Keeping a transformation successful can be much harder than anticipated. Whilst it may look like a success at the start, this can change rapidly. It seems that after the initial hard work is done, a lot of companies tend to slip back into old habits.
The significance of sustaining a transformation and the actions needed to do this may seem obvious, they are not. Companies tend to neglect the long-term as they are more focused on short-term gains. They underestimate how difficult it will be to change old habits and create a new approach that can be seen in many everyday actions.
McKinsey believe that the key to sustaining a transformation is to use what they call an ‘execution Engine’, which is a process that changes both decision making and performance rhythms in the business and can be replicated. McKinsey believe that there are five broad ways to create this engine.
1-Take an independent perspective. Companies that keep up the change are never happy with the current situation. The are constantly looking for new facts as opposed to accepting the status quo.
2-Think like an investor. This mindset can be unpopular within companies, and it is not just for the executive team, it’s for everybody! Employees in companies who sustain the transformation do so by constantly challenging other employees, not just getting along with colleagues. They look for new sources of value and refuse to go back to a relaxed pace of decision making.
3-Ensure ownership. During the transformation, there is a tendency for targets to be set by outside advisors and management. This should be avoided. Companies with big central teams that have centrally imposed initiatives are at the most risk of going back to their old ways.
4-Execute relentlessly. Once the initial targets of improvement are met, it is very easy for companies to allow the pace to slow down. When senior executives avoid acquiring all the details and go back to high-level target setting, this is a warning sign!
5-Address underlying mind-sets. In an organisation, employees who are inspired make a huge difference and usually outperform those who are used to a command-and-control culture. Managers need to instill meaning, not just challenge. They need to recognise extra effort and should not assume that employees have a full understanding as to why the company needs to operate in a different way going forward.
In organisations where transformation is sustained, Executives continue to use these five disciplines in their annual budget discussions, their monthly operating meeting and their everyday management routines. Transformation success is whether the transformation had ingrained a replicable process which will drive better results long after the transformation has been completed.
McKinsey, (2018) Sustaining the momentum of a transformation. [Online] https://www.mckinsey.com/business-functions/rts/our-insights/sustaining-the-momentum-of-a-transformation