Here is an excerpt from an article written by Nate Boaz and Erica Ariel Fox for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out others, learn more about the firm, and sign up for email alerts, please click here.
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Organizations don’t change—people do
Many companies move quickly from setting their performance objectives to implementing a suite of change initiatives. Be it a new growth strategy or business-unit structure, the integration of a recent acquisition or the rollout of a new operational-improvement effort, such organizations focus on altering systems and structures and on creating new policies and processes.
To achieve collective change over time, actions like these are necessary but seldom sufficient. A new strategy will fall short of its potential if it fails to address the underlying mind-sets and capabilities of the people who will execute it.
McKinsey research and client experience suggest that half of all efforts to transform organizational performance fail either because senior managers don’t act as role models for change or because people in the organization defend the status quo. In other words, despite the stated change goals, people on the ground tend to behave as they did before. Equally, the same McKinsey research indicates that if companies can identify and address pervasive mind-sets at the outset, they are four times more likely to succeed in organizational-change efforts than are companies that overlook this stage.
Look both inward and outward
Companies that only look outward in the process of organizational change—marginalizing individual learning and adaptation—tend to make two common mistakes.
The first is to focus solely on business outcomes. That means these companies direct their attention to what Alexander Grashow, Ronald Heifetz, and Marty Linsky call the “technical” aspects of a new solution, while failing to appreciate what they call “the adaptive work” people must do to implement it.
The second common mistake, made even by companies that recognize the need for new learning, is to focus too much on developing skills. Training that only emphasizes new behavior rarely translates into profoundly different performance outside the classroom.
In our work together with organizations undertaking leadership and cultural transformations, we’ve found that the best way to achieve an organization’s aspirations is to combine efforts that look outward with those that look inward. Linking strategic and systemic intervention to genuine self-discovery and self-development by leaders is a far better path to embracing the vision of the organization and to realizing its business goals.
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Here is a direct link to the complete article.
Nate Boaz is a principal in McKinsey’s Atlanta office. Erica Ariel Fox is a founding partner at Mobius Executive Leadership, a lecturer in negotiation at Harvard Law School, and a senior adviser to McKinsey Leadership Development. She is the author of Winning from Within: A Breakthrough Method for Leading, Living, and Lasting Change (HarperBusiness, 2013).
Nate Boaz would like to thank Mobius Executive Leadership for the ongoing collaboration that contributed to these insights. Erica Ariel Fox would like to thank her colleague John Abbruzzese, a senior leadership consultant at Mobius Executive Leadership, for his contribution to this article.