Singapore recently celebrated Labor Day, so it’s timely to reflect on the sheer number of hours that the country’s organizations have poured into change initiatives. Of the many strategic initiatives that were launched in January — from organizational restructuring and cultural alignment to market entry — about 70% of them are doomed to fail. This means that of every workweek spent on these efforts, 3.5 days are wasted.
Behavioral economics — the study of how human thought and behavior affect financial decisions — provides us with clues for why creating lasting organizational change is so difficult. Factors such as status quo bias (a preference for keeping things the same) and loss aversion (the tendency to prefer avoiding losses more strongly than acquiring gains) interact to stack the odds against employees acting very differently for very long.