified lack of commitment by senior management as a key reason for failure
Leadership failed to create the sense of urgency necessary to recruit change agents at varying levels in the organization: without dispersed ownership for change, transformation could not happen. Respondents saw a need for leaders who do not dictate their plans, but bring vision, inspired people with a sense of urgency, and help bring them bring their creativity to the project.

19% identified poor communication as a key reason for failure
Communication needs to present leadership’s commitment to change, rather than just communicate project performance against metrics. The message needs to be that leadership and the company are committed to the change, and that it matters whether people take the change seriously.

Lack of funding for change is not seen as a leading issue
The consensus was that organizations with more than $1B in revenues need to spend at least 0.1% of annual revenues on change programs, and companies with under $4B in revenues at least 0.4%.

Winning people over is easier when the company faces extinction
But this kind of situation can also create frenetic activity, with too many uncoordinated efforts amounting to nothing.

Ages of the workforce and of the business matter
A business set up 50 years ago in a slow- moving industry is harder to change than one set up 5 years ago in a fast-paced industry.

The respondents concur that change management is about leading people to change by winning their hearts and minds
Business is a human endeavor, and companies are populated with people with interests and emotions, as well as both personal and cultural baggage. Processes and procedures can help, and tools are indispensable. But ultimately, this is an art, not a science–and most organizations have not mastered this art yet.