Transformations are grounded in value creation. In this video, McKinsey senior partner Kevin Laczkowski discusses how one company identified and executed its strategic roadmap. An edited version of his remarks follows.
One of the most memorable strategic transformations that I've been involved in was probably also one of the hardest. It involved a company in a market that was facing structural decline.
The company had to pivot toward a fundamentally different business model. When we first got in the room with management, there was a lot of concern and a lot of different ideas.
First, we had to ground everything back into value creation. We had to understand which ideas were going to move the needle on value creation, which ones should be pursued, and which ones should be abandoned.
Ultimately, we got to conviction. And it was very exciting to see the management team rally around a few big ideas to pursue.
Once we had the strategic roadmap in place and moved to the detail design and planning phase, it was exciting. At that point, a larger cross section of the organization got involved and took ownership of ideas. They built out what those ideas could look like, identified key milestones, and put in place the necessary transformation infrastructure.
This was a multi-faceted transformation. The company needed to develop new products and expand into new geographies, creating a revamped go-to-market model. This required time and investment. To fund the strategic initiatives, the transformation roadmap also had to incorporate productivity initiatives.
It was exciting to see lots of buy-in and conviction, from the top team down to the front line. And it was especially rewarding when the company announced a new product or an entry into a new market and you could start seeing the impact from those initiatives.
To execute the transformation, we had to fill several capability gaps, including new advanced analytics capabilities, new digital capabilities, and new geographical capabilities. So the company brought a lot of new talent into the organization.
In addition, they used a capability building program to enhance the capabilities of some of the individuals on the team. Capability building is extremely important, but I've rarely seen a transformation that doesn’t require some injection of talent from outside the company.