In this thought-provoking McKinsey article, the authors highlight the extreme difficulty of taking your company from middle of the pack performance (the 60% of the world’s largest companies that struggle to generate profit) to becoming a top performer (the top quintile where most of the economic profit is made). Over a 10-year period of analysis, only 8% of the companies studied were successful in making the leap to becoming top performers, primarily due to their inability to conceptualize and execute a strategy based on big, transformational moves.
The research presented points to a few essential shifts for executive teams to make these performance leaps, including the critical necessity of moving from incrementalism in the planning and budgeting process to a mindset of focusing resources on a select number of high-impact breakout moves.
Indiggo’s experience in executing strategy with large, complex organizations fully supports this critical success factor. However, cascading that mindset and approach throughout an organization is exceedingly difficult. It challenges managers at all levels to be willing to consistently rethink the highest and best use of their teams’ resources to align to game changing strategic priorities. Many of these managers are understandably entrenched in non-agile behaviors due to a host of legitimate reasons:
- They have no clarity on what’s most important to the organization’s leadership
- They don’t have the ability/permission to say no to non-mission critical projects that are thrown their way
- They’re burdened with performance measures and rewards that often don’t link directly to corporate priorities
- They operate dangerously close to burnout due to an unreasonable number of responsibilities and demands, many of which create little or no value for themselves or the organization
For organizations to make performance leaps, they must work relentlessly to provide clarity to their managers on what really matters and must then free them up and incentivize them to focus on these core priorities. That way, when organizations do make big strategic bets, they are actually giving themselves and their people the means to succeed!