ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

Leading organizations have always known that they need to act fast to outpace competitors. But the COVID-19 pandemic forced businesses to move at a pace that they had likely never attained or even imagined before. For example, a US-based retailer launched curbside delivery in two days versus a planned target of 18 months, and an engineering firm designed and made ventilators within a week. Such extraordinary bursts of speed are difficult to achieve and sustain over the long term, however, unless organizations hardwire faster decision making and processes into their operating models. This week, let’s explore some of these permanent structural changes.

AN IDEA

Sprint from the start

Most organizations can’t wait to get going on exciting new projects. But it’s all too easy for that initial burst of enthusiasm to dissipate quickly, warn McKinsey partners Louisa Greco and Zachary Silverman in an article on why speed is critical in business transformations. Entrenched behaviors and practices can leave companies “stuck in the starting blocks, wasting valuable time, energy, and momentum,” the authors say. Instead, pursuing quick wins can spark optimism and lead to longer-term investments. Our research shows that successful transformations launch initiatives that deliver 57 percent of value within six months and 74 percent by the end of the first year. Then, “in year two of a transformation, look for new value-creation opportunities and make sure incentives reflect these refreshed goals and commitments,” the authors suggest.

A BIG NUMBER

72%

That’s the percentage of fast organizations that outperform their industry peers on innovation. By contrast, just 15 percent of slower organizations do the same, according to our research. Companies that act fast do so because of their adept use of technology and tactics such as a sharper focus on customers, swift decision making, and frequent and transparent communication. They score better than their competitors not only on speed of innovation but also on a host of other measures, including growth, operational resiliency, and financial performance.

A QUOTE

“Organizations can make massive and fundamental shifts when needed.”

That’s what companies have learned from the “forced acceleration” of organizational processes that the COVID-19 pandemic triggered, suggest McKinsey global managing partner Bob Sternfels and colleagues. In a series of blogs, the authors review nine actions to sustain that speed: these include revamping ways of working, redesigning organizational structures, and building new workforce capabilities. During the pandemic, a company took on the challenge of manufacturing a product it had never made before. “We came as beginners and got smart on the job,” a team member says. “Being a band of beginners means if you think of it, you do it. There is no time for rank.”

A SPOTLIGHT INTERVIEW

It’s no secret that many start-ups tend to be more nimble than larger, established players. “The biggest thing that makes most start-ups move really quickly is urgency,” says McKinsey partner Brian Quinn in a discussion with partner Stacey Haas and leading entrepreneurs. “They are running on the amount of capital and the amount of funding they have at any given moment. . . . And that level of urgency, that degree of fuel to move quickly, just doesn’t exist inside most large organizations that I’ve worked with.” Foot-dragging on decision making often slows down larger companies. One way to solve this may be to set up dedicated project teams and “force this notion that they’re going to make decisions quickly on a daily basis,” says Quinn. “That’s one of the biggest unlocks to actually moving at the speed the start-ups often move at.”

— Edited by Rama Ramaswami, senior editor, New York

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