Establish Strong Governance

A strong governance structure will enable change efforts to remain coherent, coordinated, and actively managed during the Act stage. Change programs with a governance structure that provides clarity regarding roles and responsibilities are 6.4 times more likely to be successful.² While the governance should be tailored to context, the vast majority of successful programs include the following four elements: an executive steering committee, change management office, executive sponsors, and initiative owners and their teams.

1. An executive steering committee (ESC) is typically made up of the most senior leader and a senior executive team (or their equivalents if a change effort is taking place lower in the organization).³ The ESC owns the overall direction for the change program and makes critical ongoing decisions such as approving changes in execution plans, reallocating resources, resolving issues across initiatives, and reshaping the portfolio of initiatives over time. This body is also the ultimate authority for holding those involved in the change program accountable for results. It should also frequently and openly communicate progress and success during the Act stage. Programs where the ESC plays this role are a whopping eight times more likely to be successful than those where it doesn’t.⁴
2. The change management office (CMO) is charged with coordinating the overall program, tracking its progress, and ensuring that issues are followed up on and resolved. Its role also involves facilitating transparent and effective interactions between the ESC and all relevant initiatives. The CMO sometimes assists with implementation by brokering the sharing of best practices across the portfolio and acting as a consultant and thought partner to initiative teams. It seldom leads initiatives itself except in rare cases where there is no natural owner for them elsewhere. The CMO typically has a full-time senior leader in charge of it who is responsible for the overall change program. Reporting to the role are one or more communications and change leads and an implementation monitoring role (tracking activities, metrics, budgets, and impact) at minimum.
3. Executive sponsors (ES) provide guidance, judgment, and leadership to initiative teams by reviewing progress, suggesting and validating changes to execution plans as more is learned, and keeping a tight focus on business impact. They may be members of the ESC or senior leaders a level down who have direct-line ownership of a particular initiative (or bundle of thematically related initiatives). Whereas the ESC looks to optimize the full portfolio of initiatives, the ES role looks to maximize the impact of a particular initiative.
4. Initiative owners (IO) and their teams are responsible for executing the initiative plans and delivering the desired impact. Team members are typically from the line, but may also include representation from staff functions. IOs will typically have been involved in formulating their initiative charter; identifying resources, operating expenses, and capital requirements; determining the scale-up approach; and developing timelines and milestones (as described in the previous sections). They operate as “task and finish” teams and should be constituted to be able to do both the problem-solving and people-solving required for impact.

Within this structure, accountability for impact should rest as far as possible with line management and be built into the relevant budgets. We use the cheesy-sounding formula BBB—“benefits baked into budgets”—as a reminder that no aspect of a change program is complete until its benefits have been fully reflected in the relevant budgets. This also helps ensure that the CMO provides support and oversight, but the line retains full ownership for impact.

Getting governance right pays big dividends. Programs that are characterized by clear roles and responsibilities are six times more likely to be successful than those that aren’t and programs that have effective CMOs are twice as likely to be successful as those that don’t.⁵

To see how the governance model comes together, consider the case of a retailer that was restructuring its global operations. It had embarked on the change program in the wake of three consecutive quarterly losses, and after an OHI survey had identified numerous health issues, the CEO set up an ESC comprised of senior leaders from both the retailer and its parent company.

The retailer then created a CMO and asked the widely respected senior manager of the most profitable business line to head it up. He promptly enlisted a top performer from his own department as well as two highly regarded middle managers from other departments to be part of the CMO’s staff. He also hired an external change expert and a retail turnaround specialist to work on the project so that best-in-class advice would be readily at hand. Otherwise the staffing of the CMO was kept light to ensure that it didn’t become a permanent structure within the organization or prevent project ownership from lying where it should, with the initiative teams and with line management.

Each initiative in the program had a clear IO and an ES who supported both the IO and CMO in ensuring that the relevant initiative team was fully committed to delivering against targets and had the resources it needed to do the job. The initiative team also included on the team a “project amplifier” whose role was to propagate the initiative at grassroots level and relay the concerns of the wider organization back to the initiative team.

Adopting such a clearly structured ownership model helped the retailer to reorganize its 75,000-strong workforce and cut costs by 12 percent within six months. The company also saw significant improvements in its health across the board. The light yet robust program structure proved easy to dismantle, and the responsibility for continuing to deliver and track the ongoing initiatives and generate continuous improvement was then placed firmly in the hands of the business.

Choose Scale-Up Methods

For the vast majority of initiatives, the Act phase will involve a “test, learn, and scale-up” approach to implementation. This approach makes eminent business sense: when you try out a prototype in a pilot location, you can learn from it and refine your approach before you start rolling it out more widely. If things go well, successes can be replicated elsewhere; if things go awry, you can confine mistakes to a small area and limit any damage. Early results also help to build people’s appetite for change, smoothing the way for full-scale implementation. Too often, though, organizations are impatient to get a pilot under their belt, so they press on with the rest of the implementation. Be warned that driving it too fast or without sufficient care and attention can quickly lead to unintended consequences.

