The people power of transformations

Posted on: March 12th, 2017 by bobmorris

Here is a brief excerpt from an article written by Dana Maor , Angelika Reich, and Lara Yocarini for the McKinsey Quarterly, published by McKinsey & Company. They discuss a new survey whose results such suggests that, for their transformations to succeed, organizations need employee buy-in at all levels, consistent communication, and better people strategies. To read the complete article, check out other resources, learn more about the firm, obtain subscription information, and register to receive email alerts, please click here.

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Organizational transformations are hard work, and according to the latest McKinsey Global Survey on the topic, companies are no more successful at overhauling their performance and organizational health than they were ten years ago. A particular blind spot seems to be the failure to involve frontline employees and their managers in the effort.

Transformations have their truisms. Successful ones, for example, require visibly engaged C-suite leaders who communicate clearly about the changes at hand. A vast majority of all respondents report these characteristics at their companies, whether or not their transformations have worked. But the results suggest that while C-level support is necessary, it is not by itself sufficient. A transformation’s success also requires that people across the organization have a specific role to play and that everyone knows how to carry out his or her part.

Our survey asked about seven specific roles and the actions that employees in these roles take during a transformation. For each one, and most notably for roles at lower levels of the organization, respondents at companies with the most successful transformations report overall greater degrees of involvement. Respondents at these companies also are likelier to report other practices that set their transformations apart: consistent communication around the changes being made, especially to those on the front line; clear definitions of roles and responsibilities; and a strategic approach to talent management. In contrast, responses suggest that without employees at all levels having a stake in the outcome, the transformation might well be doomed. Among respondents whose companies’ transformations failed to engage line managers and frontline employees, only 3 percent report success, compared with success rates of 26 and 28 percent, respectively, when each of these groups is engaged.

Look beyond the C-suite

Among respondents, there is clear consensus that company leaders are deeply involved in and committed to transformational change (Exhibit 1). Even on the front line, 84 percent of respondents say their CEOs are very or somewhat engaged. So do a majority of respondents at companies where the transformation failed, suggesting that CEO buy-in is a critical and therefore expected part of a transformation. Indeed, when asked which role has had the greatest impact on transformation results, respondents across the organization cite CEOs most often.

Exhibit 1: What really sets the more successful transformations apart, according to the results, is the involvement of frontline employees and their managers. Many companies seem to miss this: respondents rate these groups (along with their human-resources leaders) as the least engaged in transformations. At successful companies, though, respondents are much likelier to report visibly engaged frontline employees: 73 percent do, compared with 46 percent of all other respondents (Exhibit 2).

Exhibit 2: Not surprisingly, involving the front line is even more challenging at larger companies, where the rate of transformation success is also lower. Just 45 percent of respondents at larger firms, compared with 58 percent at smaller firms, say frontline employees are visibly engaged in transformations. The same is true of line managers: respondents at bigger companies are less likely than their smaller-company peers to say their line managers—who oversee frontline work and whose activities are directly affected by transformation initiatives—are engaged in the effort.

It’s not surprising, then, that these groups are the least likely to view their companies’ transformations as successful (Exhibit 3). Yet their involvement and perspective could not be more critical: among transformations that fail to engage either line managers or frontline employees, only 3 percent of respondents report success.

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Here is a direct link to the complete article.

The contributors to the development and analysis of this survey include Dana Maor, a senior partner in McKinsey’s Tel Aviv office; Angelika Reich, a partner in the Zurich office; and Lara Yocarini, an associate partner in the Paris office.

They wish to thank Claire Barnett, Surbhi Sikka, and Lukas Wallrich for their contributions to this work.

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