In Executive Online\'s Challenge of Change report we explore how companies view and manage change. This groundbreaking report updates our original Challenge of Change report, published in 2002, with new research involving nearly 400 senior executives in roles where they’re responsible for business transformation programmes. It explores such challenging questions as: Is change used as a strategic tool to create better companies that are more able to remain successful, or is it used reactively, in an inward-facing way? What techniques and resources are being used to deliver change? How important are senior managers in this process? And above all, how successful are change programmes?

1. CHALLENGE OF CHANGE
NETHERLANDS

3. CONTENTS
Introduction 1
Research Objectives and Methodology 2
Survey Sample 3
Defining Change Management 4
Drivers of Change 6
Planned Change 9
Managing Change 10
Recession Impact 11
When Change Goes Wrong 12
Delivering Change 13
Conclusion 17

4. INTRODUCTION
The constancy of change is a reality that impacts every Other failures in driving change often derive on the
aspect of our lives, and how an organisation manages itself resourcing side. It is important not to “overtask” staff who
amidst this reality is critical to the success or failure of any need to worry about the day to day business, by requiring
business. At times change can seem gradual and them to drive change at the same time. Leaving change
evolutionary in nature; in other cases the change can come management including support in implementing change to
suddenly and dramatically. A healthy company must have professionals and dedicated staff will pay dividends in the
the ability to adapt as needed to whatever sort of change is long run.
required, and thus the process of change management has
become a significant area of interest for executives in every Making the business more innovative was cited as a reason
industry – especially as change seems to come more and or primary driver of change in only 3% in all the cases. In
more rapidly, and from every direction. the current business climate, the most difficult in many
years, most change programmes are created for defensive
Executives Online has studied change management since reasons like reducing costs, improving efficiency, improving
2002, with the publication of our first “Challenge of Change” quality and restructuring. Emergence of new technology
report. We have continued to update this information with was the primary driver of only 1% of change programmes.
new surveys and research over the years, and we are This indicates there must be major, under-exploited
happy to deliver the latest installment: a survey conducted opportunities for companies to embrace innovation for
in September of 2009 among 262 Netherlands-based competitive advantage. Finally, change must become
executives. embedded in corporate culture, as continuous improvement
– to eliminate the necessity of large-scale, disruptive
This survey was conducted amidst a global recession, a programmes, or to make such initiatives more positive and
time during which adaptation to a changed economic effective.
environment is critical to the very survival of many
companies. Our past survey results have shown a track We hope you enjoy this latest update on the ongoing
record of rather poorly-constructed and implemented challenge of change, and as always we welcome your
change programmes; we were interested to see if that reaction or feedback on any aspect of our report.
record had improved any and what lessons might have
been learned by companies on managing change Edwin Glas
programmes. We also wanted to learn about the impact of Managing Director
the recession on change programmes currently underway. Executives Online Netherlands
Many of the executives we surveyed mentioned the
necessity of good communications during any change
programme. When change programmes are initiated, there
must be focus and attention on the messages and
communication early in the process, to all of the
stakeholders. When this is overlooked, employees can feel
criticised or blamed, as if they’d done something wrong,
and this diminishes their openness to changing. Such errors
can produce a negative start, early in the process.
1

5. RESEARCH OBJECTIVES AND METHODOLOGY
Executives Online has been publishing the Challenge of Areas of inquiry included:
Change reports since 2002 and our goal has been to
understand how the practice of effecting change in an • Definitions and consensus on change management
organisation has been evolving over time. This year we were • Drivers of change
also curious to see how the global economic recession may • Current planned business initiatives
have impacted the drivers of, attitudes toward, and • Impact of the recession on change programmes
approaches to change. • Assessment of how well companies manage change
• How change tends to go awry
Our survey was conducted online in September of 2009, via • Causes underlying change programme failure
an online questionnaire to 262 Netherlands-based interim • Effectiveness and suitability of change management
managers and some of the senior executives in resources
organisations that could employ them. • Skills required by effective change managers
2

