Driving transformational behavior change at scale

Why do so many large-scale transformation programs fall short, and what can leaders do differently to make change stick? In this episode of the Inside the Strategy Room podcast, host Sean Brown speaks with Senior Partner Rajesh Krishnan, Partner Tiffany Vogel, and Associate Partner Matt Schrimper about how organizations can translate bold aspirations into sustained performance improvements. Their conversation unpacks what “organizational effectiveness” really means, how to diagnose what might be holding your company back, and practical ways to embed lasting change. This is an edited transcript of their conversation. For more discussions on the strategy issues that matter, follow the series on your preferred podcast platform.

Sean Brown: Rajesh, you often cite research showing that only about 30 percent of large-scale change efforts fully achieve their goals. What holds the other 70 percent back?

Rajesh Krishnan: We’ve studied hundreds of transformations—both the ones we’ve helped lead and those we’ve observed—and three common pitfalls emerge.

First, organizations often don’t commit fully to the aspiration. Leaders set targets based on incremental improvement—“a little better than last year”—rather than asking, what’s the full potential of this organization if we reimagine how we operate and compete? Transformations need a bold vision that excites people and signals this is something fundamentally different, not business as usual.

Second, many efforts fail to mobilize the full organization. Companies tend to focus on a few top-down strategic initiatives to maintain control and focus. But if you’re leading an organization with thousands of people, you’re missing enormous potential if you don’t engage everyone in finding and implementing improvements in their own areas.

Finally, companies often fail to embed change into the organization’s fabric. You might get short-term gains, but without institutional mechanisms—how you measure performance, reward people, make decisions—those gains fade. It’s like a crash diet: quick results, but no lasting health.

Sean Brown: So only a third of transformations truly sustain their potential. And the shortfall often comes from weak commitment, narrow engagement, or failure to institutionalize new ways of working. When you say “how the organization is run,” Rajesh, you’re not just referring to the CEO, right?

Rajesh Krishnan: Exactly. Sustainable transformation is led by leaders, not HR. It’s driven by the people running the business day-to-day. When change feels like something “done to” the organization, it gets rejected.

I’ll share a small example. In one manufacturing company, the CEO encouraged every employee to look for ways to improve their area. One frontline worker noticed that a packaging tool was spinning too fast. By slowing it down slightly, the plant saved $50,000 a month—and that same fix was applied across their global production lines. That kind of ownership, where everyone looks critically at what they do and how to improve it, is what embeds transformation.

Sean Brown: You mentioned HR. Some transformations are led through HR because it touches the whole organization, but you emphasize the importance of line leaders. How do you get them truly engaged?

Rajesh Krishnan: One of my favorite examples is from a global manufacturer. We brought together about 40 plant managers who were skeptical about the transformation. They’re all sitting there with their arms folded. They said, “This is for you. You want higher EBITDA and cash flow. Nothing changes for us. We don’t get to reinvest any of this in our plants, some of which are falling apart.”

We asked them what they’d fix if they could. The list—leaky roofs, outdated gauges, small repairs—added up to around $50 million. The leadership team committed that the first $50 million in savings from the transformation would go into a reinvestment fund for the plants. Anything under $200,000 didn’t even need approval.

They only used part of the fund in the first year, but the message was powerful: If we change, we benefit from that change.

Matt Schrimper: I’ve seen that, too. Every organization has passionate people whose energy to improve things has dimmed over time because past efforts failed. When you show them that leadership is serious this time—that their ideas will be heard and implemented—it reignites that spark. It’s incredibly motivating.

Tiffany Vogel: Absolutely. Early wins are critical to building belief. When people see real improvements that make their work easier—like faster client onboarding or better tools—they become advocates for the change. And leaders should amplify those stories across the organization. Success stories spread faster than memos.

Sean Brown: What kind of performance impact are we really talking about? And how do you measure it—using the Organizational Health Index, for example?

Rajesh Krishnan: The global industrial company discussed earlier had been spun off from a larger parent, creating a new $5 billion to $6 billion company. The management team really embraced a start-up mentality, setting out to improve EBITDA by $1 billion. They hit the target in the first year and doubled that the next year, investing much of it back into growth. Their share price increased more than tenfold.

On our Organizational Health Index [OHI], they moved from the bottom to near the top quartile in just two years. But maintaining those heights proved hard. Over time, these figures have declined. Although they remained materially above their starting point, this pattern shows that maintaining momentum is essential.

Across the thousands of companies we’ve benchmarked, we see a clear correlation: every step up in organizational effectiveness translates into higher total shareholder returns over time. And the causal direction runs both ways—but our data shows that improving effectiveness consistently precedes performance gains.

Sean Brown: Tiffany, tell us more about how you help clients assess and improve organizational health.

Tiffany Vogel: We use a three-step approach.

First, we spend a surprising amount of time diagnosing the current state using the OHI, which benchmarks the organization against more than 2,500 companies worldwide. We look at outcomes like leadership quality, accountability, innovation, motivation, and strategic clarity.

Second, we translate those findings into specific, observable behaviors. For example, everyone says they value collaboration—but what does that look like in practice? Does it mean co-creating across teams? Sharing data openly? We make it concrete for each level, from the C-suite to the front line.

Third, we embed those behaviors into daily work—in meetings, planning, decision-making, and operations—so they become part of how the organization runs.

Sean Brown: How do you make sure those behaviors don’t get diluted as the message cascades down?

Tiffany Vogel: Leaders need to communicate eight times more than they think. Posting a strategy slide isn’t enough. You need to repeat key messages through multiple channels and voices—not just from the CEO, but from every manager.

