Stop Leading with Gains: Why Leaders should frame Change through Loss first.

Ⓒ 2026 Martin Tynan     email: martin@newtribeconsulting.com

Summary

Introduction

By any objective measure, organisations are really poor at change. 2011 Research from Harvard Business Review (HBR) and backed up by recent research from Bain (2024) and ongoing McKinsey research indicates that between 70-90% of all mergers and acquisitions (M&A) are considered failures. This aligns with 2026 research by New York University (NYU), of over 40,000 acquisitions; it found that 70–75% of M&A deals failed to create any shareholder value, within 4 years of acquisition close.

Internal change in organisation fares no better. Research by both McKinsey and the Boston Consulting Group (BSG) indicates that 70% of digital transformation projects fail to meet their original goals and of CEO’s who get fired, 31% of them are fired for ‘poor change management’ efforts. 

For scaling companies who want to grow beyond a seed or Series A funding round, only 25% of them will make it past this phase. Research by Johnson, Scaling Bottlenecks in Early-Stage Ventures (2025) indicates that the inability to absorb sustainable internal growth was one of the key factors in these organisations not scaling.

So whether you are an organisation in M&A mode, scaling up or an organisation going through strategic change, this author would argue that they all have one thing in common that makes their change initiatives likely to fail. They approach change by trying to ‘manage’ or control the change.

I have deliberately put the word ‘manage’ in italics, as in my experience, that by understanding the meaning and the systematic approach to change behind this word, this can open up some reasons why, as the data demonstrates, sustainable change in organisations is really quite rare.

Let’s first understand the executive mindset to change. 

Executive Mindset to Change

The executive mindset to change is often influenced by the desire to ‘manage’ the change in the organisation. In this author’s view this concept is a fallacy. You can instigate change, lead it, drive it and create the environment to make it happen, but you cannot manage or control change. Why not?

All organisational changes involve people. Regardless of the type of change you are trying to effect as a company, for the change to be successful, a person will have to accept and work effectively with that change. You cannot force or manage someone to accept the change or change their behaviour in a way that is sustainable from a business perspective. (Try cajoling a two year old child to eat vegetables, when they don’t want to!)

The executive mindset to organisational wide change is often framed primarily by the gain to be made. From a M&A perspective, the motivation to merge with another company or acquire another company by a CEO or leader is often ego-led (Research from Radboud University 2026).. Analysis of the FTSE 100 and S&P 500 companies and CEO compensation (Deloitte/Alvarez & Marsal, 2025/26) shows that boards often use the size and complexity of the organisation to benchmark compensation to companies of similar size and complexity. If the company size increases, then their compensation increases. This is an immediate gain for the CEO and the executive team. 

Likewise from an internal change perspective, the CEO and the leadership team identify the need for ‘things to change’ as there is pressure on meeting organisational targets and objectives (which is linked to their personal rewards like bonus or stock). The motivation to change and the mindset of change for a CEO or executive leader has an immediate gain factored into the change.

An interesting datapoint emerges from start up to scale up environments. While the research shows that in this environment there is comparatively less employee friction and explicit resistance to change, extensive research from Koilakonda & Franklin (2025), Forbes Executive Leadership Analysis (2025/2026) and Gallup (2025), shows that while this is often less explicit or overt resistance to change, there exists a high level of implicit or more passive resistance to change, particularly when the change is considered chaotic or not understood by the organisation. 

Regardless of the type of environment you operate in, often the CEO and Leaders mindset towards change is framed by the gain, for the organisation or for them personally. 

So let’s now look at the employee mindset towards change.

Employee Mindset To Change

How an employee experiences change often differs significantly from a CEO or leadership team perspective. Compared to a CEO or Executive leader, an employee often has less agency or control over what is happening in an organisation during a time of change. This lack of control in a situation is an important factor in how employees react to change and influences their mindset around change. From a neuroscience perspective, our brain treats lack of autonomy or lack of control as a threat and we react accordingly. This is backed up by original research from Rock (2008) and continued research on the neuroscience of organisational change.

Additionally , for employees, organisational wide changes often first means loss (perceived or actual). Extensive research has shown that employees do necessarily resist change, they resist loss. Loss aversion theory (as developed by Kahneman & Tversky), shows that we place a higher value on loss than we do on gains. Therefore as an employee, when I hear change, I first frame change as a loss rather than as a potential gain. A leader explaining the gains that the change will bring is speaking to someone who is experiencing loss. There is a significant mis-match in language and mindset, between the CEO/Leader and employee. They are not even speaking the same language. 

For an employee in a start up organisation, moving from a flat hierarchy to a more structured hierarchy means I lose access to the CEO or founder. In M&A, it can actually mean loss of role , or loss of a job. Thus from an employee perspective compared to a CEO or Executive leader perspective we often have a mis-match of motivation towards the change and a mis-match between perceived gain or loss from the change.

An additional datapoint is also provided by the amount of change in organisations today. 

Gartner’s 2024 HR Priorities Survey, found that 73% of HR leaders report their employees are experiencing high levels of change fatigue. This translates to a 5% drop in employee performance (and by inference organisational performance). This is further borne out by research (again from Gartner) that tracked employees willingness to change. This has dropped from 74% in 2016 to 43% in 2023. This is at least partly explained by the fact that in 2016, the average employee experienced 2 planned enterprise changes per year, by 2023 this had risen 5 fold to 10 planned enterprise changes per year.

