Why 75% of change programs fail, and what to do instead (Part 1)

75% of change programs fail.

Most organisations do not need another centrally designed change program.

They need a system that makes it normal to evolve practices, learn fast, and remove constraints, until better work becomes the default.

That failure number is so high for a simple reason: many established change methods still treat change as a move from the current culture to an “ideal” future culture, in a deterministic way. Diagnose through centrally designed surveys, design the “target culture”, then roll it out.

Estalished methods fail for three reasons, they:

1. Underestimate how difficult it is to achieve and sustain change. Many programs never get to the root causes of bad practices, the unwritten rules that keep them in place, and unlearning old ways takes time and practice.

2. Tend to discard the current situation in favor of a new future and thus throwing out the best of the what already exists.

3. Lack the ground-up nuance and flexibility needed for uncertainty. When you implement truly new ways of working, you cannot predict upfront what will and won’t work. Fixed programs struggle with that reality, plus you invite resistance when frontline employees are not involved in designing and testing the changes that shape day-to-day work.
   

I’ll focus on this third point. Not another top-down change program, but managed evolution: creating autonomous, evolutionary loops of trial and error that gradually build better ways of working.

A simple loop: identify tensions, define practices, experiment, then scale what works.

Step 1: Start from friction, not from an “ideal culture”

Ask teams: “What stands in the way of your best work?”

You will get concrete friction, not abstract values. And that matters, because friction is where practices live. Now cluster the answers into a small set of themes so you can see patterns. Use categories such as: Purpose, Authority, Structure, Strategy, Resources, Innovation, Workflow, Meetings, Information, Membership, Mastery, Compensation.

Source: Brave New Work by Aaron Dignan

Pick one area that is not too difficult. Then brainstorm one new practice that might reduce the friction.

If needed, find inspiration for new practices in Daniel Coyle's excellent book The culture playbook or Aaron Dignan's Brave New Work. Tip: Use AI as a sparring partner. Prompt: “Act as if you are Daniel Coyle and suggest new practices to help us improve [meetings / decision-making / workflow] so it becomes easier for people to do their best work.”

Step 2: Define the experiment, then run it safely

Define:

• Where you will try it

• When, and for how long

• How you will evaluate success

• What “safe to try” means, what can go wrong, and what you will do if it does

Communicate it as an experiment, not a mandate. The goal is learning, not compliance.

Step 3: Scale by removing barriers, this is where top management comes in

If the experiment works locally, it still won’t spread by itself. That’s because the blockers are often structural: decision rights, policies, KPIs, budget rules, IT constraints, governance, incentives.

This is where senior leadership earns their keep: remove the barriers that prevent a better practice from scaling. In this social age, the proven new practice will spread. Then move on to a slightly harder tension.

Word of caution: if top management only “sponsors” but does not actually remove constraints, this turns into a collection of local pilots. Lots of motion, little change. Step 3 is the difference between isolated experiments and real evolution.

How to make this scalable without turning it into another program

Steps 1 to 3 can be supported by AI co-work agents such as Claud co-work instructed with specific skills: synthesising inputs, suggesting candidate practices, spotting patterns, and bringing likely scaling barriers to senior management’s attention for discussion and decision. They can work through input from individuals and teams across the organisation via Teams, Slack, or email, and feed a steady cadence into the management rhythm:

• Here’s what is getting in the way of best work

• Here are the experiments running

• Here is what seems to work

• Here are the barriers that require leadership action

Invitation

Pick one team, ask the Step 1 question, design one practice, run one safe experiment, then bring the first real scaling barrier to leadership in Step 3. If you want, message me what friction came up and what you tried, I’m happy to react with a few candidate practices and a simple experiment setup.

And if you’d like to apply managed evolution across a wider part of the organisation, with AI supporting the listening, synthesis, and experiment tracking, reach out.

Part 2 will go deeper on why many change approaches discard the strengths of today’s culture and what to do instead.

Part 3 will go deeper on solving for the root causes of bad practices, the unwritten rules that keep them in place

*** This post was inspired by Aaron Dignan’s Brave New Work. The experiments themselves can be drawn from Daniel Coyle’s The Culture Playbook, a practical catalogue of small, repeatable moves that shape group behaviour.

Clarity in Chaos: From Budget Control to Adaptive Control

A practical way to regain control, increase autonomy, and improve performance.

Ten points, one message: budgets give you comfort, not control. This is not a 10-step program. It’s the argument, plus a few starter moves if you want adaptability without chaos.

Introduction

CFOs (and everyone pulled into the budget cycle), budget season is either here or just ending. With costs under pressure, it has been more draining than ever. And the core frustration is predictable: we lock in decisions months in advance, then spend the rest of the year defending them while reality moves on. Cost control matters. The problem is that traditional budgets often buy a feeling of control at the price of slower decisions, more politics, and weaker performance.

