Tokyo – July 2, 2021 – As traditional change management has become outdated, business leaders are looking for new ways to understand their organisations’ capacity for change. To help provide a solution to this issue, Bain & Company today announced the launch of its Change Power Index, a powerful new tool to help businesses assess their changeability and strategically improve where necessary. Change Power was the focus of the July-August cover story of Harvard Business Review.

Change Power measures a company’s changeability and compares it with other benchmarked companies, allowing business leaders to see gaps in their business and where to focus in order to improve their own capacity for change. The ratings given by the Change Power system have been tied to business performance:  Companies with high scores are more profitable, grow revenue faster, and offer better shareholder returns than their competition. These companies also have leaders and cultures that are more highly rated and are home to more engaged employees.

“Change Power is a powerful tool to help leaders become aware of both their strengths and weaknesses when it comes to the ability to change” said David Michels, the global head of Bain & Company’s change management and implementation practice. This skill is critical for businesses of all sizes, and now for the first time, we can break down the various components that enable and empower change.”

The system hones in on nine critical traits and abilities that determine an organization’s capacity for change. Companies can index their organization, rate their capacity for change, and compare themselves to other benchmarked companies to understand their competitive standing. These nine traits and abilities are:

• Purpose - Creates a sense of belonging; guides decisions and inspires action
• Direction - Translates your purpose into a plan; clarifies where you are going and how to get there
• Connection - Taps into the social side of change; creates networks of influencers and fans
• Capacity - Defines the limits of change; allows you to absorb more change
• Choreography - Helps you be more dynamic; adjusts change priorities and sequences moves
• Scaling - Creates a virtuous cycle; spreads innovation and amplifies impact
• Development - Prepares you for growth; builds learning and change capability
• Action - Builds momentum; fosters a can-do mindset and a bias for change
• Flexibility - Helps you stay in front of change; redefines how you work and even what work is

“We have established that there are three broad components that are key to successful change: leading for change, organizing for change and teaming for change,” said Kevin Murphy, an expert partner in Bain & Company’s Washington, DC office who leads the firm’s co-creation center of excellence. “For the first time, corporate leaders can identify where they need to take action by focusing on specific enablers of change.”

Based on our Change Power research, Bain has identified the four most common and relevant corporate archetypes:

• In search of focus: The strength of these firms is their energy. They’re beehives of activity and have had many successes. They’re constantly innovating, and their people have the capacity to take on a lot. But, at times, everyone in these companies seems to be chasing the ball. Statistically, this group shows weakness in the traits of direction, purpose, and connection.
• Stuck and sceptical: These companies have good ideas and a history of success, but too much of their change gets stuck at the local level. They tend to underestimate the full scope of what they have taken on. They are commonly weak in scaling, action, and connection. Innovations seem to stall and don’t spread across the organization. That makes people impatient and lowers their engagement levels.
• Aligned but constrained: These companies share important strengths: Theiremployees work well as a unit, have locked arms, and are headed in the same direction. Early success heightened their expectations, and now they find themselves pushing against hard constraints. These companies often don’t have the people they need to fill key roles in managing greater amounts of change and its accumulating disruption. Teams that fall into this category struggle with capacity, development, and connection.
• Struggling to keep up: These employees must work together as a team to forge ahead amid a challenging landscape. They must plan how they’ll work as a team, supporting, and even sacrificing for one another. They’re similar to great athletes whose single-minded focus and action orientation have delivered results. But as the race wears on, fatigue sets in, and adaptability becomes increasingly important. But these companies struggle to cope because they’re weak in flexibility, choreography, and scaling. Their single-minded focus, once a virtue, begins to morph into a vice.

“Now more than ever, companies must be able to adapt quickly and have the ability to change and while the remedies are different for each of the archetypes, the first step is knowing who you are,” said Dave Michels. “Critical shifts are fundamentally reshaping corporate change and the ways that business leaders are dealing with it and so we are excited to introduce this ground-breaking system and work with our clients to rediscover, redefine and reinvent the power of change.”

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Editor’s note: For more information or to arrange an interview, contact Calla Payne at calla.payne@bain.com or +852-6020-7693.