Consider the experience of Achmea, a large Netherlands-based insurance group. Spurred on by radical reforms in the healthcare market introduced by the Dutch government, it launched a change program in the health division. One of the most important initiatives was a call center transformation aimed at achieving a 25 percent gain in efficiency while improving customer experience at the same time. The initial pilot was a huge success and was celebrated as showing tough targets could be met. Before long, though, they ran into a roadblock: the approach taken by the manager who led the effort was hard to replicate elsewhere because he had achieved the changes through his personal influence, rather than by introducing systems to support the desired shifts. As Jeroen van Breda Vriesman, the former leader of the health division, wryly admitted: “We couldn’t duplicate the improvement achieved by the manager who did it on his own.”⁶

Achmea’s experience provides an important lesson: a successful pilot doesn’t necessarily make for a successful rollout. To be robust, the pilot phase should consist of not one but two tests—a double pilot. The first pilot is a proof of concept designed to establish whether the idea you are testing truly creates value. The second pilot is a proof of feasibility designed to test the robustness of the rollout approach, ensuring that the bulk of the desired impact can be captured in a way that is fully replicable. The end products from this pilot are not only the desired impact, but a fully codified, industrial strength, easy-to-deploy approach to roll out. Often this second pilot is also used to “train forward” those people who will lead the rollout in subsequent waves of implementation. In Achmea’s case, this lesson was well learned, ultimately leading to a multi-year programmatic rollout so successful it hosts visits from other company executives looking to learn from, and replicate, their methodologies.

As Aristotle described, “Well begun is half done,” and the double pilot approach ensures you’re on the right path. To get to “done,” however, there is still the actual scale-up. After carrying out detailed reviews of dozens of successful implementation programs and observing hundreds at a distance, we’ve identified three broad “flavors” for scaling up change program initiatives (Exhibit 6.1). The three models are linear, geometric, and “big bang”:

1. In linear scale-ups, the second pilot (proof of feasibility) is replicated in one area after another across the organization. In this approach, the next area isn’t started until the previous area is done. This approach is the best choice if: an initiative is to be rolled out in only a few areas; capable team members are in short supply; the company is not facing a crisis; the stakes (risk or rewards) are high; deep, expert-led dives are needed; there is strong resistance to change; and the toolkit and solutions being used need extensive customization.
2. In geometric scale-ups, implementation takes place in waves, with each successive wave much bigger than the last (say, two sites in the first wave, four in the second, 16 in the third, and so on). This approach makes sense if: multiple areas share a few common features; many areas need to be transformed and a linear approach would take too long; capable implementers are readily available; and the organization has the capacity to absorb the changes.
3. In “big bang” scale-ups, implementation takes place across all relevant areas at once. It takes many resources, but only for a relatively short time. This approach makes sense if: multiple areas share many common features; the need for transformation is urgent; little resistance is expected (or an appetite for change already exists); a standard toolkit and approach can be employed.

A multinational energy company, for example, used the linear approach to roll out a unified people-management software system that was replacing an array of freestanding national systems. Senior management were aware that if they switched to the new software in all their global operations in one go, or even if they proceeded on a regional basis, they might create serious technical repercussions and overload the project team with demands for troubleshooting. Since changing to the new software would be a major shift, the company also wanted to ensure that all its country-level organizations would buy into the effort, and that any concerns that might emerge at one location could be fully addressed before the rollout moved on to the next. In addition, implementation called for considerable support from an external provider that had limited resources to devote to the effort.

The same company chose a geometric approach when implementing its new global procurement strategy. By conducting an analysis of vendor relationships, it had uncovered similarities between markets in terms of buying patterns, levels of procurement sophistication, and vendor choice. Grouping markets that shared these similarities into clusters would enable it to increase its leverage with vendors. Once it had identified these clusters, it used the geometric approach to roll out the project within individual regions and countries. This enabled the procurement teams to get up to speed quickly, allowed approaches to be refined as the effort progressed, and ensured that cost savings could be captured from an early stage.

Yet another of the energy company’s initiatives related to a revamping of its public relations processes. It had recently come out of a crisis situation that it hadn’t been equipped to handle due to the decentralized approach to managing its public image. As a result, one of the change program initiatives was to centralize all of its public relations and stakeholder management efforts, roll out a new set of policies and guidelines, and conduct a company-wide (all geographies, all business units) push to ensure the general public and key stakeholders were aware of the changes being made at the company to improve transparency and accountability. A big bang approach was taken to implementation, enabling it to be fully executed during a two-month period.

Since our first edition, a buzzword related to how to test and learn has become prominent in the management lexicon: agile. For those not familiar with them, agile teams have their genesis in the world of software development where largely self-organizing and cross-functional teams integrate requirements and solutions in collaboration with end users. Agile teams are highly empowered, are ultimately held accountable for outcomes, and the means to achieve those outcomes aren’t dictated to them. Scaling via the deployment of agile teams is well-suited for working on complex problems in dynamic environments where close collaboration with end-users is feasible. They are less suited for initiatives related to more routine operations (e.g., purchasing, accounting, de-layering).

There is some speculation that agile working methods will spell the end of traditional hierarchies and become the predominant management philosophy by which organizations are run. We’re not convinced. Even those enterprises most known for employing agile methodologies—for example, Google, Amazon, Spotify, Netflix, Bosch, Tesla, SAP, Salesforce, Saab, and so on—still choose to operate with a mix of agile teams and traditional structures.⁷ In the words of Columbia Business School professor Rita Gunther McGrath, “On the one hand, [growth companies are] good at experimentation [and] can move on dime. On the other hand, they’re extremely stable.”⁸ Regardless, if an organization is thinking about embarking on a change program to shift its overall management approach from one of a traditional hierarchy to self-governing agile teams, we’d point out that it’s got the highest probability of successfully making such a change if it employs the Five Frames of Performance and Health approach to do so!

