What successful organizational transformations share: McKinsey Global Survey results

What SuccessfulWhen organizational transformations succeed, managers typically pay attention to “people issues,” especially fostering collaboration among leaders and employees and building capabilities. Here is a brief excerpt from an article which shares the result of a McKinsey Global Study (in 2010) whose findings, if anything, are even more relevant now than they were then. To read the article, check out other resources, learn more about the firm, obtain subscription information, and register for email alerts, please click here.

Source: Organizational Practice

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Over years of research and client work, we’ve identified a few tactics that help drive successful transformational change—any large-scale change, such as going from good to great performance, cutting costs, or turning around a crisis. These tactics include setting clear, aspirational targets; creating a clear structure; maintaining energy and involvement throughout the organization; and exercising strong leadership.1

In this latest survey of executives from around the world,2 we’ve dug into just how companies apply some of these tactics. We found that a few approaches in each area are most tightly correlated with successful transformations of both short-term performance and long-term corporate effectiveness, or “health.” In addition, the approaches most used by successful companies tend to complement and reinforce one another.

The survey asked executives about types of transformations (what types their companies had undertaken and why), goals for the transformation (what the goals were, how they were defined, and how successfully they were met), and implementation (how companies structured and carried out the transformation).

By looking at the approaches used by companies that executives describe as most successful in transforming themselves, we found evidence suggesting the importance of engaging employees collaboratively throughout the company and throughout the transformation journey. Another major theme was the importance of building capabilities -— particularly leadership capabilities -— to maintain long-term organizational health. In addition, a focus on strengths and achievements, not just problems, throughout the entire transformation process is strongly tied to success.

This survey reconfirms the importance of some basic best practices to successful transformations. Strong majorities of extremely successful companies define the targets, role, and structure of the transformation clearly, respondents say.

Notes

1 See, for example, Josep Isern and Caroline Pung, “Driving radical change,” McKinsey Quarterly, November 2007; Josep Isern, Mary C. Meaney, and Sarah Wilson, “Corporate transformation under pressure,” McKinsey Quarterly, April 2009; and “Creating organizational transformations: McKinsey Global Survey Results,” McKinsey Quarterly, August 2008.

2 The online survey was in the field from January 19, 2010, to January 29, 2010. We received responses from 2,512 executives representing the full range of regions, industries, functional specialties, and seniority.

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To read the complete article, please click here.

Contributors to the development and analysis of this survey include Scott Keller, a principal in McKinsey’s Chicago office; Mary Meaney, a principal in the London office; and Caroline Pung, a consultant in that office. They would also like to acknowledge the contributions of Caroline Limet.

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