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How to beat the transformation odds
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McKinsey analyzed hundreds of transformations to isolate four indicators of success.
What works
Silos don’t just show up in org charts—they take hold of minds and thinking.
Siloed stupid
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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.
The numbers behind successful transformations
Article – McKinsey Quarterly
What fails
First, the context: Three out of four transformations fall short.
Transformation with a capital T
Article – McKinsey Quarterly
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Go for extraordinary
The fourth indicator aspires to more than what seems possible at the start.
In this edition:
The changeable organization
What does it take to transform corporate organizations? New research reveals the variables that matter most.
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.
Share of transformation value achieved by top-quartile companies during first year, %
3 months
Time elapsed since launch
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.
Go for health
The third indicator commits your transformation to the health of your organization, which nearly doubles the excess TRS created.
Success rate of transformations,
% of respondents
74%
Failure
26%
Success
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.
The numbers behind successful transformations
Article – McKinsey Quarterly
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~40%
of transformation value comes from growth initiatives
The numbers behind successful transformations
Article – McKinsey Quarterly
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The numbers behind successful transformations
Article – McKinsey Quarterly
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6 months
9 months
12 months
Transformation with
a capital T
Article – McKinsey Quarterly
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28
57
66
74
health of your organization
140
130
120
110
100
90
135
118
100
Health measures fully implemented
Health measures not fully implemented
Selected index
The numbers behind successful transformations
Article – McKinsey Quarterly
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6
9
12
15
18
Months