Monitor Progress and Dynamically Adjust

To enable the governance model to work effectively and to monitor test, learn, and scale-up impact, the CMO needs to play an integrative measurement and planning role. A foundational part of this role is the rigorous tracking of progress and impact through clear metrics and milestones. Change programs characterized by this are 7.3 times more likely to succeed.⁹ This role is akin to the role your car’s onboard computer plays while driving, which reports back to you how the vehicle is functioning—speed, fuel, engine temperature, oil pressure, tire pressure, and so on.

There is more to the CMO’s role than just monitoring, however. As Julio Linares, former managing director and COO of Telefónica de España, warns: “The market is going to change constantly, and because of that you need to make a constant effort to adapt to the market. Of course, some parts of the program will end, but new ones will come up.”¹⁰ Let’s extend the driving analogy. Even with the best-laid plans and a well-functioning vehicle, a long journey seldom goes as you expect. The weather changes without warning, heavy traffic holds you up, roadworks prompt a detour, and after all that, you need a break. Even with a sound on-board computer in your vehicle, imagine such a drive in the pre-mobile phone era—this volatility could set your arrival back by days. Today, your satellite navigation plans ahead to let you know which detours to make, and your mobile phone allows you to call ahead and rebook whatever is needed all while driving. By this analogy, the CMO needs to play the role of both the vehicle’s on-board computer and the mobile phone with satellite navigation. When this is done well, change programs are 4.6 times more likely to succeed.¹¹

What does this look like in practice? To start with, in the wry words of N. R. Narayana Murthy, former chairman of Infosys, “In God we trust; everybody else brings data to the table.”¹² Managing the program dynamically depends on good data. You have to be clear from day to day how much progress you’ve made against your plans. That means regularly measuring the impact of your change program on at least four key dimensions (Exhibit 6.2):

• Initiative progress. Track progress not just in terms of time (milestones) and budget (money spent versus planned), but also against key operational performance indicators (e.g., cycle time, waste, wait times, quality).
• Health impact. Are management practices and their underlying mindsets and behaviors shifting to support the improvements in performance that you want to see? Targeted analytics, surveys, focus groups, and observation can give you a good read. Note that in Chapter 10, we provide more detail on how to measure health improvements over time, given it’s an area in which many leaders have less experience.
• Performance impact. Measure key business outcomes such as revenue, cost, and risk to confirm that improvements are happening where you expect and not causing unforeseen consequences elsewhere in the organization.
• Value creation. Keep a constant eye on the ultimate outcome that matters. In large-scale company-wide change programs, this measure is shareholder value creation. In not-for-profit and governmental organizations, it is likely related to other stakeholders. Whatever the ultimate measure for your change program, it’s vital to have a clear-eyed view of the ultimate outcome that matters most amidst all of the other data.

The specific metrics that should be monitored within each of these dimensions will be unique to your change program. That said, we warn that less is more. Too often, change-program metrics cascade into an unwieldy number of complex permutations. An analysis of all of the data in McKinsey & Company’s WAVE tool, an automated change-program-management solution used by thousands of companies globally, shows that only 29 percent of the metrics organizations claim to follow are actually used in the management of the effort. The rest become statistical noise, increased bureaucracy, and even a source of confusion and waste in the process.

Once you have the right metrics in place, the next question to answer is how often to measure and review them? The answer is also context-specific. That said, as a rough guide in large-scale change programs, initiative measures should be reviewed weekly by initiative teams, health and performance monthly or quarterly by sponsors and steering committees, and enterprise value once or twice a year by everyone involved in the change program. Reviews should serve two purposes. One is to enable you to enforce accountability, identify issues, and determine remedies. The other is to identify best practices to share, spotlight successes to celebrate, and instill a culture of continuous learning and improvement.

Even though every major initiative planned in the Architect stage will have a solid business case, robust set of execution milestones, and monthly schedule for expected value captured on the bottom line, you should anticipate that a number of initiatives will run into trouble somewhere during the Act stage of the journey. Based on the data in McKinsey & Company’s WAVE tool, 28 percent of well-planned initiatives don’t deliver the results forecasted. This means that during the journey, you can count on the fact that new ideas will need to be generated and initiatives be stood up along the way. It’s the CMO’s role to ensure the required adjustments to the program are made in a timely manner to assure the overall aspiration will be achieved. This will mean shutting down some planned initiatives, launching new ones (ensuring health is hardwired into them), and reallocating resources accordingly.

We’ve talked about how the expected impact from initiatives plays out in the Act stage, but what about the timing? Our data shows that, on average, 31 percent of initiatives will have their execution end date changed once during the lifecycle of the initiative, 28 percent will see it happen twice, and 19 percent three times. The CMO’s role is to ensure these changes happen for the right reasons, are decided on early (no last-minute delays or surprises), and rigorous problem-solving is applied to get things back on track. This is one of the reasons we advocate that initiative metrics be monitored weekly—regardless of whether there is a major milestone, asking for brief updates on progress and offering support often enables potential issues to be identified early, which is when they can be solved with minimal effort. With even five minutes of discussion, we’ve seen well-facilitated discussions enable initiatives to go from “red” (meaning they are at high risk of falling behind) to “green” (indicating a forecast of smooth sailing ahead). ¹³

Mobilize Influence Leaders

As we mentioned in our discussion of role modeling in Chapter 5, senior leaders aren’t the only ones that employees take cues from. There are influence leaders deep in the organization that, if they are excited about and on board with the change program, can have a disproportionate effect on the energy levels of everyone else.

