"Companies must be prepared to tear themselves away from
routine thinking and behavior."
So begins a recent report from McKinsey, Transformation with a Capital T. Michael Bucy, Stephen Hall, and Doug Yakola of the Transformation Services Practice address the 70% failure rate of of large scale change programs--intense, organization-wide efforts to enhance performance. They note that average companies rarely have the combination of skills, mind-sets, and ongoing commitment needed to pull off transformation at scale because leaders are reluctant to lead.
Why are the ingredients for successful change so often missing?
Enterprises have been conditioned to optimize. Most existing leaders have been rewarded for creating profits in steady state environments as buttoned down as their shirts and predictable as their pinstripes. Ultra-lounge management skills steeped in planning and delegation are poorly suited for an accelerating world. To thrive today, leaders not only need active adventure wear, they need new perceptual abilities to sense their environment and new navigational skills to arrive at results. Maps are useless when the terrain changes faster than you can email your boss a description of the territory.
To transform with a capital T you need to identify the company’s full potential and embed a new culture of execution. All heads nod. Yet, why is it so difficult? People fear their own greatness. They are averse to the vulnerability inherent in a stretch goal. An even deeper truth, most company cultures stifle innovation by retaining people in leadership positions who vilify failure. You cannot achieve the extraordinary without removing the common spectre of shame that limits people’s willingness to step out of what they know. To step into the field of possibility and face ambiguity head on, every person in the company must realize they are in it together. Mutual support is not just nice to have, it is a requirement for success.
What to do?
First, focus your energy on the goal and stop wasting time on things that make people comfortable but don’t really matter. Second, authorize a chief disrupter with the savvy and charisma to keep people motivated while their day-to-day becomes very uncomfortable. Then, tell people why and connect their world directly to the big picture of where the business is going.
"Engagement with employees and managers needs to have a context, a vision, and a call to action that will resonate with each person individually.” To keep it resonating, recognize meaningful contributions to the end game that show everyone what success looks like from many perspectives within the company.
Lastly, integrate transformation into company operations. To maintain success you’ve got to hardcode the capacity to change into your company’s DNA. “ Organizations with an effective execution engine conspicuously continue to challenge everything.” While the authors acknowledge that nothing about their approach is “especially novel or complex,” they haven’t truly explained what the new skills of transformation are, where the willingness to challenge mind-sets comes from, or how full commitment to execution is sustained.
Crucial factors for success deserve to be explicit and accessible.
We’ll look at each of them in the upcoming journals: skills for maintaining the live edge; embracing disruption from within; execution strategy = purpose + narrative + backbone.