When classic change programs fail to deliver their full potential, the disappointing results often tie back to the fact that the changes were not owned by the front line. Greg Gerstenhaber, a partner with Bain's Performance Improvement practice, describes how a line-led transformation approach can dramatically improve the odds of success.
Read the Bain Brief: When the Front Line Should Lead a Major Transformation
Read the transcript below.
GREG GERSTENHABER: In our experience, when companies pursue a transformation, the track record is actually not very good. We find that only 12% of companies actually achieve the results that they initially set out to go after. The rest of the companies either miss wildly, or they end up getting to very, very watered-down results.
So with that in mind, we also see that companies also tend to adopt a program management office in order to manage the initiatives and their change. And that program office typically sits outside of the business. We have found that a better model for successfully managing a transformation is the frontline-led model for a transformation. In that model, targets are set and given to frontline executives, who use their experience and their local knowledge in running that business in order to make the right trade-offs and figure out what it takes to go and deliver the value, while also minimizing risk to the day-to-day business.
This tends to be very, very helpful in instances when either the potential outcomes are not clear, it's not business as usual, and the low-hanging fruit has already been captured. To make a model like this work, you really need two things. First, is intent. You need employees to clearly understand the goals for the transformation. You need to make sure that everyone feels empowered to act and deliver against the transformation. And you also need to set up the right level of intensity, which is often done with the rigor in a standard reporting structure.
The other thing you have to have is accountability. This comes in the form of clear targets, clear incentives, which provide consequences not just for bad things, but also positive things. And then the final thing that you have to have is transparency of metrics. We find that when you have this in place, the model is very, very powerful and dramatically improves your odds of success for a transformation. It doesn't come together overnight, but with the right level of coaching and prodding, it works incredibly well.