In recent years as we researched how companies can measure their ability to change and assess their strengths and weaknesses, my Bain & Company colleague Kevin Murphy and I began to see an interesting pattern. In a survey of close to 2,000 employees from 37 large global organizations operating across a variety of industries, each company seemed to have its own distinct balance of factors.
Still, when it came to their overall power to change, they typically fit one of four archetypes.
In search of focus: 37% of the companies we reviewed fit this archetype, making it by far the most common. This group has great energy and innovates constantly. Its people can take on a lot, but, similar to young children playing soccer, everyone seems to be chasing the ball. These companies lack direction, purpose, and connection. Their leaders need to focus on the big picture, connecting company activities to purpose and strategy. They must prioritize, saying no to some good initiatives in order to stay focused on the best.
Aligned but constrained: 24% of the companies we looked at fit this archetype. This group works well as a unit in lockstep, yet these organizations often lack the people they need to manage greater amounts of change and its accumulating disruption. That leaves them feeling as if they were running a race in the mud, struggling with capacity, development, and connection. These organizations need to identify and address their capacity bottlenecks, reorder their priorities, and add resources where most needed.
Stuck and skeptical: 20% fit this archetype. They have good ideas and a history of success, but too much of their change gets stuck at the local level. They are weak in scaling, action, and connection, and they are unable to spread innovation across the organization. That leaves their people impatient, skeptical, and even a bit hopeless. Success will depend on reigniting the enthusiasm of teammates and convincing them that success is possible.
Struggling to keep up: 19% of the companies we reviewed fit this archetype. This group is similar to a team of cyclists in the Tour de France who battle a grueling race with many stages. They’re great athletes with a single-minded focus and an action orientation that have delivered results. But as the race wears on, fatigue sets in, and their weakness in flexibility, choreography, and scaling becomes a liability. Companies in this category need to better anticipate what’s around the corner and change their plans accordingly, evaluating whether their strategic direction is still the right one.
Harvard Business Review decided to put our findings about corporations’ power to change, their Change Power Index, and these four archetypes on the cover of the July/August issue (“How Good Is Your Company at Change?”). During the course of writing the article, we interviewed a number of executives about their organizations’ approach to change. Delta Air Lines’ leaders told us how they came to decide to block the middle seat of all their aircraft as a response to Covid-19, as well as when they knew it was time to end that restriction. Executives from Worley, a global company that provides professional project and asset services to the energy, chemicals, and resources sectors, told us about the many external shocks they’ve had to battle in recent years and how they’ve used these experiences as opportunities to train their future leaders and help them build networks across the organization.
Executives from Assurant, a company that has, in less than a decade, transformed from an insurance holding company into a very different business by exiting three of four business segments, making a number of significant acquisitions, and centralizing many functions, spoke about building new change muscles. “It’s been perpetual change,” says Keith Demmings, a 24-year veteran who will become CEO in January 2022. (Demmings and current CEO Alan Colberg will talk more about their change journey on a free webinar July 21.) Assurant has gotten better at change over the years, proving that it is indeed possible to build your change power and acquire the capabilities every company needs in today’s changeable business environment.