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read the Five …
First, the context: Three out of four transformations fall short.
What fails
What does it take to transform corporate organizations? New research reveals the variables that matter most.
The changeable organization
In this edition:
How to beat the transformation odds
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How to beat the transformation odds
The numbers behind successful transformations
The numbers behind successful transformations
Article – McKinsey Quarterly
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A quick briefing in five—
or a fifty-minute deeper dive
Go for growth
The first indicator relates to the scope of your transformation. Growth can be as transformative as cost cutting, if not more so.
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The numbers behind successful transformations
The numbers behind successful transformations
Article – McKinsey Quarterly
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How to beat the transformation odds
How to beat the transformation odds
What works
McKinsey analyzed hundreds of transformations to isolate four indicators of success.
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Go for fast
The second indicator requires a quick sprint at the start, turning the initial burst of ideas into an achievable, rigorous plan within a few short months.
Go for health
The third indicator commits your transformation to the health of your organization, which nearly doubles the excess TRS created.
Transformation with a capital T
Transformation with a capital T
Article – McKinsey Quarterly
74%
Failure
26%
Success
Success rate of transformations,
% of respondents
Scope matters
Successful efforts cut across business units and functions, target both the top and bottom lines, and engage a substantial share of the workforce.
Speed wins
Quick victories fund longer-term ambitions.
Health rules
Clear and measurable organizational-health targets matter as much as financial objectives.
Stretch targets
Setting transformation targets at 75 percent or higher of trailing earnings increases your chances of outsized TRS gains.
~40%
of transformation value comes from growth initiatives
The numbers behind successful transformations
The numbers behind successful transformations
Article – McKinsey Quarterly
Dive deeper
28
57
66
74
3 months
6 months
9 months
12 months
Time elapsed since launch
Share of transformation value achieved by top-quartile companies during first year, %
The numbers behind successful transformations
The numbers behind successful transformations
Article – McKinsey Quarterly
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135
118
100
Health measures fully implemented
Health measures not fully implemented
Selected index
140
130
120
110
100
0
3
6
9
12
15
18
Months
90
health of your organization,
The numbers behind successful transformations
The numbers behind successful transformations
Article – McKinsey Quarterly
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Go for extraordinary
The fourth indicator aspires to more than what seems possible at the start.
Transformation with a capital T
Transformation with a capital T
Article – McKinsey Quarterly
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Set targets high
Goals that are two to three times a company’s initial estimates of its potential are routinely achievable—not the exception.
Take the leap
Step outside self-imposed constraints to define what’s truly achievable. A single self-confident leap outperforms a series of incremental steps.