6. SURVEY SAMPLE
Of the survey sample, 6% identified as the “person
responsible for delivering a change initiative in your
organisation” and another 3% as the “owner of the
business case for a change programme (sponsor).” The
remainder divided nearly equally among “an interim
manager who has been engaged to deliver change” (25%),
“a senior manager or executive employed in an
organisation that is or was undergoing change” (23%), “an
interim manager” (23%), and “an independent change
management professional” (20%).
Who filled out survey?
An interim manager who has been engaged
3% to deliver change – 25%
6%
A senior manager or executive employed in
25% an organisation that is or was undergoing
change – 23%
20%
An interim manager – 23%
An independent change management
professional – 20%
23% The person responsible for delivering a
change initiative in your organisation – 6%
23%
Owner of the business case for a change
programme (sponsor) – 3%
“Change management is a structured
approach to transitioning individuals,
teams, and organisations from a current
state to a desired future state.”
3

7. DEFINING CHANGE MANAGEMENT
The majority of respondents believed that there was little
Do you believe there is consensus on what
consensus on the definition of “change management.”
change management is? That is, when someone
Less than a quarter felt that when someone used the
uses the phrase change management, that
phrase “change management,” it would be clear to others
others will instantly understand precisely what he
precisely what was meant.
or she means?
Yes
22%
No
78%
That said, when respondents were offered a possible
Do you agree with the following definition of
definition of change management, 90% agreed with that
change management: Change management is a
definition.
structured approach to transitioning individuals,
teams, and organisations from a current state to
a desired future state.
No
10%
Yes
90%
4

8. Alternative Definitions of “Change Management” A further point was that the process of change was not a
one-time thing, but an ongoing process:
While largely agreeing with the definition offered, respondents
did offer some modifications. Some respondents emphasised Change management is a more or less old-fashioned
that the transitions must focus on the “processes and concept in this world of continuous change. So every
procedures” required by the change in question. Others manager is more or less a change manager. In my view
added that any transition must be “aimed at achieving it is better to speak of different forms/levels of
tangible business results” and/or must “improve quality and intervention management.
competitiveness.” Another respondent argued that the word
“culture” must be included as “the culture makes the Finally, one respondent offered an alternative definition, one
difference: finance, strategy, and human resources are only that suggested that change management was both
results of the culture.” “structured” and “dynamic”:
One respondent focused on the timing aspect, noting that Change management is NOT a structured approach to
the change must be a gradual, or “evolutionary” one: transitioning individuals, teams or organisations from a
current state to a desired future state. I believe it's a
Change management is an evolutionary transitioning of structured, dynamic and economic way of adapting
individuals, teams and organisations to an expected your organisation to the changing necessities of your
desired future state. stakeholders while keeping close contact with those
stakeholders.
5

9. DRIVERS OF CHANGE
As for the primary driver of change, “increasing efficiency”
was most often cited, by 23% of respondents. “Corporate
restructure” (17%) was another important driver, along with
cost reduction (14%) and “quality improvement” (13%).
In the last change project you’ve witnessed or been part of, please indicate
the primary driver of that change:
Increasing efficiency 23%
Corporate restructure 17%
Cost reduction 14%
Quality improvement 13%
Looking for competitive advantage 10%
Falling sales 7%
Response to the current economic crisis 4%
Making the business more innovative 3%
Expansion into new markets 3%
Increased competition 2%
Globalisation 2%
Business relocation 1%
Emergence of new technology 1%
0 10 20 30 40 50 60
Number of Responses
6

10. When the question was expanded and respondents were
asked to indicate ALL drivers of change, “increasing
efficiency,” “cost reduction,” “quality improvement,” and
“corporate restructure” all remained at the top of the list.
More growth-oriented projects, such as “looking for
competitive advantage,” “making the business more
innovative,” and “expansion into new markets” also elicited
responses.
In the last change project you’ve witnessed or been part of, please indicate
ALL factors that were drivers of that change:
Increasing efficiency 66%
Cost reduction 59%
Quality improvement 54%
Corporate restructure 48%
Looking for competitive advantage 35%
Making the business more innovative 33%
Falling sales 24%
Expansion into new markets 22%
Increased competition 21%
Response to the current economic crisis 19%
Emergence of new technology 13%
Globalisation 13%
Business relocation 12%
0 20 40 60 80 100 120 140 160 180 200
Number of Responses
7

