Corporate transformation under pressure

It’s relatively rare for transformation programs to succeed; many surveys, including our own, put the success rate at less than 40 percent. Our recent research, however, underscores the fact that certain tactics promote successful outcomes. The most important tactics are setting clear and high aspirations and targets, exercising strong leadership from the top, creating an unambiguous structure for the transformation, and maintaining energy and involvement throughout the organization. Companies that used all of these tactics succeeded more than 80 percent of the time.

The same research also shows that what we call defensive transformations (those undertaken to stem trouble) have lower success rates than progressive ones (launched, for instance, to boost growth or to move from good to great performance). This finding seems to contradict the common wisdom that it is hardest to transform a company when it lacks an acute and apparent need for change. In our experience, however, while employees are more likely to see the need for change when a company is in crisis, this advantage is outweighed by difficult circumstances.