Influence leaders are people who, regardless of their official title or status, have a wide circle of personal contacts who respect and emulate them. Journalist, author, and public speaker Malcolm Gladwell’s best-selling book, The Tipping Point, describes three types of influencers: the “Mavens” are discerning individuals who accumulate knowledge and share advice; the “Connectors” are those who know lots of people; the “Salespeople” are those who have a natural ability to influence and persuade others. All of these types can be powerful energy and impact generators in your change program. As we mentioned in Chapter 5, our research indicates change efforts that engage influence leaders to help motivate employees are 3.8 times more likely to be successful.¹⁵

To illustrate how influence leaders can have disproportionate impact, consider the example of doctors and NGOs working on a change program related to maternal healthcare in sub-Saharan Africa. None of the interventions they had been pursuing via traditional campaigns, such as doctors and pamphlets, were working. Taking the influence leader lens, they realized that hairdressers were extremely influential amongst the target group of young women. As it turned out, one of the few places women felt they could talk to other women openly about such matters was at the hair salon. Knowing this, the doctors and NGOs focused their education campaign on hairdressers—and the message finally got through as hairdressers spread the story.

Another example comes from our work in the sawmills in Northern Canada. During the Act stage, as part of a lean operations implementation, we were helping frontline supervisors run their daily huddles differently (using data and visual boards). Although doing so led to improvements, there was little excitement for the new approach and it was clear that sustainability was in jeopardy. We made sure the chain of command, everyone from the mill manager to the department heads, was sending the right messages and role modeling accordingly. Employees had been educated on the new methods, as well, so they knew what to do. Management suggested we discuss the approach with the union leaders, which we did, but still met with limited cooperation.

What we hadn’t appreciated was that a big part of the local workforce came from the nearby First Nation community who were indigenous to the area. For them, the social hierarchy was more important than the company’s formal hierarchy, and it turned out one of the forklift operators in the yard was the local Chief. He hadn’t yet been involved in the process given the nature of the geometric scale-up method chosen at the mill, and as such hadn’t given his approval to the new working methods. On knowing this we met with him, explained the methodology and rationale, got his guidance on the process, and within days the new practices were broadly adopted.

Our Canadian experience shows that influencers are sometimes hidden. So how do you find such influence leaders? An analytical technique known as social network analysis (SNA) can be used to help identify who they are and who they influence. A fairly simple application of a SNA is referred to as “snowball sampling.” The snowball approach is based on a simple survey technique used originally by social scientists to study street gangs, drug users, and sex workers—hidden populations traditionally reluctant to participate in formal research. In that context, the method employs brief surveys (two to three minutes) that ask recipients to identify acquaintances who should also be asked to participate in the research. Thus, one name or group of names quickly snowballs into more, and trust is maintained, since referrals are made anonymously by acquaintances or peers rather than formal identification.¹⁶

In business settings, the methodology is easily adapted to better understand the patterns and networks of influence that otherwise operate below the radar. Organizations can construct simple, anonymous e-mail surveys to ask, for example: “Who do you go to for information when you have trouble at work?” or, “Whose advice do you trust and respect?” By asking employees to nominate three to five people (or more in very large organizations) who are also surveyed, executives can quickly identify a revealing set of influencers across a company. When the names of nominees start to be repeated—often, after only three to four rounds—the survey can end.

McKinsey’s proprietary Influencer tool uses the snowball methodology to identify influence leaders. Having used it in hundreds of client situations, we can say with certainty that leaders often find the results surprising, along the lines of our experience in the sawmills. For example, influencer patterns almost never follow the organizational chart. Yet most leaders we encounter feel they already have a good idea of who the influence leaders are in their organizations. Fortunately, there is empirical evidence from the Influencer tool to illuminate the truth—leaders are typically unaware of 40 percent of the key influencers in their organizations.

To illustrate further, a simplified network map is shown in Exhibit 6.4. It would have been impossible to identify Smith as an influence leader from the formal organization structure on the left. However, the network map shows the web of connections that make Smith the most influential person within the group, and thus the highest point of leverage for positive role modeling (or the highest point of vulnerability in the case of negative role modeling).

Once you’ve identified the influence leaders, there are many ways to get them mobilized. If you can get some of these people to participate in pilots or be early adopters of new tools and approaches, it can be very powerful. At the very least, you can create a two-way pipeline that provides early access to information and enables you to gather important feedback on the program as it is implemented. How does the frontline really feel? What do employees want more or less of? Where will be the most productive places to pilot? And so on. It is also ideal to bounce any new ideas to enhance implementation efforts off this group to ensure they will be as powerful as possible, as well as broadly accepted.

At the Australia and New Zealand Banking Group, commonly known as ANZ Bank, 180 influence leaders were identified. This group was charged on top of their day jobs to work with the CMO and with business leaders to ensure the company’s large-scale change program was executed successfully. One of the early experiences for these change leaders was to take part in a pilot of a workshop program to make the change program personal for leaders, something we describe in detail in the next section that can be an extremely powerful vehicle to mobilize change leaders.