11. Fear or Ambition?
In our survey, respondents were divided as to whether most
business change is driven by fear or by ambition, with 56%
indicating “fear or defensive reasons” and 44% indicating
the more positive “ambition or expansive reasons.”
The reasons behind change were varied, and many
respondents said that “a combination” of both “ambition”
and “fear” were at play. One respondent commented: “it
started with ambition but changed into a defensive mode.”
Others noted that change occurred due to “anticipation of
changing circumstances” or “reaction to competitive market
developments.” Additional factors mentioned included
“financial pressure” and “pursuit of profits.” In any case,
however, some respondents noted again that the drivers
should not matter; “change should be an ongoing focus.”
Do you think most business change is driven by
fear, or ambition? That is, for defensive or
expansive reasons, respectively?
Ambition/ Fear/
Expansive Defensive
reasons reasons
44% 56%
8

12. PLANNED CHANGE
What business change initiatives are planned in your (or
your client’s) organisation for the next 12 months?
Business restructure 47%
Major cost reduction 38%
Introduce a major business improvement initiative 31%
Downsize workforce 26%
Introduce new technology 22%
Move into a major new market 17%
Merger or aquisition 16%
Relocate any operations overseas 8%
Divestment 5%
0 20 40 60 80 100 120 140
Number of Responses
Many initiatives were planned over the next 12 months,
Do you believe this is too much planned change
especially in the areas of “business restructure” (47%) and
for your organisation over the next 12 months?
“major cost reduction” (38%). Undoubtedly the global
economic recession has been driving these cost-oriented
projects. There is also, however, some appetite for more
expansive projects: “introduce a major business
improvement initiative” (31%), “introduce new technology”
(22%) and “move into a major new market” (17%). Yes 26%
For the majority of respondents, the planned changes
seemed manageable; nearly three-quarters did not feel it
would be “too much” for their organisations.
No 74%
9

13. MANAGING CHANGE
In general, how well do companies manage change?
120 47%
100
34%
Number of Respondents
80
60
40
10%
20 7%
2%
0 Quite well Fairly well Average Fairly poorly Quite poorly
Overall, respondents were not impressed with how well
companies manage change. Only 2% indicated that
companies manage change “quite well,” and only another
10% indicated “fairly well.” Thirty-four percent rated
companies as “average” in change management and over
half said either “fairly poorly” or “quite poorly.”
10

14. RECESSION IMPACT
As previous survey data has shown, the global recession
has had an impact on companies across the board. When
asked specifically about its effects on change programmes
already underway, almost 40% said the programmes were
“continuing but with more demanding requirements.”
Twenty-four percent said that “the majority” had been put on
hold; ten percent said that “a minority” had been put on
hold. Ten percent were continuing with diminished
requirements, and for 3%, activity had stopped completely.
Only 14% indicated that there had been no impact from the
recession.
What is the main impact the recession has had on change programmes
already underway in your or your client’s organisation?
Continuing but with more demanding requirements 39%
Majority have been put on hold 24%
No impact 14%
Minority have been put on hold 10%
Continuing but with diminished requirements 10%
Activity has stopped completely 3%
0 10 20 30 40 50 60 70 80 90 100
Number of Respondents
When asked specifically about its
effects on change programmes
already underway, almost 40% said
the programmes were “continuing but
with more demanding requirements.”
11

