Seventy percent of all organizational change initiatives fail, and this failure rate has been consistent over the past 25 years! This is unacceptable. The Will Rogers quote above is from nearly 100 years ago but it still paints a picture. Many companies refuse to change and adapt for various reasons, but as Will Rogers stated, if we insist on sitting in the middle of the road, we are going to get run over—or worse, we become irrelevant. It is not enough to be on the right road. We must be moving forward quickly if we wish to remain competitive in our respective markets. Otherwise, the only view we will see on the road is the sight of other companies passing us in the fast lane.

I think you will agree that organizations must have the ability to quickly adapt and change to their business environment to stay relevant, yes? And if you have ever found yourself in a change initiative that failed, it is a very frustrating experience, correct? This frustration is experienced at all levels of the organization, but especially if you were the leader of that initiative, as you are acutely aware of the wasted resources of time, money, and the emotional investment of your employees.

Regardless of your position in the company, failure during times of change does take its toll, and trust me, you are not alone. We have all felt this pain and frustration at one time or another. I have been part of failed change initiatives where I was fully invested, but the leadership failed to provide a clear vision of what the change would accomplish. My role in the change process was not clearly communicated and no one had any idea what the end state should look like. If you have been, or are now in this situation, I feel your pain. You can feel lost, unsupported, and unsatisfied in your job.

The good news is that it does not need to be this way. In the chapters to follow, you will learn what it takes to be a Great Change Leader and you will develop the skills necessary to lead people successfully through times of change. You will learn some of the reasons why companies fail when it comes to change, so you can avoid making those same mistakes. You will learn about how to build the proper culture in your organization, so you can facilitate change more efficiently. We will discuss many tools you can use before, during, and after change that will aid in planning your initiative, as well as helping to make it stick once the initiative is complete. And most importantly, you will learn what it takes to be a Great Change Leader. The traits that set leaders apart from mediocre leaders and managers will help you get to the 30% who are successful in leading through change.

I have been a Human Resources professional for twenty years and I hold senior HR professional certifications from SHRM and HRCI, so I have had a lot of opportunities to lead organizations and teams through change myself. I have been asked to help develop change management training programs for Fortune 500 companies. I have also had many opportunities to speak on this topic for local, state, and national conferences with positive results. With all of this experience, I am still humbled and grateful for the opportunities I have had to work with companies and leaders in this area. There have literally been thousands of books, articles, and workshops on this topic, and I am in no way any smarter or more qualified than any who came before me. My hope is that the lessons learned in this book can help you.

I understand that it can be hard to open your mind to new concepts and ways of thinking. After all, we are creatures of habit, and bad habits are hard to break. If you are a smoker and you have tried to quit in the past, you know exactly what I’m talking about. The same struggle exists when it comes to leadership. It is hard to change your perspective when you have been looking at things the same way for years. But the principles and concepts you learn in this book can take you from the 70% failure group to the 30% success group.

My goal in life has always been to help others achieve their greatest potential, and it is no different with this book. If I can help just one reader succeed, I will be very gratified. My desire for you is for you to take your team, your company, and your career to the next level.

So, are you ready? Are you ready to view leadership differently? To see things from a new perspective? Are you ready to grow as a leader? Are you ready to take the next step in your career? If so, keep reading. I know the lessons in this book will make you a better leader and, more importantly, a Great Change Leader.

Failure to Understand Customers

“People will forget what you said. They will forget what you did.
But they will never forget how you made them feel.”
~ Maya Angelou

Why should we study failed companies? Where is the value in that, you ask? Simply put, understanding why companies fail helps us to not repeat their mistakes. The adage, those who do not learn from history are doomed to repeat it, certainly rings true here.

Companies must change in order to stay relevant. Those who rest on the status quo, the way they’ve always done things, are riding on borrowed time. Change has become one of those buzz words or topics, and rightfully so. The problem is that most do not “do change right” and their change initiatives fall short or fall altogether. Have you ever heard of “change initiative”? Maybe you have taken part in one or two (or seven), or maybe you haven’t. It is “a dedicated plan to venture from an old state to a new state.” It may be a change in operations or habits, processes, customer interaction, attendance policy, etc. The truth is, 70% of all change initiatives fail. Study after study and year after year reveals the same fail rate. That means, despite the numerous books, seminars, and articles on the topic, we are apparently still getting it wrong. Therefore, it only makes sense to understand why they fail to avoid the same pitfalls.

