5 Tips from McKinsey for Change or Transformation in Organisations

Emma Weber

The latest McKinsey Quarterly caught my eye recently, as authors Bucy, Hall and Yakola looked into how transformation in organisations becomes ever more important in the changing world we live in.

McKinsey & co talk about “transformation with a capital T”, defining it as more than minor or routine change, but as an “intense, organization-wide program to enhance performance (an earnings improvement of 25 percent or more, for example) and to boost organizational health”.

Most of us have experienced a transformation or change initiative at some point in the workplace; be it a new IT system to make the business more efficient, or a new process to improve productivity and streamline operations.

It’s likely that most of us can also remember how despite clear objectives, a sturdy implementation plan and an enthusiastic inception, any progress was soon lost or forgotten.

Reportedly, the failure rate of change has loitered around 70% for years.

In 2010, McKinsey & co set up a group to focus exclusively on the failed outcomes and disappointed expectations of many businesses embarking on transformation projects.

They found that the best predictor of success is whether the CEO recognises a new approach will dramatically improve the company’s performance.

McKinsey state that aside from the CEO, there are five other elements that are crucial to creating transformational success and long-term momentum;

  • Identify the company’s full potential
  • Set a new pace through a transformation office (TO)
  • Reinforce the executive team with a chief transformation officer (CTO)
  • Change employee and managerial mind-sets that are holding the organization back
  • Embed a new culture of execution throughout the business to sustain the transformation.

(McKinsey, 2016)

Without these factors considered, after initial motivation and enthusiasm, slowly but surely, the company slips back into its old ways.

McKinsey aren’t the only ones talking about the failure of change. Research collaboration between the Association for Talent Development (ATD) and i4cp found that only 17% of business and learning professionals surveyed rate their organization as highly effective in managing change initiatives. That’s not very encouraging when most organisations are facing a minimum of three major changes per year (2014).

Change is constant.

Organisations will prosper if they embrace change when it’s needed. If we do nothing, then we will continue to waste vast sums of money and countless thousand hours on change initiatives that are destined to fail before they begin.

Successful change of any type ultimately requires people to do something different. Whether that is to use a new IT system or answer the telephone differently – someone somewhere has to change their behaviour. The simple, often overlooked fact is that people don’t like change. Behavioural change is not automatic and it’s not easy. But without behavioural change, the organization doesn’t change, and therefore, the measures that matter do not improve, leaving the organization with yet another missed opportunity.

As a result, most people focus on the easy bit – the systems, processes and procedures, the documentation and design of the change. They pour their focus into planning the change and communicating the change before the initiative and as soon as it starts the energy drains away as the ‘human element’ kicks in.

Organisational change only happens when people change, which means that we need to implement a change transfer strategy to support people with that process. We need a way of holding people to account so they will do what they say they will do and make the behavioural adjustments to allow the change to ‘stick’.

As McKinsey suggests – a culture of execution needs to be embedded into the business to sustain the change. They need a structured process of intervention and support that allows the individual to choose the aspects of the change they want to implement first, give them time to reflect on the outcome of those behaviours and hold them accountable to making the change.

Together with Jack and Patti Phillips I unpack the transfer strategy Turning Learning into Action™ (TLA) in our new book Making Change Work. Initially designed to transfer learning back into the workplace following learning initiatives, TLA is just as effective with change because it holds people to account after the change has been initiated to ensure people actually change their behaviour, which will in turn drive impact and deliver a return on investment.

Finally you have an opportunity to make change work.

Get your hands on a FREE CHAPTER of Making Change Work here.

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Emma Weber is a recognized authority on the transfer of learning. As CEO of Lever – Transfer of Learning, she has helped companies such as Telstra, Oracle and BMW deliver and measure tangible business results from learning. Emma has also been a guest speaker at learning effectiveness conferences worldwide and authored the hugely successful book “Turning Learning into Action“. Much more detail around the issues and solutions examined in this article are available in the book – please feel free to download a free chapter.