Make It Personal for a Critical Mass

Victor Frankl, an Auschwitz survivor who went on to write Man’s Search for Meaning, wrote: “Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.” We find it helpful to use a shorthand version of Frankl’s quote to reflect this: S (stimulus) + T (how one chooses to think about the stimulus) = R (response). When it comes to making change happen at scale, this equation poses an interesting challenge.

Let’s think about what we’ve done so far in the Five Frames process. On one hand, we’ve named and reframed the underlying mindset shifts (the “T”) and related behaviors (the “R”) we want to see during the Assess stage. For a very select few employees, simply surfacing these shifts will be enough for them to choose to change. Most, however, will require more encouragement and proof points before they are willing to make different choices. What’s the reason why? Who else is on board? Do my incentives reinforce the shifts? Am I confident I’ll be successful? And so on. Therefore, in the Architect stage, we used the influence model to plan a host of changes to the work environment (the “S”) to reinforce the desired shifts.

There are three aspects of human behavior, however, that we still need to consider if we’re to maximize the chances of rapid, significant change. The first relates to the story of the monkeys and bananas from Chapter 4 that illustrated how mindsets created by one set of stimuli (the water jet) last far longer than the presence of the stimulus itself. The lesson here is that if we leave it to changes in the “S” to shift the “T,” we’ll very likely be waiting a long time. The second aspect is that changes to the “S” won’t impact everyone the same way. If one goes back to the opera house versus sports stadium metaphor, not everyone in a sports stadium chooses to act the same way, even though they are surrounded by the same environment.

The third aspect is perhaps the most vexing. It’s that the influence model itself relies in part on role modeling (in addition to fostering understanding and conviction, building confidence and skills, and putting in place reinforcing formal mechanisms), yet at the outset of the change program, the “S” to influence the first role models likely doesn’t yet exist. It’s their “T” and the related “R” that will become someone else’s “S,” but how can the process be kickstarted? Make no mistake; it’s a lot harder than simply asking leaders to think and behave differently. In fact, the single biggest barrier to rapid personal change is overcoming most leaders’ propensity to say, “Yes, that’s the problem. If only others would change their behaviors, we’d solve it.”

For example, at one company we asked leaders to estimate how much time they spent tiptoeing around other people’s egos: making others feel that “my idea is yours,” for instance, or taking care not to tread on someone else’s turf. Most said 20 to 30 percent. Then we asked them how much time people spend tiptoeing around their egos. Most were silent. This same phenomenon accounts for why in low-trust teams everyone can agree that’s the case, but each team member reports that they as individuals are trustworthy. Or why in self-professed bureaucratic organizations you’ll be hard-pressed to find anyone who identifies themselves as a bureaucrat or creating the bureaucracy that plagues progress.

What’s going on here? Psychology explains this dynamic as a very predictable, and very human “self-serving bias.” This is a similar phenomenon to the optimism bias we discussed in Chapter 3 that expects the best possible (versus most probable) outcome will emerge. In this case, however, it’s more personal in that it involves viewing one’s own actions favorably or interpreting events in a way that is beneficial to themselves. It explains why 88 percent of drivers rate themselves in the top 50 percent of safe drivers on the road.¹⁷ It’s why 25 percent of students rate themselves in the top 1 percent of the ability to get along with others.¹⁸ It’s also why when couples are asked to estimate their contribution to household work, the combined total routinely exceeds 100 percent.¹⁹ These are all statistical impossibilities, of course, and show that in many behavior-related areas, we as human beings consistently overestimate how much we are part of the solution, not the problem. The facts show role modeling change is one of these areas: on average a full 86 percent of leaders report that, “Leaders role model desired behavior changes,” whereas the same question asked of those that report to the leaders in question only receives a 53 percent average positive response.²⁰

If your efforts take direct action on leaders’ and employees’ “T” in addition to the “S,” change becomes faster, more reliable, and more significant. But are there any methods out there that can overcome the self-serving bias such that leaders and employees become aware of and fully commit to what they can and should change personally to role model and bring to life the desired mindset and behavior shifts, even while changes in their “S” are not yet in place? We’ve searched long and hard for ways to accomplish this efficiently and effectively.

Our journey has led us to have deep conviction regarding the application of what we call Personal Insight Workshops (PIWs). We’ve now conducted thousands of these workshops worldwide and have never been disappointed with the impact they have. Let’s explain what they are and why they work. PIWs most often take place offsite in small groups of 20 to 30 employees over 2–3 days. They are led by facilitators experienced in the principles of adult learning, knowledgeable in techniques developed in the field of human potential, and well-versed in applying the “U-process”—a social technology developed during a 10-year partnership between Generon Consulting, Otto Scharmer and Peter Senge from MIT, and the Society for Organizational Learning. This “U-process” involves three phases.

The first phase is called sensing (typically 30 percent of the workshop time is spent here). This typically involves a senior leader, who has already been through the workshop, telling both the company’s change story and his/her own. This opens the space for inspiration and learning. Next, the “hard facts” and specifics regarding the organizational context are shared to reinforce the tangibility of the story. Participants then have time to clarify their outstanding questions. Note that the nature and duration of the sensing phase differs greatly if an interactive story cascade (as described in the previous chapter) has already happened and the PIW is the next step of the journey. In some programs, however, the two are combined.

