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February 28,2021 Change Management

Top 5 Epic Fails in Change Management

Top 5 Epic Fails in Change Management

Top 5 Epic Fails in Change Management

All companies change. Some are bad at it and some are great. Our team voted on the Top 5 Epic Fails in change management.

Our Top 5:

5. Kodak

A company that was founded in 1888, Kodak made multiple missteps over its century-long life. Kodak was famously sued by Polaroid when Kodak’s version of an instant developing camera was deemed an illegal knock-off, did not stay price competitive against low-cost mass distributors, lost their film market in good part to Fuji, and bought into the pharmaceutical industry with little idea of how the business works.

But many would say that Kodak failed because they didn’t foresee how quickly and completely digital cameras would take over the industry that depended on film sales. They were caught behind the times.

4.  The Metric System

What do the United States, Burma, and Liberia have in common? They are the three countries that have not adopted the metric system, according to the CIA World Fact Book. If you live in the United States your speedometer is in MPH, your market prices food by the pound and your weatherman reports temperature in degrees Fahrenheit. Did you know that was not always the plan? Under the Carter administration, the Metric Conversion Act of 1975 was launched. Due to resounding apathy, it limped along only to be disbanded in 1982. Another classic example that culture eats process for lunch.

3. McDonald’s Innovation

McDonald’s billion-dollar mistake started with a failure to understand the fundamentals of flexible leadership. Simply put, the most effective leaders are able to juggle conflicting priorities and keep them in balance. They can quickly assess the consequences of each decision and how it might impact other areas of the organization.

In McDonald’s case, the leadership put so much emphasis on innovation that it failed to recognize how making significant changes to its food preparation would hinder its ability to maintain speed and keep costs down.

Believing customers wanted more customized orders, the head of the fast food chain’s US division overhauled the company’s entire food preparation system to introduce a concept called “Made for You.”

The initiative involved burgers cooked to order with freshly toasted buns. It required expensive equipment upgrades—and, of course, it drastically slowed down wait times. Suddenly customers were waiting twice or three times as long to get something they used to be able to pick up in just a few minutes. Nevertheless, McDonald’s leadership insisted on trying to make it work. Ultimately though, “Made for You” failed and faded into oblivion. It was an expensive mistake and one that also damaged the company’s stock prices.

If McDonald’s leadership had taken the time to collect feedback and tested the concept more thoroughly before rolling it out, it would likely have recognized that it misjudged what customers really wanted.

2. New Coke

Second on the list of epic product failures is New Coke. Launched in April, 1985 consumer opinion was so bad that by July 1985, The Coca Cola Company brought back the original formula. “Process Change 101” tells us to listen to our customers and those who will be impacted by our proposed changes. Tools like Kano Analysis also advise we look at latent customer requirements. Those powerful but unstated requirements, left unattended, can rear up and capsize any change. In the 80’s sweet was “in”. While the sweeter flavor of New Coke had passed thousands of taste tests, they totally missed the unstated requirements around the intrinsic bond consumers had with the brand.

1. USPS

It can be difficult to achieve the right balance between maintaining efficient, cost-effective processes and keeping your people happy. High salaries and generous benefit packages will almost certainly help with retention, but overspending in this area can cause an organization to become bloated and inefficient. Government agencies and union organizations, in particular, have struggled with this in recent years. During the economic recession of 2008, it became difficult for the Big Three automakers to sustain long-standing wages and benefits, and two of the three ultimately had to declare bankruptcy. The U.S. Postal Service has also struggled to reconcile wages and staff that have exceeded demand, contributing to substantial financial losses over the past 10 years.

To correct problems that have caused it to bleed money for years, the Postal Service has had to shed jobs, slash wages and close processing centers. Despite eliminating nearly 200,000 employees to reduce its staff by 25 percent, personnel accounts for 80 percent of its operating costs. As the bleeding continues, the American Postal Workers Union has warned these reductions will hurt efficiency and customer service, contributing to longer lines. Employee relations at the post office have been tense for decades, and the elimination of more experienced workers hasn’t helped. Much of the breakdown has been attributed to the Postal Service’s authoritarian culture. Supervisors enforce strict rules intended to make the office more efficient, often at the expense of people. Less experienced employees have been put in charge. Grievances have soared.

Change References

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