Research on 5 million people from 2,000 companies reveal the 5 steps for transformational change
For the past two decades, the success rates of change efforts have been dismal. In 1996, Harvard Business School professor John Kotter reported that only 30 percent of all change programs succeed. Fast forward almost twenty years, and multiple studies have shown that the odds of leading a successful change program remained largely unchanged.
What’s going on here?
The problem with most change management frameworks is that they’re focused at the organizational level. In reality, organizations don’t change, people do. Organizations are just collections of people, so if you want change, you need to zero in on what’s going to motivate, mobilize and maintain systemic change across all employees over time.
While there are many books on change, I recently uncovered a book called Beyond Performance 2.0 by Scott Keller and Bill Schaninger, senior partners at McKinsey & Company. The book is rooted in research from over 5 million survey respondents across 2,000 companies paired with the authors’ combined 40 years of experience in helping companies and public-sector organizations successfully achieve large-scale change.
Keller and Schaninger note that the big idea in leading successful change is to put an equal emphasis on performance- and health-related efforts at every stage of the change journey.
When the authors describe performance, they are referring to what an organization does to deliver results to its stakeholders in both financial and operational terms. When they talk about health, they mean how effectively an organization works together in pursuit of a common goal – it’s operating model and culture.
Beyond Performance 2.0 breaks down the change journey into five stages, each of which has a performance framework and a health framework to guide leaders in putting equal weight on each. The stages are designed such that if the leaders are able to answer the key question of the stage, they are ready to move on to the next one.
The five stages are:
- Aspire—Where do we want to go in the future? On the performance side, identify your strategic objectives that support your vision. On the health side, determine where you want to truly excel organizationally, and if any broken practices need to be to fixed to get there.
- Assess—How ready are we to go there? On the performance side, identify the skillset requirements needed for change. On the health side, determine the mindset shifts needed to drive the change.
- Architect—What must we do to get there? On the performance side, define a portfolio of initiatives and create a clear plan. On the health side, influence the soft-side of the change through communications and storytelling.
- Act—How do we manage the journey? On the performance side, establish strong governance and a scale-up model for the change. On the health side, mobilize influential leaders and create a 2-way communication approach with the critical mass.
- Advance—How do we continue to improve? On the performance side, facilitate continuous learning and embed knowledge sharing through training, development and other means. On the health side, match talent to priority roles and operationalize the change process.
For example, in the Aspire stage, Keller and Schaninger outline two frameworks: “Strategic objectives” for the performance side and “Health goals” for the health side. For the performance framework, they describe how to build a compelling long-term vision, how to transform the vision into more tangible mid-term goals, and how to pressure check the vision for biases that may make it impossible to accomplish. For the health framework, the authors describe how a company can check its health using a rigorous assessment, how leaders can choose where to be exceptional based on the company’s context, industry, and strategic objectives – versus copying best practices of other companies.
Most organizational change projects fail because they approach change as just that: a project with a finite end. Change is about people. To succeed in today’s disruptive world, organizations must help their people develop the skills and muscle memory for agility and resilience – and apply these on a continuous basis, each and every day.
Soren Kaplan is the bestselling and award-winning author of Leapfrogging and The Invisible Advantage, an affiliated professor at USC’s Center for Effective Organizations, a former corporate executive, and a co-founder of UpBOARD. He has been recognized by the Thinkers50 as one of the world’s top keynote speakers and thought leaders in business strategy and innovation.