At this point, the session turns inward for the second phase, known as presencing (typically 40 percent of the workshop time is spent here). Here, participants explore their personal “iceberg” of behavior—what uniquely drives them as individuals (in terms of thoughts, feelings, beliefs, and needs). Questions are addressed through a series of interactive modules: When do I feel in “flow” and when do I move into fight, flight, or freeze responses? What triggers me into one state versus the other? Is there a way to remain at a point of choice instead of reactively responding? What new behaviors and outcomes would be possible if that was so? How would those new behaviors and outcomes create a more powerful personal legacy in the workplace, and how do they link to the bigger organizational change we’ve discussed?

These modules are structured to make participants aware of their personal orientation toward the fundamental underlying mindset shifts at play in the change program (e.g., victim to mastery, me to we, scarcity to abundance, fear to hope, and so on), and in doing so, generate personal insights unique to each leader in relation to how they can be the best role models and have the most impact possible (moving participants from being “unconsciously incompetent” to “consciously incompetent” in adult- learning terms).

With these questions answered, the PIW transitions into its third and final phase, known as realizing (typically 30 percent of the workshop time is spent here). Here, the participants make explicit choices about how their personal leadership mindsets and behaviors will shift and identify “sustaining practices” that will facilitate them acting on the insights they’ve had. They then reflect on their personal networks in the context of ensuring they will have the challenge and support they’ll need to stay the course coming out of the workshop. This support network also includes sub-groups from the workshop known as “mini-boards” (named in the spirit of them acting as a sort of personal board of directors) that are formed to provide peer coaching beyond the workshop—supporting the individual to move from being “consciously incompetent” to become “consciously competent.” Further, any collective action the group will take on behalf of the organization is discussed and decided upon. The session then closes with each individual sharing the insights they’ve had and the commitments they are making and, in doing so, are positively acknowledged by their colleagues.

PIWs have been applied successfully in contexts as wide-ranging as helping end Colombia’s civil war to helping frontline operations leaders fully embrace their role in leading a customer-experience change program. We acknowledge the approach sounds about as “soft” as any we’ve described in this book, but also know that these workshops have universally been met with rave reviews from organizations filled with the likes of Dutch engineers, American investment bankers, Middle Eastern government officials, and South Korean conglomerates. Example feedback includes: “The most valuable program I have ever been part of—this will take us to an entirely different level”; “Life-changing for me and transforming for the company”; “An eye-opening, intense and wonderful journey”; “We went deep and got real. I loved that we work on real issues and not general leadership theory”; and, “I know what they mean when they say corporate transformation requires personal transformation.”

Should every leader go through a PIW? While many organizations ultimately choose to put all their employees through them because of the profound impact they see from doing so, the vast majority of impact potential can be realized by putting a critical mass of leaders through the program. The exact number for a specific organization will differ somewhat based on how distributed their leadership model is, but a general rule of thumb from the social science of epidemiology (how ideas and patterns of behavior spread in a social network) is that once roughly 25 to 30 percent of leaders have been through the program, the shedding of the “if only they would change” mentality spreads to all leaders and is replaced by a profound sense of “if it is to be, it’s up to me.”²¹ One can see why this is the case if one recalls our previous point that any shift in an individual’s “T” influences the “S” of all those around them (i.e., it amps up the impact of the role modeling influence lever).

For leaders involved directly in planning and executing performance initiatives, the PIW experience is often integrated into a broader field and forum journey to build skills and confidence—like those we described in Chapter 5. For influence leaders, the experience is often part of a series of upskilling and engagement events that they participate in over time. As mentioned, this group is often the ideal pilot group for the PIW approach—if it’s not going to work for your organization, this group will let you know (or let you know what needs to change for it to have impact). And if they think it’s profoundly impactful, they’ll spread the word and get others excited, such that you’ll likely be hard-pressed to keep up with demand! In truth we’ve never had a pilot group go through the experience and report back a “Don’t roll this out” recommendation.

Not every successful change program we have seen uses PIW techniques, but at the same time in our experience every change program that has used this approach has been successful. In particular, when organizations are grappling with how to thaw what’s often referred to as “the frozen middle” (a change-resistant middle management layer), we’ve seen PIWs cut through like a hot knife through butter.

So powerful is this approach that McKinsey & Company has created a new business unit of its own that does nothing but deliver PIWs and related coaching. The business unit, named Aberkyn (a name with Celtic and Norse origins meaning where communities connect to their source), is a global group of over 100 expert workshop designers, facilitators, and coaches. Working with our McKinsey Academy group, Aberkyn is also in the process of enhancing the PIW process with data and analytics-driven approaches. For example, significant work is being done to incorporate the neuroscience of behavioral “nudges” (subtle interventions that guide choices without restricting them) to allow for more mass customization and embedding of PIW techniques across the entire workforce. No doubt those methods will be written about extensively in the third edition of Beyond Performance!

Even if not via the PIW methodology, if you’re leading a large-scale change program, we urge you by whatever means possible to catalyze a critical mass of leaders to make the change personal. If you don’t, you’ll very likely have a lot of leaders, no matter how well-intentioned, nodding in agreement with the changes you are saying are important but inside thinking those changes are everyone else’s to make but theirs. When 30 percent or more of your leaders know, are committed to, and act on the one thing that each one of them can do uniquely as individuals that will make the biggest impact toward achieving your performance and health aspirations, you’ll find yourself already a long way down the path to success!