The cost of failure is just too great to attempt some cookie-cutter, prefab solution that worked for some other company. Your organization is unique and deserves a plan that is tailored to your specific goals and objectives. So, do not fall for the excuse that “failure occurs because people hate change.” That is an urban myth. The truth is, people don’t hate change at all. They love change. What they hate is the road through change, because they go about it all wrong. Many times, people try to take the easy road through change, without putting in the hard work required to implement successful change.

When you research companies who failed to adapt and change, Blockbuster Video is always near the top of the list, and for good reason. Blockbuster was the largest retailer of its kind for movie and video game rentals, beginning in the VHS and BETA era. However, the industry was disrupted by a new technology that would change the way people watch movies at home. Streaming media like Netflix and Hulu revolutionized entertainment choices. Yet Blockbuster believed the  customers still preferred to get in their cars, drive to the nearest Blockbuster, comb through aisle after aisle of tapes, and search intently for the one title they came for, only to find on the shelf an empty space with a sign reading, SOLD OUT!

Do you remember that disappointing feeling? Of course, most were determined not to go home empty-handed, so they continued to search for an acceptable alternative. Having found a video that the family could agree on (no small feat in and of itself), they head to the checkout counter to wait in line to be tempted by everything from popcorn to kids’ toys. Of  course, to get the membership required to take anything out of the store, they needed a copy of your driver’s license, Social Security Card, birth certificate, fingerprints, a blood sample, and a cheek swab as collateral. Okay, I may have exaggerated that a bit, but it paints a picture. Doesn’t it? In the end, it was not new technology that caused Blockbuster’s demise. Even their own Marketing Communications Director stated it wasn’t Netflix who led to the company’s downfall. It was their own leadership’s failure to grasp what their customer wanted.

To make matters even worse, Netflix approached Blockbuster with a business proposition in 2000 to partner together in a joint venture. They wanted Blockbuster to advertise their streaming service in their stores and, in return, Netflix would manage Blockbuster online. An arrangement that would have undoubtedly saved Blockbuster from their own short-sightedness. However, Blockbuster CEO John Antioco rejected the proposal, believing that Netflix was an insignificant player in the entertainment industry. Today, Netflix is worth an estimated $194 Billion—hardly an insignificant number. Don’t you think John Antioco regrets that decision now?

Macy’s department store is a similar story to that of Blockbuster. Once one of the most beloved retailers in America, Macy’s has been featured in several Hollywood films including Ocean’s Eleven, King Kong, and, most notably, Miracle on 34^th Street. Most of us tune in every November to watch the Macy’s Thanksgiving Day Parade. However, Macy’s downfall started in the 1980’s when they were offered an opportunity to start a cable television channel that would feature their product lines. The leadership at Macy’s, however, believed like Blockbuster did, that their customers still preferred to shop in physical brick and mortar retail stores, and they declined the idea. Honestly, though, I can understand why these companies held on to this notion.

Think back, if you’re old enough, to those days in the 80’s. The thought of buying something like clothing without the opportunity to physically touch it and try it on seemed strange; but that was old-world mentality. When Macy’s declined the offer for the cable TV channel, other companies swooped in to take advantage. QVC and The Home Shopping Network became the pioneers of shopping from the comfort of your own home in the mid 80’s, leaving Macy’s to miss a huge opportunity. Ironically, the first big retailer to contract with QVC was Sears, another company who later failed to adapt and change to their market environment.

Abercrombie & Fitch is another example of a company that lost touch with what their customers wanted. Originally, A&F was an outdoorsman retailer who underwent multiple reorganizations after the founders retired. Eventually they became a high-end seller of apparel targeted at teens. The company survived The Great Depression and other economic downturns, even bankruptcy. They were near extinction when they finally rose as one of the most successful and trendy brands in the early 2000’s.

