CEOs leading transformations of their organizations must lay the necessary groundwork. In this video, McKinsey senior partners Jon Garcia and Wesley Walden outline five essential conditions that will position an organization for success. An edited version of their remarks follows.
Wesley Walden: When I talk to CEOs who are considering a transformation, I always stress five prerequisites that need to be in place.
The first is to have a CEO who is completely committed to the transformation and treats it as a top priority. That person must be willing to devote a high level of engagement, attention, and focus to the project.
The second prerequisite is having a CEO who is willing to go after the full potential for the transformation. It’s critical that CEOs have a desire to shoot for an aspiration that’s above and beyond anything they’ve ever seen.
Jon Garcia: You’ve got to really want to be outstanding and to achieve your full potential. But wanting something isn’t enough. You’ve also got to be willing to work for it. It’s a journey that requires significant effort, and you’ve got commit to that effort.
Wesley Walden: The third is a willingness to commit the organization by marshaling the best resources and making sure that the leadership team is ready to dedicate the time. You also have to make sure you’re assigning the best people in your organization to the transformation.
The fourth is a willingness to follow the transformation “recipe,” as we call it. This process doesn’t just involve setting targets and pursuing a series of initiatives or projects. It’s all about following a particular recipe to identify a company’s potential and then build bottom-up plans and granular initiatives to deliver that potential. It also requires that you engage the entire organization to execute and deliver on those plans. In addition, the recipe requires that you think about organizational health, including improving attitudes and capabilities in your organization to sustain the transformation.
Jon Garcia: One of the things we’ve learned over the past decade or so is that trying to transform part of a company or an isolated corporate function is a pretty fraught and difficult exercise. You’ll get better results when you approach a transformation comprehensively, meaning you tackle all parts of the puzzle, including performance and organizational effectiveness and health.
Wesley Walden: As a final prerequisite, any CEO or organization considering a transformation needs to visit other organizations that have been through a transformation so they can understand firsthand what it means for them. They’ll see what it requires in terms of commitment and resource allocation and how the journey will feel.