We hope our explanation of the why, what, and how of PIWs has been compelling. That said, we often liken the PIW experience to that of tasting an apple. You can explain that it’s sweet, sharp, fresh, juicy, and so on, but if the person you’re talking to has never eaten an apple, they won’t fully “get” what it tastes like until they take their first bite. We therefore encourage change leaders to actually “taste the apple” and attend a PIW in order to decide if it should be part of their change leadership menu. We host a number of multi-client PIWs through the year expressly to enable leaders to do so.

We close by acknowledging that the “Make it Personal” approach may feel even softer to hard-nosed leaders than our treatment of mindsets in Chapter 4. Rest assured, however, that performance and health outcomes are ultimately unlocked. In the words of Frans van Houten, CEO of the multinational technology company Philips, when talking about the company’s application of the PIW process that was known internally as the Accelerate Leadership Program (ALP), “The beautiful thing is that when you take people through this and people have discovered where they have blind spots, they come up with a breakthrough action plan for themselves and for their teams, and productivity goes up in a wonderful way. I can correlate business performance with teams who have done this and teams that have not—it makes a real difference.”²²

Maintain High Impact, Two-Way Communications

The final element that change leaders should tend to with rigor and discipline in the Act stage is engaging the workforce in high impact, two-way communications. Change programs that make the organization feel engaged and energized through communications and involvement are four times more likely to succeed than programs that don’t do these things.²³ But, you may ask, haven’t we already won most of this battle by all of the “writing their own lottery ticket” work done in the first three stages of the change journey? Interestingly, all that work can create a problem in this stage—one that is up to you as the change leader to ensure doesn’t come to fruition.

Consider an experiment that involved a group of people divided into two sets, “tappers” and “listeners.”²⁴ Tappers were asked to drum out with their fingers the rhythm of a well-known tune such as “Happy Birthday to You.” Listeners had to guess what tune was being tapped. Once they knew what songs they would be tapping, the tappers were asked to predict what proportion of the songs their listeners would guess correctly. They predicted half. Over the course of the experiment, the actual result was just 2.5 percent. Only 1 person in 40 correctly identified the tune. What’s more, as the tappers tapped, they visibly became frustrated with their listeners. “How can they not get it? It’s so clear what this is,” they would think to themselves. Meanwhile the listeners remained bewildered as they continued to hear an unintelligible Morse-type code.

Why the huge gap between expectation and reality, and why was it such an emotive experience for the participants? It’s because once we know something, we find it incredibly hard to imagine not knowing it. It’s easy for us to hear the tune as we tap (and, conversely, it’s impossible for us to not hear the tune as we tap), but the listener hears only a sequence of apparently random beats. This phenomenon is known as “the curse of knowledge.”

We see the curse of knowledge playing out in change programs all the time. Leaders who know the story inside out and are passionate and excited to get on with making it reality assume incorrectly that other people will take it in quickly and see all the implications that they see. As with our tappers and listeners, that’s unfortunately not how it works. When people hear a story for the first time, they are so busy processing what they hear and trying to work out what it means that they can’t possibly appreciate all the nuances. More often than not, what leaders consider to be carefully crafted messages that make so much sense to them aren’t heard by employees as anything other than a string of seemingly disconnected ideas.

Having established that the curse exists, is there a way to break it? We suggest a combination of four approaches to do so: relentless repetition with the right mindset; repeating simple and memorable language; balancing “telling” with “asking”; and using multiple, well-orchestrated channels. It’s not rocket science, but that doesn’t mean it’s easy.

Firstly, leaders who have to tell and retell a story over and over again should remind themselves to approach it with a “beginners’ mind”—and not lose sight of what it’s like to tell and hear the story for the first time. As Alan G. Lafley, former CEO of P&G, notes, “Excruciating repetition and clarity are important—employees have so many things going on in the operation of their daily business that they don’t always take the time to stop, think, and internalize.”²⁵ Paolo Scaroni, who has led three Italian public companies through major change as CEO of Techint, Enel, and Eni, agrees as he indicates the key to successful communications is “repeat, repeat, and repeat … throughout the organization.”²⁶

The second way to ensure the message sticks is to coin and relentlessly repeat language that is simple and memorable. Consider Walmart’s “10-foot rule,” which reminds frontline employees of the company’s customer service aspiration: whenever you are within 10 feet of a customer, look them in the eye, smile, and ask how you can help. At Microsoft, at the end of every meeting the question is called as to, “Was that a growth mindset or a fixed mindset meeting?” This acts not just as a reminder of the desired shift, but also prompts the act of continuous learning that a growth mindset is meant to manifest. As Willie Walsh, former CEO of British Airways, explains, “The simpler the message, the easier it is to deliver. The simpler the message, the more likely it is to be consistent. The simpler the message, the easier it is to control and manage the communication.”²⁷

The language not used can be just as powerful as that which is. When Australian telecommunications and media company Telstra wanted to improve internal collaboration, it banned people from using the word “they” in conversations about other teams and units to remind employees to work as one organization. Posters proclaiming, “No ‘they,’” like the one below appeared everywhere, and people started to call attention to references to “they” and “them” even in casual conversations.

