Podcast transcript

Hello, and welcome to this edition of the McKinsey Podcast, with me, Simon London. Just imagine for a moment that you’re running a network of hospitals, or factories, or R&D labs, or call centers. To boost productivity and quality, you know that you have to introduce new ways of working, probably alongside new technology and new processes. And you know that new skills will be required, not only on the frontline but also along that all important middle layer of site managers, line leaders, and supervisors.

Well, congratulations because you’re facing an implementation challenge. The bad news is that implementation of this kind, at scale, is very hard. The good news is that we know more than ever about what it takes to build capabilities and make change stick.

To find out more, I flew to Denver, Colorado, to speak with two McKinsey Implementation experts. Nick Waugh and Blake Lindsay spend a lot of time with senior executives and have done research on this topic. They also spend a lot of time out in the field, coaching, training, and doing the heavy lifting. So I hope you enjoy this conversation about the theory, the practice, the art, and the science of implementation.

Simon London: Nick and Blake, thanks very much for doing this today. I thought we should start with a real beginner’s question, which is, when we talk about implementation, what are we talking about? How does it relate to concepts like change, execution, and transformation?

Nick Waugh: Execution is around the day-to-day business. The COO is steering the ship and has current speed and course, whereas implementation is often course correcting a little bit or speeding up. We’re usually involved when there’s a change imperative of some kind.

Simon London: How is this different from change management?

Blake Lindsay: Change management is obviously a core part of what we think of as implementation, but when you’re talking about ensuring that a business or an organization is going to continue to do things differently moving forward, we’re effectively driving new processes and new capabilities within the organization. So, implementation goes beyond just change management. The concept is, I have now taken a group of people or an organization and fundamentally changed the way that they think about doing their work or whatever processes that are now put into place and am building their skills and capabilities along the way. We define it as the ability to achieve a desired result and sustain that result and continue to improve upon it.

Nick Waugh: The change-management aspects are really around the mind-sets and the behaviors that come along with this. When you start asking someone who’s done the same thing for 35 years to do their job differently, there’s a huge amount of change management or culture associated with that mind-set change.

Simon London: So, it’s the implementation of processes, the implementation of new ways of working and new technologies. It could be something programmatic, like lean, or it could be something that’s very specific to a company. But it’s actually doing work on the ground and making sure that happens and sustains over time.

Nick Waugh: We’ve rolled out lean management in factories and hospitals and the back office of an insurance company. You can imagine, the deployment model for McKinsey looks very different. It’s not a bunch of folks sitting in a room at headquarters. It’s folks like Blake and myself who are out in the field coaching, building capabilities. And the profile of our implementation practitioners therefore requires a certain amount of “been there, done that.” It establishes credibility when we walk into the situation, but it’s also the pattern recognition of being able to say, “I’m asking someone to do something different than they’ve ever done it before.”

Simon London: Let’s talk a little bit about the research that you have done, because in addition to doing this on the ground, we’ve done two quite big surveys, one in 2014 and one in 2017, about what works around implementation and transformation. Talk a little bit about the research and what we’ve learned.

Nick Waugh: We surveyed 1,400 CXOs across the globe and really probed what it was they were working on as far as implementation was concerned. Then we assessed the success, their subjective success, against the dimensions that we felt were the ones that truly drive implementation success.

Blake Lindsay: Part of what we were trying to do was to figure out what the markers are for success. Which I think that we’ve been able to do. We’ve distilled it into 30 practices, which turn into seven core capabilities.

One of the big things that we were trying to do was find this “silver bullet.” What are the two or three things that I have to go and do to make sure that I’m going to be a successful implementer? And what was really fascinating is that across these 30 practices, pretty much every single one of them is relatively of the same importance and weight. You can basically look at it and say, OK, all of these things are important.

The research shows that it’s more about the level of effort that an organization puts into getting an implementation correct whether they’re going to be able to achieve and sustain their results. Of those 30 practices—and it doesn’t matter which practice you’re doing—as you start to get to 20 to 25 and can say, “I’ve done 20 or 25 of these things, and I’m doing it and focusing on it,” that’s where you actually start to achieve success.

Simon London: It’s interesting, for me, if I look at your list of seven key capabilities or success factors, some of them sound like motherhood and apple pie. I’ll read them out for the audience.

Focus on continuous improvement, not a one-off effort. Obtain strong ownership and commitment by leadership. Focus on the right priorities, really understanding what you’re going for. Create clear accountability, with KPIs [key performance indicators]. Perform skill building, capability building, within the organization. Get a really effective program-management structure. And then really think about sustainability from the start—not environmental sustainability, but, can we sustain the change?

So, seven things there. They all sound somewhat generic, so how do you respond to that?

Blake Lindsay: It’s interesting that you say that, because I think you could walk into any executive’s office and have a conversation around an implementation program and say, “These are the seven things that will make you successful.” And she or he is going to say, “OK, thank you for wasting these five minutes of my life.”

But that begs the question of why two-thirds of change programs still fail to achieve their results or sustain their results. That was really the science that we were trying to get to. What’s interesting about that is, you talked about showing true ownership and commitment [Exhibit 1]. Can that executive actually tell you what that really looks like and how to make sure that’s happening within their organization? The way that we’ve broken it out shows you exactly what “good” looks like. And can you specifically say, “I am doing this thing,” rather than just saying, “Yeah, sure, we own this and we’re committed to it.”

Nick Waugh: The value in those seven is in the nuance that lies underneath them. I often think of this idea: don’t tell me you’re funny; tell me a joke. For me, with the ownership and commitment point that you raised, Blake, it’s not about telling people that you’re behind the effort and this is important and mentioning it on earnings calls and in town halls. It’s about what the behavior is that you’re role modeling to the rest of the organization. You’re letting your actions do the talking. That’s the thing that’s very hard to assess when you go into an organization.

And as to Blake’s point, you could stand in an office of a CXO, and they could tell you that they’re very committed to the change and it’s a strong level of ownership and commitment. Then you could observe them for a week and realize that what they’re doing is very different than that.