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 / Winter 2008 /Issue 53(originally published by Booz & Company)


Stand by Your Change Agent

 • Paragons. Of the 36 com­panies we studied, 11 embraced change enthusiastically and viewed change leadership as an indispensable part of leadership development. At these model companies, 85 percent of change events exceeded expectations and 15 percent met expectations. Of the change leaders, 62 percent were promoted, 24 percent moved laterally, and only 14 percent exited (either voluntarily or involuntarily).

 • Masters. Eleven other companies valued the individual mastery that comes with careful attention to leadership development, but had not developed a sophisticated change capability. At these companies, 28 percent of change events exceeded expectations, 56 percent met expectations, and 16 percent failed to meet expectations. Only 16 percent of the change leaders were promoted; 60 percent moved laterally, and 24 percent exited.

Warriors. Five companies had developed change skills as a necessary condition for doing competitive battle, but undervalued leadership development. At these companies, 43 percent of initiatives exceeded expectations, 28 percent met expectations, and 29 percent failed to meet expectations. Of the change leaders, just 7 percent were promoted; 57 percent moved laterally, and 35 percent exited.

 • Laggards. Nine of the companies we studied were uncertain how to implement change and did a relatively poor job of leadership development. At these companies, a mere 5 percent of initiatives ex­ceeded expectations; 67 percent met expectations, and 28 percent failed to meet expectations. Of the change leaders, 11 percent were promoted, 50 percent moved laterally, and 39 percent exited.

In short, the companies that scored highest in both leadership development and embracing change were also the most likely to improve their performance and promote their change leaders at the end of the initiative. The data confirmed a virtuous circle that we had noticed long ago at the most capable companies we have served: Change initiatives succeed and the company retains its high-performing executives to lead the next wave of change — and, as these leaders rise in the organization, they apply those hard-won change skills to challenges in general management.

Among the companies with low scores for embracing change, for leadership development, or both, it’s a vicious circle: Their ability to exceed the expectations set for their change initiatives lags significantly behind that of top companies, and their change leaders depart at a greater rate, decreasing the likelihood that future change efforts will succeed. And we found that strong players at these companies often avoid change leadership roles.

For CEOs or other executives who ultimately oversee an organization’s portfolio of change initiatives, the lesson is clear. Seeing a change initiative through to fruition begins with evaluating the readiness of the organization and thinking carefully about the career paths for the leaders involved. Less-sophisticated or­ganizations are more likely to reject even successful change leaders, much as our bodies’ white blood cells may attack any cells — including helpful ones — that have unfamiliar attributes. So leaders of such organizations would be wise to ensure that their change leaders receive support, rewards, and recognition commensurate with the extra risk and challenge of their work.

The first step is to accurately assess whether the company is a par­agon, a master, a warrior, or a laggard. Once the top leaders have made that assessment, they can manage their talent and their change initiatives in ways that leverage the strengths of their people.

Paragons: Proceed Confidently
Among the companies we studied, those meeting the “paragon” criteria were those most likely to consciously use change events as important learning opportunities for leaders. They often put high-potential executives at the head of major change initiatives, providing them with the kinds of big challenges that will further develop them. Paragons also provide stronger organizational support for their initiatives. They may declare at the outset their intention to promote the change leader if the effort succeeds, which not only energizes the change leader but also improves the chances of exceeding expectations.

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