A third way to overcome the curse of knowledge is to move from “telling” to “asking.” This has the benefit of also leveraging the “lottery ticket” effect to build ownership. With this technique, even chance conversations can be put to good use. At Emerson Electric, CEO David Farr makes a point of asking virtually everyone he encounters the same four questions: “How do you make a difference?” (to find out whether people are aligned on the company’s direction); “What improvement ideas are you working on?” (to emphasize execution edge health recipe); “When did you last get coaching from your boss?” (to probe on the people development management practice); and “Who is the enemy?” (emphasizing collaboration—the right answer is to name a competitor and not some other department!). This sends a clear message that these issues matter. If employees don’t have good answers for you right at that moment, you can bet they will when they are asked next time.

The fourth way to overcome the curse of knowledge is to ensure the story doesn’t just come from leaders and instead is reinforced through as many channels as possible: speech, print, online, actions, symbols, rituals, and so on. Using multiple channels reinforces the consistent message. Back to the tappers and listeners analogy, it ensures the song being tapped is heard multiple times using different instruments. We’d be remiss not to mention that the most progressive two-way communications programs take what’s known as a “transmedia” approach—not just telling the same story through multiple channels but telling different aspects of the story through different channels that all add up to the integrated picture in ways that otherwise wouldn’t be possible to build.

We encourage companies to get creative in the channels they use, in particular given the many options that social media provides. We’ve seen very successful two-way communications strategies involving blogs, tweets, videos, podcasts, “jams” (online, topical, time-bound problem-solving sessions often involving thousands of employees—like IBM’s ValuesJam example we shared in Chapter 3), online change-focused Wiki-like resource centers tailored to employee segments, and so on. These are made even more powerful when interwoven with in-person formats such as large group offsites, unannounced “walking the floor” visits, brownbag lunches, and the like.

Equally important to the more top-down oriented channels is the creation of bottom-up-led channels. What does this look like in practice? At Neustar, former CEO Lisa Hook sponsored a video competition to help communicate the company’s story and strategy (employees submit a video recording, employees are able to vote online, a winner from the top five is selected by the ExCo, and the CEO gives an award at the annual All Hands Meeting). At Australia’s largest telecommunications company, Telstra, a “rogue” comic strip was created by employees to express and correct cynical views of the change program. At McKinsey & Company, “citizen journalism” is encouraged, where employees share their own stories and others that interest them—including being able to submit requests for “investigative reports” by the firm’s communications team. Admittedly, bottom-up efforts are still kicked off by the corporate center, but after that they must be left to spread through the organization under their own steam. To get them started, some infrastructure and funding may be needed. Companies often give an influence leader in each area a small budget and what is often referred to as “freedom within a framework,” which means they can decide how to create energy for change in accordance within a few broad guidelines about which aspects of the story to emphasize.

One often underestimated channel is that of embedding new rituals into the organization. For example, a mining company we worked with, for whom safety was an important theme of their change program, made it a point to open all meetings with an announcement about emergency exits and safety hazards. Viewed as a one-off activity, this might seem a waste of time given that serious accidents don’t often happen in meeting rooms. Regarded as a ritual, however, it went a long way to embed the mindset that safety matters.

Another often underutilized channel is the outside world. As Banca Intesa’s former CEO, Corrado Passera, reflects, “Internal results undoubtedly matter, but even they won’t count for much if everyone keeps reading in the newspapers that the business is still a poor performer, is not contributing to society, or is letting down the country as a whole.”²⁸ Beyond the press, change leaders should look for ways to leverage customers, users, patients, voters, and other stakeholders to generate energy for change.

The power of a multi-channel or transmedia strategy is maximized when it’s designed by taking a “receiver” view—like what we advocated when we discussed sequencing the change program in Chapter 5. The “receiver” view starts with an employee segment and maps the coherence of the communications journey they will be taken on to ensure it moves them from understanding to commitment to action. For example, employees may learn of the change program in an offsite interactive story cascade session. Then they read about it on the company home page as they log in. At lunch, they see posters on the walls. At home, they read about the plans in the press. Next, they take part in a skill-building “field and forum” journey that starts with a PIW that helps them be a better change leader themselves. As time goes on, they notice how the environment is changing. People work in open-plan offices, not behind closed doors. The corporate jet goes up for sale. All of these things are set in the context of the overall change story. If, from the receiver view, all of the communications and experiences combine to help employees clearly understand the meaning of the change story, convince them that it is real, and motivate them to play a role, then the communications plan can be seen as robust.

As we bring our discussion on high impact, two-way communications to a close, savvy business readers will no doubt be scratching their heads as to why we haven’t made a fuss about the importance of celebrating successes. Yes, celebrating successes is important—it puts a spotlight on what you want to see more of, shows that doing what’s desired matters, shares best practices, and increases motivation. Further, when coupled with “how do we get more of this?” messaging it taps into the “studying our strikes” bowling-team effect that we described at the end of Chapter 4. That said, we’ve seen too many change communications programs take the mantra of celebrating success and become nothing more than a cheerleading program, which employees quickly tune out as not credible.

In the words of one of our communications colleagues, “Everyone loves ice cream, but if fed it for every meal, they get sick of it. It’s important, and healthy, that they have broccoli, too.” Sober, substantive messages linked directly back to the change story, repeated with a “learner’s mindset,” done with simple and memorable language, balancing telling and asking, using multiple channels orchestrated to take the receiver on a sense-making journey—and the curse of knowledge is lifted!