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Change is hard. But it can also give companies a competitive edge.

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The truth about transformation

In the news

•

Change is life’s only constant. For the modern organization, it seems that disruption has become the new status quo. Case in point: the rapid rise of generative AI and the ongoing reckoning with its potential effects on our personal and professional lives. If companies across sectors embrace the technology at scale, the broader economic implications are significant. For individual companies, it may require no less than a revolution to adopt new, AI-based ways of working—and to take advantage of the business benefits these changes could confer. [Economist]

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The power of storytelling. As the world around them transforms continuously, organizations and their leaders have no choice but to transform in turn. Of course, large-scale organizational change can be destabilizing and anxiety-inducing for many employees. But storytelling is a powerful tool for building trust, even in uncertain times. Stories can make abstract concepts—such as the reasons for a company’s transformation and what that change might mean for people’s day-to-day work—feel personal and emotionally resonant. Stories about the changes under way can also influence people’s behaviors and actions so that they match the organization’s vision. [Quartz]

When respondents’ transformations have fostered understanding and conviction about the changes being made, they are 3.2 times likelier than others to report outperforming their competitors.

On McKinsey.com

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The will to succeed. After years of McKinsey research on transformations, some persistent truths remain: a comprehensive approach to change is best, and the value at stake is incredibly high—and easy to lose. What partner Rajesh Krishnan and coauthors tested this year is how, and by how much, four broad elements (will, skill, rigor, and scope) can affect a transformation’s outcomes: not only whether the effort achieved and sustained performance improvements, but also whether it enabled the company to outperform its competition.

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Seven actions to take. The survey results indicate that when all four elements are implemented, it’s much more likely that an organization has outperformed its peers since its transformation began: 39% say so, versus 16% with one element in place. The results also point to seven specific actions—including role modeling, moving quickly, and striving for holistic impact—that are most likely to increase the odds of gaining a competitive edge. Consider the actions that can help set organizations up for transformation success.

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— Edited by Daniella Seiler, executive editor, Washington, DC

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 01:23 - 23 Oct 2023

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Change is hard. But it can also give companies a competitive edge.

The truth about transformation

In the news

When respondents’ transformations have fostered understanding and conviction about the changes being made, they are 3.2 times likelier than others to report outperforming their competitors.

On McKinsey.com