A better alternative exists: Beyond Budgeting, an approach that separates targets, forecasts, and resource decisions, and replaces fixed annual contracts with a more adaptive management model. It’s not theory only. On 9 May 2005, Statoil’s Executive Committee formally decided to abolish traditional budgeting as part of their shift to a different performance framework. [1] What follows is a practical summary, grounded in the work of Bjarte Bogsnes and the Beyond Budgeting movement, plus what I’ve seen in real organizations.

1) Budgeting was built for a different world

Budgeting rose with industrial-era management thinking: central planning, predictability, and control. James O. McKinsey’s 1922 book Budgetary Control is an early, clear example of that mindset. [2][3] This worldview assumes the future is forecastable enough to lock in detailed plans, then manage performance by variance. That assumption is increasingly shaky.

2) The criticism is not new, it’s just more urgent now

Russell Ackoff mocked corporate planning as a “ritual rain dance”: lots of activity, little effect, and most energy spent improving the dance rather than the weather. [4][5]. That line lands because it describes what many leadership teams experience today: budgeting becomes an internal optimisation machine.

3) The cost is not the time, it’s the performance you lose

Budgeting is expensive in time and attention. Harvard Business School’s Working Knowledge once cited that the average billion-dollar company can spend up to 25,000 person-days per year putting the budget together. [6]

More painful than the effort is the performance impact:

• revenue targets become ceilings,

• cost budgets become floors (“spend it or lose it”),

• decisions slow down because the budget becomes the permission system,

• and customer reality loses to internal negotiation.

4) Why budgeting keeps failing (even with smart people)

The root cause is simple and structural. Most organizations force one set of numbers to do three incompatible jobs:

1. Target setting (what we want to happen)

2. Forecasting (what we think will happen)

3. Resource allocation (what it will take to make it happen)

Targets should stretch. Forecasts should be unbiased. Resource decisions should be disciplined but adaptable. When you compress these into one number, people will game it. Not because they are bad people, but because the system rewards it.

5) Beyond Budgeting in two moves

There isn’t one recipe. If someone offers you a template that “works everywhere”, be sceptical. But most Beyond Budgeting journeys have two common moves:

Move 1: Split the budget into three separate mechanisms Separate targets, forecasts, and funding.

Move 2: Make each mechanism dynamic instead of calendar-driven Shift from “annual, fixed, negotiated” to “rolling, event-driven, reality-based”.

6) What it looks like in practice

Target setting: from fixed numbers to relative direction

Use goals that are relative and directional, for example:

• relative to competitors, peers, or market growth,

• relative to your own trend,

• directional outcomes like ROCE/ROACE that leave room for local judgement.

Then evaluate performance in context, not by “did you hit the number”.

Forecasting: from weapon to instrument

Forecasts should exist to steer decisions, not to judge people. So you:

• separate forecast from target,

• simplify detail where it adds no decision value,

• update more frequently (rolling),

• use driver-based models.

  
  

AI can help here, but only if it improves speed and accuracy. The point is not the tech, it’s removing bias and increasing responsiveness.

Resource allocation: from entitlement to dynamic funding

Funding becomes a decision process, not an annual entitlement:

• thresholds for local autonomy,

• transparency for spend and exceptions,

• stage-gated funding for innovation,

• investment committee logic for bigger bets.

This is where leadership teams get nervous. Fair. But it’s also where you trade the illusion of control for real control in real time.

7) CFOs and CHROs need to stop running in parallel

This is not a finance-only redesign. If you increase autonomy and adaptability, you must redesign the human system too:

• performance evaluation (relative, contextual, values-based),

• incentives (less gaming, more intrinsic motivation),

• leadership development (enabling conditions, not micromanagement).

Daniel Pink’s work is a useful reference point here: for complex work, heavy extrinsic incentives can backfire by undermining intrinsic motivation. [7]

8) Leadership assumptions decide whether this works

Process redesign won’t stick if leadership beliefs stay “command and control”.

Douglas McGregor framed this as Theory X vs Theory Y:

• Theory X assumes people avoid responsibility and need control.

• Theory Y assumes people want to contribute and grow if conditions are right. [8]

Beyond Budgeting is, at its core, a Theory Y operating model. A practical metaphor used by Bjarte Bogsnes: traffic lights (central permission, stop-go) vs. roundabouts (clear shared rules, flow, local judgement).

9) A counterpoint you should take seriously

Some budgeting discipline is genuinely useful. If you’re capital-intensive, cash-constrained, or heavily regulated, you cannot simply “let teams decide” without guardrails. Boards and investors may also require annual financial plans and external guidance.

So the aim is not “abolish planning”. The aim is:

• Stop using the annual budget as the internal contract for running the business

• Separate targets, forecasts, and funding

• Keep whatever external planning you need, without letting it poison internal agility.

