Change is thus inevitable and constant in organizations, and the ability of organizations and their members to respond successfully to change is viewed as an imperative for future organizational and career survival. In an environment in which two of three transformation initiatives fail, scholars predict that the most successful organizations of the future will be those that respond effectively to change, while those that fail to mount a timely response to change won’t last. In a 2004 Conference Board report on CEO challenges, 88 percent of the 539 European, Asian, and North American CEOs surveyed ranked organizational flexibility and adaptability to change among their greatest leadership concerns and the number one issue for 42 percent of the executives. Carl Steffen, a vice president at PeopleSoft, which co-sponsored the study, noted that “developing an agile, adaptable workforce that embraces change and aligns itself quickly will be tomorrow’s competitive differentiator.”
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The consequences for both leaders and employees of failing to respond to change can be dramatic. A four-year study by LeadershipIQ.com released in 2005 found that 31 percent of CEOs get fired for mismanaging change, contrary to the commonly held belief that these leaders are terminated (or are forced to resign or retire under pressure) because of current financial performance. A 2002 survey developed by temporary staffing service Accountemps of 1,400 chief financial officers from a stratified random sample of U.S. companies with more than 20 employees indicated that more than a third said embracing change is a critical success factor for employees.