One reason for the rise of Abercrombie & Fitch was the 1992 entrance of Mike Jeffries as their new President. Jeffries had his finger on the pulse of the teen generation and sales began to skyrocket. You see, Jeffries embraced the notion that “sex sells” and he rebuilt the A&F brand to reflect that philosophy. He built his advertising to market overpriced clothing to “hot people.” The stores were infused with young, thin, and scantily dressed models who every teen of that era wanted to look like. A&F had made a comeback. However, Jeffries, the architect of that comeback, would also be responsible for their colossal fall from grace.

You see, Jeffries had embraced the ‘beautiful’ philosophy so intently that he alienated the rest of the population. Many companies identify and target a specific demographic, but they also do not actively insult other groups who may want to buy their products. (But I’m getting ahead of myself.) A&F’s problems started in the late 1990’s when they were named in a lawsuit for the use of sweatshops to produce their apparel. Of course, this was not just an A&F problem. Many high-end retailers faced similar lawsuits. Lawsuits like these gave the brand a black eye, but not a fatal blow. Unfortunately for A&F, this was just the first in a series of blunders that would be a major hit to the brand.

In 2008, The Great Recession caused another economic downturn, this time fueled by the housing bubble. The stock market crashed again and many families around the globe struggled to survive financially. 401(k)’s disappeared overnight, jobs were lost, and businesses closed their doors for good. Even during this financial crisis, Abercrombie & Fitch refused to lower prices, which left a poor taste among consumers for the A&F brand. At one point, one of A&F’s district managers made the distasteful comment that they would rather burn their clothes than to give them to poor people.

Okay, now back to CEO Jeffries. In 2013, he was asked why A&F did not carry plus-size apparel for women (they only carried up to size Large). He responded by saying that “fat people do not belong in his stores”. Earlier, he had also made the comment that he only hires attractive people to work in his stores because his workers attract beautiful customers. He never wanted to see “ugly people” wearing his brand. Strike three! (But the chaos doesn’t stop here.)

To add insult to injury, Abercrombie & Fitch had what they called their “look policy”, allegedly discriminating against any applicant who did not fit the company’s ideal look. In other words, if you were not young, white, and attractive, they were suddenly no longer hiring. The company faced numerous lawsuits around this alleged discrimination as well as for mistreatment of their employees. One lawsuit, which eventually became a huge class-action suit, claimed that A&F required its employees to wear A&F apparel that the employees had to purchase on their own dime. Most of these suits were settled by the company, without admitting any guilt.

All these missteps and misdeeds earned the company the dubious title of the Most Hated Brand in America by the American Customer Satisfaction Index in 2016. Sadly, the one thing that Jeffries and the A&F leadership team lost sight of was who their customers were, and what they wanted. Which is ironic because the whole philosophy was centered around the type of customer demographic that A&F wanted to target.

In other words, they lost sight of the fact that American teens were slowly moving away from being influenced by pop culture and moving towards social justice. This was the era of the rise of the Millennials and they were not as impressed by high-dollar price tags, nor by which beautiful celebrity was wearing their clothes. No, the Millennial Generation is more concerned with a company’s ethics, its treatment of others, and how it gives back to the communities they live in.

Jeffries and his staff could not see the forest for the trees. They were so bent on catering to a specific customer type that they failed to realize this type no longer existed. The world had changed around them, and they were oblivious to the change. The good news for A&F is, they are working to rebrand themselves and are poised to make another comeback. Time will tell.

So, how could companies like these miss the mark so profoundly when it came to identifying with their customers? In one word—arrogance. Blockbuster Video and Macy’s believed they knew more about what their customers wanted than their customers did. The arrogance of A&F CEO Mike Jeffries, in my opinion, is undeniable. He obviously believed he could say and do anything without repercussions. Statistics show that most dissatisfied customers never complain; they just leave. That is why the most successful brands and retailers make a point of knowing and connecting with their customers. They offer generous return policies, conduct frequent customer surveys, and provide satisfaction forums. They give their customers what they want because they know it’s worth it to keep them in the long run.