  
  

10) How to start without breaking the business

Do not launch a corporate-wide change program with an army of consultants and a big-bang rollout. You will recreate the same disease, just with new vocabulary. Start like innovation: small, principled experiments, fast learning.

Step 1: Create executive clarity on the problem and the prize

Quantify the cost of the current system in time, delays, missed opportunities, and dysfunctions.

Step 2: Assess readiness and predictable failure modes

Name leadership assumptions, current performance management flaws, tooling gaps, and where resistance will come from.

Step 3: Pick a safe pilot and learn fast

Choose an area with measurable outcomes, strong leadership, contained risk, and willingness to test.

Invitation

If you are serious about performance in uncertainty, here’s the uncomfortable question: Are you running the business, or are you running the budget?

At IntotheNXT, we help leadership teams replace legacy practices that switch people off with modern practices that switch people on, combining Tech & Touch: data and technology (increasingly AI), plus management practices that raise autonomy, accountability, and pace.

If you want to explore what Beyond Budgeting could look like in your context, I’m happy to pressure-test your situation and identify a low-risk starting point that creates evidence quickly.

Sources

[1] Bjarte Bogsnes, Implementing Beyond Budgeting (Wiley, 2016), Chapter 4 “The Statoil Case”.

https://onlinelibrary.wiley.com/doi/10.1002/9781119449577.ch4

[2] Library of Congress catalog entry, James O. McKinsey, Budgetary Control (1922).

https://www.loc.gov/item/22015901/

[3] Example secondary citation referencing the quote (McKinsey 1922, p. 12) used in management control literature:

https://www.academia.edu/110049716/The_evolution_of_a_management_control_package_a_retrospective_case_study

[4] Reference that attributes the “Corporate Rain Dance” critique to Russell L. Ackoff, The Wharton Magazine (Winter 1977):

https://ponarseurasia.org/wp-content/uploads/attachments/pepm_172.pdf

[5] Ackoff publication list (includes “The Corporate Rain Dance”, Wharton Magazine, Winter ’77):

https://sffreeman.com/ackoffpublications.cgi

[6] Harvard Business School Working Knowledge: “Why Budgeting Kills Your Company” (Aug 11, 2003), includes the 25,000 person-days figure.

https://www.library.hbs.edu/working-knowledge/why-budgeting-kills-your-company

[7] Daniel H. Pink, Drive: The Surprising Truth About What Motivates Us (2009).

[8] Douglas McGregor, The Human Side of Enterprise (1960).

[9] Beyond Budgeting Round Table (BBRT).

https://bbrt.org/

Dilemma-thinking: Turning strategy into high-performance execution

Weak performance is often treated as a strategy problem, a leadership problem, or an execution problem. In reality, it is often a tension problem. Organisations face decisive dilemmas, speed versus quality, autonomy versus coherence, innovation versus discipline, and either hold them well or they do not. When they do by asking "how can we improve one, through the other", virtuous learning loops form, accelerating performance. When they do not, vicious cycles emerge, control increases, politics spreads, and bureaucracy grows. The role of values is to hold these tensions, not as slogans, but as reconciled opposites anchored in everyday behaviours. That is the missing link between strategy on paper and performance in practice.

Strategy on paper vs strategy executed

The real strategy of a company is not the strategy deck, it is the pattern of decisions people make every day, especially under pressure. Which means that closing the gap between “strategy on paper” and “strategy executed” is not primarily a communication problem, it is a behavioural problem.

The decisive dilemmas hidden inside your strategy

Every serious strategy creates tensions that cannot be solved by picking a side. If your strategy requires speed close to customers, you also need coherence. If your strategy requires innovation at scale, you also need discipline. If your strategy requires premium positioning, you also need cost consciousness. These are not optional trade-offs. They are decisive dilemmas your execution depends on.

Values are tensions, not statements

In real life, the values that matter most come in pairs that pull against each other: decisiveness and thorough analysis, empowerment and clear direction, entrepreneurship and process reliability, purpose and cost efficiency, warmth and professionalism. You also see the same tension expressed as central versus decentral and coherence versus autonomy. Without decentral there is no central. So the purpose of central is for decentral to exist. It's nature. Think of the human body: the body has centralized certain functions such as the heart, the brain, for the rest of the body to function, autonomously.

The trap: choosing a side

The trap is that leadership teams try to “choose a side” and simplify reality, or that ghosts from the past, incentives or governance create one-sidedness. For a short moment that can even look like progress. But the opposite never disappears. It returns later, often as consequences. And those consequences show up as rework, risk incidents, internal friction, customer pain, disengagement, or the slow creep of bureaucracy.

