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Business Transformations Tend to Fail When Leaders Don’t Take a Human-Centric Approach to Transformation

A New Report from The Boston Consulting Group Finds That It’s Not Enough for Business Transformations to Focus on the “Head and Hands” of Transformation; They Also Have to Engage the “Heart” 

SAN FRANCISCO—As digital transformation sweeps the business landscape, large-scale change efforts are not just increasingly necessary but also constant—businesses today are in a state of “always-on” transformation. To succeed in this environment, leaders need to engage three crucial elements, according to a new Boston Consulting Group (BCG) report titled The Head, Heart, and Hands of Transformation. Not only do they need a strong vision and a focused set of actions (the “head") and agile ways of working (the “hands”), but also they must inspire and empower people at all levels (the “heart”).

“‘Always-on’ transformation calls on leaders to go beyond traditional one-off short-term approaches,” says Jim Hemerling, a coauthor of the report and a senior partner at BCG. “Too often, with the focus on short-term results, leaders neglect their employees, who more than ever are overwhelmed by the demands of constant change. In this challenging environment, it is vital to take a holistic, human-centric approach to transformation, emphasizing things like an organization’s purpose, an empowering culture, and demonstrating care for people whose lives are being disrupted.”

Research from the report underscores the importance of the head, heart, and hands: of the more than 100 transforming companies BCG studied, 96% of those that fully engaged all three elements showed sustained performance improvement, compared with 33% for companies that did not.

One example of the success of the head, heart, and hands approach is Microsoft’s transformation under CEO Satya Nadella.

Nadella hammered home a “mobile-first, cloud-first” vision and focused the organization on growth, addressing the head of transformation. Notably, and this is often overlooked, he articulated a new purpose—“to empower every person and organization on the planet to achieve more”—and fostered a new culture and leadership model, thus tending to the heart. He unleashed new ways of working that have not only enabled execution but also spurred innovation and agility; that is, he equipped the hands. 

Unfortunately, among the companies BCG studied, the heart was the most consistently neglected aspect of transformation. Says Hemerling, “People, working as individuals and in teams, are the lifeblood of successful transformation. But in practice, they are frequently treated as a means to an end or, worse, as collateral damage, which can have dire consequences for them and the organization.”   

Hemerling offers some specifics on the steps leaders must take to engage the heart of their companies:

  • Activate and embed purpose. Purpose is an organization’s “why”—its reason for being. Purpose fuels transformation by fostering an emotional connection that inspires greater employee commitment and a willingness to go the extra mile.
  • Create an empowering culture. Culture comprises a clear articulation of the values and behaviors that define how things get done in an organization. A healthy culture serves as a tacit code of conduct that steers individuals to make choices that advance the organization’s goals and strategy and can also serve as a magnet for talent. For example, as part of its highly successful transformation, Australian airline Qantas put thousands of senior-level, frontline, and supervisory leaders through leadership development programs that helped them become better listeners, effectively coach staff, and empower their people. This, among other initiatives, helped Qantas move away from a “command and control” workplace culture and toward one that invigorated the hearts and minds of the workforce.
  • Demonstrate care. Leaders need to express empathy for the employees whose lives are disrupted by a transformation. It is critical that leaders solicit the input of employees and visibly address their concerns. At a pharmaceutical company undergoing a merger, for instance, a routine pulse check from management revealed that employees felt a lack of resources in their day-to-day work, something leaders then promptly addressed.

“It’s no longer enough for leaders to excel at setting direction and executing change quickly,” Hemerling says. “Increasingly, employees are looking for much more than a paycheck or tangible rewards; they seek intrinsic motivations, such as meaning and connection. They want to contribute, develop, and achieve. While it’s not a panacea, the head, heart, and hands approach to transformation enables organizations that truly embrace it to succeed today and thrive tomorrow.”

A copy of the report can be downloaded here.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About Boston Consulting Group

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact.

To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow our clients to thrive.

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