When it comes to transformation, more employees owning initiatives leads to better results.
New research from McKinsey & Company finds that while the average organization involves 2% of its employees as initiative owners in a transformation, 7% is the tipping point for better results. When at least 7% of employees own part of the transformation, the organization is twice as likely to have positive excess total returns to shareholders (TRS) as those that involve a smaller share. What’s more, the researchers found that as employee involvement increases, the average excess TRS rises as well.
Why 7%? When 7% of employees own part of the transformation, transformation-initiative owners can no longer be ignored, and employees realize that the transformation is not a distant project but rather a fundamental change in how they work.
In addition to identifying the number of people needed in a transformation, the research also highlighted the need for alignment on a higher purpose in driving change. Specifically, the researchers found that employees are more likely to rally around transformation initiatives that are purpose-driven and personalized than they are to rally around transformation initiatives focused on financial targets.
The research is reflective of how we work with our clients to drive successful transformation. We have seen the value of engaging the organization, employees owning the process, and aligning and energizing the organization in our work.
Let’s take the example of a global packaging company.
The interim president of a global packaging company’s beauty and personal care division faced mounting market pressures and obstacles, including an absence of operating mechanisms and a lack of trust among the leadership team.
To transform the organization, Brimstone began by taking the division’s leadership team through Strategy and Leadership Team Alignment. Strategy and Leadership Team Alignment is Brimstone’s proven methodology to help organizations gain – and sustain – the coordination, collaboration, and clarity that deliver results. It is designed to align the leadership team by clarifying strategy, setting the stage for strategy implementation by engaging and aligning the organization, and driving the leadership team to high performance.
Strategy and Leadership Team Alignment helped the leadership team to increase trust, establish operating mechanisms, and unify the group around a single strategic view of the division and its future. As part of Strategy and Leadership Team Alignment, Brimstone facilitated the leadership team’s process to create a Strategic Business Framework.
The Strategic Business Framework outlines objectives and measures and, more importantly, prioritizes the strategic imperatives and outlines what the team needs to do to succeed. The Strategic Business Framework ensures the entire team owns the strategy and that the organization is engaged in the process.
The leadership team then went through Brimstone’s Business Acceleration Teams. Business Acceleration Teams address the most critical issues facing the organization while changing the way people work and developing new leadership capabilities.
As part of Business Acceleration Teams, the team conducted an extensive calendar management exercise. The exercise focused on scheduling and prioritization. Through the work, it was clear that the team did not have enough days in the week to do everything they were trying to do.
The division was successful in its transformation initiative by engaging and energizing employees, giving employees ownership of the process, and focusing on alignment.
The division prioritized specific segments of the business. As a result, within one year, sales in these segments grew by 9%. This was driven by the radical improvement in the division’s alignment, trust, and team performance, as well as clarification of roles and the establishment of ground rules and operating mechanisms.
What’s more, the division reduced emphasis on less profitable business segments and then later sold these segments.
The interim president summarized the transformation: “Consultants tend to go into an organization and say, ‘this is the answer.’ This approach doesn’t work. ‘The answer,’ typically sits on the shelf and change does not happen. Brimstone takes a different approach. Brimstone works with leaders and with organizations. The Brimstone process is built on engagement and on multi-level feedback. It truly involves the entire team. The result is lasting transformation.”