One-sidedness and pathology

When one side breaks loose, you get pathology, a predictable negative loop where the upside turns into its exaggerated form. Decisiveness becomes recklessness. Analysis becomes paralysis. Empowerment becomes chaos. Process becomes suffocation. Autonomy becomes fragmentation. Coherence becomes rigidity. The organisation then compensates with more controls, more escalation, and more politics, which makes the original problem worse.

This one-sided drift is one of the biggest risks in large organisations because it rarely looks dangerous at the start. It looks like focus, clarity, or “finally making a choice”. But it is usually a false trade-off that creates long-term fragility.

You see the same pattern in what Clayton Christensen described as the innovator’s dilemma. Incumbents often understand intellectually that they must keep their current business profitable while also building the next one, yet in practice one side dominates. Either the core is protected so hard that disruption is starved of resources and legitimacy, or the shiny new thing is celebrated in ways that quietly undermine the operational excellence that funds it.

The point is not that leaders are ignorant. The point is that without a discipline for holding opposites together, organisations naturally slide into the comfort of one-sidedness. And that slide is exactly what turns into organisational self-sabotage.

Virtuous learning loops

Dilemma thinking starts from a blunt premise: you do not solve these tensions once, you keep solving them, thousands of times, in small decisions across the organisation. The cumulative pattern of how you solve them becomes your culture. When you hold the tension well, you create virtuous learning loops.

People experience that speed can coexist with quality, autonomy can coexist with coherence, decentral decision-making can coexist with central clarity, and ambition can coexist with discipline. Trust increases, decision quality improves, and execution accelerates in a self-reinforcing way.

Example: the infamous HQ vs. local unit tension

Look at the two circles, left and right. The left is "vicious" because the ropes at the centre have "snapped" and the system is in runaway, its mutual restraints gone. The more top management promotes formality and centralized authority, the more the business units deviate informally and decentralize to escape an influence they dislike. But this only has the effect of increasing attempts to formalize and centralize, which are then resisted in their turn.

Now look at the opposite on the right, this circle is virtuous because the opposite values of informality-formality, decentralization-centralization remain in creative tension and in mutual restraint. The circle is self-balancing and self-correcting. Those informal activities seen as valuable become integrated into the formal system by official recognition and encouragement. The initiatives of decentralized units are registered at the centre and communicated to other decentralized units for consideration and possible emulation, the centre reserving the right to commend such initiatives or otherwise.

Over time it is likely that the amount of informal activities will increase and the body of formal rules and procedures will grow. The culture will become more decentralized and at the same time better centralized in the sense of guiding and coordinating the autonomous activity of its units.

Dual values still fail without everyday behaviour

The need to keep the tension explains the following Fons Trompenaars quote:

The Value of a Value is the degree to which it helps you reconcile your business dilemma

Values that do not explicitly contain duality are often naïve. A single value statement easily becomes a licence for one-sidedness.

But there is an equally common failure mode, and it is more lethal. Organisations may have values with the right duality on paper and still get nowhere, because they never translate those values into observable everyday behaviours. Until you can point to what a value means on a Tuesday morning in a meeting, in a customer call, in a project trade-off, in a hiring decision, and in a budget discussion, you do not have a value. You have a slogan.

Examples: turning strategy dilemmas into behaviours

• If your strategy requires speed close to customers, leaders need to define behavioural rules that let teams move fast without losing coherence, such as clear decision rights, escalation triggers, and lightweight review routines that prevent rework.

• If your strategy requires innovation at scale, leaders need behaviours that protect experimentation while still enforcing learning discipline, such as short-cycle test-and-learn cadences, explicit kill criteria, and transparent sharing of insights.

• If your strategy requires both premium and efficiency, leaders need behaviours that make cost consciousness strengthen purpose rather than shrink it, such as designing value-engineering choices around customer outcomes instead of across-the-board cuts.

The breakthrough question that shifts the conversation

The practical move is not to turn dilemmas into debates, or to spend your time arguing with the loudest voices who polarise everything into either-or. It is to create a dialogue discipline across the organisation that mobilises the silent middle, the people who can see both upsides and both downsides and are willing to do the harder work of integration.

The central question is deliberately uncomfortable, because it forces a shift in thinking: how can we get more of value X through value Y, and more of value Y through value X? Not so that we compromise our way into mediocrity, but so that we build a better solution than either side could produce on its own.

The bottom line

Dilemma thinking is not a philosophical add-on. It is a performance mechanism. It clarifies the decisive tensions your strategy depends on, it prevents the pathologies of one-sidedness, and it turns values into concrete behaviours that people can practise, learn, and reinforce, until the organisation’s daily operating rhythm expresses the strategy you claim to have.

Invitation

If any of this resonates, let’s talk. I’m happy to do a short, no-prep conversation to identify the 3 to 5 decisive dilemmas in your strategy, where one-sidedness is quietly creeping in, and what everyday behaviours would close the gap between the strategy you describe and the strategy your organisation actually executes. If that’s useful, send me a message.