What the research overwhelmingly indicates is that employees in organisations are reaching a level of change saturation that is unsustainable, and that many organisation's current approach to ‘managing’ them through the change is mostly ineffective. Given this, perhaps there might be a different approach to take? 

Absorb and Process rather than Manage Organisational Change

This article argues that to make continual change successful, organisations should look less at what framework to use to ‘manage’ the employee and the organisation through the change and more to enable them to absorb and process the change.

While it might feel like a nuanced use of words, this approach is about recognising that to build a successful organisation, there is a need for the organisation and the people in the organisation to process and absorb change constantly and not be managed through it.

Processing might mean more time, more explanation, more rationale, more personal perspective at what it means to them. More focus on WHY it is happening? This might mean work time and effort spent by CEO’s and Leaders in enabling the organisation to process the change through a two-way process of dialogue, questioning and understanding rather than a one way process of being told and being ‘managed’. This, I would argue, necessitates an open, adult conversation about WHY employees should engage with the change or WHY the change needs to happen. Rather than perhaps trying to convince the two year child that vegetables are good for them!

And why do the hard work that this involves? As mentioned previously, research indicates that there is a 5% drop in employee performance because of change fatigue. As a leader, ask yourself, how much time, effort and resources would you put into making sure that each person in your organisation had a 5% improvement in performance. How much effort would you put into improving your organisational performance by 5%? My feeling is that would be a lot.

To back this feeling up, a 2025 study found that human-centered transformations (those prioritising employee well-being and clarity) were 2.5 times more likely to maintain their value five years post-change compared to those that focused purely on structure and systems first. Is this not the work of CEO’s and leaders to create organisational value?

Along with a shift in language from leaders, there is also a need for a shift in mindset. Research by Thomas ( Journal of Applied Psychology, 2026) showed that when organisations framed the change as a loss first (if we don’t change or fail to act this will be the loss), employees showed a 16% higher engagement level towards the change. When the threat of loss was collective (affecting the whole team), the likelihood of proactive behavior rose by 35%. While this might seem counterintuitive, the emerging research shows that by focusing on the potential losses ( that would occur without the change happening) and not the potential gains, this approach has a higher rate of engagement from employees. Loss Aversion Theory demonstrates that we will work twice as hard to avoid a loss as we do to make a gain. Loss is a painful emotional process. We will do many things to avoid this, including changing!

What Leaders can do differently? 7 Practical Actions

1. Understand your own mindset

Your mindset as a leader will be shaped by your own motivation towards the change (clearer view of the gains) as well as a clearer view of WHY the change needs to happen

2. Understand Employee mindset

Employee’s mindset will be shaped by their immediate reaction to the change (loss rather than gain) and a less clearer understanding of why the change needs to happen.

3. Appreciate the mismatch

Appreciate that the potential mis-match between your motivation and understanding of the gain and the employees will be a powerful first step to address the mis-match and reset the language and mindset towards the change.

4. Processing the Change 

Recognise and use the strength of loss aversion theory. Don’t explain the gains. First , explain the immediate term loss if the organisation fails to change or act. This will engage people quicker in the process of change. Once that happens, then the gains will become obvious to employees without any need for ‘selling’ the gains.

5. Change Fatigue 

Be ruthless on introducing change into your organisation when it absolutely needs to happen, but likewise be ruthless on avoiding change for changes sake. Constant chaotic changes that don’t really add to organisational performance get in the way of allowing time for the organisation to absorb and process the changes that will actually impact organisational performance.

6. Building Organisational Capability

Develop organisational capability and muscle to process the change through allowing the organisation to understand why the change needs to happen. Couple this with CEO and Leadership time and effort devoted to supporting the organisation to build the capacity and capability to absorb more and more change. By building change resilience into your culture and organisation, this will become self-reinforcing and will create more change capability and capacity in the organisation.

7. Align with your Feedback Culture

Lots of organisations espouse a strong feedback culture. If you truly have a feedback culture in your organisation, appreciate potential doubts, worries, concerns over the change/loss as organisational feedback. This is organisational data that can help you understand where to focus organisational energies to help to process the change. 

Like the two year old child refusing to eat vegetables, no one can really change someone else’s behavior. People change because they want to change. Recognise that not everyone in your organisation will want to go on the journey of change. If you feel you have done all you can to help employees understand, process and absorb the change but they can’t move forward, then the kindest thing to do is to have an adult conversation about this perhaps not being the place for them to work anymore. 

Conclusion

The argument in this article is that as a leader a good place to start with change is understanding your own mindset around the change and recognise that not everyone in the organisation will be starting from the same mindset as you.

Instead of trying to manage people through change, treat them as adults and stakeholders in going through the process of change. Enable them to understand why the change needs to happen and what the loss/adverse impact of not changing will be, and devoting leadership time and efforts to helping them to do so and therefore ensuring no drop off in employee and organisational performance. 

The reality is that organisations, similar to human beings are a constant work in progress. By approaching continual change as a process rather than a project, not only will change be more likely to lead to higher organisational performance, you will also over time develop the organisational muscle and capability into the organisation to build sustainable organisation growth. You are also less likely to be one of the 31% of CEO’s fired for ‘poor change management’ efforts.

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