15. WHEN CHANGE GOES WRONG
Given respondents’ feelings on how poorly companies “walk the talk” by senior management was also a factor;
manage change, it is clear that much goes wrong. In terms “failure to communicate” was mentioned frequently as well.
of diagnosing specific issues, the most significant ones
seemed to be around staffing and timing: “failure to [Senior management is] not participating, not
empower staff so that they can deliver” (24%), “not allowing motivating the employees, which is unbelievably stupid
enough time for the change to be implemented” (15%), and because they are a part of it.
“expecting employees to do day jobs and also change
roles” (13%). Other problems included “no clear operational translation of
the change wanted” and “too many projects not aligned
When asked for additional comment, some respondents with each other, resulting in chaos.” At the end of the day,
noted there was often an “inconsistent message” and “too respondents observed that “change needs time, because
much top-down instead of bottom-up”. An unwillingness to it’s people work and they adjust only slowly.”
Where change goes wrong, what have you seen as the main cause?
Failure to empower staff so that they can deliver 24%
Not allowing enough time for the change to be implemented 15%
Expecting employees to do day jobs and also change roles 13%
No clear measurable targets 10%
Failure to appoint a committed change sponsor/champion 10%
Failure to identify the right changes to employ 9%
Failure to make decisions in a timely fashion 7%
Not implementing the change(s) quickly enough 5%
Failure to hire a change expert 3%
Not allowing enough budget 2%
Failure to gauge how much change is needed 2%
0 10 20 30 40 50 60
Number of respondents
12

16. DELIVERING CHANGE
Actually delivering on the planned change programme is the Management consulting firms – either “name brand” or
key challenge. A variety of different resources may be boutique/niche firms – were not used very often. There was
involved in a single change programme, depending on the usage of external players, however: external/independent
company and the magnitude of the change sought. The change management professionals (21%) and external
board (i.e., CEO/Managing Director) generally had a role interim/contract workers (23%).
(59%), and department heads were often involved as well
(49%). Internal teams (those for whom change
responsibilities were added to their usual responsibilities)
played a part almost half of the time.
In the last change project you have been part of, what resources have
been used to lead and deliver change? (tick as many as apply)
The board ie CEO/Managing Director 59%
Departmental heads 49%
Internal team: change responsibilities added to usual responsibilities 47%
External interim/contract workers brought in to
23%
deliver aspects of change programme
External/independent change management professionals 21%
Internal team: members seconded or otherwise
17%
100% applied to change programme
External “name brand” global consultancy firm 5%
External boutique or niche change management consultancy 4%
0 25 50 75 100 125 150 175
Number of respondents
13

17. Primary Resource vs. Effective Resource
Survey respondents were then asked to indicate which
resources had been the PRIMARY resource for change, and
then which resource had been the MOST EFFECTIVE
resource for the change. In most cases, the two statistics
aligned fairly closely. However, the board (i.e.,
CEO/Managing Director) was viewed as less effective
(relative to its usage), and internal teams dedicated to
change programmes and external/independent change
management professionals as more effective.
In the last change project you have been part of, which resource was the PRIMARY one used
to deliver change? Which was the MOST EFFECTIVE one used to deliver change?
Primary Resource for Change Most Effective Resource for Change
The board ie CEO/Managing Director 25%
18%
Departmental heads 23%
23%
Internal team: change responsibilities added to usual responsibilities 20%
19%
External/independent change management professionals 13%
16%
Internal team: members seconded or otherwise 9%
100% applied to change programme 13%
External interim/contract workers brought in to 7%
deliver aspects of change programme 8%
External “name brand” global consultancy firm 2%
1%
External boutique or niche change management consultancy 1%
2%
0 10 20 30 40 50 60
Number of respondents
14

18. Suitability Ratings
When asked to rate each role as to its “suitability for leading
change management,” respondents tended to favor
external/independent change management professionals,
as well as the board and department heads as being either
“excellent” or “average” in their suitability for leading
change management. Internal teams rated more highly
when they were “seconded or otherwise 100% applied to
the change programme.” External “name brand” global
consultancy firms fared the worst in suitability ratings.
Suitability Ratings
Excellent Average Poor
External/independent change management professionals 51%
39%
10%
The board ie CEO/Managing Director 47%
34%
19%
Departmental heads 46%
43%
12%
Internal team: members seconded or otherwise 41%
51%
100% applied to change programme 9%
External interim/contract workers brought in to 36%
46%
deliver aspects of change programme 17%
Internal team: change responsibilities added to usual responsibilities 26%
52%
21%
External boutique or niche change management consultancy 26%
50%
24%
External “name brand” global consultancy firm 13%
55%
32%
0 20 40 60 80 100 120 140
Number of respondents
15

