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Thursday, July 27, 2006

Organizational Change and Transformation

The newest McKinsey Quarterly online survey (subscription required) sheds new light on what drives a successful transformation in organizational performance.

Their premise?
  • Transformations appear to produce the best results when executives mobilize organizational energy and communicate their objectives in a clear, comprehensive, and engaging way.
  • Certain change mechanisms also were correlated with executives' satisfaction with transformation.

The survey, which covered a range of contexts from turnarounds to restructuring, highlights the mixed emotions felt by those on the receiving end of deep-rooted change.

Respondents with the most successful transformations reckon that their company was conspicuously more effective than the others at raising expectations about future performance, addressing short-term performance, engaging people at all levels of the organization, including a clear and coordinated program design, and making the change visible—through, say, new IT tools or physical surroundings.

Emotions play a leading role in a performance transformation. Overall, the respondents report negative and positive moods in roughly equal proportions, with anxiety (mentioned by 46 percent of all respondents) as the most common negative feeling, well ahead of confusion, frustration, fatigue, and resistance. Among the positives, a sense of focus, enthusiasm, and feelings of momentum occur roughly equally. Not surprisingly, more of the top performers report experiencing the positive emotions—especially focus and enthusiasm.

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