John Lin - McKinsey - Leading Transformational Change

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Introduction to

Leading Transformational Change


McKinsey & Company | 1
Introduction to
Leading Transformational Change
Herding Cats
“Vision without action
is merely a dream

Action without vision


merely passes the time

Vision with action can


change the world.”
- Chinese proverb

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The big idea

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The research

Research Conundrum Impact


Increase in likelihood
of a successful
transformation
Survey respon-
850,000 dents from over
650 organizations
participated in our
36% “CEO”
involvement 2.6x
“Organizational
Health Index” Percent of Organization
research
CEOs and senior
transformations
succeed
energized and
engaged
4.0x
8,200 executives
completed further
surveys regarding
transformational
Role modeling
by leaders 4.1x
change
Academic journal
900 articles and books
reviewed
Deploy best
talent 5.5x
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Three strategies for making change stick (… the 20 minute version)

1 Focus on both Performance and Health

2 Shift the context using the Influence Model

3 Tell 5 stories at once

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1 Performance … and health

Performance Health

What a university does How an organization


to improve how it aligns itself,
educates students, executes with
innovates through excellence, and renews
research, and gives itself to sustainably
back to the community achieve performance
through service aspirations

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1 Focusing on both increases your chances of success Successful1

Percent Unsuccessful2

Transformation focused on…


Public sector (n=974) Private sector (n=4,572)

Generating near-term Generating near-term


73 27 73 27
impact on performance impact on performance

Strengthening the Strengthening the


company’s "health" 54 46 company’s "health" 61 39
for the longer term for the longer term

Both near-term impact on Both near-term impact on


performance and the performance and the
51 49 58 42
organization’s longer- organization’s longer-
term health term health

1 Successful includes respondent choices of extremely or very successful


2 Unsuccessful includes respondent choices of not at all or somewhat successful

SOURCE: McKinsey Quarterly Transformational Change Surveys - public sector (2012), private sector (2006, 2008, 2010) McKinsey & Company | 8
2 Shift the context

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2 The Influence Model

Role-modeling Fostering understanding


and conviction
“I see superiors, peers
and subordinates “I know what is expected
behaving in of me – I agree with it,
the new way” and it is meaningful”

“I will change
my mindsets and
behaviors, if…”

Developing talent Reinforcing


and skills mechanisms

“I have the skills and “Structures, processes


competencies to behave and systems reinforce
in the new way” the change”

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2 The City Colleges of Chicago transformation: “Reinvention”

▪ Developed clear case for change


with unassailable facts (e.g., 7%
▪ Personally led by Chancellor. graduation rate)
Center of her agenda … each and
every day ▪ Extensive roadshows of the
“Case” to all 7 campuses
▪ Articulated 4 goals. Unwavering in Role- Fostering
using them to guide the tough ▪ 5 Advisory Boards (Community,
decisions modeling understanding Academic, Business, etc.)
and conviction
▪ New presidents “walked the ▪ Wave 1 task force included 60
campus” to assess key issues and leaders from all 7 campuses …
incorporate needs competitively selected
Change
▪ Rotated faculty, staff, and students ▪ Clear goals for Reinvention,
through Waves of task forces, each printed on the back of each
of whom undergo a Capability person’s business card
Building training (problem solving, Developing
communications, etc.) talent Reinforcing ▪ Internal Sharepoint site for work
planning and project
▪ Hired star talent into key positions and skills mechanisms management
(e.g., CIO, Reinvention leader) to
set a new tone ▪ Regular tracking of metrics
against each goal, with reporting
on a dedicated website
Improvement in
graduation rate
(2010 to 2012)
50%
McKinsey & Company | 11
2 The City Colleges of Chicago transformation: “Reinvention”

▪ Developed clear case for change


with unassailable facts (e.g., 7%
graduation rate)

▪ Extensive roadshows of the


“Case” to all 7 campuses
Fostering
▪ 5 Advisory Boards (Community,
understanding Academic, Business, etc.)
and conviction
▪ Wave 1 task force included 60
leaders from all 7 campuses …
competitively selected

Developing
talent Reinforcing
and skills mechanisms

McKinsey & Company | 12


2 The City Colleges of Chicago transformation: “Reinvention”

▪ Clear goals for Reinvention,


printed on the back of each
person’s business card

Reinforcing ▪ Internal Sharepoint site for work


planning and project
mechanisms management

▪ Regular tracking of metrics


against each goal, with reporting
on a dedicated website

McKinsey & Company | 13


2 The City Colleges of Chicago transformation: “Reinvention”

▪ Personally led by Chancellor.


Center of her agenda … each and
every day

▪ Articulated 4 goals. Unwavering in Role-


using them to guide the tough
decisions modeling

▪ New presidents “walked the


campus” to assess key issues and
incorporate needs

▪ Rotated faculty, staff, and students


through Waves of task forces, each
of whom undergo a Capability
Building training (problem solving, Developing
communications, etc.) talent
▪ Hired star talent into key positions and skills
(e.g., CIO, Reinvention leader) to
set a new tone

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3 The Power of Words

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3 Telling a story

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3 The X Factor: Sources of meaning

Importance to you Example calls to action

Mission/
____% ▪ Improving society
Community
▪ Building the community
▪ Civic duty

Institution/
____% ▪ Reputation / rankings
University
▪ Growth (enrollments, faculty)
▪ Sponsored research

____% ▪ Student success


Students ▪ Shaping lives
▪ Superior service / make it easy

Team
____% ▪ High performing teams
experience
▪ Sense of belonging
▪ Caring environment

____% ▪ Personal development


Me personally ▪ Paycheck
▪ Empowerment

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3 Example: Appealing to ‘5 sources of meaning’

Cost-focused ‘Good to great’


turn around program transformation

Mission/
▪ Ultimately this is about us being ▪ Ultimately this is about building the
able to serve more students with community and making it a vibrant
Community
the limited resources we have place to live

Institution/
▪ Uses of funds are growing faster ▪ We have the opportunity to “jump
than sources of funds, this can’t a curve” and leave the competition
University
continue or we won’t survive far in the dust

▪ Greater simplicity, fewer errors, ▪ Expanding the range of programs


Students more affordable tuition and less and experiential learning that our
student debt students have access to

Team
▪ Less duplication of effort, ▪ Working together across silos to
accountability matched with achieve collectively what one
experience
empowerment person or team could not do alone

▪ This is a once in a career ▪ Increase financial rewards,


opportunity to turn around the expanded opportunities to
Me personally
institution. In the end, there will be advance and develop in a growing
bigger, more attractive jobs organization

McKinsey & Company | 18


Recap

You can beat the odds by putting equal rigor


& discipline into performance & health

To shift mindsets, shift the context in which


people are working

Tell five stories at once – it’s powerful,


practical, and easy to apply

McKinsey & Company | 19

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