19. Change Management Skillset Other Skills
Finally, survey respondents were asked to rank a list of skills Respondents added other skills they felt were important to
in terms of their importance to a person responsible for the role of an interim manager: “being able to make
delivering change. The top ranked skills were actually rather decisions,” “constantly being adaptive to change” and
generic qualities: “successful leadership skills,” “excellent “achieving and creating trust and cooperation.” One
communication skills,” and “personal charisma/ respondent clarified that “vision must come first;” another
persuasiveness.” Following next in ranked importance were caveat was that “while too often change is based on
more experience-related aspects: “experience in the books/theory, it’s really about people and attitude only.”
function in which the majority of change is concentrated”
and “experience in the organisation’s industry.” Change should always involve the people who will
maintain the changes. Change management is
therefore leadership and communication with the rest of
the business.
Please rank the following skills in terms of their importance Rank
to a person responsible for delivering change
Successful leadership skills 1
Excellent communication skills 2
Personal charisma/persuasiveness 3
Being goal-oriented 4
Experience in the organisation's industry 5
Successful track record in similar change management programme(s) 6
Experience in the function in which the majority of the change is concentrated 7
Marketing and sales capabilities 8
Technical acumen (modelling, analysis, mastery of formal analytical tools) 9
Sense of urgency 10
Patience 11
16

20. CONCLUSION
The “challenge of change” continues to stymie the majority many respondents, and given the lack of success
of companies. Consistent with previous survey results, our continually seen across the change programmes cited,
September 2009 respondents were not impressed with how perhaps employing more individuals with change
well companies manage change: just 12% said “quite well” management expertise might make sense.
or “fairly well” and well over half indicated either “fairly
poorly” or “very poorly.” Interestingly, the top-ranked skills for an effective change
manager tended to be more generic qualities vs. more
Corporate restructure, cost reduction and increasing specific or technical skills. Successful leadership and
efficiency were all viewed as significant drivers of change excellent communication skills as well as personal
and were also among the most common planned initiatives, charisma/persuasiveness all ranked highly. Many survey
which is not surprising amidst a global recession. Of the respondents commented on the critical importance of the
companies surveyed, just 14% said the recession had not “human side” of the change process, adding further
impacted their change programmes; 39% were continuing credence to the need for strong leadership, communication
but with more demanding requirements and other and persuasiveness.
programmes had either been put on hold, scaled back, or
stopped completely. The recession has necessitated change across most
companies and industries, and the ability of a company to
Change tended to “go wrong” when staff did not feel successfully navigate the tides of change will be a factor in
empowered and/or when they were expected to continue determining who survives. Finding the right formula for
with their day jobs as well as helping to implement change. effective change management: what to change; who should
There were also issues around lack of a committed change effect that change; and how to execute on the chosen
sponsor/champion, and of overall senior management programme... all of these elements require careful attention
commitment and engagement in the changes planned – for success.
another aspect that had come up repeatedly in past research.
Executives Online has a strong track record in finding
The board, department heads, and internal teams were all change management expertise; feel free to call us
commonly tapped to employ change. External/independent + 3 1 ( 0 ) 2 0 3 0 1 2 1 5 9 if you think we might be able
change managers also received a vote of confidence from to help.
Corporate restructure, cost reduction
and increasing efficiency were all
viewed as significant drivers of change
and were also among the most
common planned initiatives
17

21. ABOUT EXECUTIVES ONLINE
We offer a unique, full-service process which is a
balanced blend of technology and personal service.
Executives Online delivers fast-track executive resourcing – interim
management, project management, change management, and
permanent recruitment – leveraging our 80,000-strong Talent Bank of
senior executives. We source talent globally, via the Talent Bank
which is built and drawn upon by each of our growing network of
offices around the world.
We offer a unique, full-service process which is a balanced blend of
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best candidates and the most challenging opportunities, and enables
us to rapidly and effectively match them together in successful
placements.

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