David Michels

Kevin Murphy

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Problem</h5>
  <p>In today’s rapidly evolving business landscape, companies need to understand their capacity for change. But until now that capacity hasn’t been easy to determine, because we’ve lacked effective tools for measuring it.</p>
  <h5>The Solution</h5>
  <p>To gauge the capacity for change, the authors have created a system that rates companies on nine common traits and abilities. These ratings illuminate strengths and weaknesses—and allow companies to determine their overall <em>change power</em></p>
  <h5>The Benefits</h5>
  <p>Change power is a strong predictor of performance. Companies with high change power scores are more profitable, grow revenue faster, offer better shareholder returns, have leaders and cultures that are more highly rated, and are home to more-engaged employees.</p>
 </div>
</article-ideainbrief><p>It was a month like no other that Delta Air Lines had ever experienced: March 2020. Travel bans and rising coronavirus fears sent bookings into negative territory—more customers were canceling upcoming trips than booking new ones—and at the nadir the airline cut 85% of its flights. Not even the terrorist attacks of 9/11 had precipitated such a sharp drop in business, and the decline was accelerating each day.</p>

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<p>As they deal with a business landscape that is evolving constantly, rapidly, and unpredictably, executives all over the world are full of questions about change: <em>How much? How fast? How sustainable?</em> And sometimes just <em>How?</em></p>
<p>They can&#8217;t hope to answer those questions unless they understand their companies&#8217; capacity for change&#8212;but they&#8217;ve lacked good tools for measuring that. To address this problem, Michels and Murphy, partners at Bain, devised a way of systematically measuring what they call <em>change power.</em> In this article they explain how they devised their system, describe the nine main factors that they believe determine a company&#8217;s change power, and present data suggesting that companies that rank high on their change power index tend to perform remarkably well financially and have more-satisfied employees.</p>
<p>Most organizations have a change power profile that corresponds to one of four archetypes. Using company examples, the authors suggest a specific approach to improvement for each one.</p>

How Good Is Your Company at Change?

As they deal with a business landscape that is evolving constantly, rapidly, and unpredictably, executives all over the world are full of questions about change: How much? How fast? How sustainable? And sometimes just How? They can’t hope to answer those questions unless they understand their companies’ capacity for change—but they’ve lacked good tools for measuring that. To address this problem, Michels and Murphy, partners at Bain, devised a way of systematically measuring what they call change power. In this article they explain how they devised their system, describe the nine main factors that they believe determine a company’s change power, and present data suggesting that companies that rank high on their change power index tend to perform remarkably well financially and have more-satisfied employees. Most organizations have a change power profile that corresponds to one of four archetypes. Using company examples, the authors suggest a specific approach to improvement for each one.

How Good Is Your Company at Change?

Summary.

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