70% of all change initiatives fail

By Nitin Nohria and Michael Beer


... To improve the odds of success, and to reduce the human carnage, it is imperative that executives understand the nature and process of corporate change much better. But even that is not enough. Leaders need to crack the code of change.

... There are two archetypes, or theories, of change. These archetypes are based on very different and often unconscious assumptions by senior executives—and the consultants and academics who advise them—about why and how changes should be made. Theory E is change based on economic value. Theory O is change based on organizational capability.

Theory E change strategies usually involve heavy use of economic incentives, drastic layoffs, downsizing, and restructuring. Shareholder value is the only legitimate measure of corporate success.


Theory O change strategies are geared toward building up the corporate culture: employee behaviors, attitudes, capabilities, and commitment. The organization’s ability to learn from its experiences is a legitimate yardstick of corporate success.


... Companies that effectively combine hard and soft approaches to change can reap big payoffs in profitability and productivity.


You want to explore how one company successfully resolved the tensions between E and O strategies or read the article ?  Click the link :  https://hbr.org/2000/05/cracking-the-code-of-change.