Why change projects failafter a good start?

F&P Blog

Transforming a company into profitability through a turnaround program requires a change manager with a high level of expertise in complex structures.

We are all familiar with this classic scenario – a situation in a company has reached a deadlock, the company’s own employees and managers cannot find a way back to profitability on their own – an external expert is needed to realign the management team and employees of the organization in focus. Once this turnaround expert has been found and has very quickly gained a picture of the situation in the company, the processes, the price management and the qualifications of the relevant key players, he starts work on the recommendations for action and reports this to the supervisory body or management board. Once a project with milestones and associated sub-projects has been developed from the recommendations and approved, the work begins.

It is often discussed at this stage how much time is needed for implementation and at what stage the handover to a yet-to-be-named project manager would be conceivable.

In most cases, none of their own team is suitable for taking on the project, because these employees or managers had not understood it before and did not stand out for their independent, assertive work in complex structures. In most cases, there is also a lack of leadership qualifications. After the first successes of the external manager in the course of the project and the first few months of payments of daily rates to the external manager, the supervisory body becomes impatient and expects a quick handover to someone from the team. Once this person has been found, and usually has to be persuaded from above, the wrong decision is preprogrammed for the entire further course of the project and the result of the turnaround program.

Companies fall into disrepair after changing their processesusually return to their old patterns

Of course, from the management’s point of view, a lot of money was initially saved and project responsibility and management was transferred back into their own hands. In the end, however, this short-sightedness took its revenge, as in my cases the companies actually slipped into insolvency in the medium term – and this was absolutely unnecessary – or did not get their act together. They fell back into the “old rut” without thinking in terms of processes and continuing to live the newly established structures and working methods. In these cases, the consulting and interim sector is left with a bland aftertaste, as a reorientation that was well designed from the outset did not work out due to short-sighted cost savings.

How can this be countered? How can a change project succeed in the long term?

A turnaround situation should only be handed over to new process owners once the new processes have actually been established in a stable manner. This is the case when the newly established KPIs (key performance indicators) deliver good results over a reliable period of time.

If no project manager can be found from your own team, it is better to look for an externally employed manager in a leadership position and hand over to them.

The costs for this consistency in implementation are initially significantly higher, but so is the success rate in the medium and long term.