Changing change management

Research tells us that most change efforts fail. Yet change methodologies are stuck in a predigital era.
It’s high time to start catching up.

Change management as it is traditionally applied is outdated. We know, for example, that
70 percent of change programs fail to achieve their goals, largely due to employee resistance
and lack of management support. We also know that when people are truly invested in change
it is 30 percent more likely to stick. While companies have been obsessing about how to use
digital to improve their customer-facing businesses, the application of digital tools to promote
and accelerate internal change has received far less scrutiny. However, applying new digital
tools can make change more meaningful—and durable—both for the individuals who are
experiencing it and for those who are implementing it.
The advent of digital change tools comes at just the right time. Organizations today must
simultaneously deliver rapid results and sustainable growth in an increasingly competitive
environment. They are being forced to adapt and change to an unprecedented degree: leaders
have to make decisions more quickly; managers have to react more rapidly to opportunities and
threats; employees on the front line have to be more flexible and collaborative. Mastering the art
of changing quickly is now a critical competitive advantage.
change 2For many organizations, a five-year strategic plan—or even a three-year one—is a thing of the
past. Organizations that once enjoyed the luxury of time to test and roll out new initiatives must
now do so in a compressed period while competing with tens or hundreds of existing (and often
incomplete) initiatives. In this dynamic and fast-paced environment, competitive advantage will
accrue to companies with the ability to set new priorities and implement new processes quicker
than their rivals.

The power of digital to drive change
Large companies are increasingly engaged in multiple simultaneous change programs, often
involving scores of people across numerous geographies. While traditional workshops and
training courses have their place, they are not effective at scale and are slow moving.
B2C companies have unlocked powerful digital tools to enhance the customer journey and
shift consumer behavior. Wearable technology, adaptive interfaces, and integration into social
platforms are all areas where B2C companies have innovated to make change more personal
and responsive. Some of these same digital tools and techniques can be applied with great
effectiveness to change-management techniques within an organization. Digital dashboards
and personalized messages, for example, can build faster, more effective support for new
behaviors or processes in environments where management capacity to engage deeply and
frequently with every employee is constrained by time and geography.
Digitizing five areas in particular can help make internal change efforts more effective
and enduring.

1. Provide just-in-time feedback
The best feedback processes are designed to offer the right information when the recipient can
actually act on it. Just-in-time feedback gives recipients the opportunity to make adjustments to
their behavior and to witness the effects of these adjustments on performance.
Consider the experience of a beverage company experiencing sustained share losses and
stagnant market growth in a highly competitive market in Africa. The challenge was to motivate
1,000-plus sales representatives to sell with greater urgency and effectiveness. A simple SMS
message system was implemented to keep the widely distributed sales reps, often on the
road for weeks at a time, plugged into the organization. Each rep received two to three daily
SMS messages with personalized performance information, along with customer and market
insights. For example, one message might offer feedback on which outlets had placed orders
below target; another would alert the rep to a situation that indicated a need for increased
orders, such as special events or popular brands that were trending in the area. Within days of
implementing the system, cross-selling and upselling rates increased to more than 50 percent
from 4 percent, and within the first year, the solution delivered a $25 million increase in gross
margin, which helped to swing a 1.5 percent market-share loss into a 1 percent gain.

2. Personalize the experience
Personalization is about filtering information in a way that is uniquely relevant to the user and
showing each individual’s role in and contribution to a greater group goal. An easy-to-use
system can be an effective motivator and engender positive peer pressure.
This worked brilliantly for a rail yard looking to reduce the idle time of its engines and cars by
up to 10 percent. It implemented a system that presented only the most relevant information
to each worker at that moment, such as details on the status of a train under that worker’s
supervision, the precise whereabouts of each of the trains in the yard, or alerts indicating
which train to work on. Providing such specific and relevant information helped workers clarify
priorities, increase accountability, and reduce delays.

3. Sidestep hierarchy
Creating direct connections among people across the organization allows them to sidestep
cumbersome hierarchal protocols and shorten the time it takes to get things done. It also
fosters more direct and instant connections that allow employees to share important
information, find answers quickly, and get help and advice from people they trust.
In the rail-yard example, a new digital communications platform was introduced to connect
relevant parties right away, bypassing middlemen and ensuring that issues get resolved quickly
and efficiently. For example, if the person in charge of the rail yard has a question about the
status of an incoming train, he or she need only log into the system and tap the train icon to
pose the question directly to the individuals working on that train. Previously, all calls and
queries had to be routed through a central source. This ability to bridge organizational divides is
a core advantage in increasing agility, collaboration, and effectiveness.

4. Build empathy, community, and shared purpose
In increasingly global organizations, communities involved in change efforts are often physically
distant from one another. Providing an outlet for colleagues to share and see all the information
related to a task, including progress updates and informal commentary, can create an
important esprit de corps.
Specific tools are necessary to achieve this level of connectivity and commitment. Those
that we have seen work well include shared dashboards, visualizations of activity across
the team, “gamification” to bolster competition, and online forums where people can easily
speak to one another (for example, linking a Twitter-like feed to a work flow or creating
forums tied to leaderboards so people can easily discuss how to move up in the rankings).
This approach worked particularly well with a leading global bank aiming to reduce critical
job vacancies. The sourcing team made the HR process a shared experience, showing all
stakeholders the end-to-end view—dashboards identifying vacancies; hiring requisitions made
and approved; candidates identified, tested, and interviewed; offers made and accepted;
and hire letters issued. This transparency and openness built a shared commitment to getting
results, a greater willingness to deliver on one’s own step in the process, and a greater
willingness to help one another beyond functional boundaries.

5. Demonstrate progress
Organizational change is like turning a ship: the people at the front can see the change but the
people at the back may not notice for a while. Digital change tools are helpful in this
case to communicate progress so that people can see what is happening in real time. More
sophisticated tools can also show individual contributions toward the common goal. We have
seen how this type of communication makes the change feel more urgent and real, which in
turn creates momentum that can help push an organization to a tipping point where a new way
of doing things becomes the way things are done.

Digital tools and platforms, if correctly applied, offer a powerful new way to accelerate and
amplify the ability of an organization to change. However, let’s be clear: the tool should not drive
the solution. Each company should have a clear view of the new behavior it wants to reinforce
and find a digital solution to support it. The best solutions are tightly focused on a specific task
and are rolled out only after successful pilots are completed. The chances of success increase
when management actively encourages feedback from users and incorporates it to give them a
sense of ownership in the process.

Sourece: McKInsey.com, July 2015
Authors: Boris Ewenstein, Wesley Smith and Ashvin Sologar
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