Insights

When it comes to implementing large-scale organisational change, the most successful organisations commit themselves fully to the effort from start to finish.

Many organisations embark on large-scale transformations, only to end with frustrated leaders and worse-than-expected long-term results. These efforts typically start with high aspirations and significant energy then lose an average of 42 percent of their expected value in the later phases of the transformation program, where the focus shifts to executing and sustaining change.

While many programs lead to disappointment, our research shows that success is attainable and that organisations that excel at implementation tend to outperform their peers financially. The research also indicates that the top-performing organisations—that is, the ones that achieved their transformation goals and sustained performance gains for at least three years—have several attributes in common. Specifically, these organisations are more likely than others to install a comprehensive, rigorous slate of implementation practices over the program’s life span. They also achieve most of their people-oriented transformation goals and commit enough resources to the effort.

At a glance

·  With transformations, long-term impact is rarer than one may think. While 56 percent of organisations have achieved most or all of their transformation goals, only 12 percent report that they have sustained these goals for more than three years.

·  Significant value is lost during the executing and sustaining phases. On average, 42 percent of the potential financial benefit from their organisations transformation is lost during the latter of five stages of a large-scale change effort.

·  There’s a big payoff for those who succeed with implementation. Respondents who say their companies have achieved their implementation performance goals and also sustained the transformation gains for more than three years report twice the rate of financial growth as their peers.

·  Commitment to executing and sustaining changes over time is crucial to seeing impact. Top-performing organisations are more likely than others to commit themselves to three implementation practices: maintaining implementation rigor in the later phases of the program; focusing on “people” goals, including employee experience and talent management; and devoting appropriate resources to every stage of the effort. In fact, those organisations that commit to all three areas are 3.4 times more likely than others to achieve and sustain their performance gains for more than three years.

The value of getting implementation right

Among leaders who have led or participated in a transformation within the past five years, only a little more than half (56 percent) say their companies’ transformation programs were able to accomplish most or all of their performance goals—at least initially. The picture looks even bleaker when asked how long they sustained these performance gains: only 12 percent say their organisations were able to sustain them for more than three years.

For those who do succeed in accomplishing their goals, there appears to be a big payoff. Those who had achieved their implementation performance goals and managed to sustain the transformation gains for at least three years (those who we call the “top performers”) are more likely to report above-average financial growth: an average of 11 percent compound annual EBIT growth over the past five years, compared with an average of 5.3 percent among other organisations.

Top performers know the long road ahead

So what sets these top performers apart from the pack? This is a question that countless executives continue to ask as they push to make a transformation’s initiatives, and their impact on the organisation, hold up over time.

When we look at top-performing transformations, a pattern emerges. These programs are much more likely than others to demonstrate three critical long-tail implementation practices that appear to dramatically improve their odds of success.

1.  Maintain implementation rigor across the program’s later stages. From start to finish, top-performing transformations are more likely to say their senior leaders model the importance of the program through their active engagement and continual presence. Top-performing transformations also are more likely to foster a spirit of continuous improvement to adapt to changing market conditions. They maintain a steady drumbeat of progress by embedding the project management or transformation office deep into the structure of the organisation, and they keep the organisation energised by aligning performance incentives with the goals of the program.

2.  Use the program to upgrade their talent. They are more likely to seek out their best talent for mission-critical roles—and use the transformation as an opportunity to identify and promote new talent across the organisation. They tend to invest in capability building across the organisation, using the later stages to lock in new leadership, technical, and functional skills. Organisations that achieved most of their “people” goals in a transformation were twice as likely as other organisations to sustain those goals for more than three years.

3.  Invest the right resources in every stage. Top performers are more likely than others to make their transformation a priority over other possible investments. They deploy their best people in critical program roles and provide the right level of financial support to foster a sustainable impact. They also keep the organisation’s focus on minimising the loss of value throughout a long transformation journey and use strategic resourcing to maintain pace and momentum.

In the realm of large-scale organisational transformations, success is not just an initial achievement but a sustained commitment. Our research underscores that while many organisations embark on transformation journeys with high aspirations, only a minority—12 percent—sustain their goals for more than three years.

The top-performing organisations, characterised by financial outperformance and sustained transformation gains, share a commitment to rigorous implementation practices, a focus on people-oriented goals, and the allocation of adequate resources throughout the transformation journey. Achieving long-term impact demands steadfast dedication to maintaining rigor, upgrading talent, and strategic resource deployment across every stage of the transformation process.