We also encourage team-level discussions. When teams of ten to 100 people talk through what new behaviors mean in their daily work, they begin to hold one another accountable. That’s when change sticks.

Sean Brown: Tell us a little bit more about the Organizational Health Index, or OHI. How do you use the OHI with clients?

Tiffany Vogel: Organizational effectiveness can often be framed as “soft stuff.” OHI brings a hard edge—benchmarking and a strong fact base—as we look at the current baseline of where an organization stands.

Clients receive an overall score ranked in quartiles against a global benchmark built from more than 20 years of research and data from over 2,500 organizations. They can see how they compare with peers and leading companies around the world on key dimensions of organizational effectiveness.

The OHI assesses nine outcomes that together drive performance: the quality of leadership, levels of motivation and innovation, learning and accountability, and the organization’s ability to create strategic clarity and direction across employees. We survey the entire organization to measure these outcomes—not based on perception, but on observed behaviors and practices. Underneath each outcome, we also look at specific management and organizational practices that either enable or hinder performance.

Sean Brown: So how do you get employees, especially on the front line, truly bought into a new strategy? Sometimes culture seems to get in the way of execution, and as Peter Drucker famously said, “Culture eats strategy for breakfast.” How do you see culture and strategy interacting in this context?

Tiffany Vogel: We hear this all the time—people in organizations are overwhelmed, stretched thin, and trying to do too many things at once. One of the first things we say is: “If you’re not deprioritizing activities to align with the strategy, you’re not actually doing strategy.”

Having a great strategy on paper is essential. Communicating it is also essential. But the real test is whether people understand the strategy and how it applies to their specific role. Do they see how their day-to-day work connects to the company’s direction? Can they raise their hand and say, “What I’m doing doesn’t align with the strategy—should I be focusing elsewhere?”

Sean Brown: Once a company has benchmarked its health, what comes next?

Tiffany Vogel: After we gather data, we go on a listening tour—focus groups and deep interviews across all levels—to uncover underlying mindsets. For example, one organization celebrated “firefighting.” People who solved crises were heroes, while those who prevented them got little recognition.

We found this culture stemmed from a discomfort with feedback. Managers avoided hard conversations, so problems festered until they exploded. The organization prided itself on politeness—but that politeness was blocking progress.

Once we surfaced that insight, leaders could explicitly focus on building a culture of constructive feedback and open debate. That shift reduced the firefighting and improved operational discipline across the board.

Sean Brown: Rajesh, how do you cascade the “why” of a transformation throughout the organization? Many employees may see it as just another restructuring.

Rajesh Krishnan: We use what we call a change story—everyone’s “why” for the transformation. The most powerful ones often come not from the CEO or president of the business but from frontline employees.

One of their stories stays with me years later: “Three generations of my family have worked in this plant. It’s not dying on my watch.” That sort of story carries emotional conviction. It reminds people that transformation isn’t about spreadsheets; it’s about preserving livelihoods and communities.

Sean Brown: Matt, let’s go deeper into behavior change. How can leaders influence mindsets and behaviors across a large organization?

Matt Schrimper: You can’t mandate behavior change—you have to influence it. We use McKinsey’s influence model, which has four levers: tell me, show me, guide me, teach me.

“Tell me” builds understanding and conviction through a compelling story—not just statistics.

“Show me” means role modeling. If leaders don’t demonstrate the new behaviors, change dies instantly.

“Guide me” is about reinforcing mechanisms—making it easier to act in the new way and harder to fall back. That includes incentives, systems, and processes.

“Teach me” focuses on building skills. Even when people believe in the change, they’ll resist if they don’t feel capable.

Using all four levers together makes you more than eight times more likely to achieve lasting behavior change. And it applies in life beyond work—I use it to teach my young child to wash their hands!

Sean Brown: What does applying these four levers look like in practice?

Matt Schrimper: Take strategic clarity. Under Show Me, leaders should visibly raise their hands when work doesn’t align with strategy. Under Guide Me, you align objectives and key results to strategic priorities so the new behaviors are reinforced daily.

One CEO was frustrated that few employees could articulate the company’s strategy. We helped her run an accountability loop cascade: She presented the strategy to her direct reports, who then did the same with their teams. Afterward, we surveyed employees to test their understanding and gathered feedback.

Where the message landed, she celebrated those leaders. Where it didn’t, she asked them to go back and try again. Within six months, the company’s OHI score for strategic clarity jumped from the 11th to the 90th percentile—proof that measurement and persistence drive results.

In another case, a company streamlined its meeting structure. They clarified decision rights, reduced unnecessary attendees, and aligned meeting cadence with business rhythms. The result: a two- to threefold increase in decision speed and a 50 percent reduction in time spent on low-value meetings.

The lesson is that you must treat behavioral interventions with the same rigor you would apply to financial initiatives.

Sean Brown: Rajesh, as we wrap up, what final lessons would you share with leaders seeking to improve organizational effectiveness?

Rajesh Krishnan: A few weeks ago, we met with transformation leaders from a dozen organizations. Four key takeaways emerged.

First, commit—and recommit—to full potential. Don’t settle for incrementalism. Second, the CEO must remain an active role model. When leaders pull back, the organization notices. Third, embed change to sustain impact—through communications, decision rights, skills, incentives, and performance management.

And finally, celebrate wins along the way. Recognition energizes people and builds momentum. Log your wins, share them widely, and use them to recommit to the journey ahead.

Sean Brown: Rajesh, Matt, Tiffany—thank you. This has been a fascinating conversation about how organizations can drive transformational behavior change at scale and sustain performance over time.