SECTION 2

WHY CHANGE READINESS MATTERS

One in four Australian businesses recorded a high change readiness score. But why does this matter?

Change-ready businesses grow faster; perform ahead of their industry or category; and are more experienced and successful in dealing with change.

We’ll discover how being always ready for change is good for business.

If you're not ready for change, then growth is guaranteed not to happen. Your business has a life expectancy of about five years.

– Roger La Salle, futurist and business commentator

Change-ready businesses are performance leaders

The relationship between change readiness and business performance is linear – the higher the change readiness score, the more likely the business will perform well.

Over half (58%) of change-ready businesses say they are performing stronger than their competitors. This figure drops to 32% for less change-ready businesses.

The change gaps: Which businesses have outperformed competitors?
The change gaps: Which businesses have outperformed competitors?

Change readiness equals high growth

Change-ready businesses grow faster than other businesses. Based on their self-assessments, they are more than twice as likely as less change-ready businesses to have overachieved on their growth targets over the past two or three years.

When change is happening around you and you are changing with it, it sends a strong message that you’ll have a healthy business tomorrow.

– Executive, Banking and Finance, Enterprise
The change gaps: Which businesses have over-achieved their growth targets?
The change gaps: Which businesses have over-achieved their growth targets?

Change programs often fail because there's no clear sense of progress. People get bogged down. Goals and targets shift autocratically. They’ve got contamination from existing incentives that reward particular behaviours that are not conducive to change.

– Dr Jason Fox, motivational strategy and design expert

Why change-ready businesses are better at transforming

Experience isn’t everything when it comes to successful change. Our research reveals businesses that have experience with change don’t necessarily have more success with their transformation initiatives.

What does make a significant difference is the change readiness of an organisation. Businesses that scored high on the change readiness scale succeeded with 75% of their transformation initiatives, while less-change ready businesses succeeded only 59% of the time.

Success rates with change initiatives
Success rates with change initiatives

Change is a positive, not a negative

Change-ready businesses take a positive view of change, focussing on external drivers. Their top two triggers for undergoing transformation were:

  • meeting customers’ needs, and
  • improving service delivery

Less change-ready businesses were more defensive and inward-looking. Their top two triggers were:

  • reducing costs, and
  • generating growth and increasing profits.

We always overestimate the time frame and underestimate the impact of change. We always think transformational change is going happen to faster than it does and we always underrate how transformative it's going to be.

– Mark Pesce, inventor and futurist
High change-ready businesses
High change-ready businesses
High change-ready businesses
High change-ready businesses
Low change-ready businesses
Low change-ready businesses