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Change-management programs can succeed only if employees at all levels—senior managers, middle managers, and the front line—share the will and the skills to change. McKinsey studied these programs at 40 organizations and found a connection between good skills for managing change and the value an organization captures from it.
Developing new strategies or operational initiatives is an important way for a company to renew itself. But the success of any new program depends as much on how a change is made as on the nature of the change.
Executives know that for new processes to take root, employees must be able to adapt. To determine the role of people in process changes, McKinsey studied programs to implement them at 40 organizations, including banks, hospitals, manufacturers, and utilities. We looked at two dimensions: first, the difference between the expected and actual value of the change and, second, a company's strengths in 12 factors that determine whether it can be managed effectively.
We measured these strengths at three organizational levels. Senior managers were evaluated on their ability to lead change and to communicate a clear and compelling message about it, middle managers on their skills in managing people and projects, and the front line on how well employees were trained and motivated to change.
Reassuringly, the companies with the best change-management skills were the most successful at capturing value from such programs. While only 42 percent of the companies met or exceeded their goals, those companies had above-average change-management skills at no fewer than two of the three organizational levels we examined. Companies with good skills at only one level failed to reach their targets, while companies with good skills at two beat their expectations by almost a third.
For more details on the factors that promote successful corporate transformations, read "Helping employees embrace change," The McKinsey Quarterly, 2002 Number 4.
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"The psychology of change management" (The McKinsey Quarterly, 2003 Number 2 Organization) draws on lessons from child and adult development to suggest four conditions necessary for people to change their behavior.
"All I ever needed to know about change management I learned at engineering school" (The McKinsey Quarterly, 1997 Number 2) looks at change management from the perspective of a mechanical engineer (and McKinsey consultant). The author explains why managing change is more difficult, and more ongoing, than most of the literature suggests. |
"Creative destruction," (The McKinsey Quarterly, 2001 Number 3), an excerpt from the book of the same title, argues that managers must abandon assumptions of continuity and break down the cultural barriers that make it hard to change corporate cultures. "Corporate transformation without a crisis," (The McKinsey Quarterly, 2000 Number 4) explains why it is easier to manage change during emergencies—and shows several ways to make it happen without one. |
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