This article originally appeared on Forbes.com.
Most corporate change efforts fail to achieve anything near their desired effect. When Bain & Company surveyed 250 companies, only 12% said they achieved what they set out to accomplish. Some 38% failed by a wide margin, capturing less than half of the value they initially targeted. And 50% settled for a significant dilution of results. The disturbing implication: Over time, too many organizations unwittingly wind up accepting mediocre performance.
While most executives understand the basics of change, they often have blind spots that can undermine well-intentioned efforts. In successful programs, executives anticipate and overcome these blind spots. They do this by addressing the “what, who and how” of change: What do we want to achieve? Who will make change happen? How will we get there?
Senior leaders often rationalize new programs with strong quantitative analysis, but they fail to make a compelling case to employees—such as highlighting how the proposed changes will make the company faster, more agile and easier to do business with. To motivate large-scale organizational change, executives need to answer the question: “What is our beach?”
When planning a vacation, people get excited by imagining themselves on the beach or ski slope, not by reading the travel itinerary. Similarly, effective change requires leaders who can inspire people with a compelling picture of the desired end state, and provide them with the internal compass to realign their behaviors.
This type of rallying call played an essential role during the recent operating model redesign for a U.S.-based consumer goods company. One internal challenge was that, despite operating globally, the company made most decisions at its U.S. headquarters. Defining and communicating the case for change, then, had to actively involve senior leaders from all regions. They gathered over several sessions to flesh out the “beach” that would inspire employees to move beyond anxieties over layoffs and get excited by the chance to build a more innovative, growth-oriented business with greater local decision making. The firm trained leaders at every level and region to communicate a single global vision in their local context so that the message was authentic.
Who needs to behave differently for the change to occur? It’s essential to identify who on the front line is most affected, and how their boss and their boss’s boss—and so on up the chain—can support them with the right messages and reinforcements. This raises the second question executives need to answer: “Who is our spine?”
Change efforts depend on having a strong sponsorship spine. An African gold mining company had to stabilize declining production as its mines neared the end of their lives by instilling higher-quality ways of working and effecting a marked improvement in safety. The challenge: inspiring 30,000 employees working in mines often three kilometers underground.
The company turned to the sponsorship spine, with a monthly rhythm of training that cascaded through the mine hierarchy. This matched the pace of change with each mine’s capacity to adopt new ideas, and the ideas took hold because they were now promoted by experienced mine operatives who had credibility in the minds of their peers and subordinates. As mine teams could not readily be taken away from their working areas, these sessions mostly occurred at 6 a.m. on one Saturday morning per month.
As a result of its transformation, a much improved safety performance allowed the company to halt further declines in production, and its stock outpaced competitors during a challenging period for the gold industry as a whole.
Once a program starts, it’s important to maintain a clear sense of progress on the various initiatives. Most organizations install tracking tools, using a green light for on track, yellow for at risk and red for stalled. Yet because people want to demonstrate progress, there’s an inherent bias toward showing green at all costs. To counter this impulse, executives need to adopt a “red is good” mindset and ask the question: “How red are our risks?”
A risk-savvy organization acknowledges individual implementation risks that crop up so that it can deal with them early and thoughtfully.
Consider the merger of two global pharmaceutical companies, based in two countries an ocean apart. The team leading the integration launched a risk predictor survey covering 70% of the employee base, revealing several problems that senior management had overlooked. For example, many employees did not have a sense of what working in the combined company should look like and what it would mean for them personally. Worse, many felt they had no channel to provide feedback or raise concerns on how the new operation was proceeding.
With this information, the executive board recognized the risk of losing crucial employee support, so they took pains to communicate the target picture (the “beach”) for the new combined entity in terms relevant for individuals, including new global career options. The firm also established a monthly risk monitoring and feedback process at the business unit level, and repeated its broader survey after six months. These mitigating steps helped to launch the integration with the majority of employees actively supporting it.
Executives who shape their efforts by understanding the what, who and how of change will raise their odds of success, and also develop the organizational muscles to keep getting better over time.
Alan Bird founded Bain & Company’s Results Delivery practice and is now an advisory partner.
Torsten Lichtenau leads the practice in the U.K.
David Michels leads the practice in Europe, the Middle East and Africa.