English Subtitles for McKinsey on Change Management

Subtitles / Closed Captions - English


yeah yeah seventy percent of major change programs don't achieve the objectives they set out to and when you look at that seventy percent that fail what you find is that seventy percent of the time it's because of the human issues the organization issues the culture issues sometimes it's the

employees who don't really understand it or don't feel personally motivated to change sometimes it's because management's not on board sometimes it's because the top team is engaged one of the organization's I've worked with recently it's a large energy company and the CEO is absolutely convinced that he had a very clear vision and strategy so we organized the workshop and we use some of the anonymous voting machines

the first question we put up was we have a clear and compelling strategy for our business a hundred percent of the people in the room voted yes the second question we put up was our strategy is and we listed six completely different statements of where they could take that company each statement got two votes at that point the CEO blew up left the room

but actually they needed to have a breakdown in order to get a breakthrough because that was the only way we could have an open and honest discussion about the fact they were all in completely different places and not surprisingly we are creating confusion and chaos in the organization because they were sending very very different signals and messages this video is very much about engaging with our clients engaging with our

colleagues to help them understand what some of the success factors are in really making change successful and sustainable over time many CEOs believe that common sense just needs to become common practice unfortunately that's not always the case I give an example one of the things that many CEOs do is they try to engage other people with what excites and inspires them personally

one of the CEOs I've been working with recently he's the head of a major pharma company and for him the vision of where you wanted to take this company was he wanted to go and be number one but when we started testing it with people across the organization what we found was actually for a lot of the sales reps frankly being number one yeah fine but it wasn't really what got them engaged

so over time we worked with the CEO and we helped him develop a story where what he was going to do with absolutely consistent everywhere but why resonated with many many different people so he started talking about the fact that this was transforming medicine finding cures for illnesses that are currently incurable he talked about the journey that they were go on as a team continuing to grow

in a period of major patent expiration and he talked about the individual rewards that we're going to come by doing all of this they were gonna be number one and as I was sitting listening to him with a hundred and fifty other people what resonated for each of the people sitting at that table with something different but each of them left motivated excited and passionate about

making that vision a reality they're at least five sources of meaning around society and mission about the customer about the company about the team and about me about me personally and as CEOs and senior executives engage on why this matters it's really important to appeal to each of those five sources of meaning we looked at the SMP 500 and one of the interesting things if you look at 1935

is the average lifespan of a company on that list was 90 years if you fast forward to 2010 that average lifespan has dropped to only 14 years half of the companies on the list in 2010 will not be there in 2017 now they won't all go bust but what it does mean is the necessity of being able to change yourself perhaps one of the classic examples is the italian postal service they had made

a profit in half a century their quality standards are so low they didn't achieve the minimum on the european standard scale and yet the in the period of about three or four years they went from that initial starting point to being the third largest financial services institution in Italy now it's that kind of transformation where there's no going back where it's a radical step change and skills and

mindsets and capabilities and processes that's what we're trying to achieve when we look at a transformation we typically think about five frames the first one is being really clear about where you going it's about aspire what's your vision what's your strategy what are the targets and how do you create a really compelling story that's

going to engage your organization if you're not very clear on those targets your chance of success isn't thirty percent which is the average it's actually only twelve percent where you have very clearly defined targets you more than double your chances of success once you've gone through the Aspire phase it's been critical to assess when organizations actually spend the time to really look hard at whether they have

the capabilities to succeed and whether they have the mindsets to succeed there between four and six times more likely to be successful the third step is to architects that once you have a clear vision of where you want to go and you know where you are today you then need to create a plan that's going to get you from here to there it's also about how do you change individuals

what we found is that there are four things that need to be in place the first one is they have to understand why they have to change and it has to mean something to them individually the second thing is all the systems and processes need to be in place to reinforce the new set of behaviors the third liver is they have to have the skills to do it and then the fourth flavor which actually is the most

powerful of all is the role modeling so people they trust and respect people they admire have to behave in the new way to I'd like to just emphasize that last one because according to all the research it is the most important one of the CEO's that we've worked with who's the head of a major bank he was driving a transformation program around customer focus and he goes into one of the retail branches and he notices that

the windows are dirty and so you mentioned this to the staff next morning when he comes back he notices that the windows are still dirty he rolls up his sleeves and he starts washing the windows in front of every single member of that retail branch within two days there is not a dirty window in any of the retail branches anywhere in the country

so now that you've architected your plan you now need to act and typically what we find is that transformations our journey they often start with a big burst of enthusiasm and excitement and then typically what you find sometimes six months sometimes 12 months in is that there's a dip it gets really hard Energy starts to flag results may not come through quite as quickly as you

want and what's really important is to make sure that you've got things that will create energy that will give momentum that will give people confidence they're heading in the right direction it takes having a story that cuts through the noise it takes having some quick wins sometimes it means stopping things and sometimes it actually means being willing to make tough decisions on

people last but not least is advanced the transformation is a phenomenal opportunity to build skills to develop leaders to make sure that you've got your best talent focused on the most critical issues for your business so when change really works you can go in and you can look and touch it and feel it you can see people who were excited who are passionate who are doing

things they never thought possible who genuinely believed in the power and the impact of what they've done and feel like they have personally grown tremendously from the experienced one of the clients I work with they have seen their share price literally increased by 5 times in the last five years you walk into the organization and everybody is incredibly motivated and

excited and passionate about their jobs it's that feeling it's that sensation that you can it's it's hard to describe but when you experience it you never forget it

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